Weil Gotshal’s $2 Billion Unraveling Followed a Script Big Law Has Seen Before

Weil, Gotshal & Manges came apart the way most large law firms do: its leaders left in groups, a succession plan collapsed, and a merger that offered a way out fell through.

On Oct. 28, Weil’s management committee recommended “an orderly wind-down” to the firm’s partners, who must formally vote on the plan. The 95-year-old firm employs about 1,200 lawyers and brought in more than $2 billion in revenue last year, according to Reuters. If partners approve, the collapse would surpass Dewey & LeBoeuf’s in 2012 as the largest modern law firm failure. The wind-down is expected to take months.

The warning signs of this unraveling were public for months, and every firm leader should know how to spot them.

The Exodus Started at the Top

Weil’s losses came from leadership and from its most marketable practices. Corporate department chair Michael Aiello left for Cravath, Swaine & Moore in September with five other partners. Private equity partner Christopher Machera joined Paul, Weiss. Two London M&A partners went to Sullivan & Cromwell, and others left for Simpson Thacher.

Then the departures reached the firm’s governance. Lyuba Goltser, co-managing partner of the corporate department, plans to join Sidley Austin while Drew Tulumello, a member of Weil’s management committee, is joining Davis Polk, according to Bloomberg Government. More than 30 partners left Weil this year, Reuters reported.

Departures at this level change the math for every partner who stays. David McGowan, a University of San Diego law professor, told Bloomberg that “lateral movement for ‘I can do better’ is very common.” Once departures accelerate, he said, partners start to worry that they’ll be the ones “left holding the bag.”

Stroock & Stroock & Lavan followed the same path in 2023. Nearly 20 partners left for Paul Hastings in 2022, about 27 lawyers left for Steptoe in July 2023, and more than 30 partners, mostly from real estate, moved to Hogan Lovells, Bloomberg Law reported. In October 2023, the partners voted to dissolve the firm.

The lateral market makes leaving easy. Lateral partner hiring rose 17.8% in 2025, according to NALP. When rivals are hiring at that pace, a firm’s best groups are always on someone’s recruiting list.

A Failed Merger Is the Last Warning Sign

Weil’s merger talks with Willkie Farr & Gallagher ended around Oct. 22, according to Bloomberg Government. The combination would have produced a firm with more than $4 billion in revenue. Six days later, Weil’s leadership recommended winding down.

Heller Ehrman, Howrey and Stroock all went through the same sequence:

• Mayer Brown ended merger talks in September, and at least 15 intellectual property partners left for Covington & Burling. Within weeks, chairman Matthew Larrabee told partners the 118-year-old firm would wind down.
• Merger talks with Winston & Strawn broke down in January over client conflicts. Winston then offered jobs to about 75% of Howrey’s partners individually. More than 100 partners had left since 2009, and by March the partnership was preparing to vote on a wind-down. “The wind-down of Howrey is an inevitability,” one former partner said.
• The firm held talks with Pillsbury, Nixon Peabody, Steptoe, Squire Patton Boggs and McGuireWoods. None produced a deal. Hogan Lovells wanted some of Stroock’s lawyers, not the firm.

Firms that walk away from a merger often come back to hire the target’s best partners anyway. A merger pursued as a rescue tells the market that the struggling firm can’t stand alone, and partners act on that signal before the talks end.

Succession Is a Retention Issue

In March, Weil named private equity partner Ramona Nee to succeed longtime executive partner Barry Wolf. Nee later decided not to take the role, according to Reuters, and she held talks with Simpson Thacher, Nonbillable reported.

Weil’s partners were weighing the firm’s future when the person picked to lead it stepped away. At any firm, partners deciding whether to stay look at who will run the place next. Firms with a long-serving leader and an unsettled succession plan should treat that gap as a retention problem.

The Groups Get Absorbed

The partners who stay through the end usually move in groups, not one by one. In 2014, Bingham McCutchen lost 25 partners to Akin Gump, including most of its London and Hong Kong offices. Weeks later, Morgan Lewis admitted 227 Bingham partners as a group rather than merging with the firm.

Expect the same with Weil’s restructuring, litigation and private equity practices. Firms that hire Weil’s groups get the partners and their clients, as long as they integrate each group fast enough to keep it from moving again.

The Partnership Agreement Decides the Ending

Weil plans to wind down out of court, with AlixPartners advising and Davis Polk restructuring counsel already engaged. But that path only works while a firm can pay its employees, landlords and lenders. It’s still unclear what Weil owes certain partners under its partnership agreement, Reuters reported

Dewey & LeBoeuf did not get that option. In bankruptcy, about 400 former partners paid $71.5 million from their 2011 and 2012 compensation in exchange for a release from further liability. Stroock’s problems included years of unfunded pensions for retired partners, a liability that reached about $8 million a year, Bloomberg Law reported.

Courts have also limited what a dissolved firm can claim from partners who leave. In In re Thelen LLP (2014), New York’s Court of Appeals held that pending hourly matters are not partnership property. “A law firm does not own a client or an engagement,” the court wrote, according to a Hughes Hubbard summary of the ruling. The California Supreme Court reached the same result for Heller Ehrman in 2018. In both states, departing partners take their hourly work with them, and the old firm cannot follow the fees.

What Other Firms Should Check Now

Firm leaders should answer four questions before departures start:

1. Track departures by practice and office. Three partners leaving one group is a bigger warning than five leaving five groups.
2. Name the next leader early, and make sure that person is committed.
3. Pursue combinations from strength. Merger talks that start in a crisis accelerate the departures.
4. Review capital accounts, retired partner obligations, lease exposure and what partners owe if the firm dissolves.

Weil’s lawyers spent decades guiding General Motors, Enron and Lehman Brothers through bankruptcy. Now their own firm needs the same advice.