why Munger phased out his law career
Munger has talked about incentive bias related to two clients his father (an attorney) had: Grant McFayden — McFayden owned a Ford dealership and was a brilliant man of enormous charm and integrity and who made excellent decisions. Mr X — Mr. X (Munger leaves out his name) was a blowhard, overreaching, pompous, difficult man. Charlie, when he was 14, asked his dad why he did so much work for Mr. X, the blowhard, instead of doing more work for wonderful men like McFayden. Charlies says his father told him: “Grant McFayden treats his employees right, his customers right, and his problems right. If he gets involved with a psychotic, he quickly walks over to where the psychotic is and works out an exit as fast as he can. Therefore, Grant McFayden doesn’t have enough remunerative law business to keep you in Coca-Cola. But Mr. X is a walking minefield of wonderful legal business.” Translation: lawyers have a much stronger financial incentiv...