Leaving employment with Western Electric Company in 1920, Schlage opened a shop in San Francisco in the present-day financial district. The Schlage Lock Company was incorporated with a starting capital of $30. In the same year, he applied for a patent for a lock that could be drilled into a door with only two holes. This new cylindrical lock had a single plate, serving as both escutcheon and striker plate, wrapping around the door's edge. It was mostly used on interior doors, where it replaced the older Mortise lock.