What Killed Weil? Rainmakers Who Left In Packs

A month ago, Weil Gotshal & Manges was a 95-year-old Biglaw institution that brought in $2.1 billion last year. Now it’s winding down, and the rest of the industry is still trying to work out how that happened so quickly.

The surprise is pretty much universal. Law360 reports that Weil’s collapse is the talk of Biglaw this week, with lawyers struggling to explain how a firm that powerful imploded that fast. Former Above the Law editor David Lat, who has been covering law firm failures for 20 years, summed it up, “I think we’re all in shock because it unraveled so rapidly.”

Part of what makes it so jarring is that the usual post-mortem doesn’t work. When Dewey & LeBoeuf went under in 2012, there was a trail to follow: debt, obligations it couldn’t meet, and eventually criminal charges. Weil carries “no debt and few liabilities,” according to the Wall Street Journal. There is no clear finger to point here, just partners walking out the door, a group at a time, until there weren’t enough of them left to hold the place up.

Experts have some theories. Yale Law professor John Morley, who has studied law firm collapses, told Bloomberg Law there are legal reasons for a firm to pull the plug quickly even when it still looks financially healthy. Kent Zimmermann, a consultant to law firm leaders at the Zeughauser Group, told the outlet that Weil’s departures show how more profitable rivals can destabilize a competitor that’s merely perceived as weaker.

To make sense of it, I spoke with Laura Saklad, legal industry vice president at Intapp and former COO of Orrick. To her, Weil is a case study in how exposed a firm is to its rainmakers:

I think what the Weil situation brings to light is the challenge of how does a firm protect themselves on the downside for rainmakers that may move? So what do they do to make sure that they’re not too reliant on a small group of individual rainmakers. The circle that surrounds those rainmakers and how insular is that circle that surrounds those rainmakers. So how do they protect themselves on the downside? It’s also the question of how do you create the motivation to keep people at the firm, especially in a case where you start to see some departures. What is it that stems the tide and gives people confidence and maybe makes them move a little more slowly than what we saw at Weil?

Weil did not move slowly. Corporate chair Mike Aiello took five M&A partners to Cravath in September, and seven weeks later the firm was done.

Saklad’s prescription is to spread the wealth. Firms need to “try to make sure that you don’t have too much of your business that’s concentrated in a small handful,” she said, adding that Weil “points out the risks of not having a deep enough bench of very talented business developers that are coming up the ranks and building up to being those next rainmakers.”

And the clients should belong to the firm, not to whichever partner happens to answer the phone:

Firms have been talking for a long time about how important it is to create institutional client relationships. And there’s a benefit for the client. You can serve the client better if you are understanding the totality of their needs. And there’s obviously a benefit for the firm, that they have deeper, broader, stickier relationships with their clients when it’s not based on any one person. So to me, it does emphasize the need to double down on everything you can do to try to institutionalize client relationships.

She also thinks partners underestimate what their own firms bring to the table. “I think partners have a hard time understanding the full strength of their broad firm network and what firms can do,” Saklad said. “And I think it really heightens the importance of using the new technologies that are available to make it easier.” (Intapp, for the record, sells that kind of technology.)

Weil had the revenue, the history, and a balance sheet without much debt, and none of it mattered once its rainmakers decided to leave together, which is why every Biglaw managing partner should be taking a very close look at who their stars eat lunch with.

Earlier: Weil’s Wind-Down Message To Associates: Good Luck Out There, And Don’t Forget Your Timesheets
After 95 Years, Weil Gotshal Is Winding Down
Weil Practice Head Tells His Associates To Start Looking For Work Elsewhere
Weil Gotshal Is Now Discussing A Possible Wind-Down
Weil Partners Are ‘Frantically Sending Résumés’ As Leadership Weighs Its Options
Weil’s Successor Walked Away, And Now The Firm Has A ‘Run On The Bank’ Problem
Weil’s Merger With Willkie Is Dead, But Its Partner Exodus Is Very Much Alive
Weil’s Revolving Door Now Spins In Both Directions
Weil’s Corporate Chair Decamps For Cravath, Which Weil Would Like You To Know Is ‘A Smaller Platform’

Kathryn Rubino is a Senior Editor at Above the Law, host of The Jabot podcast, and co-host of Thinking Like A Lawyer. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter @Kathryn1 or Bluesky @Kathryn1

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