Taylor Swaine, The Cravath Firm and Its Predecessors (New York: Ad Press, 1946-48).
Chapter VII THE CRAVATH FIRM
The dominant personality of this volume is Paul D. Cravath. He was the
authoritative head of the firm until his death in 1940, and his conceptions of the
management of a law office still control its operations. Henderson and de Gersdorff in
corporate work, and Wood in litigation, were long active with him in developing the
"Cravath system" and the Cravath tradition; they have now passed on, leaving the
firm to new generations of partners.
The firms practice, even in litigation has dealt primarily with
corporation and financial problems, and the character of the work from year to year has
been increasingly determined by national economic conditions. Cycles of security issues in
boom times have been followed by cycles of receiverships and reorganizations in times of
depression, while, without letup, problems arising from the constantly heavier impact on
business of Federal taxation and regulation have pre-empted more and more of the time of
partners and staff.
Cravath, Henderson & de Gersdorff
(May 1, 1906--January 31, 1913)
The Cravath System.
Cravath had a definite philosophy about the organization of his law firm, its partners,
its practice and its relation to its associates.
As to recruiting the legal staff:
Cravath believed that a staff trained within the office would be better adapted to its
methods of work than a staff recruited from older men who, in practice elsewhere, might
have acquired habits inconsistent with Cravath methods, and hence he insisted that the
staff should be recruited, so far as possible, from men just out of the law schools.
He believed that these men should have had a thorough preliminary education in the arts
as well as in the theory of the law. Cravath believed that disciplined minds are more
likely to be found among college graduates than among men lacking in formal education;
that mastery of the fundamental theories of the common law is a sine qua non of
legal competence; and that such mastery can better be taught in the law schools than by
practitioners in a busy office. The best men, too, are most likely to be found in the law
schools which have established reputations by reason of their distinguished faculties and
rigorous curricula, and which, by that very fact, attract the more scholarly college
Cravath believed in seriousness of purpose--a man with a competent mind, adaptable 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 "gentlemen" 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. Cravath himself
had not made an unusually distinguished college record. As the playboy traditions of
college life became obsolete in the stern realities of the depression of the 30s,
however, college records of applicants came to have added importance. For a poor law
school record Cravath never had tolerance. He believed that a man 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; in either case, the man was not for the Cravath
The scholastic standards of the "Cravath system: thus made a Phi beta Kappa man
from a good college who had become a law review editor at Harvard, Columbia or Yale the
first choice. Such standards are commonplace today among New York offices; when Cravath
came to the Seward firm in 1899 they were regarded as somewhat eccentric--not to say
stuffy. As other offices have adopted the same standards, the supply of the theoretically
first-choice men has not equaled the demand, and from time to time quite a number of
B-men, and occasionally C-men, have been employed. Experience has proved the reliability,
for the purposes of the Cravath office, of the scholastic standards to which it endeavors
to adhere. Few of the B-men and none of the C-men have been able, within the office, to
equal the accomplishments of their contemporaries of higher scholastic achievement. Of the
23 partners on May 31, 1948, 15 are Phi Beta Kappa and 15 were law review editors.
Cravath did not, however, want colorless, narrow-minded bookworms. From applicants who
met his standards of scholarship, he wanted those who also had warmth and force of
personality and physical stamina adequate to the pressure to which they would often be
subject because of the rugged character of the work. It is, of course, difficult to judge
these qualities in the brief interviews which the partners are able to have with most of
the many applicants. This was especially true during the conventional "rushing
season" of December which prevailed prior to World War II, when applicants came to
the office in scores in a concentrated period of a few weeks. Despite the care taken in
interviewing and checking the men finally chosen, misjudgments have sometimes been made in
taking men not adapted in their personal qualities to the Cravath practice; probably many
more mistakes have been made in adversely judging men on inadequate contact.
There were two exceptions to Cravaths general standards during his active
leadership. Because he found that most of the more brilliant young men strongly preferred
handling concrete matters to library research, he thought the office should always have at
least one associate of mature experience with capacity and preference for legal research.
He also believed that for real-estate work and litigation it was well to have a few men
who had been trained in other organizations where there was more of such work than in his
own office. There was some reason for such exceptions in the first decades of the Cravath
firm, when its legal personnel numbered less than forty. But as the organization has grown
to more than a hundred lawyers and the fields of its practice and its own expertness have
become more comprehensive, Cravaths early exceptions have tended to disappear, and
the same standards are applied to all the men in the office, whatever their work.
As to training associates:
Cravath preferred that men should not specialize in such branches of the law as real
estate or administration of estates or, later, taxation, until they had attained a general
experience over several years. This objective required that a man should not be confined
to the work of one client or even be assigned to one partner for any undue length of time.
At the outset of their practice Cravath men are not thrown into deep water and told to
swim; rather, they are taken into shallow water and carefully taught strokes. The Cravath
office does not follow the practice of many other offices of leaving small routine matters
entirely to young men fresh from law school without much supervision, on the theory that a
man best learns how to handle cases by actually handling them. Under the "Cravath
system" a young man watches his senior break a large problem down into its component
parts, is given one of the small parts and does thoroughly and exhaustively the part
assigned to him--a process impracticable in the handling of small routine matters. Cravath
believed that the man who learns to analyze the component parts of a large problem
involving complicated facts, and to do each detailed part well, becomes a better lawyer
faster than the man who is not taught in such detail. Matters involving small amounts
often involve difficult, complicated law problems, and a man may be misled, perhaps made
careless, by being allowed to handle such a matter without adequate analysis and
Cravaths insistence that the legal staff be recruited from men just graduating
from the law schools, rather than from older, experienced lawyers, was based not only upon
his desire for a Cravath-trained staff but also upon his belief that the office and its
clients would get the best service from men confident of unimpeded opportunity for
advancement. When a former associate asked, in 1916, whether there might be an opportunity
for him to return to the office and make it his career, Cravath referred to the
"office policy of filling advanced positions from the ranks of the young men who
enter the office as beginners," and added: "I feel that if our office has been
successful it is very largely because of our adherence to this plan, which has enabled
young men to feel that if they remain with us during the year of preparation they will
have the first chance when opportunities for responsible positions from time to time
It is a fundamental part of the Cravath training that a mans responsibility shall
be increased as his growing competency permits. There are partners in the firm today who,
after only two years in the office, handled effectively as associates, with little
supervision from partners, matters involving millions of dollars. On the other hand, there
have been men of the finest scholastic records and personalities who could not acquire
capacity for independent responsibility.
As the men grow in professional stature, those who evidence capacity for delegation are
given opportunity to expand their own activities by the use of younger assistants to whom
they can in turn give the same kind of training they have enjoyed. The art of delegation
in the practice of the law is difficult, requiring nicety of balance which many men with
fine minds and excellent judgment are unable to attain. There have been many cases--some
even among the partners--of inability to find the happy medium between doing all of a job
personally and turning it over completely to an assistant. The more nearly he attains the
right compromise between these two extremes, the greater the amount of effective work a
man can turn out, and hence the greater his value to the firm.
As to compensation:
Before Cravath came to the firm, law students in the office and several of the admitted
associates received no compensation. Those associates made their living by doing what
business they could develop for themselves and paid for desk room by assisting in office
business. Cravath could not tolerate the inefficiency and divided loyalty implicit in such
an arrangement. He abolished the study of law within the office, and every associate,
including the man fresh from law school, was put on salary. Because its demands in time,
energy and competence are heavy, the Cravath offices tries to keep annual advancements and
ultimate compensation at least as high as those of any other office in the City.
Adoption by other City offices of many of the same principles on which the
"Cravath system" is based led, about 1910, to competitive bidding for the
highest-ranking men of the leading law schools. This gave a few men inordinately high
beginning salaries, sometimes double those of the generally applicable scale. The
discrimination among the men just coming out of law school became unfair and made the
initial salary offered too important a criterion in the choice of offices. Within a few
years the evils of the practice were admitted by the offices and strongly objected to by
the faculties of the law schools; on their suggestion it was abandoned after World War I,
following a conference among the managing partners of the larger offices. Beginning
salaries thereafter tended to become uniform, and at increasing rates, until the
disruption of education during World War II and elimination of the regular annual crop of
law school graduates made it impossible to apply uniform standards to men of widely
varying ages who had spent years in Government service.
As to tenure:
Every lawyer who enters the Cravath office has a right to aspire to find his life
career there--but only by attaining partnership.
Men who are willing to stay only a year or two are not desired, for the "Cravath
system" cannot train a man in that short time. They are expected to remain as long,
but only as long as they are growing in responsibility. Cravath used to say that, except
for a few research scholars and specialists, no one should be permitted to stay in the
office more than six years unless the partners had determined to admit him into the
partnership. Most of the partners admitted up to 1926 had been in the office for five or
six years. As the work of the office, the complexity of the problems, the number of
partners and the size of the staff increased rapidly during the 30s, the period of
apprenticeship for the partners admitted in 1940 lengthened to about eight years. The
dislocations due to World War II further lengthened the period; the partners admitted in
1946 all graduated from law school before 1936.
Ten years is too long for a man to remain a Cravath associate under normal conditions
unless he has been told that the chances of his being made a partner are still good. A man
who is not growing professionally creates a barrier to the progress of the younger men
within the organization and, himself, tends to sink into a mental rut--to lose ambition;
and loss of ambition induces carelessness. It is much better for the man, for the office
and for the clients that he leave while he still has self-confidence and determination to
advance. The frustrated man will not be happy, and the unhappy man will not do a good job.
Under the "Cravath system" of taking a substantial number of men annually and
keeping a current constantly moving up in the office, and its philosophy of tenure, men
are constantly leaving. Where do they go? Associates with good records have no difficulty
in finding promising and profitable opportunities if they do not stay too long, causing
potential connections to question their success and hesitate to gamble on advanced age or
salary levels. The firm constantly has requests from clients and other leading industrial
and financial organizations to supply men for legal and executive positions. Other
high-ranking law firms of the City and elsewhere have taken Cravath men as partners; many
Cravath men have formed successful law firms of their own; and quite a number have become
members of law school faculties. It is often difficult to keep the best men long enough to
determine whether they shall be made partners, for Cravath-trained men are always in
demand, usually at premium salaries. Because among the many called to the staff only a few
can be chosen as partners, even good men are likely to feel that the odds against them are
so great that they should accept flattering offers from others.
Almost without exception, the relations between the Cravath partners and the men who
have left the office to compete professionally have remained friendly, and often intimate.
Cravath partners take great pride in the success of the alumni. Business which such men
have been doing while with the firm has frequently been encouraged to continue with them;
new business is often referred to former associates.
As to choosing partners:
The "Cravath system" has given the firm a multiplicity of talent from which
to choose its partners. While recognizing the risks of too much inbreeding, Cravath
insisted that new partners should be chosen within the office, unless special requirements
otherwise compelled. Young partners and young associates are seldom subjected to the
discouragement of seeing someone come in over them from the outside. During the four
decades of the Cravath firm there have been but three exceptions: the two advocates,
Walker D. Hines and Frederick H. Wood, and the present senior tax partner, Roswell Magill.
Obviously not all the men competent to be partners can be taken into the firm--for that
would make the firm unwieldy. The choice is difficult; factors which control ultimate
decisions are intangible; admittedly they are affected by the idiosyncrasies of the
existing partners. Mental ability there must be, but in addition, personality, judgment,
character. No pretense is made that the ultimate decisions are infallible. Only
infrequently have mistakes been made in taking men into the firm; more often, mistakes not
so easily remedied have been made in not admitting others.
As to interests outside the firm:
Probably the most rigid feature of the "Cravath system" has been insistence
that for every man in the office, from the senior partner to the neophyte law clerk, the
practice of law must be the primary interest and that that practice shall be solely as a
member of the Cravath team.
This is not to say that the great advantages of interest outside the law are not
recognized. On the contrary, Cravath himself gave much time to charitable, educational and
artistic activities. He wanted his partners and associates to have such interests, and
believed that the few who allowed office work to pre-empt all their energies were harming
themselves and the firm. Neither partners nor associates, however, are encouraged to have
outside business interests, and they may not have any such interest which would impair
their work at the office. There are no half-time partners or associates. Nor is there any
such thing as the business of individual partners or associates: all the business in the
office must be firm business. This means that there is no division of fees between the
firm and its associates, as there is in many other offices. The problem of the firm is to
do effectively the business which comes to it; by so doing that business, more comes in.
Hence, business-getting ability is not a factor in the advancement of a man within the
office at any level, except in so far as that ability arises out of competence in doing
law work, as contrasted with family or social connections.
Cravath early came to believe that in most cases the client is best advised by a lawyer
who maintains an objective point of view and that such objectivity may be impeded by any
financial interest in the clients business or any participation in its management.
Accordingly, he made it the policy of the firm that neither its partners or its associates
should hold equity securities of any client, or serve as a director of a corporate client,
or have a financial interest, direct or indirect, in any transaction in which the firm was
acting as counsel. Occasionally, more frequently in recent years, clients have insisted
upon exceptions permitting partners to occupy directorships and own qualifying equity
securities, but the exceptions have been few.
As to the relations of the partners inter se:
Every partner is expected to cooperate with every other in the firms business,
through whichever partner originating, and to contribute to all the work of the firm to
the maximum of his ability. The formation among the partners of cliques practicing
independently of each other, which developed under Guthrie, would not be allowed today.
Attainment of partnership does not mark either the limit of potential growth or
accession to any automatic hierarchy. The younger partner who evidences capacity to win
the confidence of clients with whom he works so that they continue with the firm, who
impresses others who come into contact with his work so that other business comes to the
firm through him, and who takes responsibility for a number of varied matters, at the same
time supervising the work of members of the staff and sometimes of other partners, may
well rise, and indeed often has risen, within the firm more rapidly than some of his
seniors. The partners are judged inter se just as are the associates, and
adjustments are made to reflect the evaluation of the younger partners by their seniors.
Complete objectivity in such appraisals is not easy, for the most companionable man is not
always the best, or the most effective, lawyer.
As to the scope of the practice:
The practice of the office is essentially a civil business practice. Cravath desired a
staff equipped to serve corporate and banking clients in any of their legal problems.
After the withdrawal of Guthrie, the office work in litigation did not attain standards
fully acceptable to Cravath until Wood joined the firm in 1924. With the assistance,
first, of Bruce Bromley and later, also, of William D. Whitney, Alfred McCormack and
Albert R. Connelly, Wood was able to build that practice up to the standards of the rest
of the office and the traditions of Blatchford, Seward and Guthrie.
As the importance of tax questions increased, a partner was delegated to become an
expert in taxation. First it was Hoyt A. Moore, then Hugh Satterlee, then Charles A.
Roberts, then Maurice T. Moore; and in 1943 Roswell Magill was brought into the firm.
Anomalously, only in the fields of patents and admiralty, in which the firm was once
premier, has it failed to provide expert service within its own staff. As early as the
Seward era the specialized patent practice was almost wholly superseded by the nearly
equally specialized corporate practice, and patent law specialists have been brought in as
co-counsel in most of the patent work developed by the office. The partners have, however,
handled patent-licensing problems, as well as those involving the impact of the antitrust
laws upon patent licenses. In recent years this work has greatly increased, and currently
several cases primarily involving patent law problems are being handled by the litigating
The firm has a substantial practice in the administration of estates and personal
trusts; but domestic relations cases are not encouraged.
As to "influence":
Not since the retirement from practice of Richard Blatchford has the firm trafficked in
political influence. While Cravath recognized that acquaintance of the partners with
judges and administrative officials, commanding their confidence, was an asset to the
firm, he followed the tradition of Clarence Seward in never purporting to have special
influence with a judge or governmental officer, or ability to produce a magic result,
which could not be exerted or produced by anyone else of equal legal ability and
diligence. It was Cravaths philosophy that the politically "right people"
are transitory, hence that political influence is evanescent, and that a practice based or
dependent upon such an approach to legal problems is unlikely to have permanence. He also
believed that those (of whom there have been so many in recent years) who purport to have
special connections enabling them to accomplish results not capable of being accomplished
by any other skillful lawyer usually oversell their wares; that most courts and
administrative bodies decide cases on the merits rather than by favor; and that,
notwithstanding the frequent gullibility of clients, skill and diligence in developing the
law and the facts are much more important than "influence." That is still the
As to the firms management:
Cravath believed that a law firm, like any other successful organization, must have
strong executive direction, and until the mid-1930s his firm was under a dictatorship in
his person. Details of office management were, of course, left to the conventional
managing clerk, and there has always been a managing partner, chosen from the younger
partners, charged with supervision of managerial detail and, in effect, the liaison
between the senior partner and the staff.
Cravath never completely delegated to anyone ultimate determination of office policy or
evaluation of associates and partners. However, as the legal and clerical staffs began to
increase rapidly after World War I, he relied more on the judgments of his partners.
Weekly firm meetings started about 1923, where matters of general policy and of
management, as well as current law problems, are discussed. Today every partner has a
voice in the decision of every important question, as well as the benefit of the views of
all his partners.