The importance of training and professional standards in the legal profession were first institutionalised by Paul Cravath in 1890 in what has become known as the Cravath System.Īs we entered the 20th century, the need for professional standards led to the creation of professional bodies to govern the conduct of members of each profession, with strict rules of professionalism. These practices were, in many ways, time telling (in the sense used by Jim Collins in his book, Built to Last: Successful habits of visionary companies) and many did not survive beyond the first or second generation. It was during these economic times that the founders of today’s Big Four and BigLaw firms established their practices, initially as sole practitioners. Fuelled by commerce, it is also during this time that companies were recognised as separate legal entities with its rights being further crystallised in US and UK courts. The financial centres of the time were London, Paris, Frankfurt and Berlin as Europe was the world’s banker while New York emerged as a financial centre only in the early 20th century. The world economy was booming in the late 19th century, this is best illustrated by the UK’s Edwardian Era of plenty, the US’s Gilded Age and France’s Belle Époque. Similar trends drove other western economies. The need for capital created the first networks of correspondent banks in the US as infrastructure projects fused the separate towns into a cohesive economic entity. The global economy prospered on the foundations of the Age of Enlightenment, the Industrial Revolution and freeing up of world trade. Each profession was in its infancy, serving the needs of clients, and running its businesses, although none would have spoken of the ‘business’ of practice. Prologue I: Setting the foundationĭuring the late 19th and early 20th centuries, firms of the day were built on the master-apprentice model, as were crafts and trades.
The past as William Shakespeare observed, is a prologue to our present. So to understand what’s happening, let’s start in the past, specifically the important intersecting points in the historical development of the accounting, legal and management consulting professions. As George Beaton pointed out, each profession – accountancy, law and management consulting – started and grew in a profession-specific silo.īut now these silos are breaking down, fast. The professions are like evolving organisms, each continuously evolving to thrive in its environment.