Bankruptcy practices have become so ubiquitous among Am Law 200 firms that it's easy to forget that not so long ago, large firms steered clear of them. Much of the credit for the change goes to Harvey Miller, partner in the business finance and restructuring department at Weil, Gotshal & Man­ges. He showed that a bankruptcy practice could be a profitable component of a broader practice mix, and along the way, he trained many of the lawyers who today lead bankruptcy practices at other firms.
In 1970, Miller and two others left a boutique firm to join Weil, which then had about 40 lawyers. The move was met with some skepticism. "Bankruptcy wasn't a mainstream practice, and there was confusion [in the legal community] as to why they would want us," Miller says. Soon the second-guessing would stop: In 1975 W.T. Grant Company filed for Chapter 11, becoming the first billion-dollar bankruptcy. Weil was counsel for the trustee. Weil's insolvency group grew to more than 70 lawyers that year, and Miller went on to represent debtors in some of the largest filings ever.
Miller recalls that early in his career, before he joined Weil, he represented clients in the garment industry—an industry that, as Miller puts it, was rife with undercapitalized companies. Increasingly, other industries came to mirror the garment business: While the economic downturn in the 1970s led to a wave of bankruptcies, the real boon to bankruptcy practitioners resulted from the destigmatization of leverage in the 1970s and 1980s.
Over the years, Weil became a prime recruiting ground for firms seeking to launch or beef up their own prac­tices. Bankruptcy practice leaders and key partners at more than a half-dozen firms got their start at Weil. "Other firms began to pick off our people," Miller says. More than any other development, that was proof that bankruptcy practice had become mainstream.