A Historical Look: BigLaw, 1899, and Alaska

While doing some digging, I found a fascinating article from the Fordham Law Review published in 1989. Considering it was written nearly three decades ago, it is dismaying how relevant some of the issues covered still are in today’s legal world; from inclusion of women and minorities to technology and mobility, I recommend that you read it in its entirety. However, since the context of my search was around the origin of the big law model, I’ll focus on that. The history is both illuminating and somewhat circular considering the current industry shifts.

It all started when Paul Cravath joined the Seward* firm in 1899:

Before the “Cravath model” was created and widely co-opted, law firms were grouped independent practitioners that gave “desk space” to assistants (or associates, of which some were still students) to learn the trade. These associates were compensated entirely by the privilege of working with an experienced lawyer. The only way to earn a living was to build your own book of business. Cravath then formulated a new model with the following components:

1. Only hire associates that have graduated from law school (this spurred bidding wars for students from top schools)
2. Pay associates a full-time salary in lieu of them handling their own business (building a book was banned)
3. Up-or-out policy — no more than six years (later lengthened to eight and then ten) unless admitted to partnership

With few exceptions, lateral hiring was shunned and partnership was entirely organic. This model remained practically unchanged until the 1980s from when there has since been some modification: contract work and lateral hiring are common, roles like research lawyer or counsel emerged, some outsourcing and technology (e-discovery) entered the value chain, and clerks and paralegals are much more involved. Oh, and finding your own clients is no longer banned (I think it’s safe to assume this feature fell away much earlier). However, the following paragraph in particular caught my attention:

Besides incremental adaptations to the original model, there has not been much substantial change since 1899. Yet the size of firms, nature of work, and social, economic, and political environment were, and still are, constantly evolving. I doubt Sussman imagined the “period of opportunity” would require a generation to pass with little action.

If lawyers were loosely grouped “independent entrepreneurs” that largely transitioned to a rigid structure that is still replicated by firms of all sizes (structure itself is not the issue), the pendulum metaphor was constructive. The period of a pendulum’s oscillation depends on its length; although delayed for law, technology has cut short the pendulum’s string and, in doing so, compressed the period of adaptation. There isn’t another thirty year stasis coming. Options are abundant and increasing. Lawyers can:

• Find quality work and have modern technology neatly packaged in a marketplace like UpCounsel,
• Work flexibly and strategically through something like Axiom,
• Go in-house where the trend towards retaining the interesting work continues,
• Practice at firms embracing the future and drastically reorganizing, or
• Simply hang a shingle and use any combination of great technology to power their operations, punching well above their weight.

My sense is that we have something akin to the pre-Cravath model thriving and, even in coexistence with new law, the old structure must change. Large, specialized firms (and boutiques) will endure, but decentralization was (slowly) underway and has accelerated with new models, marketplaces, and technologies. It’s safe to say we are past the experimental phase. Specialist or not, the proactive firms and lawyers will adopt technology smartly and urgently; I’ve touched on the notion of the plat-firm before. But, if you don’t have a unique value proposition and are a laggard in innovating, you’re probably in big trouble. It isn’t called the innovator’s dilemma for nothing.

Standardization works really well, but it is easy to forget that it applies both ways. The same advantages and flaws in a model impact everyone using it. Although there are examples of success, there is no easily implementable model to replicate — the only way forward is to make hard choices and do new things. The modern orthodoxy is entirely rooted in one person that decided to create a new model. The lesson, at least to me, is to lead and create standards not blindly accept them.

All of the above is to say that, perhaps ironically, the shift we’re experiencing is, in some ways, more of a refresh than something entirely new. It is not a stretch to imagine that coupled with the independent origins of practice were the flexibility, creativity, and connection to the client that have eroded over time. Who doesn’t love a good precedent? In 2017, it looks like it’s time to practice like it’s 1899. And that is, mutatis mutandis, a good thing.

*If you’re wondering what Alaska has to do with any of this, I guess nothing specifically. But William H. Seward was one of the targets in the 1865 assassination of Abraham Lincoln and negotiated the purchase of Alaska from Russia. Kind of interesting if you ask me.