3D Studio Max uses smoothing groups to make low-poly geometry look smooth. In Real-time it's called "Normal Smoothing". Most all 3D apps have the feature, but each call it something different. (In Maya it's just Hard or Soft Edges for example)

To control the smoothing groups you have to be in Polygon select mode. Select a group of polys (or your entire mesh if you want) and scroll down in the Polygon modifing area until you see the Polygon Properties rollout.

The smoothing groups area looks like a grid of numbers. Each number is a group that will be smoothed together. If you select a group of polys and you see several numbers grayed out that means that these polys do not all share the same groups.

For the foot, first select all of the polys and click the Clear All button. The model will now look completely faceted.

Now select just the heel, and the ball of the shoe (but not the indent) and click the 1 button.

Now select just the indent and click the 2 button. Now select the rest of the shoe and click the 3 button.

You've now assigned smoothing groups.
The shoes are one of the few areas will I will seperate out areas for groups. For most of the model, I will have the entire mesh all be assigned to a single smoothing group.

Once you're satisfied with the shape of the shoe, select the polys that make up the top border and delete them. Then go to Border select mode and click on the open edge.

Now go to the Left viewport, HOLD DOWN SHIFT and MOVE the edges up. Instead of moving them, it has created new polys!

Do this a few more times, going up the lege to around the knee. Remember, the fewer edges you need to get the correct shape, the better. We're just working the left viewport right now, we will move to the front viewport in a moment but first, lets add in a few small details...

A lot of people feel like they need to add in an entire row of edges for every little detail, but that's a waste. We want a little bit of geometry for the major wrinkles near the bottom of the pant leg, but don't need an entire row of edges for it.
Select the front edges and click connect and adjust the slide so that the new edges are lower.
Connect the edge verts to an existing vert to avoide n-gons.
Move the new verts outward to closer fit the contour of the leg.

go ahead and do this around the knee area as well. Once you've got the side going up just past the knee and are happy with the basic shape, switch to the front view.

Yikes! Okay... so it looks funky, That's okay! Just start moving things around so they line up a little better from the front viewport. Remember things won't be perfect, but get it close.

Another useful and essential tool for poly modeling is the Cut Tool. To get to it, you need to scroll further down in the editable poly modifier tools then the standard edit vert / edit edge area. It's under the Edit Geometry Rollout.

Cut will let you cut new edges directly on the surface of your model. It's usually most useful in the perspective viewport.

Something to watch for though! It's common to think you've clicked on an already existing vert and cut a new edge, but max thinks that you clicked just off the vert and has created a new vert. So even though you can't really see it, you now have two verts sitting right next to each other. When this happens just select the verts and Weld with a high threshold so that the two verts are welded together.

I cut this edge along the bottom of the pants cuff and then pulled the edges out to give the bottom of the pants more volume. You should also use cut in other areas around the pants to define other wrinkles and deformations in the shape of the cloth. Remember though! Don't go overboard. Just very basic volume defining changes.