More than a hundred years ago, an ambitious business lawyer developed a new way to organize a law firm. The firm combined teams of specialized lawyers with an incentive structure that rewarded efficiency and high-quality work. The coordination of skill and effort enable the firm to handle large, complex legal matters and obtain excellent, cost-effective results.
The clients were very impressed by this service, so the work poured in. To take full advantage of high client demand, the firm needed more specialized, sophisticated lawyers who could manage and delegate work. Since no law school could fill this order, the ambitious business lawyer decided to build a highly technical training process into the day-to-day flow of client work.
The training process was an enormous investment of time and money, but it also enabled the firm to keep pace with its clients while improving the knowledge and skills of the firm’s lawyers. Within a decade, some variation of this model–the “Cravath system,” designed by Paul Cravath–was implemented by business law firms in virtually all major U.S. cities.
The model endured for so long because everyone–partners, junior lawyers, and clients–was made better off. Although changing business conditions have placed this model under stress, its original logic provides valuable clues to how we might adapt.
Is the test of a great business model the ability to make all stakeholders better off? If so, Milbank Tweed’s new initiative with Harvard University, dubbed [email protected], may provide a blueprint for a new, more sustainable law firm model.
As I make this claim, I can practically hear readers scoffing. “[email protected] is a PR manuever, a branding exercise between two elite institutions.” Yet, when [email protected] is deconstructed and mapped onto the needs and desires of partners, junior lawyers, and clients, it contains much of the same elegant business logic as the original Cravath system.
Perhaps the most striking parallel is the emphasis on creating better lawyers. Each year, Milbank will send its entire midlevel ranks–roughly 150 lawyers three to seven years out of law school, 40 at a time–to Harvard University for eight days of intensive business-oriented training.
The curriculum is sequenced over four years to match the professional development needs of junior, midlevel, and senior associates.
At a time when virtually all large law firms are cutting back on professional development budgets, the cost of [email protected] should convince readers of the sincerity of Milbank’s initiative. Consider the following back-of-the envelope calculations:
·Tuition: $12,000 tuition per associate (an estimate based on typical executive education training) x 150 associates = $1.8 million annually.
·Travel and Lodging: $3,500 for travel and lodging x 150 associates = $525,000 annually.
·Lost billings: 8 hours per day x 8 days x $350/hour x 150 associates = $3.4 million.
·Total cost: roughly $5.8 million per year.
A lot of money. It comes to almost $50,000 for each of Milbank’s 119 equity partners. But I believe that it is money well spent. The program will allow the firm to grapple with four interconnected trends that any firm must conquer if it aspires to a marquee position in the market.