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As The Weil Turns: Houston, We Have A Problem

Last Friday, we broke the news of four partners in Houston leaving the powerhouse firm of Weil Gotshal & Manges. This news came just a week after eight partners in Dallas announced their move to Sidley Austin.

In today’s episode of “As The Weil Turns,” we’ll reveal the identities of the Houston defectors, then explore the possible reasons for their leaving Weil….

(Please note the multiple UPDATES at the end of this story.)

Here’s a report from Law360 (sub. req.):

Litigation partner and Houston office lead John Strasburger announced Friday he would leave the firm after nearly two decades, according to the source. Three other partners — commercial litigators Melanie Grey and Jason Billeck, and bankruptcy lawyer Lydia Protopapas — put in their notices the same day.

John Strasburger served as Weil’s managing partner in Houston, and Melanie Grey co-chaired the firm’s bankruptcy litigation group. Jason Billeck and Lydia Protopapas were relatively young partners at Weil.

Those pending departures leave just six partners in the newly leaderless Houston office. Houston intellectual property litigator Nicolas Barzoukas also recently departed that team to join Baker Botts LLP.

We broke the news of the Barzoukas departure here (and it was later confirmed by this Baker Botts press release).

One of our Weil sources said the leaving of the litigators in Houston did not come as a surprise. Focused on commercial litigation, IP litigation, and bankruptcy, Houston was never as full-service as Dallas, and the cuts and subsequent departures will reduce the lawyer headcount by about half. Despite pronouncements from management in New York to the contrary, “many of us believe that the Houston office is not long for this world,” this tipster told us.

Here is Law360’s reporting on what’s driving the defections:

The underlying reason for departures in both cities is tension surrounding the firm’s insistence on maintaining premium New York rates across all offices, the source said. That hard line has put increasing pressure on partners with clients pushing for smaller-market rates.

Weil’s dramatic June layoffs, which hit 60 associates and more than 100 staff in several offices, including in Texas, also contributed by broadcasting management’s intention to de-emphasize Weil’s general litigation lawyers, who have been propped up by bankruptcy-related work in recent years.

Rate tension in satellite offices “is the underlying cause, and it’s not just a Texas problem, it’s also Boston and in D.C.,” the source said.

This is consistent with what we’ve previously reported about Weil’s apparent attempt to slim down its bankruptcy and commercial litigation practices and make itself a more capital-markets-facing firm. Almost all of the recent Texas defectors have been litigators (with two exceptions, finance lawyers Angela Fontana and Kelly Dybala).

Speaking of the Dallas defectors, all of their bios remain on the Weil website. So it sounds like Weil is still holding them to the notice period for leaving the partnership, as least for now.

When they eventually move, how many associates will join them? At the time the news was announced, Sidley said it expected about 25 associates to make the jump. But one of our Weil sources said the final number will probably be smaller.

“The eight partners that left have been unable to get many of the associates to follow — in part because people really like it here and in part because many are not the easiest partners to work for, even if they’re quite likable people generally,” this tipster told us. “I think the associate haul for Sidley will be closer to 10 total. I’m surprised by how many associates, at least for the moment, seem to want to stay and make this place work.”

Weil Gotshal and the various departing partners did not comment on the recent Houston news. If you have information or opinion you’d like to contribute to the next exciting episode of “As The Weil Turns,” just email us or text us (646-820-8477).

UPDATE (3:45 p.m.): A source claims that (1) the departures have been driven less by rate tension and more by a power struggle between management in New York and non-NYC factions and (2) some of the associates remaining at Weil were not invited to join Sidley.

UPDATE (6 p.m.): A tipster tells us that two of the Weil-to-Sidley associates were offered partnerships at Weil but turned them down for counsel positions at Sidley.

UPDATE (10/4/2013, 10 a.m.): 1. The four Houston partners are joining Winston & Strawn, according to Am Law Daily.

2. Another Weil source pushes back on the rate-tension theory, calling it “false,” and claims that “Weil management always likes to say when partners leave of their own volition that the departures don’t hurt Weil,” even when they do.

Weil Gotshal’s Texas Troubles Hit Houston [Law360 (sub. req.)]

Earlier: As The Weil Turns: More Texas Turmoil
What’s Cooking At Baker Botts?
Weil We Wait For More Big News….
The Weil Gotshal Dallas Departures: A Deeper Dive
The Soap Opera of ‘Dallas’: Now Starring Weil Gotshal

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