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NAME: Michael Roster TITLE: Executive vice president, general counsel and secretary AGE: 56 ORGANIZATION: Oakland, Calif.-based Golden West Financial Corp. is a savings and loan holding company whose principal subsidiary, World Savings Bank, reported assets in 2000 of $55.7 billion and net annual income of $540 million, most from its main business of adjustable rate mortgages. The 6,200-employee bank operates 253 savings branches and 278 loan origination offices in 35 states. Golden West also operates the Atlas family of mutual funds. ROSTER’S ROLE: Roster, general counsel since February 2000, reports to Golden West’s co-chairs and CEOs, husband and wife Herbert and Marion Sandler, and he directly supervises two of the company’s 13 attorneys. Roster and his subordinates work on corporate governance, securities issues, human relations, facility-related matters, and “anything that doesn’t fall into the other branches,” he says. The 10 other in-house counsel are assigned to the company’s lending, savings and mutual fund business groups. These scattered lawyers keep Roster abreast of important legal issues, but report to their department heads and are responsible for overseeing litigation related to their groups. Roster, who earned $307,566 in 2000, says he plays a “coordinating role” in Golden West’s decentralized in-house system. LITIGATION: Golden West and World Savings are involved in scant litigation compared with similar financial institutions, says Roster. Slip-and-fall and other premises liability matters are sent to insurance carriers; since 1995, employment disputes have gone to arbitrators. Roster says that the company’s regulatory compliance practices and borrower-friendly policies have minimized loan-related litigation such as truth-in-lending lawsuits and mortgage foreclosures. According to Roster, a strong economy in recent years has also reduced foreclosures. But he also credits World Savings’ “smart underwriting” and sympathetic dealings with families facing financial exigencies. “We’re not lenders who try to put people in high cost loans, wipe out their equity, and take over their property,” says Roster. “Our business is not to take over property; our business is making safe and secure loans.” PREDATORY-LENDING: Roster is concerned about the growing popularity of predatory-lending laws. World Savings does not engage in predatory practices, he says, and it makes many market-rate loans to lower and moderate-income families. The company doesn’t use credit scores as loan cutoffs or to raise interest rates, he says, but instead, the company aims to “provide a uniform product at decent rate … .Each loan application is looked at individually, and if we can underwrite it, if it’s a safe and sound loan, we’ll make it.” Roster does track predatory-lending laws nationwide, however, and lobbies against what he considers to be ill-considered state and local legislation. According to Roster, this inconsistent patchwork of laws punishes honest banks and other regulated entities through increased administrative costs and quirky compliance procedures, while not reaching unregulated, predatory lenders who target immigrants and the poor and the elderly. ACCA ISSUES: In addition to his post at Golden West, Roster chairs the American Corporate Counsel Association (ACCA), the bar association for in-house counsel. His priorities include encouraging state bars to allow multidisciplinary practice (MDP) and encouraging his corporate colleagues to participate in ACCA’s pro bono and diversity programs. The in-house bar has long advocated MDP, Roster notes. Corporate counsel simply want the best legal service provider, he says, and that is not always a traditional law firm. He cites his own experience as GC at Stanford University, where he dealt with occasional problems in the school’s $1 billion construction project. “On the spot market, we had to find lawyers and engineers and architects to figure out what went wrong, and how to defend ourselves,” he recalls. These issues could have been more efficiently and more effectively handled by a multidisciplinary firm specializing in construction, he says. While the American Bar Association continues to debate the merits of MDP, the system is “just going to quietly start taking place,” he predicts, citing its widespread use in Europe and growing experimentation in the United States. PRINCIPAL OUTSIDE COUNSEL: Golden West budgets about $700,000 for outside counsel fees, says Roster, although the figure may rise past a million if the company faced a major trial. Dividing this pie are San Francisco’s Orrick Herrington & Sutcliffe — primary outside counsel for corporate and IP matters — and Hanson, Bridgett, Marcus, Vlahos & Rudy, which deals with labor issues; and two Los Angeles firms: litigation counsel Musick, Peeler & Garrett and Paul, Hastings, Janofsky & Walker, which handles mutual fund work. ROUTE TO THE TOP: The Chicago native is a 1967 graduate of Stanford University, where he edited The Stanford Daily while working as a stringer at Time-Life’s San Francisco bureau. Roster went on to Stanford Law School, taking a leave of absence in 1969-71 to serve in the U.S. Navy. After earning his J.D. in 1973, Roster joined Los Angeles’ McKenna & Fitting (later McKenna & Cuneo), where he eventually led the firm’s banking and corporate groups in Washington, D.C. In 1987, he joined San Francisco’s Morrison & Foerster, becoming managing partner of the L.A. office and co-chairman of MoFo’s financial services practice group. After becoming Stanford’s GC in 1993, he undertook a major restructuring of the university’s law office, outsourcing most of the legal work to three firms, slashing the in-house staff from 26 to six and earning a reputation in some quarters as the grim reaper of college counsel. In a particularly controversial move, he invited in-house lawyers to a meeting where they were asked to describe their jobs to law firms bidding for Stanford’s legal business. “It’s such a painful thing,” one unnamed Stanford lawyer told a reporter in May 1994. “The worst of it was our sense when we did our presentations that we were walking up and stretching our necks on the chopping block.” At the time, Roster defended the restructuring as necessary, but called the job cuts and resulting backlash “the most awful experience of my life.” Now, Roster is more sanguine. “It was difficult to do, but in the long term it was very helpful for the university, and it’s opened some terrific career paths” for the former Stanford attorneys. Roster also cancelled hourly billing arrangements with outside firms, inviting them to bid for parts of Stanford’s legal business for a fixed annual fee. He says this saved money and improved the quality and efficiency of its legal representation. Although he is interested in discussing retainer arrangements with Golden West’s outside firms, he says he does not envision a restructuring similar to Stanford’s. “We have good outside and in-house lawyers,” he says. “Here people renew themselves because we push ourselves, and we move people around.” PET PEEVE: Roster is riled by law firms that have “no clue what the client is doing … and don’t realize how much time in-house lawyers spend trying to fix what they’ve sent over.” Roster blames much of this on the billable-hour system, which encourages outside counsel to respond to a client question with an over-researched memo, when some commonsense legal judgment would do. FAMILY: Roster, who is single, has homes in San Francisco and Pasadena. LAST BOOKS READ: “The Poisonwood Bible,” by Barbara Kingsolver, and “Freedom From Fear,” David Kennedy’s Pulitzer Prize-winning history of the Great Depression and World War II.

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