White Shoe: How a New Breed of Wall Street Lawyers Changed Big Business and the American Century by John Oller (Dutton: 2019). Review by Frederick C. Ingram, CorporateHistory.International, January 27, 2019.
White Shoe promises to deliver an engaging and revealing tale regarding the handful of New York City attorneys who effectively created big business as we’ve known it, the “new high priests for a new century.” As an accomplished historian (The Swamp Fox: How Francis Marion Saved the American Revolution, Da Capo: 2016) and former Wall Street attorney himself (Willkie Farr & Gallagher), John Oller is well placed to fulfill this tall order.
In a previous economy, I researched hundreds of corporations for the International Directory of Company Histories, so the prospect of peeking a little beyond the opaque public relations and investor relations curtain intrigued me. I’m also reminded of strolling along Fifth Avenue, whose equally opaque walls sheltered the titans of industry.
I’ve also worked in law offices beginning in college and know a few attorneys. And the focus of the book, the Cravath System, remains relevant as the godfather of BigLaw perhaps the great-grandfather of the #lawtech industry. Paul Cravath created the mold by which elite firms would henceforth hire the most promising associates, train them extensively in-house, work them like rented mules, and then fire most of them when they stopped being promotable.
Progressive Era Pioneers
The setting for White Shoe is the Progressive Era (1890–1916), when the United States embraced regulation as a way to tamper the monopolistic abuses of the robber barons. Then, as now, the legal profession lagged behind the technological progress of the business and industrial world. This is one of many themes in the book that remain vitally relevant a century later.
There is also a thread of internationalist foreign policy, even intrigues, the Panama Canal being a case study of the close ties between business lawyers and U.S. bureaucrats and policy-makers. This is a pattern that would be repeated many times over throughout the 20th century.
The Dulles brothers make a prominent appearance, but have been the topic of many books in their own right. Oller sketches several other WSLs in a little more detail; there is a lot of material to cover and he keeps the train rolling, though it slows as through a mountain pass during some of the railroad lawsuit details.
While Wall Street lawyers came to be associated with WASP-y privilege, Oller reveals this early crop of as essentially self-made men. With the chief exception of brothers John Foster and Allen Dulles, Cold War diplomat and spymaster, none of the WSLs is interesting enough to warrant a mass market book, but taken together it’s quite a potboiler.
Some of their names might already be familiar to law students, such as that of smooth talking, top hat–wearing William Nelson Cromwell, progenitor of the Cromwell Plan of bankruptcy reorganization. Then there’s the man behind the Cravath System that set the mold for hiring and training proverbial high powered corporate attorneys.
Paul Brennan Cravath was inspired by the efficient practices of the big business clients he saw. Eventually law firms would become major corporations in their own right. Big Law back then meant perhaps 20 lawyers in a firm; now the biggest have thousands, backed by legions of support personnel. And #lawtech has come a long way since rubber bands and elevators were a novelty. The pattern for how big business, and society, and journalism was done, was being set for the entire 20th century. In fact, the country’s first $1 billion company, that oft-coveted unicorn of Silicon Valley parlance, dates back to this period and the 1901 formation of U.S. Steel.
White Shoe has the content of a history lesson, but doesn’t read like a textbook. Even tourists might enjoy a bit of insight into the development of the New York City subway system. Lawyers and those who love them should appreciate the debates and details of super complicated deals such as the Westchester Railroad buyout. LBOs weren’t invented in the ’80s. Some noteworthy M&A activity, such as the 1932 merger that formed the New York Philharmonic, also came out of the WSLs’ philanthropic endeavors.
White Shoe lawyers fought on various sides in antitrust actions in the oil, tobacco, and railroad industries. However, apart from a few recalcitrant Republicans, they became sensible advocates and problem solvers for for social dilemmas; what one might call capitalism with a human face. Frank Lynde Stetson’s moral awakening is an interesting subplot, and a little tragic.
Hardly a soulless paper pusher, Cravath visited the fighting in Verdun during World War I, making him “a much more humane person.” He warned against a “mania … for organization, efficiency, and volume.” Cravath died July 1, 1940, at the age of 79, before he could see the full span of the horrors of industrialized warfare in World War II.
Indeed, many WSLs became full blown reformers, such as “people’s lawyer” Louis Brandeis. Brandeis railed against the “curse of bigness” and wrote a book with the very contemporary sounding title Other People’s Money. To be fair, corporate-level greed did lead to neglect and deadly accidents in multiple industries. The pattern was being set for an anti-corporate backlash, replete with crusading SJWs, some railing against the “engines of death” of what would later be called the military-industrial complex. Then there’s the Russians, the Red Scare that followed WWI, including FBI raids against communist subversives and anarchist terrorists (one of whom killed had President McKinley in 1901 after all).
The topical themes of immigration and inclusion are personified in Samuel Untermeyer, an outsider who developed a considerable entertainment industry practice. A Jew, Untermeyer was staunchly pro-German before World War I but was leery of Hitler’s rise and ultimately predicted the Holocaust. The agonizing failure of the WSLs to work out a more equitable reparations agreement is presented in some detail. “Each year has the significance of a hundred,” said William Nelson Cromwell in 1918.
Vive le Patriarchy
When robber baron like J.P. Morgan is grilled in court in a climactic “clash of ideas, new and old,” he comes off as a fount of patrician wisdom before he exits the world stage. “A man I do not trust could not get money from me.” Of character, he says, “Money cannot buy it.” There are also a couple of loons and epic scam artist David Lamar.
Having worked as a BigLaw accounting clerk myself, I have an issue with the Cravath System and the slavish devotion to billable hours. Is your spouse really going to leave you if you don’t make $250,000 this year? Will your children no longer look up to you? Is that worth being a cortisol-addled prick 80 hours a week, every weekday of your miserable life? Wouldn’t it be wiser to make, I don’t know, $100k or even $50k and have your peace of mind back? But what do I know. Anyway, as Oller is well aware, the makeup of corporate law firms is fast changing. They’re more diverse in every way, and more are at least paying lip service to work-life balance.
“The Last Great Epoch”
The end of “The Last Great Epoch coincided with the end of World War I, flanked by the funerals of the earlier generation of great industrialists and white shoe pioneers. “Each year has the significance of a hundred,” said William Nelson Cromwell in 1918, and this applied not just to armistice negotiations but vast swaths of human society. Business, law, and government in the US would be professionalized and regulated, but still relatively free by world standards. The reforms advocated by enlightened and informed WSLs formed a barrier against imported radicalism. Even rightwing attorneys backed movements such as social security, child labor prohibitions, and even minimum wage.
I read a couple other books concurrently with this, including Jordan Peterson’s 12 Rules for Life and Christopher Andrews’ weighty tome Secret World: The History of Intelligence. White Shoe relates to the former as a sort of moral quest or search for order in the rapidly evolving corporate landscape of the 20th century.
The impression I get is of good, decent Protestants with vision and foresight, applying the male principle for America to stride forth and rule what was the then–terra incognita of the 20th century. As a good, relatively decent, and patriotic Protestant myself, maybe that is what I want to see, and a good postmodernist will see it all as a load of hooey. It would be hard not to wish the WSLs negotiating the peace after the Great War had been able to somehow prevent World War II altogether.
Up or Out
The times they are still a-changing. Incredibly, Cravath, Swaine & Moore celebrates its 200th anniversary in 2019. A few other centenarian NYC law firms are still kicking. The Cravath System remains widely known today, though perhaps a bit old fashioned as BigLaw compensation and billing expectations evolve and a new crop of soft digital-native Millennials demand their precious, app-driven quality of life. Some informed souls would question why, if they’re so clever, would they would leverage themselves with enormous debt to get into what been deemed a shrinking industry for decades. Someone is doubtless already designing a Cravath System algorithm to train their AI robot replacements.
––Frederick C. Ingram
Oller, John. “One Firm”: A Short History of Willkie Farr & Gallagher LLP, 1888–. Willkie Farr & Gallagher LLP, 2004.
Swaine, Robert T. The Cravath Firm and Its Predecessors, 1819–1947. Reprint. Clark, NJ: Lawbook Exchange, 2012.