It's confusing why a major multi billion dollar law firm is going bankrupt. So I talked to a bunch of lawyer friends about why Weil could suddenly be insolvent. Unintuitively, law firms are basically fixed-cost businesses. Revenue comes from a concentrated core group of rainmakers. Those rainmakers carry the whole business, while the rest of the business basically drags ass. Junior partners are rainmakers-in-training--they can't yet bring in the huge load-bearing dollars. Everyone else--associates, back office staff--comprises one gigantic fixed cost center. Not to mention basic overhead like offices, revolver interest (for cashflow timing needs), etc. The problem with law firms in particular, as opposed to other advisory businesses like banking, consulting, accounting, is that the clients are inherently portable. So any partner can take their team and clients and leave. Doing so deleverages the rest of the partnership, because a small number of partners carry most of the revenue while leaving behind fixed costs. Once there's a crisis of confidence, it no longer makes sense for partners to stay, because they're now getting underpaid in profit share relative to their revenue potential. If they were to leave for a megafirm like Kirkland, they'd be properly compensated for their earning potential instead of being saddled by rising fixed costs as a percent of revenue. There's also not much IP or brand moat in a law firm. Clients follow partners, and the process of crafting exceptional judgment is mostly in partners' heads (versus for instance more regimented value delivery in consulting and banking, where there can be a branded firm process). And lastly, the partners ARE the equity in the firm. Law firms have no terminal value, so when partners leave it's as if a huge chunk of the firm equity walks out the door. tl;dr law firm bankruptcy is basically a crisis of partner confidence, and the resulting departure spiral saddles anyone remaining with the gigantic fixed overheads of running a billion-dollar business.