Antitrust Is More Interesting Than You Think

When I was a 3L, that is, a third-year law student, I — like every other 3L — spent half my time studying dismal areas of the law and half my time interviewing with law firms for permanent legal jobs.

One of the firms I was interested in was Cravath, Swain & Moore. (Cravath, by the way, is pronounced “cra-VATH.”) Cravath is one of the oldest law firms in the United States, tracing its roots back to 1819.

But I was more interested in the so-called “Cravath System,” a way of managing a law firm that, at least as I understood it, encompassed several principles: Hire only the best-of-the-best, promote strictly on merit, up-or-out (i.e., once the firm decides you aren’t partnership material, you are outplaced), and a true partnership of equals (i.e., once you become a partner, you are paid the same as every other partner, except, I suppose, for seniority).

The downside of a firm like Cravath was that very few young lawyers hired out of law school ever became partners in the firm. The competition was just too stiff. In the days when I was interviewing, roughly one out of seven lawyers hired would eventually make partner.

When I interviewed in Cravath’s New York offices, the morning went swimmingly. I was not only impressed by the partners I met, I liked them as people. Unlike the students at, say, Harvard Law School, they seemed to be decent human beings first and lawyers second. I was thinking that the opportunity to become a partner at Cravath was extremely exciting, even if I had only a one-in-seven chance of making it.

But then I went to lunch with two second-year lawyers, known as “associates.” These guys were exactly my age, since I’d already done two years of military duty, so I wasn’t bedazzled by them, as I’d been by the Cravath partners.

The two young associates had obviously been prepped on “how to take a candidate for employment to lunch,” and they droned on about the many advantages of working at Cravath. However, they were droning on in a kind of boring monotone, as though they’d been lobotomized.

They also looked terrible. They had deep bags under their eyes, their skin was pale, and their suits were wrinkled.

Finally, I sat back in my seat, cast a pointed eye at them, and said, “What the hell’s wrong with you guys? Are you on drugs?”

Startled, they glanced at each other, then peered furtively around the room to see if any Cravath partners might be lurking in the vicinity. Finally, one of them leaned toward me and whispered, “Run the other way! Don’t come here, you’ll hate it!”

Needless to say, I was startled by this, but the young men were right. The Antitrust Division of the U.S. Department of Justice had recently sued both IBM and AT&T with the objective of forcing them to break up into smaller companies. What I didn’t know was that IBM and AT&T were both Cravath clients.

Cravath may be one of the best law firms in the world, but it’s nowhere near one of the largest. Then and now, Cravath was on the small side, and having to defend both IBM and AT&T against the big guns of the United States government had stretched the firm to its limits. (As you may know, Cravath eventually won the IBM case but lost the AT&T case. AT&T was broken up into the so-called “Baby Bells.”)

The two young lawyers told me that, from the day they had arrived at Cravath two years earlier right up until the present, they had done nothing but sit in conference rooms all over the country going through documents IBM and AT&T had produced in response to the Antitrust Division’s lawsuits. IBM alone eventually produced thirty million documents. The lawyers were convinced they would never make partner because all they did was scut work.

In other words, that’s what I had in store for me if I joined Cravath. Instead, running the other way, I joined a large firm in Pittsburgh (Reed Smith, which was and is much larger than Cravath). Damned if the first big matter I was assigned to work on wasn’t an antitrust case.

This time it wasn’t the Justice Department bringing the lawsuit; it was “private” antitrust litigation. A big steel company in New York had sued a bigger steel company in Pennsylvania and the Pennsylvania company was a Reed Smith client. The plaintiff wanted damages for alleged breach of contract of $100 million, and he wanted the damages trebled, as was permitted under U.S. antitrust law. In other words, the greedy bastards wanted $300 million from our client, which was big money in those days.

I spent months sitting in rooms doing nothing but going through tens of thousands of documents that had been produced by both litigants. In the process, I realized just how good the fellows at Cravath had it. They may have been sitting in boring conference rooms, but I was sitting in windowless steel warehouses that were located in dank waterfront buildings populated mainly by rats.

After three days in a particularly disgusting warehouse along the Detroit River, I had a frightening nightmare. I dreamed that, while I was sleeping, dozens of rats had carried me off to the river with the objective of having me for dinner. I was saved only because the rats kept arguing over whether to start eating me from the toes or fingers, and while they were bickering I woke up.

When that damned case was finally over, I vowed never again to go anywhere near antitrust law, even if I had to switch careers and become an actuary.

But that was then and this is now. See next week’s post.

Next in this series: “Antitrust Is More Interesting Than You Think, Part II”