The situation at Weil, Gotshal & Manges is rapidly deteriorating. The law firm is hemorrhaging top lawyers, has no clear succession plan after its incoming chair declined to step into the role, and has engaged a bankruptcy lawyer for advice.

Despite its woes, the firm’s future is far from ordained. Weil raked in $2.1 billion in revenue last year and, like most law firms, it has relatively few liabilities outside of its global office leases. While it could collapse quickly, there are scenarios where it could survive in a reduced form.

Here’s what to know about how one of Wall Street’s most vaunted law firms reached this dire point, and how events could unfold from here.

The roots of the crisis at Weil date back more than a decade. The firm raked in business during the chaotic aftermath of the 2008 financial crisis but failed to reinvest those profits and even cut lawyers when many of its competitors were in growth mode. It has fallen behind industry leaders in head count, revenue and profit—leaving it vulnerable to poaching from rival firms.

Weil has pushed hard in the past year or so to grow, seeking a firm with which to merge and amping up efforts to lure new partners. Some firm insiders say there was a power struggle between influential partners who wanted to grow to compete with mega-firm rivals and others who wanted to remain smaller. In March, the firm elected private-equity partner Ramona Nee to take over leadership in January 2027. Nee recently decided to walk away from the role.

In September, news broke that Michael Aiello, the firm’s top dealmaker, was leaving for Cravath, Swaine & Moore. It marked an inflection point. Efforts soon accelerated to find a merger partner. When a deal with Willkie Farr fell through and more top lawyers announced their departure, confidence in Weil’s future cratered.

“A law firm’s most valuable asset is its people. If they go home one night and don’t come back the next day, it’s over,” said Albert Togut, a bankruptcy lawyer who handled the infamous collapse of Dewey & LeBoeuf.

The partner exodus at Weil reflects upheaval in the legal industry as firms compete fiercely for top talent. Even healthy firms with strong reputations can be destabilized if they lose key people or practice groups.

It was once unusual for partners to jump from firm to firm, but in the current market, some of the most successful firms have amassed so much money that they can lure partners with $20 million-plus guarantees.

Unlike people in other industries, lawyers aren’t bound by noncompete agreements, making lawyers free agents—and when they leave, they often take their prized clients with them.

Weil, a white-shoe firm founded nearly a century ago by Jewish lawyers who were often excluded from other elite shops, has established itself as a blue-chip restructuring powerhouse with a strong record of clinching private equity and M&A deals. The firm was a pioneer in building a restructuring practice, leading some of the largest bankruptcies in history, including those of Lehman Brothers, General Motors and Enron.

Its financial picture has been healthy. Its partners earned $5.6 million each last year, making it one of the top 20 most profitable firms. But while partner profit at the top 100 firms grew 14% last year, Weil’s grew only 4%.

Weil’s future hangs in part on the question of whether it can stop losing lawyers. Rivals are heavily courting Matt Barr, the head of Weil’s restructuring practice, and Nee, the private-equity partner and would-be firm leader. Losing its most lucrative teams would make it difficult for it to survive in its current form long-term.

Potentially cushioning the recent blows is the fact that departing partners typically forfeit their share of profits at the end of the year. Weil also repays departing partners, who own a share of the firm, their equity over a number of years, according to people familiar with the matter, easing some immediate financial pressure.

Law firms facing a financial crisis or talent exodus can collapse fast—sometimes into bankruptcy. The preferred path is to find a merger partner that would retain the brand and at least some of the partnership, like when the struggling firm Patton Boggs found a last-minute merger partner in Squire Sanders in 2014.

Some firms hobbled by partner defections have simply wound down, such as with the restructuring and transactional boutique Stroock & Stroock & Lavan in 2023. But large firms with major liabilities have had to resort to bankruptcy protection to deal with debts, leases or other lingering obligations. Unlike a business that enters chapter 11 to reorganize, law firms that file for bankruptcy generally don’t survive. The 2014 Dewey & LeBoeuf bankruptcy spawned years of litigation against its former partners to claw back profit they had collected before its collapse.

If Weil were to choose that path, it would be the first bankruptcy by a major law firm in more than a decade.

As an alternative to bankruptcy, the firm could instead intentionally shrink and focus only on a few moneymaking areas. It would look very different from its current iteration, with some 1,200 lawyers worldwide. The partners could also wind down the firm without filing for bankruptcy.

One challenge: Its real-estate portfolio reflects its current stature. Weil has leases around the globe, including one for some 380,000 square feet at the General Motors Building across from Central Park in Manhattan, according to CoStar Group. One person familiar with the matter said that Weil has been examining its lease obligations in recent days.