Storied Wall Street law firm Weil, Gotshal & Manges is poised to shut down, with its leadership recommending the drastic move following an exodus of top partners and failed merger negotiations.
Longtime leader Barry Wolf disclosed the recommendation during a companywide meeting Wednesday afternoon, with a vote by the firm’s partners expected in the coming days, according to the firm.
“For more than 90 years, Weil, Gotshal & Manges has had the privilege of advising clients on some of their most consequential matters. 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.
Partners are expected to vote on the matter in the coming days.
A shutdown would mark a dramatic reversal for a 95-year-old Wall Street institution that raked in $2.1 billion in revenue last year and helped steer some of the largest corporate bankruptcies in US history.
Even as partners head for the exits, Weil, which boasts a workforce of 1,200 lawyers worldwide, remains debt-free and has relatively few liabilities, the Wall Street Journal reported, citing people familiar with the matter.
Weil is still collecting payments on outstanding client bills and could shut down without entering bankruptcy, a process that could allow its lawyers to recoup at least some of their unpaid earnings, according to the Journal.
The firm’s lease at Manhattan’s General Motors Building covers roughly 380,000 square feet and ranks among its largest liabilities, according to the Journal.
The space could attract a new tenant willing to pay more than Weil does, according to real estate experts cited by the Journal, who said it should be relatively easy to lease again.
Weil suffered a major blow in September when leading dealmaker Michael Aiello and his team decided to join rival Cravath, Swaine & Moore, according to the Journal.
The firm reportedly explored a merger with rival Willkie Farr & Gallagher that would have created a titan generating more than $4 billion in revenue.
But as the talks fizzled, more Weil partners began looking for the exits, with some contacting rival firms about potential moves, the Journal reported.
Weil’s leadership succession plans also unraveled amid the turmoil.
Ramona Nee, a private equity partner tapped to replace longtime firm leader Wolf, informed fellow partners in September that she no longer planned to assume the role, according to the Journal.
Wolf has led Weil for 16 years.
Insiders told the Journal that influential partners were at odds over the firm’s future growth strategies as some aimed to compete with larger rivals while others advocated for remaining a slimmed-down operation.
Weil generated $2.1 billion in revenue last year but experienced sluggish growth over the past decade, as deep-pocketed rivals including Kirkland & Ellis and Latham & Watkins competed for top legal talent, according to the Journal.
Frank Weil, Sylvan Gotshal and Horace Manges founded the New York firm in 1931.
It later became a major force in corporate bankruptcy proceedings, mergers and acquisitions, and high-stakes litigation.
Among its most prominent assignments was the 2008 bankruptcy of Lehman Brothers, in which Weil served as chief debtors’ counsel. It became the largest Chapter 11 filing in US history, involving about $630 billion in assets.
The following year, Weil served as lead bankruptcy counsel to General Motors, helping carry out a government-backed sale of the automaker’s viable assets during its Chapter 11 proceedings.
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