During his legal career, Abraham Lincoln represented clients from diverse backgrounds. The wealthiest and most powerful of them was unquestionably the Illinois Central Railroad. Lincoln was sent to the White House in a campaign that identified him as a rail splitter, capitalizing on his powerful upper body strength. It was his success as a defender of the railroad, however, that earned him a special place in legal history.
Lincoln represented the Illinois Central Railroad on retainer. He did not seem to be overly concerned about keeping track of his billable hours. In 1856, for example, he charged $150 for the entire year’s work. With his bill, he wrote that the had handled “at least fifteen cases (I believe one or two more), and I have concluded to lump them off at ten dollars a case.” In addition to his fee, Lincoln received an annual pass that allowed him to travel free of charge on any of the Illinois Central Railroad’s trains.
For the most part, the cases he handled were routine and easy to handle. That changed when the company butted heads with McLean County, Illinois.
The Railroad’s 1851 charter promised exemption from local taxes. Despite this, McLean County maintained that it had a right to tax the company’s property. Accordingly, the McLean County assessor levied a $428.57 tax on Illinois Central property in the county that included 118 acres of mostly right-of-way. The railroad was not about to roll over on this issue, so it filed a lawsuit against the county and directed Lincoln to do whatever he could.
Lincoln proposed a legal maneuver that would hasten the resolution of the case. He proposed, and the county agreed, that the McLean County Circuit Court should dismiss the case. This allowed the railroad to file an appeal to the Illinois Supreme Court.
As lead attorney, Lincoln argued that the railroad’s charter was issued by the state. Consequently, anything in the charter had to supersede any conflicting provisions of local and county law. The Supreme Court agreed.
The court issued its decision in Illinois Central Railroad v. County of McLean, (17 Ill. 291 (1855)). It was a landmark case. Had the court ruled differently, the railroad would likely have been forced into bankruptcy. Lincoln’s victory on behalf of his client not only saved the company but it positioned the city of Bloomington to become a major railroad hub. In addition to the Illinois Central Railroad, McLean County benefitted from the Alton and Sangamon Railroad and the Toledo, Peoria, and Western Railroad, triggering rapid growth for Bloomington.
Presumably, the executives of the Illinois Central Railroad expected to get a bill for more than the $150 Lincoln had charged them the previous year. What they were not expecting was the amount that he charged them: $5,000 (approximately $192,000 in 2023). It was more than the annual salary of the state’s governor. Lincoln had presented the largest bill for legal services the company had received. Despite the benefit the railroad gained from its lawyer’s work, it balked and refused to pay the bill.
The railroad argued that the fee was clearly unreasonable. Lincoln was forced to sue his own client to collect his fee. He brought suit on June 23, 1857. He submitted the reasoned opinions of prominent attorneys, all of whom also happened to be personal friends of his. Norman Judd, Isaac Arnold, Grant Goodrich, Archibald Williams, and his former law partner, Stephen T. Logan each declared that Lincoln’s charges were very reasonable under the circumstances.
In his brief, Lincoln wrote, “Are, or not the amount of labor, the doubtfulness and difficulty of the question, the degree of success in the result; and the amount of pecuniary interest involved, not merely in the particular case, but covered by the principle decided, and thereby secured to the client, all proper elements, by the custom of the profession to consider in determining what is a reasonable fee in a given case. That $5000 is not an unreasonable fee in this case.”
When the case came up for trial, no representative for the railroad was present and the judge awarded Lincoln five thousand dollars. John Douglass, the Illinois Central railroad’s attorney, did show up the next day and begged for a new trial, which Lincoln did not resist. Setting aside the earlier verdict, they retried the case and the jury again decided for Lincoln. This time they awarded him $4,800 because Lincoln had received $200 as a retainer. In fact, as records show, the amount he received was actually $250. Apparently, he was either unaware of the discrepancy, or he decided that it wasn’t worth quibbling over $50.
Lincoln deposited the check in a Springfield bank on August 12, 1857. On August 31, he withdrew that amount.
As he did with all of his cases, Lincoln split the fee with his partner, William H. Herndon. Lincoln sent his share to Norman Judd to purchase land in Iowa.
Despite their disagreements, the Illinois Central Railroad continued to keep Lincoln on retainer until his move to Washington, DC to take up the presidency. Lincoln also continued to benefit from the free annual pass to use the trains — a benefit that assisted him as he traveled in his failed campaign for the Senate against Stephen Douglas and in the successful campaign for the presidency.
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