FEES: ONE CONTROVERSY
Illinois before he was president, as everyone knows. It was a general
practice—some litigation, some transactional work, some lobbying, especially at
times when he was in or closely connected to the state legislature.
of the sources of his business were railroads, an important and growing
component of the state’s economy. Sometimes he worked for them, and sometimes
he worked against them. Obviously, either disciplinary rules or the willingness
of clients to consent to conflicting representations have changed substantially
in the last 150 years, or so.
representations ended up in a fee dispute. That case involved a state law
regarding the right of counties to tax the property of railroads, in this case,
the Illinois Central Railroad. The
precise issues in the case don’t matter for the purpose of this story. Lincoln
represented the ICR. Another attorney for it had lost the case in the trial
court, and Lincoln joined in appealing the case to the Illinois Supreme Court.
There, the rail line prevailed. Lincoln’s work may have contributed to the
victory, perhaps since the court cited a number of the cases to be found in his
this point, I take the rest of the story from Brian McGinty’s LINICOL’S
GREATEST CASE: THE RIVER, THE BRIDGE, AND THE MAKING OF AMERICA (2015). This
story is part of the background for the case which is the topic of the book.
the case of Illinois Central Railroad
Company v. County of McLean[, 17 Ill. 291 (1857)] was concluded, Lincoln
presented a bill for his services. Years later, [William H. (Billy)] Herndon
recalled that the amount was originally $2000 but that the railroad refused to
pay. Herndon said that the railroad official in Chicago exclaimed, ‘Why, sir,
this is as much as Daniel Webster himself would have charged. We cannot allow
such a claim.’ Stung by the rebuff, Lincoln increased his bill to $5000, and in
January 1857, filed suit against the railroad for that amount. He submitted to
the court a written opinion signed by six highly respected lawyers stating that
this services in behalf of the railroad were reasonably worth $5000, and on
June 23, 1857, the court awarded him judgment in that amount. After the sheriff
was given a writ to collect the judgment, the railroad relented, paying Lincoln
$4,800, the amount of the judgment less Lincoln’s initial retainer of $200.
Since his agreement with Herndon[, his law partner,] called for equal division
of all of their fees, Lincoln promptly gave his partner one-half of the money
he received.” (pp. 30-31)
size of legal fees is an old problem.
According to one currency calculator on the Internet, $2000 in 1857 was
worth $56,000 in 2014, and $5000 in 1857 was worth 140,000 in 2014. Issues about legal fees go a long way back. See my blog-essay Legal Fees and Legal History–Legal Ethics, Excessive Fees: An Old Story (April 7, 2013)
book does not say whether there was an explicit agreement as to the legal fee
beforehand. If it was a contingency fee,
there is no doubt that Lincoln’s fee was reasonable. The book does, however say, in a footnote,
that the oft repeated proposition that the official at the ICR was George
McClain, later an important Union General whom Lincoln fired) is false. Then again, McGinty’s dates on some of the
related events don’t initially strike one as quite right.
P.S. For readers who like this sort of thing, McGinty’s informal book is an easy and fun read about both the development of commercial land and river transportation, an interesting accident involving a ship colliding with a bridge across the Mississippi, and about the resultant law suit. There is even a bit of insurance built into the discussions.