Paul Cravath built a reputation handling complex lawsuits for the new
electrical industry. Devising the Cravath System, he enlarged the law office, and also professionalised it by establishing full-time
librarians, a recruiting system focused solely on the highest-ranked law schools, and partners who specialized.[4] Robert Swaine describes the fundamentals of the Cravath System in the beginning of Volume 2 of the history of the Cravath firm.[5] These include:
Recruiting staff
Paul Cravath sought to hire only the "best of the best", and primarily looked to
Harvard,
Yale, and
Columbia law schools for candidates. Graduates were expected to be members of the
Phi Beta Kappa/
Beta Gamma Sigma system, and to have served as editors of their respective school's
law review. A graduate from a university outside of the top five was expected to be, at a minimum, the equivalent of a "B" student at Harvard or Columbia over time. Distinctly, only new law graduates or those who had served as clerks after law school were to be hired, except in rare circumstances, to avoid previously developed habits, outside the Cravath System, coming to the firm's culture.
Training staff
Associates would be assigned to a partner for typically 18 months, or less, where they would learn to break down large tasks into manageable pieces to lead. The view was that they would serve as apprentices of the partner's practice, and train on the job under close supervision and guidance.
Compensation
The system practices
lockstep compensation. Early law firm hiring practices paid the associates nothing, except what they could bring in for themselves. By 1910,
Cravath was one of the first to hire incoming lawyers on a
salary. Since Cravath preferred to hire the best and remunerate them very well, this led to wide disparities in starting salaries in the
legal industry.
Collusion among law firms and schools led to uniform starting salaries across law firms from the end of World War I until World War II, but this stopped once the top law firms salaries reached parity soon after.[6]
Tenure
Generally, only partners may have permanent employment at the firm, and as long as an associate was deemed worthy of promotion, they may stay; those who were not suitable for promotion were dismissed in a strictly enforced "
up or out" staffing policy.
Choosing partners
Unless there is some exceptional need for expertise unavailable within the firm, partners should be chosen and promoted only from within the office.
Interests outside the firm
Partners and associates may not have business interests outside the firm. Charitable, educational and artistic interests are permitted with permission from the senior partner. There are no
part time associates and partners, and all business in the office is company business and not individual.
Relationships of the partners
Partners are expected to work with each other;
silos and
cliques are to be strictly avoided so as to foster trust and a firmwide
esprit de corps.
Scope of the practice
Cravath handled predominantly
civil law matters in the early years; the majority of firms adopting this system are also civil law firms.[7]
Influence
The firm would avoid
lobbying, or currying favors with politicians in the state or national capital. The firm would stick with skill and diligence in applying the law.
Management
Cravath believed that a firm must have strong executive direction, led by the senior partner who was elected by the partnership for a limited term.
Paul Cravath built a reputation handling complex lawsuits for the new
electrical industry. Devising the Cravath System, he enlarged the law office, and also professionalised it by establishing full-time
librarians, a recruiting system focused solely on the highest-ranked law schools, and partners who specialized.[4] Robert Swaine describes the fundamentals of the Cravath System in the beginning of Volume 2 of the history of the Cravath firm.[5] These include:
Recruiting staff
Paul Cravath sought to hire only the "best of the best", and primarily looked to
Harvard,
Yale, and
Columbia law schools for candidates. Graduates were expected to be members of the
Phi Beta Kappa/
Beta Gamma Sigma system, and to have served as editors of their respective school's
law review. A graduate from a university outside of the top five was expected to be, at a minimum, the equivalent of a "B" student at Harvard or Columbia over time. Distinctly, only new law graduates or those who had served as clerks after law school were to be hired, except in rare circumstances, to avoid previously developed habits, outside the Cravath System, coming to the firm's culture.
Training staff
Associates would be assigned to a partner for typically 18 months, or less, where they would learn to break down large tasks into manageable pieces to lead. The view was that they would serve as apprentices of the partner's practice, and train on the job under close supervision and guidance.
Compensation
The system practices
lockstep compensation. Early law firm hiring practices paid the associates nothing, except what they could bring in for themselves. By 1910,
Cravath was one of the first to hire incoming lawyers on a
salary. Since Cravath preferred to hire the best and remunerate them very well, this led to wide disparities in starting salaries in the
legal industry.
Collusion among law firms and schools led to uniform starting salaries across law firms from the end of World War I until World War II, but this stopped once the top law firms salaries reached parity soon after.[6]
Tenure
Generally, only partners may have permanent employment at the firm, and as long as an associate was deemed worthy of promotion, they may stay; those who were not suitable for promotion were dismissed in a strictly enforced "
up or out" staffing policy.
Choosing partners
Unless there is some exceptional need for expertise unavailable within the firm, partners should be chosen and promoted only from within the office.
Interests outside the firm
Partners and associates may not have business interests outside the firm. Charitable, educational and artistic interests are permitted with permission from the senior partner. There are no
part time associates and partners, and all business in the office is company business and not individual.
Relationships of the partners
Partners are expected to work with each other;
silos and
cliques are to be strictly avoided so as to foster trust and a firmwide
esprit de corps.
Scope of the practice
Cravath handled predominantly
civil law matters in the early years; the majority of firms adopting this system are also civil law firms.[7]
Influence
The firm would avoid
lobbying, or currying favors with politicians in the state or national capital. The firm would stick with skill and diligence in applying the law.
Management
Cravath believed that a firm must have strong executive direction, led by the senior partner who was elected by the partnership for a limited term.