With Weil, Gotshal & Manges’ June layoffs of 60 associates and 110 staff firmwide, the firm’s Texas heft will diminish, as the firm slims its complex commercial litigation practice in Houston.
On June 24, Barry Wolf, the firm’s executive partner, announced in an email sent to lawyers and staff that Weil Gotshal “will be deemphasizing” its complex commercial litigation practice in Houston as part of “adjustments” the firm announced because “the market for premium legal services has entered into a ‘new normal’ after the 2008 financial crisis.”
The New York City-based firm planned to lay off about 60 associates and 110 staff and adjust compensation of certain partners, wrote Wolf. The layoffs were effective June 26, said Glenn West, managing partner of the Dallas office and a member of the firm’s management committee.
The number of lawyers and staff who will be affected by the downsizing in the firm’s Houston and Dallas offices is unclear. West says he cannot comment on how the layoffs will impact any particular office, but he says the firm will lose about 7 percent of associates and 8 percent of staff.
“We don’t think it’s fair to talk about specific numbers,” he says, noting that when the reduction-in-force is complete, “very few” complex commercial litigation associates will remain in the Houston office.
Prior to the cuts, the firm had 79 lawyers in Dallas and 37 in Houston, according to the firm’s website.
John Strasburger, managing partner of the Houston office, did not return two telephone messages seeking comment.
Despite the plan to de-emphasize the complex commercial litigation practice in Houston and Boston, West says the firm still will maintain the practice in Houston; however, he says, the bulk of the matters will be handled in Dallas.
“The focus in Texas will be on staffing those matters and that practice primarily from other offices of the firm — most notably our Dallas office . . . .” he says. “There are partners in our Houston office that will certainly be a part of that practice, but we are going to be focusing our resources more on the Dallas side of that rather than Houston.”
West and Robert Lennon, head of business development at the firm, said the firm will not close any offices.
Wolf wrote in the email that restructuring and litigation work related to the 2008 financial crisis is winding down, and the overall market for transactional activity remains at low levels, so the firm must make adjustments it has avoided over the last few years.
He wrote that the market for premium legal services is “continuing to shrink” and that actions to enhance revenue alone are insufficient to position the firm for the new market conditions.
“Accordingly, there will have to be meaningful compensation adjustments for certain partners in light of the economic realities of the new normal. It may well be that some of these partners will decide to pursue other opportunities,” Wolf wrote.
West says laid off associates will receive severance consisting of six months of base pay and benefits.
Weil Gotshal’s gross revenue hit $1,228.5 million in 2012, which was flat compared to 2011, according to the AmLaw 100 report, published by Texas Lawyer sister publication The American Lawyer. Profits per partner in 2012 averaged $2.23 million, down 8.6 percent when compared to 2011, and revenue per lawyer averaged $1.025 million, down 3.8 percent.