In 1960, at the age of twenty-seven, the author, Sidney B. Silverman, started his own law practice. He began by tackling corporate giants and never stopped until he retired in 2001. He was an aggressive, street-smart trial lawyer.Upon his retirement, Silverman enrolled in graduate school at Columbia University. Concentrating in philosophy, he received a master's degree in 2007. He was as competitive in the classroom as he was in the courtroom. After graduating he looked for another challenge. He had played chess for many years. Now he wanted to play in tournaments and become a chess master. Although he tried hard to become an expert chess player, he failed. A Happy Life chronicles Silverman's adventures, before, during and after his long and successful career. What pieces of wisdom can he share that will help readers to find their best, most successful retirement years? Read on.

A Happy Life

From Courtroom to ClassroomBy Sidney B. Silverman

iUniverse, Inc.

Copyright © 2009 Sidney B. Silverman
All right reserved.
ISBN: 978-1-4401-5085-2

Chapter One

Getting Started

Thanks to some highly publicized reports of badly behaving lawyers, the legal profession has become the target of comedians and whoever it is that sends out comic material over the Internet. The comedy derives from grossly exaggerated portrayals of shockingly improper conduct. Lawyers, we are told, are beneath contempt, only marginally human. My experience as a lawyer has brought me into contact with hundreds of wonderful people, lawyers, judges, clients, clerks, office workers. Of course, people must look out for themselves in this world, but the legal community as a whole is populated by those who sincerely want to increase the amount of justice in the world. For every bad apple with a license to practice law, there are thousands of kind, intelligent, upstanding, and ethical men and women. I salute them. I am proud to salute them, and I hope that what follows will to some extent counteract our day's fascination with the bad apples.

I was not called to the bar; it happened by default. I studied Russian language at Colgate University and, upon graduation in 1954, planned to enlist in the army. The cold war with the Soviet Union was heating up and a proficiency in Russian could be put to good use. The army maintained an intensive foreign language program in Monterey, California. My Russian language professor assured me I would be tapped for the school. After Monterey, I would serve in Hamburg, Germany, live off base, my rank classified, and dress in civilian clothes. My professor also told me that in Hamburg, the ratio of women to men was nine to one. My immediate, post-college future seemed set, but the army turned me down because of a hip injury. I was not going to be a foreign spy. I needed to do something, something suitable for a college graduate. My choices seemed few. With a minimum of consideration, I enrolled in Columbia Law School.

In due course, I began work at a New York firm. As the most junior lawyer, I was relegated to the library and assigned small points of law to research. I wanted to get ahead quickly, but I felt I was on a slow and stodgy path to nowhere. The lawyers receiving responsible assignments were specialists. Many had gained expertise working for the government. I discussed my future with a sympathetic partner. Securities law was in its infancy but showed promise of booming. He suggested I work for the Securities and Exchange Commission in Washington, and then return to the firm. The partner predicted it would take five years to become an expert.

I got a job with the SEC in the department charged with regulating investment companies. I worked hard, advanced, and learned a lot. I lived in a large apartment with three other government lawyers. One of my roommates was Mordecai Rosenfeld, also a transplanted New Yorker. He was a Yale Law School graduate. He was smart, charming, and funny, but he had a serious drawback: his appearance. He had a large mop of black hair covering his forehead, making him appear to be what he was not, a lowbrow. His features, especially his ears, were outsized. Because of his homely appearance, he was shy until he got to know you. Then, he opened up. He was popular, but only with men. Like me, he was Brooklyn born and bred. We were homeboys and bonded.

In 1960, Rosenfeld and I said good-bye to Washington, returned to New York, and formed a partnership. We rented a one-room office for $75 a month in a rundown building in downtown Manhattan, and furnished it with an abandoned partner's desk and chairs stored in the basement of the building and "purchased" from the janitor for a tip of $10. The desk had two openings on opposite sides. He sat on one side and I sat on the other.

I was twenty-seven. I paid no attention to my shabby surroundings; what excited me was my name on the door. I was a partner in the firm of Rosenfeld and Silverman. My career had begun.

Rosenfeld had worked in New York for Abe Pomerantz, a lawyer who specialized in stockholder actions. He may have even invented them. It was Rosenfeld's idea to bring stockholder suits, and mine, as the specialist in investment companies, to sue the managers of mutual funds.

Our first client was my partner's four-year-old nephew, Joel Benjamin Rosenfeld. His father had purchased stock for his son at his birth, in One William Street, a mutual fund managed by Lehman Brothers. Under the law, any stockholder, even a four year old, can sue. The action is nominally against the corporation but only because it has failed to sue those who have wronged it. The corporation's claim is pursued "derivatively" by the stockholder on behalf of the corporation and the recovery inures to the corporation. The judge orders the corporation receiving the benefit to pay the plaintiff's legal fees. Otherwise, the corporation would be unjustly enriched. Lehman, then the quintessential and all-powerful investment banking firm, was our target.

Mutual funds are pools of liquid assets, contributed and owned by investors and managed by professional investment advisers. By pooling their money, small investors, who could not on their own afford to hire an investment adviser, can engage skilled money managers. Mutual funds are controlled and managed by their investment adviser. Under the law, one who assumes control over another's assets is a trustee and is held to the highest ethical and moral standards. Under the ancient common law, the trustee could not charge for his services; he served because it was his duty to do so. The rule was consistent with Kantian concepts of morality. One did what was right because it was right and not from inclination, pleasure, or desire for reward. Modern law relaxes this ban and allows a fiduciary to be paid, provided that the fee is fair.

Lehman charged the One William Street fund 0.005 percent of its net assets, the standard fee charged by fund managers. Lehman also managed another investment company, Lehman Corp, a closed-end investment company. It was customary to charge closed-end funds a flat fee rather than a percentage of assets, and Lehman charged Lehman Corp an annual fee of $250,000. Both funds were about the same size and held stock in the same companies. We thought that the percentage fee charged One William Street flunked the fairness test. It came to about $1 million, four times the fee charged Lehman Corp.

While in Washington, we scribbled out the complaint. After opening our office in New York, we turned over our handwritten draft to a public stenographer who typed it. On our second day in practice, the two partners walked to the federal court and together handed the complaint to a clerk for filing. We were off and running.

I was impressed with myself. In just three years, I had leapt from the library and the lower echelons of the Securities and Exchange Commission to senior partner and co-head of a litigation firm handling a million dollar lawsuit.

Simpson, Thatcher, and Bartlett, a large and powerful law firm, represented Lehman. They were understandably perplexed when they received the complaint; Rosenfeld and Silverman was not listed in any directory of lawyers in the New York telephone book, or even on the directory in the lobby of the building given as its address. The firm thought the suit might be a hoax. An investigator was hired; he came to our office and quickly all doubts...