By Sara Merken and Jonathan Stempel
NEW YORK, Oct 28 (Reuters) – Weil, Gotshal & Manges plans to wind down its operations, its leadership told partners on Wednesday, capping a dizzying downfall for the nearly century-old law firm after it failed to stem an exodus of partners.
“Following a careful review of strategic alternatives, the firm’s management committee has recommended to the partnership that the firm pursue an orderly wind-down,” Weil said in a statement. “During the wind-down process over the coming months, the firm will continue serving clients with the dedication and excellence that have defined it since its founding and will remain committed to supporting its colleagues.”
It is unclear what the dissolution will mean for Weil’s approximately 1,200 lawyers, its staff and its creditors.
The dissolution would mark the collapse of one of the country’s most prominent law firms, whose lawyers have helped steer landmark bankruptcies, corporate takeovers and litigation for decades.
Weil is headquartered on Fifth Avenue in Manhattan, in a tower still often referred to as the General Motors building.
Throughout the legal industry, law firms have increasingly used aggressive compensation packages to recruit top partners for lucrative private equity, merger and litigation work.
That has sparked a talent war that has left even large and storied law firms financially vulnerable when rainmakers depart, and other lawyers start hunting for their own exit ramps.
MERGER TALKS FAILED
In the last few months, Weil has suffered notable departures from its legal ranks.
Among those to exit were corporate department chair Michael Aiello, widely regarded as one of the country’s leading mergers and acquisitions lawyers, who decamped for Cravath, Swaine & Moore and took five partners with him.
Others who left include private equity partner Christopher Machera, who joined Paul, Weiss, Rifkind, Wharton & Garrison, and two London-based mergers partners who went to Sullivan & Cromwell. Still more Weil lawyers departed for Simpson Thacher & Bartlett and other law firms.
Weil had held merger talks reportedly with Willkie Farr & Gallagher but they fell apart. It hired Davis Polk & Wardwell to help with restructuring as defections persisted.
The firm is close in size to the former Dewey & LeBoeuf, a New York-based firm with more than 1,300 lawyers when it was created through a law firm merger in 2007.
Dewey failed in 2012, also devastated by a stream of lawyer departures, as well as by too much debt and overwhelming financial obligations to current and retired partners.
ENRON, GM AND LEHMAN
Founded in 1931 by Frank Weil, Sylvan Gotshal and Horace Manges, Weil has long been one of the legal industry’s most recognizable brands.
It became particularly prominent in bankruptcy, where it advised in cases such as GM, Enron and the largest Chapter 11 bankruptcy of all, Lehman Brothers.
Weil generated more than $2 billion in revenue last year, putting it in the top quarter of US law firms.
While average profits per equity partner totaled about $5.4 million, according to the trade publication American Lawyer, that was only about half the more than $10 million average at two other white-shoe firms, Kirkland & Ellis and Wachtell, Lipton, Rosen & Katz.
Some top firms have recently been able to merge to regain stability following lawyer departures.
Cadwalader, Wickersham & Taft, which had been New York City’s oldest law firm, merged this year with Hogan Lovells to form Hogan Lovells Cadwalader. Another big New York-based firm, Shearman & Sterling, merged in 2024 with Britain’s Allen & Overy to form A&O Shearman.
(Reporting by Sara Merken, Jonathan Stempel and Kanjyik Ghosh; Editing by David Bario, Nia Williams, Shreya Biswas and Alistair Bell)
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