AI Didn’t Cause the Weil Crisis

Some have suggested that Weil’s impending dissolution has been caused by AI’s impact. Artificial Lawyer has got to say: technology is the least of the reasons for this crisis. The real reason is simple: top partners left for firms with relatively higher profits, this created a cascade effect – as seen in many other firms in the past, and then the failed merger talks accelerated the panic.

Once panic is in full effect in a business formed primarily by a partnership of colleagues – all now thinking about a safe port to arrive at – then there is little one can do. The bonds that tied everyone together are severed and ‘things fall apart’.

The initial trigger has been different for many law firms, but the cascade, the ‘run on the bank’ effect, is always the same. We saw this with: Dewey, Heller Ehrman, Howrey, Coudert Brothers, Brobeck, Thelen, Bingham and others.

As soon as enough equity partners leave even a major firm can sink, as talent, client following, goodwill – and revenue, drain away at incredible speed. Banks worry too about any outstanding loans. Clients who start off loyal also soon begin to seek a safe haven for their work. The firm becomes untenable as an ongoing business. The whole thing capsizes so quickly – leaving associates, support staff and many others in a terrible situation.

And in fact, AL recently wrote a piece about Weil’s summer associate AI program – just imagine what is going through the minds of those young lawyers who have staked their future on starting at Weil…..? These firm collapses affect so many people.

When AL’s founder worked full-time as a management consultant to Big Law firms, this story of partnerships collapsing was repeated again and again.

Those who have been in this market for a long time will also have seen this same pattern over the last few decades. It will happen again. No doubt.

Law firms are incredible businesses. But, their Achilles Heel is that the partnership has got to stick together to make it work. As soon as the ‘glue’ dissolves, that’s it. Game over.

AI had no part in this. AI simply is not having a sufficient impact on how the elite New York firms operate yet to trigger something like this. Maybe in the future AI will be the cause, the initial trigger. But, not this time. Not by a very, very long way.

That’s all there is to say on causes. The rest is really to express sadness and support for all those people affected, some of which AL only just interviewed.