Yisro's insight was that this was not the proper way to handle the cause of justice in a society. It is true that Moshe Rabbeinu was the quintessential navi and was able to judge using the divine revelation. Of course he knew exactly what Hashem wanted him to say and would therefore judge correctly. However, he was only one person. He could not rely on others to read his mind and "know" what he would have said. When the next leader took (Joshua) over, or the judges who would lead after that, how could he be sure that the would continue properly in the way that he had mapped out? Yisro knew that this was not what Hashem wanted. In order to ensure that the torah was kept, a uniform system of justice had to be established. That is why he suggested setting up a hierarchy of judges at all levels of society to teach, and enforce the laws of the torah. This would ensure that the laws of society would be uniform and not subject to the whim of any individual, no matter how pious, not even Moshe Rabbeinu.
This is why Moshe Rabbeinu was able to enthusiastically and immediately endorse his father-in-law's suggestion. The laws of the society were indeed based on an objective and lasting source, the torah. No matter who was sitting in the judges seat, the law was uniform and enforced uniformly. It did not matter who was the plaintiff or the defendant or even the judge. The law was as Hashem had given it. Indeed, the principle from then on was "lo bashamayim hi" (it is not in heaven), so that when laws were forgotten after the death of Moshe, Hashem could not give them again by divine revelation. When Rabbi Eliezer disputed with the rabbis, he could not succeed in his arguments even when a bas kol (divine voice) declared that he was correct. Anyone who claimed to have received a revelation that any part of the the torah had been changed was subject to the death penalty as a "false prophet" by definition.
The significant difference between the original suggestion and the way Moshe implemented it is also explained by this. Yisro originally said, leave the "little" cases to the judges and have them bring you the "big" cases. Moshe Rabbeinu said, bring the "difficult" (or complicated) cases to me no matter how "small" they might appear (with the implication that he could ask Hashem to explain them). This indeed sets up the ability for future courts to analyze and make a "good" determination in the future.
Of course, Moshe Rabbeinu probably intended this from the beginning. However, as long as he was the only source, it appeared that he was judging each case individually (like a king) and not from the general principles set down in the Torah. The methodology showed that judgement comes from the Torah and is based on principle.
This also explains a similar development of another point regarding the reaction of Bnei Yisrael to the giving of the torah as explained by Rabbi Jonathan Sacks, the Chief Rabbi of England. Next week (in Mishpatim) we have the famous statement "na'aseh venishmah" (we will do and we will listen). However there are two other places where a similar statement is made. In Yisro (Shmos 19:8) we see the statement
ויענו כל העם יחדו ויאמרו כל אשר דבר ה' נעשה
The entire people responded together and said, "Everything that Hashem has spoken we shall do".The difference is that here, the sentence shows everyone responding as a single unit. In Mishpatim (Shmos 24:3), the actual sentence is
ויאמרו כל הדברים אשר דבר ה' נעשה
... they said, "Everything that Hashem has said, we will do and we will obey"We see that the unity of the first sentence is missing. This is deliberate. In action, the nation is one and the judges would all be working from the same set of laws. However, as far as studying and understanding, everyone will reach his own level and follow his individual tendencies in understanding the meanings of the laws. "There are seventy facets to the torah". Some people can appreciate the torah through logic and develop his connection to Hashem like Yisro, who studied "all the world's religions" in order to appreciate the truth that Hashem has given us. Others learn by hearing the stories of the mystics and miracle workers of teh past in order learn of the path that they must follow. Some people will be drawn in by the "Torah Codes" while others would find that there is no meaning for them in that area. However, in the end, we will all be one people, following one Torah, and growing in our knowledge and appreciation of the path that Hashem has set for us to reach the goal that Hashem has placed before us.
The medrash speaks of everyone in a circle around Hashem pointing to the center and saying "This is Hashem" This is the legacy of Yisro and the result of the advice that he gave to Moshe Rabbeinu.
Rabbi Shlomo Porter of Etz Chaim in Baltimore points out the necessity of this type of justice. Rather than summarize and give my own explanation, I will quote his email.
Torah Portion: Mishpatim - The Parsha begins with a short introduction, “And these are the ordinances that you shall place before them.” The Parsha continues on with a comprehensive system of laws governing human rights and responsibilities from the ethical treatment of slaves to not cursing a leader. These laws were all given at Mt. Sinai and are considered Mitzvos-Divine Commandments that not only govern Jewish society but, in truth, shape us into a holy nation with a unique relationship to The Creator and the rest of the nations of the world.Rashi, the preeminent Torah commentator, quotes a Talmudic insight about the phrase, “place before them”. Why doesn’t it say “teach the” or “inform them” instead of “place before them.”The Talmud answers that G-d wanted to teach Moshe that he should not teach the Jewish people just to parrot back the laws. He had to place the laws before them like a set table; a Shulchan Aruch, in order that they could sit down and eat right away. How so? He needed to tell them the reasons and principles that could help them apply the laws to other cases. This is called the Taamim.Taamim has two meanings: reason and tasty. Reason to the mind is like taste to the palate. Both give us pleasure and make the object enjoyable. The pleasure of knowing why is more enjoyable than a good tasty steak. There are teachers who can give us the facts of Torah, but the ones we gain the most from are the teachers that give us a “Geshmack,” the pleasure, in learning Torah, who make it a truly enjoyable experience.Moshe had to teach the Jews to enjoy the Torah. Part and parcel of the mitzva of learning Torah is to enjoy the wisdom of The Creator. Just as one gets attached to those whose company we enjoy, so we get closer to The Creator and his Torah by really enjoying and having pleasure out of Jewish living and learning.In the Morning Service we say a special blessing on learning Torah. “Please G-d make the words of Torah sweet in our mouths and the mouths of our children and all the children of the Jewish people.”When Torah is a pleasure to us then our children will continue to seek out this same “candy.” They will pass on this unique “candy” to their children and all future generations.Good Shabbos,
Rabbi Shlomo Porter