Weil Gotshal accelerates merger search as partners depart and chair declines

Rivals court restructuring head Matt Barr and private-equity partner Nee

Weil, Gotshal & Manges is facing an unsettled succession after private-equity partner Ramona Nee declined the role the firm elected her to take in January 2027. The Wall Street Journal reported that Nee had been elected in March to lead the firm but recently walked away, leaving no clear succession plan. Top dealmaker Michael Aiello also left for Cravath, Swaine & Moore in September, a development the report called an inflection point.

The firm has engaged a bankruptcy lawyer for advice and accelerated efforts to find a merger partner. A proposed transaction with Willkie Farr fell through, additional top lawyers announced departures, and confidence in Weil’s future deteriorated sharply, according to the Journal.

Weil generated $2.1 billion in revenue last year and, like most law firms, has relatively few liabilities outside its global office leases. The report said Weil could collapse quickly, but it also described scenarios in which the firm could survive in reduced form. The firm has some 1,200 lawyers worldwide.

Each partner at Weil earned $5.6 million last year, placing the firm among the 20 most profitable firms. Partner profit at the top 100 firms grew 14% last year, compared with 4% at Weil.

The roots of the crisis extend more than a decade. Weil took on business during the chaotic aftermath of the 2008 financial crisis but did not reinvest its profits and cut lawyers while many competitors were growing. The firm fell behind industry leaders in head count, revenue and profit, leaving it vulnerable to poaching by rivals.

Over the past year or so, Weil has pushed to grow, sought a merger partner and increased efforts to lure new partners. Some firm insiders said a power struggle developed between influential partners who wanted to compete with mega-firm rivals and others who favored remaining smaller. Nee’s withdrawal and Aiello’s departure left the firm without a settled leadership plan as those growth efforts continued.

Albert Togut, a bankruptcy lawyer who handled the collapse of Dewey & LeBoeuf, said, “A law firm’s most valuable asset is its people. If they go home one night and don’t come back the next day, it’s over.” The report said even healthy firms with strong reputations can be destabilized if they lose key people or practice groups.

Market conditions have made that risk more acute. It was once unusual for partners to move between firms, but some of the most successful firms now have enough money to lure partners with $20 million-plus guarantees. Unlike people in other industries, lawyers are not bound by noncompete agreements, and departing lawyers often take their prized clients with them.

Weil was founded nearly a century ago by Jewish lawyers who were often excluded from other elite firms. It pioneered a restructuring practice, developed a strong record in private-equity and M&A deals and led some of the largest bankruptcies in history, including Lehman Brothers, General Motors and Enron.

Rivals are heavily courting Matt Barr, who heads Weil’s restructuring practice, and Nee. Losing those partners’ most lucrative teams would make it difficult for Weil to survive in its current form for the long term, and the firm’s future depends in part on whether it can stop losing lawyers.

Departing partners typically forfeit their share of profits at the end of the year. According to people familiar with the matter, Weil repays departing partners’ equity over a number of years, which eases some immediate financial pressure.

One possible route is a merger that retains the brand and at least part of the partnership, as Patton Boggs did with Squire Sanders in 2014. Other firms hobbled by partner defections have wound down, including Stroock & Stroock & Lavan in 2023. Weil could also intentionally shrink and focus on a few moneymaking areas or wind down without filing for bankruptcy.

Bankruptcy would be a more consequential path. Large firms with major liabilities have used bankruptcy to address debts, leases and other obligations, but law firms that file generally do not survive, unlike a business entering Chapter 11 to reorganize. The 2014 Dewey & LeBoeuf bankruptcy led to years of litigation against former partners to recover profits collected before the collapse. If Weil filed, it would be the first bankruptcy by a major law firm in more than a decade.

One challenge to downsizing is Weil’s real-estate portfolio, which reflects the firm’s current stature. The firm has leases around the globe, including some 380,000 square feet at the General Motors Building across from Central Park in Manhattan, according to CoStar Group. One person familiar with the matter said Weil had been examining its lease obligations in recent days.