Harvey Miller, who built Weil, Gotshal & Manges into a bankruptcy powerhouse before he left in 2002, is rejoining his old firm.
But he’s going back to a much different Weil, one whose bankruptcy department has been suffering through a long cold spell since he left the firm.
On Wednesday, Miller said that he would be rejoining Weil as a partner after spending the last five years at Greenhill & Co., Inc., an investment bank. Miller, who spoke to The American Lawyer in his first interview following the announcement he would rejoin the firm, described the move as “returning to an old love.”
“My last few assignments [at Greenhill] were closely involved with legal stuff, and it sort of revived my interest,” he says. At Greenhill, Miller worked as an investment banker and often worked with his former colleagues at Weil.
Miller first joined Weil in 1969 and is credited with introducing the firm to bankruptcy work before most Wall Street firms realized it could be a lucrative and sophisticated practice. Throughout the 1980s, he helped solidify Weil’s dominance as a leading firm for debtors by landing major work in the bankruptcies of Continental Airlines Inc., Texaco, Inc. and Drexel Burnham Lambert Inc. By the time he left, Weil’s bankruptcy department, then at 90 lawyers, had become so successful that Weil had to work hard at being known as more than just a firm that troubled companies call.
Miller told The American Lawyer in May 2003 that he was leaving Weil because partners there are required to give up management responsibilities when they turn 68 and relinquish their equity stake in exchange for a fixed salary. Miller said that while he wasn’t forced out, he also didn’t want to practice at Weil without some measure of management authority.
Now 73, Miller said Wednesday he’s rejoining as a contract partner, but will not be heading the bankruptcy department.
Miller returns to a challenging environment. According to federal court statistics, Chapter 11 filings have declined from 11,669 in 2002 to 6,003 in 2006. And Weil’s bankruptcy department has felt the impact. The firm once dominated mega bankruptcies. When Miller left, Weil was serving as debtor’s counsel to Enron Corp. and WorldCom Inc., the two largest bankruptcies in history. In 2002, it was also representing Global Crossing Ltd., the seventh-largest bankruptcy ever filed.
Weil’s bankruptcy fortunes, however, have faded. The firm scored no debtor’s counsel assignments among the top 10 bankruptcies filed from 2003 to 2006, according to BankruptcyData.com. Partners have also exited. Last year, for instance, star bankruptcy partner Paul Basta decamped for Kirkland & Ellis.
Competitors say the absence of stars like Miller has hurt the firm. “It’s sort of like asking … do the Yankees have a good team without Mickey Mantle?” says J. Gregory Milmoe, co-head of the corporate restructuring group at Skadden, Arps, Slate, Meagher & Flom. “The answer is of course they do. But there’s a superstar quality which has to be missed.”
Conflicts in the airline and automotive industries, which have spawned many of the largest recent bankruptcies, may also have played a role in Weil’s absence as debtor’s counsel. Two big Weil clients — General Motors Corp. and AMR Corp. (parent of American Airlines) — have conflicted the firm out of major cases, according to Weil lawyers.
Despite its bankruptcy troubles, Weil has grown during the last year — though not as quickly as some of its New York competitors. Weil reported to The American Lawyer that its revenues increased 3 percent last year to $1.05 billion. Profits per partner inched up 4 percent to $1.9 million.
Weil’s chairman, Stephen Dannhauser, says a dip in bankruptcy work is expected from time to time and that the firm’s diversification into private equity, commercial litigation and intellectual property, among other areas, has allowed the firm to prosper. “When we get back into a heavy-duty bankruptcy cycle, I promise to you we’ll be there,” says Dannhauser.
Miller concurs, saying the slowdown in bankruptcy work has nothing to do with Weil’s lawyers. “I left at a time when they were running at full capacity,” he says. “The business cycle has changed, but it will come back.”