As The Weil Turns: More Texas Turmoil

How can one law firm produce so much drama?

It seems that Weil Gotshal & Manges enjoys the title we recently bestowed upon it: “the reigning drama queen of Biglaw.” The juicy news and novel plot twists just keep on coming.

For those of you just tuning into “As The Weil Turns,” here’s a quick recap. Last week, eight prominent partners left Weil’s Dallas office for Sidley Austin. There was lots of speculation for what motivated the move. The Boston office of Weil instituted an unusual policy for raising attorney morale. Weil in Houston lost another partner to a rival.

Today brings more news: fresh partner departures from Houston, additional drama out of Dallas….

“Yesterday was just the beginning,” one source told us about the defection of IP litigation partner Nicolas Barzoukas. According to this tipster, four more Houston partners resigned yesterday, leaving Weil with hardly any litigation partners or women partners in Texas.

Here’s the Houston roster for Weil, which lists six litigation partners (not counting Barzoukas, who’s already off the website). Assuming it hasn’t been updated yet to reflect the most recent departures, Weil in Houston should have about two litigation partners left.

Here’s the Dallas roster for Weil. Interestingly enough, it still includes the names of the partners who decamped for Sidley. If you take away those names, you’re left with one litigation partner in Dallas, Ray Guy — head of Weil’s Dallas litigation practice, or what remains of it.

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Why are the Sidley defectors still listed on the Weil website? Law firm websites, as a form of lawyer advertising governed by the rules of legal ethics, tend to be scrupulously maintained and updated. You can often tell if a partner has left a firm, even if her departure has not yet been announced publicly, by seeing if her bio is still on the website.

The continuing presence of the Sidley eight on the Weil website leads us to our second story of the day:

Word is Weil NY and the management are trying to hold the leaving partners in Dallas to their notice periods in their partnership agreements and use that as leverage to make them sacrifice their deferred comp and capital accounts, which has never been done before.

You have to wonder if it weren’t a regional office, or they weren’t mostly women, if that would be happening. It’s insulting to the associates and not in the best interest of the clients or the staff, either, who are all in limbo while the the Weil management drags this on unnecessarily.

There’s a lot of dissatisfaction and anger in many of the regional offices, but the reaction from NY is of disinterest and uncaring — all we can picture is the white, old, male management in NY sitting around and wondering why the colonists are getting restless.

Interesting — and accurate, we believe, based on the fact that the Sidley laterals remain on the Weil website. But we do have one correction to our tipster: enforcing notice periods against departing partners is a strategy that Weil has employed before. The firm did it with respect to the D.C. defectors to Quinn Emanuel, Mike Lyle and Eric Lyttle. This ain’t Weil’s first time at the rodeo (to use an expression our Texas readers should appreciate).

We reached out to Weil and to Sidley for comment. Weil did not get back to us. Carter Phillips, the chair of Sidley (and the renowned Supreme Court litigator), explained that Sidley is not privy to the negotiations between Weil and its departing partners. We then asked Phillips if the Weil laterals have a start date Sidley yet; he said that they do not. This fact suggests that the Weil-to-Sidley defectors are still busy negotiating their exits from WGM.

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It’s possible that the parties are near an agreement that would split the difference and allow them to leave Weil before the notice period, believed to be 60 days, is over. A different source tells us that some or all of the Dallas partners will have their last day at Weil next week, which would be about two weeks from when they first gave their notice.

Why didn’t Weil just let the departing partners go immediately? One has to wonder if there might be a little spite involved, since there’s some evidence to suggest that Weil isn’t that sorry to lose some of them. We’ve previously discussed how some of their billing rates may have been incompatible with the new Weil model. In light of the big restructuring back in June, involving layoffs and partner pay cuts, I personally think there’s a lot of truth to a comment posted on this thread:

Weil’s current misery is the inevitable result of its insistence on maintaining ultra-super-premium billing rates, which are unsustainable outside of limited financial transactions for the New York market. Weil’s strategy is to transform itself from a national firm to a NYC boutique, which will result in higher PPP for the partners who are serving clients who are still willing to pay the ultra-super-premium billing rates.

I agree with the general gist of this comment, although I’m not sure “boutique” is the right word. Instead, using the helpful law firm taxonomy developed by Bruce MacEwen, I’d say that Weil wants to go from being a “global player,” a la DLA Piper, to being a “capital-markets centric firm”, a la Wachtell or Cravath.

Will it work? What else is going on at Weil? Do you have more information for us on the Houston departures, or corrections to anything we’ve previously written? If you’d like to contribute to the unfolding saga of Weil Gotshal, please email us or text us (646-820-8477).

And tune in next week, for another exciting episode of “As The Weil Turns.”

Earlier: The Soap Opera of ‘Dallas’: Now Starring Weil Gotshal
The Weil Gotshal Dallas Departures: A Deeper Dive
Weil We Wait For More Big News….
What’s Cooking At Baker Botts?
Musical Chairs: Quinn Emanuel Snags Two Weil Gotshal Partners — and Weil Is Not Happy About It
ATL Law Firm Ratings: Texas Edition