Cravath Swaine & Moore

Subscribe to Cravath Swaine & Moore via RSS

Stable, transparent, not very complicated, reasonably profitable, and often quite collegial. It also has flaws.

As noted in Part I (330) of this “learning about law firms” series, it’s taken nearly two decades in the trenches, including many years doing applied work with law firms, for a very confusing and counterintuitive insight to come into focus:  Most large firms are not “firms” in the sense of conventional business theory.  Instead, they are a confederation of individual partners building and running leveraged practices in various complementary and adjacent legal specialties.

In today’s essay (Part II), I’ll add a second counterintuitive insight:  For the most part, lawyers pay little or no financial price for organizing themselves as a confederation rather than a firm.  Even in the event of spectacular collapse, as was the case with Dewey, Brobeck, Heller, Howrey, Thelen, and many other large firms, see ALM Staff, “30 Years of Law Firm Collapses: An Annotated Timeline,” Law.com, Oct 29, 2019, there’s always a large cadre of competitor firms looking to give the partners (and their fee-generating practices) a new home.  In most cases, what provides financial security and certainty to an equity partner is seldom the quality of firm-level strategy, or the ability of firm leadership to execute, but instead the health and vitality of their own practice.

This is what distinguishes law firms from conventional businesses. Like Legos blocks, individual law practices can be removed from one law firm and snapped onto another. 
Continue Reading Learning about law firms, Part II: Why confederation is our default model (332)

Norma Rae (1979), 20th Century Fox.  Photo from The Hollywood Archives, Alamy.

Higher profits come at a cost.  Be careful what you wish for.

As a multiple-decade veteran of Big Law, I vividly remember the many debates about whether practicing law was a profession or a business.  I was often leading these discussions as the firm-wide managing partner of operations of a global law firm.  How could a firm with over 1,000 lawyers, over $1 billion in revenue, and over 20 offices be anything but a business?

In an attempt to gain the latest insights on strategy, finance, human resources, outsourcing, and IT, I eagerly read every issue of Harvard Business Review.  I remember years ago having to overcome the partners’ resistance to being paid only by direct deposit and to increasing the partner-to-secretary ratio beyond 1-to-1.  Now that I am gone from Big Law and managing a law-school legal clinic where I am still practicing law (but with startups and other micro businesses), I frequently question whether being so focused on productivity and efficiency in my former life was worth the price.  Perhaps giving up a few ticks in profits per partner (PPP) would have made my firm a better place.

In this Labor Day essay, I’ll offer some second thoughts on the business of law,
Continue Reading Labor Day reflections, including some second thoughts, on the business of law (327)

The main residence of Veraton, Paul Cravath’s country estate, circa 1907. Source: “Veraton,” Old Long Island, Oct. 31, 2011.

Creating a baseline to measure the wealth, and building turmoil, of the current Gilded Age.

It is hard to imagine a more stark and tangible manifestation of the original Gilded Age than the large estates built along the Long Island Sound in the region that would later become known as the Gold Coast.  Yet, you may be surprised that such opulence was not limited to robber barons or captains of industry.  In fact, some of the very best real estate was owned by their lawyers.

Above is a photo of the main residence of Paul Cravath’s Veraton estate, which was built in 1905.  Shortly after completion, the lavish property was profiled in Town & Country magazine, which noted that Veraton “consists of over 600 acres of lawn, gardens, woodland, farmlands and paddocks. … The residence and outlying buildings are so placed that every advantage of beauty and utility has been obtained.”  See “One of Long Island’s Stateliest Homes,” Town & Country (Nov. 30, 1907) at 12.
Continue Reading The original Gilded Age lawyers (312)

Photo by micheile dot com on Unsplash

Success as a lawyer can come at the expense of personal relationships. Is it worth the price?

Few of my former partners in the global firm where I worked would understand my transition from a profits-first managing partner to a speaker and commentator on lawyer well-being.  How could this have happened?  Have I gone soft?  Quite the contrary—I remain on my mission to live a good life.

Before offering my views on law practice and lawyer careers, it’s useful for me to state my background upfront so that readers know my biases. For about three decades, I was a partner in a global law firm, practicing in a wide variety of business areas (frankly, wherever the clients led me).  For the last 15 years of that run, I was the full-time managing partner with firm-wide responsibility for the day-to-day business of the firm.  At the end of my third term as a managing partner (at age 62), I looked for another career and began teaching at a large university’s law school, where I started a legal clinic for startup and early-stage businesses.
Continue Reading Being #1 isn’t always a good thing—loneliness among lawyers (296)

Will 2020 unleash a long-awaited wave of legal innovation?

Law firms offer a bundle of services tied tightly together, and most lawyers think of this bundle as a naturally integrated offering.  But innovators have long believed that the legal services bundle is actually composed of a series of largely unrelated capabilities, and the true flowering…

Reflections on the connection between specialization and innovation

Your mother needs heart valve replacement surgery, and it’s time to choose between doctors. You will have to explain yourself to two siblings and a few other relatives, but as a practical matter the choice is in your hands. You interview two potential surgeons. Here’s what they have to say:
Continue Reading The Swiss Army Lawyer (138)