Weil, Gotshal and Manges has told its partners the firm should be wound down, bringing an end to one of the United States's most storied legal firms after 95 years and an exodus of partners in recent months.
Weil, Gotshal and Manges has told its partners the firm should be wound down, in a move that will bring an end to one of the US's most storied legal firms. The firm has seen an exodus of partners across the US and London in recent months, including former corporate co-managing partner Michael Hickey and private equity co-head Christopher Machera, who left for US competitor Paul Weiss in August.
Speculation spread across the legal sector over the firm's future after it was reportedly "negotiating a memorandum of understanding" with an unnamed law firm earlier this month. The merger talks, understood to be with fellow competitor Willkie Farr & Gallagher, fell through. Bosses of the white-shoe firm reportedly told staff to join a company call on Wednesday afternoon, where they were informed the company was set to be dissolved, the Financial Times reported.
A Weil spokesperson said in a statement: "For more than 90 years, Weil, Gotshal & Manges has had the privilege of advising clients on some of their most consequential matters." The statement said the Firm's Management Committee had recommended to the partnership that the Firm pursue an orderly wind-down, with partners expected to vote in the coming days. It said the firm would continue serving clients during the wind-down process and remain committed to supporting its colleagues.
The 95-year-old law firm has over 2,000 staff worldwide, including a London office open since 1996 with a headcount around the 400 mark.
John Bringardner, head of financial analytics firm Debtwire, said the failed merger talks caused a crisis of confidence among Weil's top partners. "Ultimately, it is this crisis of confidence that has caused the liquidation, rather than the debt or overspending seen in other large firm collapses, such as Dewey & LeBoeuf," he said. Bringardner added that the firm may file for Chapter 7 bankruptcy in an attempt to reject its office leases, while lawyers, staff and clients would be free to move to other firms.
Analysis
Why This Matters
- The collapse of a major 'white shoe' corporate law firm signals risk in the upper end of the legal market, where partner departure can now unravel a decades-old institution.
- Weil's roughly 400-strong London office and its clients face disruption as the firm winds down over the coming months.
- The partner vote in coming days will determine whether the wind-down proceeds as recommended.
Background
Weil, Gotshal and Manges, founded 95 years ago, was long a powerhouse in corporate law. Its troubles follow months of high-profile partner departures on both sides of the Atlantic and failed talks to merge with Willkie Farr & Gallagher. Analysts contrast this collapse with earlier big-firm failures driven by debt or overspending, pointing instead to a loss of confidence among senior partners.
Key Perspectives
Weil, Gotshal and Manges: the Management Committee has recommended an orderly wind-down after a careful review of strategic alternatives; partners are expected to vote in the coming days and the firm will keep serving clients with "the dedication and excellence" that have defined it since its founding.
John Bringardner, Debtwire: the liquidation was caused by a crisis of confidence among top partners after the failed merger talks, rather than debt or overspending; the firm may file for Chapter 7 bankruptcy to reject its office leases.
What to Watch
- Whether the partnership votes in favour of the wind-down in the coming days.
- Any Chapter 7 bankruptcy filing, which would let the firm shed its office leases.
- Where Weil's departing lawyers and clients land, and whether rival firms absorb the London practice.
Checked
12 claims in this story checked against 1 source: 9 supported.
Show each claim
- Partly supportedThe firm is set to be wound down, and partners have been told to dissolve it.City AM: “Weil, Gotshal and Manges has told its partners the firm should be wound down”
- Partly supportedFailed merger talks and a partner exodus are bringing the firm to an end.City AM: ““Ultimately, it is this crisis of confidence that has caused the liquidation, rather than the debt or overspending seen in other large firm collapses, such as Dewey & LeBoeuf,” he said”
- SupportedThe Weil spokesperson said: “For more than 90 years, Weil, Gotshal & Manges has had the privilege of advising clients on some of their most consequential matters.”City AM: ““For more than 90 years, Weil, Gotshal & Manges has had the privilege of advising clients on some of their most consequential matters.”
- SupportedBringardner said the crisis of confidence caused the liquidation, rather than debt or overspending.City AM: ““Ultimately, it is this crisis of confidence that has caused the liquidation, rather than the debt or overspending seen in other large firm collapses, such as Dewey & LeBoeuf,” he said”
- SupportedThe Management Committee recommended an orderly wind-down, with partners expected to vote in the coming days.City AM: ““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. “The partners are expected to vote in the coming days.”
- Partly supportedBringardner said the failed merger talks caused a crisis of confidence among Weil’s top partners.City AM: “John Bringardner, head of financial analytics firm Debtwire, said following the failed merger talks, there was a crisis of confidence among Weil’s top partners.”
- SupportedThe firm has seen an exodus of partners across the US and London, including Michael Hickey and Christopher Machera, who left for Paul Weiss in August.City AM: “Weil has seen an exodus of partners across the US and London in recent months, including former corporate co-managing partner Michael Hickey and private equity co-head Christopher Machera, who left the firm for US competitor Paul Weiss in August.”
- SupportedThe merger talks were understood to be with Willkie Farr & Gallagher and fell through.City AM: “It was understood that the firm in a merger negotiations was its fellow competitor, Willkie Farr & Gallagher, but the talks fell through.”
- SupportedThe firm is 95 years old.City AM: “The 95-year-old law firm has over 2,000 staff worldwide.”
- SupportedThe firm has over 2,000 staff worldwide.City AM: “The 95-year-old law firm has over 2,000 staff worldwide.”
- SupportedBosses reportedly told staff to join a company call on Wednesday afternoon, where they were told the firm was set to be dissolved, according to the Financial Times.City AM: “Bosses of the $2bn ‘white shoe’ firm reportedly told staff to join a company call on Wednesday afternoon, where they were informed the company was set to be dissolved, the Financial Times reported.”
- SupportedBringardner said the firm may file for Chapter 7 bankruptcy to try to reject its office leases, and that lawyers, staff and clients would be free to move to other firms.City AM: “Bringardner added, “The firm itself will enter wind-down mode and may file for Chapter 7 bankruptcy in an attempt to reject its office leases, while lawyers, staff, and clients will be free to move to other firms.“”
