In my last post, I discussed the linkage between the bimodal distribution and the emphasis on credentials under the "Cravath system". I also stated that most law firms misunderstood the internal logic of the original Cravath model and promised to elaborate in a subsequent post. This is the promised entry.
One note of context: this post is not a history lesson. The Cravath system reflects a profoundly powerful method of developing human assets. Cravath started with very good associates/inputs and turned them into truly exceptional lawyers who were in high demand by clients and other firms. Moreover, the Cravath system required lawyers to work together collaboratively to further the clients' interests. This resulted in efficient and highly effective legal services that engendered the abiding loyalty of clients and more demand for the firm's services. See Results or Résumés at 4 & n. 13 (discussing concept of firm-specific capital). In other words, under the true Cravath system, everyone comes out ahead. Two caveats: (1) the first-mover--here, Cravath 108 years ago--garners the most benefit; (2) if a firm neglects a key element--e.g., investing in associates--the model generates no competitive advantage.
[Sources: The Cravath system described below come primarily from Robert Swaine's 1948 history of the firm and other contemporaneous sources from the 50s, 60s, and 70s, which I will cite as appropriate.]
Recruiting Elite Law School Graduates
One of the hallmarks of the Cravath system is the recruitment of elite law school graduates. As of 1948, Cravath, Swaine & Moore and its predecessor firm had employed a total of 454 law school graduates as associates. Of this total, 67.7% attended Harvard (128), Columbia (124), or Yale (54). According to Swaine, "in recent years there has been an increasing number from the law schools of the Universities of Virginia and Michigan." These two schools rounded out the top five : (UVA 30, Michigan 26).
Cravath's emphasis on credentials, however, had a clear economic logic that was designed to compensate for the deficiencies of early 20th century legal education. During this period, most law schools required little or no college education. In contrast, Harvard, Columbia, and Yale grads typically had a college degree before entering law school. Swaine writes,
Cravath believed that disciplined minds are more likely to be found among college graduates than among men lacking in formal education ... .
Cravath believed in seriousness of purpose--a man with a competent mind, adapting to practicing law according to Cravath standards, should have made a good scholastic record at college. But he recognized, without full approval, the tradition of the early decades of this century--that "gentleman" went to college primarily to have a good time and make friends. Hence, while a good college record was always a factor in favor of an applicant, lack of such a record was not necessarily an excluding factor. ... [I]n the stern realities of the depression of the '30s, however, college records of applicants came to have added importance.
Yet, "[f]or a poor law school record Cravath had no tolerance." Candidates who "had not attained at least the equivalent of a Harvard Law School "B" either had a mind not adapted to the law or lacked purpose and ambition ... ." Thus, the "first choice" was a "Phi Beta Kappa man from a good college who had become a law review editor at Harvard, Columbia or Yale."
Note, however, that Cravath's emphasis on credentials had a clear business purpose designed to compensate for the limitations of legal education. During the first half of the 20th century, going to an Ivy League law school did not guaranteed legal aptitude. Prior to advent of the LSAT in 1948, college grades were the only predictors of success in law school. In 1955, The "LSAT Handbook" included cross-tab tables of LSAT scores versus law school performance for several individual law schools. At Harvard Law, roughly 1/3 of the class scored below the 50th percentile. On the west coast, UC Berkeley had a similar wide range of LSAT scores. See The Law School Admission Test and Suggestions for Its Use (ETS 1955). The clear relationship between LSAT and grades subsequently encouraged law schools to revamp their admissions criterion. But that process took decades. See Lunneburg & Radford, The LSAT: A Survey of Actual Practice, 18 J. Legal Educ. 313 (1965).
In a talk at Harvard Law School, Cravath stated that a successful "lawyer of affairs" (aka corporate lawyer) assumed "the fundamental qualities of good health, ordinary honesty, a sound education and normal intelligence." On top of these attributes, a candidate must have "character, industry and intellectual thoroughness, qualities that do not make for charm but go far to make up that indefinable something that we call efficiency. Brilliant intellectual powers are not essential."
More after the jump...