Weil, Gotshal & Manges has lured away prominent bankruptcy partner Ray Schrock from rival Kirkland & Ellis in a move that will bolster its own signature practice.
Schrock, 43, had served as a partner in Kirkland’s restructuring group, where he represented debtors, nondebtor parent companies, private equity and financial institutions as well as secured and unsecured creditors in restructuring matters, according to the firm’s website, which still contained Schrock’s profile as Friday.
Kirkland confirmed Schrock’s departure in an email but did not say where he was going.
“We thank Ray for his service to the firm. We wish him well,” a firm spokesperson wrote in a statement Friday.
Weil did not respond to email and phone requests for comment. Schrock also did not respond to a phone call and email to his Kirkland office for comment. Sources close to the matter, however, confirmed that Schrock had landed at Weil.
The high-profile move is a major coup for Weil, which itself has lost dozens of partners and associates in a slowdown of reorganization work amid a general improvement in business activity worldwide, although the firm has seen gains in other practice areas, including litigation and dealmaking as a result.
As The American Lawyer reported in May, more than 40 partners have left Weil in the last several years. In June 2013, the firm slashed its staff and associate ranks by 7 percent, citing a reduction in demand for its services.
Weil is now banking on Schrock’s deep well of experience from his years at Kirkland, where he served as lead restructuring partner representing Ally Financial Inc. and Ally Bank and their subsidiaries in the Chapter 11 bankruptcy cases of Residential Capital LLC, the mortgage unit of Ally Financial Inc. Those cases resulted in a global financial settlement.
Residential Capital is the fifth-largest servicer of residential mortgage loans in the United States, with $15.6 billion in assets and $15.2 billion of indebtedness, according to Kirkland. U.S. Bankruptcy Judge Martin Glenn in New York called the proceeding “the most legally and factually complex case” he had heard in his seven years on the bench, according to The Wall Street Journal.
Schrock also was one of the lead restructuring partners in the Great Atlantic & Pacific Tea Company Chapter 11 cases filed in 2010, as well as the 2008 prearranged Chapter 11 case of Charter Communications, Inc.—the fourth-largest cable operator in the United States—in one of the largest prearranged Chapter 11 cases ever filed with more than $20 billion in debt and $13 billion in assets.
Schrock is moving to a firm that is a longtime leader in bankruptcy and restructuring and was rewarded generously for that expertise during the financial crisis. Harvey Miller, a leader of Weil’s restructuring practice and a dean of the legal field, led Weil’s representation of Lehman Brothers Holding Co. during the largest bankruptcy in U.S. history, a period in which the firm hired many new attorneys to keep up with the workload.
In fiscal year 2011, Weil’s profits per partner reached an all-time high, according to The American Lawyer. Miller established Weil’s restructuring practice and was a member of the firm’s management committee for more than 25 years. (Partners Marcia Goldstein and Gary Holtzer are Weil’s current restructuring practice leaders.)
But revenues slowed after that, and by 2012 profits per partner had dropped to 8.6 percent. In 2013, Weil’s revenue slipped 7.4 percent, to $1.14 billion from a year earlier, while profits per equity partner fell to $2.07 million. Revenue per lawyer also fell 4 percent, to $985,000, according to a March report in The Am Law Daily.