Cravath System

The Cravath System is a set of management principles for organizing a professional service firm, originated at the New York law firm Cravath, Swaine and Moore. According to John Oller's history of the early twentieth century New York bar, White Shoe, the system is credited to Paul Drennan Cravath, who established it at that firm in the early twentieth century, and it was adopted by virtually every other white shoe law firm well before the Cravath System name itself came into wide use. Its core practices include recruiting associates directly out of top law schools rather than through family or social connections, training those associates under the close mentorship of the firm's partners, paying a standardized salary rather than negotiating compensation case by case, and promoting new partners only from within the firm's own ranks rather than hiring senior lawyers laterally from other firms. The system has since spread beyond law into management consulting and investment banking, shaping how many elite American professional service firms structure their own hiring, training, compensation, and promotion.