Law Firms

History

Historians cannot assign any definitive origin to law firms, but they have found records of twoand threeman partnerships existing in England in 1780. The great majority of lawyers, however, were solo practitioners. Industrialization was one of the main incentives for the development of law practice in both the United States and Europe. Landed gentry began to exploit their latent natural resources, which brought lawyers into the business of creating businesses and raising finances for them. Big enterprises, such as the formation of the railroads, demanded an array of legal skills in finance, corporate structure, and bankruptcy, which lawyers were able to offer.

Permissive and facilitative legislation, such as the British Joint Stock Companies Act of 1856 and the Limited Liability Act of 1855, fostered the spirit of enterprise. Regulation was limited and fraud rife. The City of London became a hive of inventive activity as investment trusts were born and foreign bonds issued. As railways extended their lines, law firms were involved in forming companies, acquiring land, petitioning Parliament, and resolving contract disputes. For example, the London firm of Norton Rose maintained twenty-three railway company accounts between 1848 and 1878. These law firms had small numbers of partners; two or three were the norm. However, they buttressed their activities with large numbers of clerks, who were unqualified men, at ratios of partners to clerks of one in twenty to one in one hundred. The railway business gave lawyers considerable experience in risk management, investment [Page 925]strategy, and trust administration, both in England and abroad.

Nineteenth-century New York City was the true birthplace of the modern law firm. Both legal education and law firms transformed themselves to become meritocratic and rational. Law schools did this by adopting the case method devised by Christopher Columbus Langdell (1826–1906) at Harvard. Paul Cravath (1861–1940) evolved his law firm organically by selecting partners from the finest associates trained within the firm.

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