White-shoe firm
Term for prestigious professional firms
From Wikipedia, the free encyclopedia
In the United States, "white-shoe firm" is a term used to describe prestigious professional services firms—particularly law firms, investment banks, and accounting firms—historically associated with the upper-class elite and Ivy League graduates. The term most often describes leading Wall Street institutions, particularly those based in New York City and Boston, that have existed for over a century.[1] The term comes from white buckskin derby shoes (bucks), once the style among the men of the upper class.
While the term has historically implied a cultural homogeneity associated with White Anglo-Saxon Protestant men, the term is now used more broadly to denote firms that are long-established, prestigious, and specializing in complex, high-stakes business matters.
Former Wall Street attorney John Oller, author of White Shoe, credits Paul Drennan Cravath with creating the distinct model adopted by virtually all white-shoe law firms, the Cravath System, just after the beginning of the 20th century, about 50 years before the phrase white-shoe firm came into use.[2]
Etymology
The phrase derives from "white bucks", laced suede or buckskin (or Nubuck) derby shoes, usually with a red sole, long popular among the student body of Ivy League colleges.[1] A 1953 Esquire article, describing social strata at Yale University, explained that "White Shoe applies primarily to the socially ambitious and the socially smug types who affect a good deal of worldly sophistication, run, ride and drink in rather small cliques, and look in on the second halves of football games when the weather is good."[3] The Oxford English Dictionary cites the phrase "white-shoe college boys" in the J.D. Salinger novel Franny and Zooey (1957) as the first use of the term:[4] "Phooey, I say, on all white-shoe college boys who edit their campus literary magazines. Give me an honest con man any day."[5] It also appears in a 1958 Fortune article by Spencer Klaw, which describes some firms as having "a predilection for young men who are listed in the Social Register. These firms are called 'white-shoe outfits', a term derived from the buckskin shoes that used to be part of the accepted uniform at certain eastern prep schools and colleges."[6]
Usage
The American term white-shoe first originated in Ivy League colleges, then reflecting a stereotype of East Coast old-line firms that were populated by White Anglo-Saxon Protestants (WASPs). The term historically had antisemitic connotations, as many of the New York firms known as white-shoe were considered inaccessible to Jewish lawyers until the 1960s.[4][7] The phrase has since lost some of this connotation, but is still defined by Princeton University's WordNet as "denoting a company or law firm owned and run by members of the WASP elite who are generally conservative".[8] Most white-shoe firms also excluded Roman Catholics.[9][10][11][12] A 2010 column in The Economist described the term as synonymous with "big, old, east-coast and fairly traditional."[13] In the 21st century, the term is sometimes used in a general sense to refer to firms that are perceived as prestigious or high-quality; it is also sometimes used in a derogatory manner to denote stodginess, elitism, or a lack of diversity.[4]
Notable white-shoe firms
The following U.S. firms are often referred to in media as being white-shoe firms:
Accountancy
The current Big Four accounting firms[14] and the former Big Eight auditors from which they merged:
- Deloitte (merged from Deloitte Haskins & Sells and Touche Ross)
- Ernst & Young (merged from Ernst & Whinney and Arthur Young)
- KPMG (formerly Peat Marwick Mitchell)
- PricewaterhouseCoopers (merged from Price Waterhouse and Coopers & Lybrand)
The only former Big Eight firm not merged into one of the Big Four is Arthur Andersen, defunct since 2002, following felony conviction resulting from the Enron scandal.[15]
Banking
- Traditional
- Brown Brothers Harriman & Co.
- JPMorgan Chase[16][17] (successor to J.P. Morgan & Co.)
- Morgan Stanley[18]
- Modern
- Defunct
- Dillon, Read & Co. (acquired by UBS in 1998)
- First Boston (acquired by Credit Suisse in 1990)
- Kuhn, Loeb & Co. (merged with Lehman Brothers in 1977)
- Lehman Brothers
- White Weld & Co. (acquired by Merrill Lynch in 1978)
Law
- Traditional
- Covington & Burling[21]
- Cravath, Swaine & Moore[22]
- Davis Polk & Wardwell[23]
- Debevoise & Plimpton[24]
- Milbank[25]
- Ropes & Gray[26]
- Sidley Austin[27][28]
- Simpson Thacher & Bartlett[29]
- Sullivan & Cromwell[30]
- White & Case[31]
- Willkie Farr & Gallagher[32][33]
- WilmerHale[34][35][36]
- Modern
While the term "white-shoe" historically applied only to those law firms populated by WASPs, usage of the term has since been expanded to other prestigious firms. Many of these firms were founded as a direct result of the exclusionary tendencies of the original white-shoe firms, which provided limited opportunities for Jewish and Catholic lawyers, as well as other non-WASPs, and include:
- Arnold & Porter[37]
- Cleary, Gottlieb, Steen & Hamilton[38]
- Gibson, Dunn & Crutcher[39]
- King & Spalding[40][41][42]
- Kirkland & Ellis[43]
- Latham & Watkins[44]
- Paul Hastings[45]
- Paul, Weiss, Rifkind, Wharton & Garrison[46][47]
- Skadden, Arps, Slate, Meagher & Flom[48][49]
- Wachtell, Lipton, Rosen & Katz[50]
- Weil, Gotshal & Manges[51][52][53]
- Williams & Connolly[54]
- Defunct
Management consultancies
The Big Three[56] consists of the largest management consulting firms by revenue, which are also colloquially known as "MBB":[57]
Common terms for elite law firms outside of the United States
- Australia
- Big Six: In 2012, three of these firms merged with overseas firms, and one other began operating in association with an overseas firm. As a consequence, it has proposed that the term is no longer applicable to the Australian legal profession, displaced by the concept of Global Elite law firms or International Business law firms.[58]
- Canada
- Seven Sisters
- China (People's Republic)
- Red Circle, coined by The Lawyer magazine in 2014.[59]
- Japan
- Big Four
- South Africa
- Big Five
- Singapore
- Big Four
- United Kingdom (centered on the City of London)
- Magic Circle, firms with the largest revenues, the most international work and which generally outperform the rest of the London market on profitability.
- Silver Circle, the next tier below the Magic Circle (there is no Golden Circle[60]) has firms smaller than those in the Magic Circle, though sometimes with similar level of profits per equity partner (PEP) and average revenue per lawyer.[61][62][63]