Washington, DC and its surrounding suburbs are known for an abundance of “Beltway bandits,” those who make their living by feeding, either directly or indirectly, from the public trough. I recently reviewed a book recounting the storied history of one type of Beltway bandit: the accounting and consulting firms collectively called the Big Four (“Are the ‘Big Four’ on Their Last Leg?” Fall 2019).

This book, White Shoe by John Oller, traces the parallel historical development of the modern law firm. He worked as a “white shoe Wall Street lawyer” in the New York office of Willkie Farr & Gallagher, representing such prominent clients as Major League Baseball. In 2004 he wrote a history of the firm, which was a precursor to this volume.

In the prologue to White Shoe, Oller gives us some background on the curious term that provides the book’s title. It comes from “the white buck shoes worn by generations of Ivy League college men who, as members of the WASP elite, went on to run the leading law, banking, and accounting firms on Wall Street.”

Modernization of administration / Oller begins White Shoe with folksy stories about the structure of the late 19th century law firm. He colorfully describes cozy little operations made up of one or two partners supported by a handful of clerks who worked “without pay for a few years, performing secretarial duties in exchange for a desk and access to the partners’ library.”

Those law firms often eschewed the contemporary, emerging conveniences of telephones and typewriters because they were inconsistent with the era’s social operating norms. Telephones were seen as lacking privacy because partners felt that “the only dignified way of communication between members of the legal profession was for them to write each other in Spencerian script, and to have the message thus expressed delivered by hand.”

Similar attitudes were applied to the use of typewriters.

Documents were drawn up in longhand by men who stood or sat on tall stools at high slanting desks. The best penman would write page after page and pass them down the line to scriveners, who laboriously copied them at long tables.

Finally, as the workload grew in the early 20th century, “firms began hiring female stenographers, secretaries and typists to replace most copyists.”

Oller commits an early chapter to the “Cravath system” for hiring, training, and compensating lawyers, created by Paul Drennan Cravath of Cravath Swaine & Moore. The system would remain popular for the remainder of the century. But as the chapters unfold in White Shoe, we find that Oller’s primary focus is much more than the administrative side of law firms.

Changes wrought during the Progressive Era / After the initial chapters, White Shoe reflects on the history of changes in federal public policy from 1890 to 1920 and traces how those changes transformed the staid law firm that existed at the beginning of the era. Oller tells his story through the partners of a number of white shoe firms, weaving their lives through multiple chapters over the course of the book.

With the emergence of massive corporations, Wall Street partners like William Nelson Cromwell, the “physician of Wall Street,” focused on corporate and bankruptcy law. Cromwell first labored over combinations that led to corporations such as Northern Pacific Railway. Then he stood at the ready to clean up the mess “when they went belly up.” He was also known for going to great lengths in fighting for one of his clients, the French engineer Philippe Bunau-Varilla, to get a canal built in Panama instead of Nicaragua. Some even blamed Cromwell for the Panamanian Revolution, which involved the overthrow of the Columbians who ruled Panama.

Although Cravath is best remembered for his work on the management of law firms, he also represented industrialists like George Westinghouse in his running battle with Thomas Edison over the infrastructure at the heart of electrical power. Westinghouse enlisted Cravath’s legal advice when he was accused of violating Edison’s patent for the light bulb, and when he became embroiled in a conflict over whether Westinghouse’s alternating current or Edison’s direct current would become standard. Cravath and Westinghouse would part ways following the Panic of 1907, as Cravath oversaw a reorganization of Westinghouse Electric that resulted in its namesake losing control of his company.

These were heady days for the emerging class of progressives who were leading charges in a range of policy areas such as antitrust, banking, and Prohibition.

More importantly from a policy perspective, these were heady days for the emerging class of progressives who were leading changes in a wide range of policy areas: antitrust, banking, Prohibition, and foreign policy. At the time, a contemporary could bear witness to the building of the administrative state and the solidification of the revolving door for professionals in finance and law. By the end of the period, current and former white shoe lawyers were omnipresent in all aspects of public policy.

Trust Busters! / Antitrust enforcement exploded during this era. Oller first describes the largely hands-off regulatory policies of Presidents Grover Cleveland and William McKinley. He explains that although the Sherman Antitrust Act was passed in 1890, Cleveland and McKinley did not vigorously enforce it.

Cleveland was even in private law practice for a large New York law firm from 1889 to 1893, in the interregnum between his two terms in the White House. He was brought to the firm by his friend and adviser, Frank Stetson, who was said to be the “attorney general” for financier J.P. Morgan. Stetson’s work for Morgan included helping form U.S. Steel, the largest company in the world at the time. This represented the nascent development of the “axis of access,” that corridor of connectedness between New York City and Washington, DC. After Cleveland’s second term, the minimalist enforcement stance continued: “The McKinley administration had been lax in enforcing [the Sherman Antitrust Act of 1890], giving rise to the greatest wave of industrial mergers in American history.”

That would change with the “Trust Buster,” Theodore Roosevelt, and his progressive successors in office. The filing of the Northern Securities lawsuit during his administration was “an end of an era” of antitrust enforcement as his attorney general, Philander Knox, worked to break up the empire, which was brought together through the financial maneuverings of J.P. Morgan. Knox was a former corporate lawyer for Andrew Carnegie, whose steel empire fed into the creation of U.S. Steel. The Supreme Court’s 5–4 decision that Northern Securities was “an illegal restraint of trade in violation of the Sherman Antitrust Act … was a huge victory for the government, … a significant defeat for Wall Street, … and ended the merger wave that had begun around 1890.”

By the election of 1912, there was a triangulation of the antitrust issue:

Taft’s policy was to continue to rely on the judiciary, and ultimately the Supreme Court, to interpret and enforce the Sherman Antitrust Act. … Roosevelt wanted greater federal administrative regulation … under executive branch control. … Wilson took a middle position … through a combination of a mild-mannered federal commission … and aggressive federal antitrust enforcement subject to judicial review.

Antitrust became a reliable cash cow for white shoe lawyers.

World War I and Prohibition / Oller commits a number of chapters to foreign policy, especially surrounding World War I. The white shoe lawyers of the day included many foreign policy interventionists who “came to form the ‘Atlanticist’ foreign policy establishment of the United States—primarily upper-class lawyers, bankers, academics, and East Coast politicians committed to what has been called ‘Anglophile Internationalism.’ ” This coalition “believed the United States had inherited England’s role as the conciliator, and if necessary, enforcer, of international disputes.” These elites were the predecessors of today’s proponents of foreign policy interventionism and nation building. Oller muses openly about whether this group was simply guilty of “warmongering” or “war profiteering,” as he makes the point that “companies such as U.S. Steel, Bethlehem Steel, and Westinghouse, controlled by bankers such as J.P. Morgan and Co. and represented by lawyers such as Cravath, were profiting enormously from munitions contracts with the Allies.”

One of the last issues Oller assesses is Prohibition, which “at heart was a progressive, reformist movement.” He traces the constitutional challenges to these efforts led by Elihu Root, Roosevelt’s secretary of war and state “who glided easily between the highest levels of government in Washington and his private legal practice in New York.”

Conclusion / White Shoe is a well-told story. In his concluding chapters, Oller makes the case that these lawyers held a benevolent role:

In the thirty years between 1890 and 1920, the steering of a middle course between unchecked capitalism and state socialism owed much to the elite Wall Street lawyers and their firms…. But they also influenced their clients to change with the times to prevent more radical changes from below.

To me, Oller’s history reveals the resilience of this breed of lawyer in adjusting to the rapid changes in industry, policy, and finance.

He does not reflect in detail on the current era and the future of the law firm. However, in making references to today’s popular culture, he makes clear that white shoe lawyers of the early 20th century were in a real sense celebrities: “Their advice was eagerly sought by robber barons and presidents alike and they were known to the public to a greater degree than any present-day corporate lawyers…. Few people in 2019 could name the most trusted attorney for Facebook’s CEO Mark Zuckerberg or for Amazon’s Jeff Bezos.”