The story "The Red Headed League" is a Sherlock Holmes mystery. The plot involves one of Holmes' famous challenges in trying to ascertain why a red-headed man was hired to copy the Encyclopedia Britannica for four hours a day, for a decent amount of money, and then closed out of his place of work without explanation.
The construction of the narrating perspective is necessary for the development of the story's plot. Sir Arthur Conan Doyle uses this structure to build up the suspense in the story. The story is narrated by Holmes' less-that-adept sidekick, Dr. Watson. He is a foil for the character of Holmes. Watson is not nearly as intelligent as Holmes is made out to be. His average intelligences allows for Holmes to be even more amazing, as he picks up on details that Watson misses, and draws conclusions that never occur to Watson.
This structure also allows for the mounting suspense. The narrative at the beginning of the story is sedate. The premise of the story is displayed cleanly, and the plot's movement is very slow. As Watson describes Holmes' studious introspection, coupled suddenly with his unexpected, rapid but "silent" epiphanies (which are not revealed to the audience/Watson), the tension mounts quickly.
By the time Holmes starts to put the pieces into play, the plot is galloping along, and though the reader is not privy to the smaller details, large pieces are brought into play to lead the reader along to the climax of the story.
It is in the falling action and resolution of the plot that the reader is finally given the details that hold all the larger pieces together, while also once again lifting Holmes and his superior intellect up to closer and awe-inspiring inspection by the reader.
It is formula writing that is very specifically associated with Conan Doyle's writing style, which made him very popular in his day and still draws fans so many years later.