Hearing of the wonders that had transpired, Yitro, Moshe's father in law, arrives in the Israelite encampment in the desert. He is genuinely happy to hear of the wondrous events that had brought about the Israelites' reversal of fortune, transforming them from lowly slaves into free people. Yitro joins Moshe, Aharon and the elders in a thanksgiving feast.
When the celebration ends, Yitro observes Moshe and is struck by his son-in-law's enormous workload. Yitro, the leader ("kohen") of Midian, knew something about leadership and public service. He knew that Moshe could very quickly be overwhelmed and "burned out" by the enormity of the responsibility. This over-extension strikes Yitro as a terrible strategy, and he suggests a system in which the burden may be divided and, whenever possible, delegated.
The wisdom of Yitro's suggestion is immediately apparent, and his proposal is incorporated into the Israelite camp's basic structure.
As an aside, we might pause to appreciate the irony of the situation: Moshe and Yitro would never have met had Moshe not fled Egypt - and his escape was precipitated by a very pointed question hurled at him accusingly: "Who appointed you judge over us?" Upon seeing two Jews struggling, Moshe jumped into the fray - only to be accused of overstepping his authority. Now, Moshe had become the authority, the sole arbiter of justice, the judge for all Israel.
And so, Yitro assesses the situation and proposes a method for curtailing Moshe's workload, delegating responsibility and sharing authority - with one exception. There is one aspect of Moshe's position that will not be shared: Moshe alone will continue to stand between the people and God. The difficult questions that rise through the lower courts will be brought to the Almighty by Moshe for clarification and adjudication.
You are going to wear yourself out, along with this nation that is with you. Your responsibility is too great. You cannot do it all alone. Now, listen to me; I will advise you, and God will be with you. You must be God's representative for the people, and bring [their] concerns to God. (Shmot 18:18-19)
Moshe has a dual role: He is both God's representative and the people's representative, and it may be this dual role that explains why the story of Yitro's arrival is inserted at this particular juncture.
According to tradition, Yitro arrived in the Israelite camp months later - after Yom Kippur, in the fall -whereas the following portion, the Revelation at Sinai and all the events described in the next several chapters, transpired in the spring. Ostensibly, the reason Yitro's arrival is recounted at this point is because it is, in a sense, the continuation of the Exodus and the splitting of the sea: The report of the great miracles and triumphs the Israelites had experienced had reached Yitro in Moav, spurring him to visit and pay his respects.
However, there may be a deeper, more substantive reason to insert Yitro's visit at this point. Yitro apparently had a uniquely clear grasp of the nature of Moshe's role. Having himself served in a position of leadership, Yitro was able to see the day-to-day operation of the Israelite camp from a more removed perspective, akin to that of a systems analyst or organizational consultant. The judicial structure Yitro suggests is predicated on his very discerning and insightful understanding of Moshe's essential role. And what more important juncture to clarify Moshe's dual role, as God's representative to the people and the people's representative to God, than on the eve of the Revelation at Sinai? Indeed, in the events that immediately follow Yitro's arrival (Chapter 19), in Moshe's most celebrated role, he brings the Word of God down to the People, and represents the frightened, awe-struck nation when they are afraid to hear the Word of God. Moshe is far more than an ambassador, representing one side of the dialogue; he faithfully represents both sides, with both precision and compassion. It is this role that continues until the end of Moshe's life.
In the story of the Exodus, Moshe's role had been secondary; God spoke through him, Aharon spoke for him - even his own "magical" staff took a more prominent role in the plagues and miracles. But at Sinai, Moshe's role becomes perfectly clear. Moshe is far more than a judge, far more than a neutral messenger of God's instructions. From this point on, Moshe is both the "Servant of God" (a description that eventually becomes his epitaph), bringing the Torah down from heaven, and, at the same time, the defender, protector, representative and teacher of the Jewish People. At Sinai, Moshe becomes, for all time, Moshe Rabbenu - Moshe, our teacher, leader, and master. Yitro was the first to identify Moshe's dual role, and the first to give it practical expression, in preparation for the events that would soon unfold.
For a more in-depth analysis see: http://arikahn.blogspot.co.il/2016/01/audio-and-essays-parashat-yitro.html
1. See Rashi and Unkelos, Shmot 2:16.
2. Rashi, Shmot 18:13.
3. Dvarim 34:5.