This Prestigious Firm’s Downfall Is Shaking Big Law

Weil, it’s over. One of the most storied law firms in the industry—Weil, Gotshal & Manges—is set to wind down operations after ruling the world of high-profile bankruptcies for decades.

The nearly century-old firm’s stunning fall from grace happened slowly, and then all at once:

• More than 30 partners left Weil Gotshal this year, including several top moneymakers (who tend to take their clients with them).
• The firm was in talks to shore itself up through a merger with a rival, but the deal reportedly fell apart last week amid more partner exits.
• Then, news broke that the firm’s chosen successor to its current chair had declined the job.

Why this implosion is such a shocker: Weil Gotshal employs 2,000 people (including 1,200 lawyers), has few liabilities, and is one of the Top 20 most profitable law firms. It guided Enron’s historic bankruptcy filing in 2001 and scored $1+ billion in fees in 2009 from Lehman Brothers, General Motors, and other filers.

But…post-recession, Weil Gotshal was outpaced by competitors like Kirkland & Ellis, whose revenue exploded from $2 billion in 2015 to beyond $10 billion last year, while Weil Gotshal’s grew from $1 billion to $2 billion in the same period.

Zoom out: It’s now common practice for big firms to use multimillion-dollar pay packages to poach top partners, which can lead to a cascading talent exodus that’s hard to stop. It’s a “white-hot lateral market for partners,” law journalist Kathryn Rubino told CNBC.—ML

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