Yes, but it only works based on when you play the card.
For example:
1. You are Allowed to do:
Pidgey > evolve normally to Pidgeotto > Wally's training to Pidgeot.
2. You are Not Allowed to do:
Pidgey > Wally's training to Pidgeotto > evolve normally to Pidgeot.
Wally's training doesn't count as a "normal" evolution (which is why you can do example 1), but it still counts as evolving a Pokemon regardless (which is why you can't do example 2).
For further Wally questions the please view the Compendium link listed at the top of TCG Questions, it contains ALOT of Wally training rulings.