Once, in sleepier times, the top New York law firms didn’t forage for the best law students, didn’t dismiss associates who were unworthy of partnership, and didn’t even deem it necessary to pay those young attorneys a salary.Then along came Paul Cravath. In 1899, when Cravath joined Seward, Guthrie & Steele, its three partners (all male) worked independently, each with his own clients and associates (six altogether). Those associates, some still in law school, generally earned fees only by developing their own clients.
Cravath, then 38 and already known as a corporate genius, regularly called on by an assortment of incredibly wealthy clients, immediately began to change things. He instituted an “up-or-out” policy and insisted that the firm recruit only the highest achievers of graduating law classes. He forbade partners from operating individual fiefdoms, maintaining that all work was firm work. And he ordered that all associates be compensated.
