Loss of Bankruptcy Rainmaker Shows Weil Gotshal ‘Time Warp’

Partner defections in the bankruptcy department at Weil, Gotshal & Manges highlight a disagreement in the firm about how its pre-eminent restructuring practice should be integrated with the rest of the firm.

New York lawyer Martin Bienenstock, the co-head of Weil’s bankruptcy department, left the firm in November to join Dewey & LeBoeuf. He had been the firm’s biggest bankruptcy rainmaker. “His departure, beyond hurting Weil Gotshal's status as a dominant player in the field, has revealed a rift within Weil about the future of the bankruptcy practice and how the firm should meet it,” the American Lawyer reports.

At Dewey, Bienenstock will lead a “business solutions and governance group” that markets and integrates bankruptcy law with other practice areas, the legal magazine says. The group will include corporate lawyers, litigators and academics. The integration idea is gaining currency at other law firms, including Skadden, Arps, Slate, Meagher & Flom and Kirkland & Ellis.

But the idea drew strong opposition at Weil Gotshal, which remains “locked in a time warp,” one anonymous partner told American Lawyer. Some lawyers thought corporate clients would be alarmed by visits from bankruptcy lawyers. Others feared integration would threaten their own practices.

Joining Bienenstock in jumping to the new firm were veteran partner Judy Liu and associate Timothy Karcher, who will be a partner at Dewey. The loss followed the loss of four other high-profile partners last spring to Cadwalader, Wickersham & Taft.

Bienenstock qualifies for full retirement under Weil’s system, which gives full benefits to lawyers whose age and years of service total 85. Bienenstock is 55 years old with 30 years of experience.

Despite the loss, Weil’s bankruptcy group still has 26 partners, including superstar Harvey Miller, who rejoined the firm after leaving in 2002 to join an investment bank. Weil Gotshal chairman Stephen Dannhauser says the firm's bankruptcy practice is still the best.