In 1980, Skadden was the first New York firm to bring in a non-lawyer – Earle Yaffa, hired from the accounting firm Arthur Young, with MBA (management) and CPA (accounting) qualifications – as managing director. Skadden ‘had grown so fast and furious that part-time surveillance [by partners] was woefully inadequate,’ Yaffa told me. Secretaries and lawyers had long written down billable hours on paper slips, then stuffed those slips, sometimes unsorted, into their desk drawers. Yaffa’s first move was to hire a computer programmer to create a system that tracked each associate’s time slips. ‘Once you put that into a computer,’ remembers Yaffa, ‘then it became very easy to keep track of how busy people were and what they were doing.’ Now, each month, an associate could be handed a ‘utilisation report’: a printout detailing just how many hours they’d billed, and how close they were to meeting ‘100 per cent utilisation’, an ideal figured based on a fictional associate who took no vacations, sick days, and bathroom or lunch breaks.
Under this new arrangement, associates were overworked to the point of exhaustion. Like soldiers in wartime, they developed a peculiar sense of pride while toiling on takeover deals. At some point in the 1980s, associates at Skadden originated the ‘Beast of Burden’ prize. It was given monthly to a peer who had worked the most hours and received the most abuse. Extra points were awarded when an associate had endured a partner’s verbal tirade. One Skadden associate billed an average of 350 hours per month – or 12 hours every day, including weekends – when working on four successive mergers. After he quit the firm, he framed his computerised billings sheet as a reminder that he had ‘survived boot camp’. ‘I was away [on business] 24 days a month,’ he told an interviewer. ‘It was a miserable lifestyle.’
Soon, the management techniques that Skadden pioneered spread to all the top firms – Jewish, mixed and WASP alike. By 1991, a study by the ABA’s Young Lawyers Division found that, armed with these new forms of surveillance, partners and their non-attorney managers resembled less the ‘enlightened corporate executive or professional, but rather the industrial manager in the earlier years of the Industrial Revolution.’ Of course, it wasn’t exactly a 19th-century mill. Lawyers were paid handsomely for their work – roughly double the median US household income. Entry-level associate salaries rose to $65,000 in 1986 (nearly $200,000 today).
But those soaring salaries created an ironic situation: astronomical entry-level compensation meant that it would have been too costly to spend time training young associates. Far from ennobling lawyers’ labour, bigger transactions and larger salaries encouraged their de-skilling. Takeover deals moved so fast and were so lucrative that it was more profitable to bill associates’ hours to a client than it was to slow down to tutor them in the finer points of dealmaking.