‘It feels like the music is playing faster and faster.’
This comment, from a partner at a rival firm, captures the sense of chaos that has surrounded Weil in recent weeks, as partner exits have snowballed and merger rumours have swirled.
With music reaching a crescendo this week amid rumours of merger discussions over the weekend and more exits to come, Weil’s leadership yesterday (20 October), called the partnership into a virtual meeting.
Yet, sources tell Legal Business that those joining were given little information of substance, with a message that amounted to little more than, in one source’s words: ‘Keep calm and carry on – hang in there!’
‘The meeting lacked substance,’ another source says. ‘If you can’t communicate a strategy with inspiration and substance, you’re never going to reassure or be taken seriously by partners.’
Others agree. As one partner at a rival firm notes: ‘The messaging from that partner meeting sounds like a desperate attempt to tell partners to stop panicking.’
‘The best strategy is to leave the big boys to it, everyone else get on with their day jobs’
Others are less sceptical about Weil’s apparent approach.
One partner at a rival firm argues that not giving everything away to the entire partnership can be the best way to avoid compromising merger talks: ‘The firm will be talking to lots of counterparties, and the best strategy is to leave the big boys to it, everyone else get on with their day jobs.’
‘If you’re one of the firms talking to Weil, you need much more buy-in, so you’d need to consult the partnership more widely,’ the partner continues.
‘But nobody wants to have their name circulated as a merger partner, as headhunters will come calling and people will get picked off.’
They add: ‘Law firm mergers get very personal very quickly.’
Movement of the people
A number of high-profile exits in late summer kicked off a stream of departures from Weil that has now reached more than 30 partners leaving or announcing their intention to leave since August, with the tally clearing 50 since January.
As one recruiter notes, exits on this scale can be damaging: ‘If you go into any firm and remove the right ten people, the situation becomes extremely challenging,’ they say. ‘A narrative builds.’
‘People are scratching their heads about how this could happen’
That many of those leaving Weil have joined rivals such as Simpson Thacher or Cravath in teams, rather than individually, compounds the problem.
‘When you have one partner and their team that are mobile enough to leave and take a book of business that is a significant portion of the firm’s total revenue, that can be a risk.
‘People are scratching their heads about how this could happen.’
Team exits have happened on both sides of the Atlantic, with London co-managing partner David Avery-Gee and M&A partner Sarah Flaherty moving to Sullivan & Cromwell, while London finance head Tom Richards is set to take a three-partner team to Simpson Thacher, which has hired a large number of Weil partners in both London and New York.
Dance partners
Though talk of Weil’s choice of partner has been plentiful, Willkie, Farr & Gallagher stands out as the apparent frontrunner according to multiple sources.
One source close to Willkie tells LB that talk among partners about a potential tie-up with Weil began in the summer, with some sceptical about a combination as they were ‘nervous’ about the impact on their firm.
Another firm that has been linked with Weil in recent weeks is Texas heavyweight Vinson & Elkins.
One former Weil partner argues that Weil and V&E’s very different profiles mean the firms could benefit from a tie-up: ‘Vinson & Elkins doesn’t really have much of a restructuring or PE practice, or a big European presence, so there would be a lot of synergies there,’ they say.
Other rumoured partners have included Skadden, Linklaters, and Cleary, all of which have denied any conversations with Weil.
‘If a firm can say, “I want to merge, who’s interested?” then it makes sense to proceed that way’
One commentator argues that Weil may benefit from a choice of suitors. ‘Mergers are a delicate process, but one that can’t be dragged on for too long,’ they say.
‘An auction-style process [with multiple firms involved] has the advantage of speeding things up. If a firm can say, “I want to merge now, who’s interested?”, then it makes sense to proceed that way.’
If Weil is pursuing an auction-style approach, it has good precedent: Cadwalader went through a similar process, courting partners including Alston & Bird before opting to combine with Hogan Lovells in the largest law firm merger yet.
Still moving
Whether or not current discussions are successful, rivals suggest Weil still has plenty to offer a merger partner or to build on if it does not merge. They point, most notably to its PE and restructuring practices, with the firm holding Legal 500 US rankings in tier 2 for high-value PE buyouts and tier 1 for restructuring.
One partner at a US firm says Weil’s PE group is ‘the crown jewel’. An ex partner meanwhile notes the firm’s strength despite recent exits: ‘Weil isn’t struggling financially, they’ve just recruited lots of senior people from big firms.’
The firm has built in PE in particular, with recent hires including Cravath practice head Peter Feist in New York, Freshfields partner Rebecca Ward in London, and David Janssen, who joined the firm in Frankfurt from potential merger partner Willkie.
‘They’re still recruiting, they aren’t going down a plughole,’ the former Weil partner says.
‘The problem with merging with Weil now is, what are you buying?’
In contrast to distressed mergers that have happened in the past, Weil is not facing questions around its financial success, with internal politics and differences of opinion around strategy said to have rather driven some of the initial summer exits.
However the impact of so much of the firm’s top talent leaving could still limit its options for a merger. As one partner at another firm asks: ‘The problem with merging with Weil now is, what are you buying?’
They conclude: ‘You don’t know what you’ll have in six weeks time, let alone six months.’
With additional reporting by Will Lewallen and Eliza Winter.
