Abstract

Takeover: Finance and Proletarianization at Wall Street Law Firms

This paper explores Wall Street law firms’ geometric growth during the merger wave of during the 1980s, as shifts in federal regulation and global debt markets drove a frenzy of investment-bank-led takeovers and mergers. As deal activity accelerated, Wall Street law firms went on a hiring spree: By 1989, the number of corporate lawyers in New York City had roughly doubled from a decade earlier. This paper seeks to answer a series of related questions: Where did these new associates come from? What did they do all day? How did their work change as the machinations of the financial sector came to dominate the workload at firms like Skadden Arps? And what were the consequences for the rest of the legal profession, and for the economy at large? This paper argues that the growth in corporate law firms had two key outcomes. One, growth democratized the legal world. The need for hundreds of associates to vet deals meant that elite firms began hiring at second-tier law schools, and for the first time, increased their ranks of traditionally underrepresented groups, particularly women and African-Americans. Two, rapidly-expanding associate cohorts led to something like white-collar proletarianization. As law firms grew in scale and specialization, highly-trained associates were deskilled—asked to toil over less and less meaningful intellectual piecework. And partners, far from mentoring associates with an eye towards partnership, sought to profit from their sweated productivity before moving on to exploit new cohorts of young recruits. In the 1980s, finance’s logic of liquidity remade the legal world. And those firms, in turn, would became the shock troops for the financialization of American life.