A profitable 95-year-old law firm came apart in weeks. Many employers are more exposed than they realise.
in nearly US$2.1 billion in revenue last year. Its equity partners averaged about US$5.6 million in profits, the 20th-highest figure among America’s largest firms. And it carried no debt, according to a person familiar with its plans.
On 28 October, its management committee told partners the firm should close, with a partner vote expected within days. “Following a careful review of strategic alternatives, the firm’s management committee has recommended to the partnership that the firm pursue an orderly wind-down,” a Weil spokesperson said in a statement.
What ran out was people – the building blocks of many services firms. A group of private equity partners left over the northern summer for Paul Weiss and Simpson Thacher & Bartlett. In September, corporate department head Michael Aiello said he was moving to Cravath, Swaine & Moore with five other partners. Ramona Nee, who was due to succeed long-time leader Barry Wolf in January, decided she no longer wanted the job. Talks to merge with Willkie Farr & Gallagher fell apart. At least seven management committee members had left, or were reported to be leaving, since late 2024.
On paper, the revenue that walked out the door was survivable. The Financial Times estimated that Aiello and his team accounted for US$100 million to US$150 million a year, roughly 5% to 7% of the firm’s total. What left with them was confidence. Every departure made the next one more likely, and partners began to calculate that the safest seat was at another firm.
John Morley, a Yale Law School professor who has studied 37 law firm failures, told Reuters that Weil’s path was “exactly on script.” A key rainmaker leaves, colleagues follow and take clients, leadership hunts for a merger, and if that fails, the end comes fast.
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Bigger than Big Law
Law firms sit at the far end of the key-person spectrum. In the U.S., professional ethics rules effectively stop firms from binding lawyers with non-compete agreements, and partners have no unvested shares to forfeit when they go. Most employers have more ways to keep people.
The underlying pattern is common, though. At Weil, revenue, client loyalty and internal influence had pooled around a small number of people with no obvious bench behind them. The same thing happens in sales teams, in engineering groups, in founder-led businesses and at the top of plenty of large ones. The research suggests many employers haven’t planned for it.
The risk doesn’t only show up when stars walk out. Sometimes it runs the other way. In November 2023, after OpenAI’s board fired chief executive Sam Altman, about 700 of the company’s roughly 770 employees signed a letter threatening to quit unless he came back. He was reinstated within days. When one person anchors a workforce’s confidence, removing them can be as destabilising as losing them.
In 2025, just 22% of HR leaders in the U.S. said their organisation had a formal succession plan, according to SHRM. The figure was 16% at smaller organisations and 44% at extra-large ones. In the Mercer and Marsh U.S. People Risk 2024 report, 34% of employers said they were concerned about significant dependencies on key people and inadequate succession planning. Closer to home for Australian readers, a Robert Half survey found that 27% of Australian businesses had no succession plan at all, HRD reported.
“People are an organization’s most important asset, but they can also expose organizations to risk without the right culture, policies, and training,” Susan Potter, Mercer’s U.S. and Canada region president, said when the report came out.
Four warning signs
A handful of people carry the business. Try a blunt exercise. If your two or three most valuable people resigned in the same quarter, what would go with them? Client relationships, a big slice of revenue, the only real understanding of a critical system? If the honest answer is “a lot,” that is key-person risk, whatever the organisation chart says.
The star decides who else gets to grow. Bloomberg Law has reported that Aiello resisted investing in new practice areas, that this caused friction among Weil’s leaders, and that they were unwilling to part ways with their biggest business generator. When one person’s blessing is needed before anyone else can build something, the pipeline of future leaders narrows. Watch for high performers who keep clients to themselves, stall promotions or quietly kill new ideas.
Succession hangs on one relationship. Weil’s leadership handover and the loyalty of its top dealmaker had become tangled together. According to Bloomberg Law, Aiello often said he would not stay if Wolf was no longer running the firm, and Wolf was approaching Weil’s mandatory retirement age. When the chosen successor stepped back, the firm faced replacing its leader and its most important partner at the same moment.
Leaders go quiet. The FT reported that equity partners were not told about Nee’s decision for weeks while leaders worked on a merger they hoped to announce alongside it. Associates kept asking partners what was going on. Recruiters were glad to fill the silence: one partner told the FT he was fielding more than a dozen calls a day from search firms.
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What employers should do now
Audit dependency, not just roles. A succession chart shows who could step into a job. A key-person review asks something harder: who holds relationships, knowledge or decision rights that nobody else has? Practitioners interviewed by HRD suggest focusing on the 10% to 20% of roles that are genuinely critical and revisiting them every quarter, including a check on whether the incumbent’s flight risk has changed.
Spread the relationships. Important clients should know more than one person in your organisation. Pair senior relationship-holders with colleagues on major accounts, and count that sharing in pay and promotion decisions. If remuneration rewards only personal origination, nobody has much reason to hand anything over.
Build a bench, not a name. Russell Reynolds Associates advises boards to develop several qualified candidates over time rather than betting on one “ready now” successor, HRD reported. Weil shows why. Once Nee opted out, Bloomberg Law reported, the firm had nobody else lined up to run it.
Frame it as risk, not replacement. Senior people often hear “succession planning” as a hint that they are on their way out. “Succession planning, if driven by the HR team, tends to get this roadblock where leaders feel that it’s a matter of HR seeing them gone,” Prudence Pitter, global head of HR for Amazon Web Services’ Automotive, Manufacturing, and Business Development division, told SHRM. Some HR leaders find it easier to win support by treating succession as risk management, which puts the focus on protecting the business rather than on anyone’s exit.
Talk early when things wobble. Retention tends to suffer most when people sense trouble and hear nothing. A short, honest update from leadership, even one that says decisions are still being made, gives people less reason to return a recruiter’s call.
Sidebar: a five-question key-person risk check
- Which five people, if they resigned together, would cost us the most revenue, clients or know-how?
- For each of them, who could step in now, and who could be ready within a year?
- Do our biggest clients have real relationships with at least two of our people?
- Does any one person’s approval effectively decide who else gets promoted or funded?
- If the succession plan for the top job fell through tomorrow, what is plan B, and who knows it?
What contracts can and can’t do
Many employers’ first instinct is legal: tie the stars down. That is getting harder across most of countries, although the new limits largely leave the most senior people untouched.
In Australia, the federal government has released draft legislation to ban non-compete clauses for employees earning below the Fair Work high-income threshold, currently A$190,100, possibly from 1 January 2027. In Canada, Ontario has barred most employment non-competes since 2021, with exceptions for executives and business sales, and the federal Bill C-31 proposes a similar regime for federally regulated employers. In the UK, the government consulted on options for reform last year and said on 9 October that it would legislate to curb non-competes, without yet saying how.
Notice who is mostly left out: the executives and high earners who tend to be an organisation’s key people. And even where a non-compete holds, it buys time rather than loyalty. It can slow a star’s move to a rival. It does nothing for the colleagues who watch that star go and decide the ship is sinking. That was Weil’s real problem, and no contract fixes it. A bench, shared client relationships and honest communication might.
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The people left behind
The heaviest costs of Weil’s collapse are likely hurt those with the least say in it. Nearly 600 associates are now on the job market, and support staff such as paralegals and assistants have far less of a cushion than the partners. Associates and staff were told they would keep receiving pay for 90 days, plus bonuses at the end of 2026.
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“There’s just not much holding those organizations together,” legal consultant Janet Stanton told Reuters, speaking of large law firms.
For business leaders in other industries, that line works as a test. If your three most important people left tomorrow, what would keep everyone else in their seats?
