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NAME AND TITLE: Lawrence R. Sobol, general counsel AGE: 51 ORGANIZATION: Edward D. Jones & Co. sells stocks, bonds, certificates of deposit and mutual funds through a nationwide network of single-broker offices, located primarily in suburban and rural communities. The privately held company is owned by 209 general and 5,400 limited partners, all current or retired employees. It has resisted the quick bucks and higher volume of online trading, opting for the more personal service and higher commissions that led it to $2.2 billion in revenues and $230 million in pretax profits in 2001. Based in the St. Louis suburb of Des Peres, Mo., Edward Jones has 25,000 employees in 8,127 branches throughout the United States, Canada and the United Kingdom. PARTNERSHIP PARADISE? Sobol supervises four lawyers and one paralegal in Edward Jones’ law department. His office oversees outside counsel’s work on arbitration and litigation, and handles general business, employment and contractual matters. Sobol also consults regularly with the 10 lawyers in the compliance division. BEST COMPANY: In February, Fortune magazine rated Edward Jones as the best company to work for in America, and the firm made Working Mother magazine’s 2001 list of the “100 Best Companies for Working Mothers.” The firm’s employee partners have created its worker-friendly atmosphere, says Sobol, an attitude that carries over to his shop. For example, one recently hired lawyer is expecting her second child, and Sobol believes that she’ll take three months of maternity leave, with her work schedule then adjusted to accommodate her new childcare needs. Unlike law firms that restrict partnership to the top income-generating attorneys, Edward Jones offers a stake in the company to all employees — from top management to mail clerks — who are high-achievers within the scope of their assigned duties. Sobol, a general partner since 1977, oversees an in-house staff that includes another general partner and a limited partner. In addition to improving quality of life for the lawyers, the partnership system results in a more effective and efficient law office, Sobol believes. “We can make better long-term strategic decisions, without having to worry about how [litigation and arbitration cases] will impact the numbers in the next annual report,” he says. Present or potential ownership interest makes all employees — including lawyers — more motivated in their day-to-day work, and more sensitive to cost concerns, Sobol adds. “If we’re taking a deposition in another city, we’re not staying in the most luxurious hotels and eating at the fanciest restaurants,” he says. EMPLOYEES’ E-MAIL ERROR: There are dark days even in a workers’ paradise. In May 1999, after an employee complaint, Edward Jones fired 19 employees and disciplined 41 for e-mailing pornography on their work computers. Sobol consulted with management and personnel officials on legal issues related to the actions, which he says involved both employees’ privacy interests and the company’s duty to prevent inappropriate and offensive use of its communication system. Sobol regrets that Edward Jones lost some “good people” in this incident, but believes that the company had to take firm action when faced with a legitimate employee complaint. “If someone sent an e-mail that was slightly off-color, we couldn’t care less, but this was at the other extreme,” he says. “We make it clear, whether it’s e-mail or talk during a coffee break, that [employees] run the risk of disciplinary action if someone is offended.” LITIGATION: In recent years, Edward Jones’ litigation and arbitration docket has ranged from 75 to 100 cases, most of which are arbitrations of investor complaints. “We wish it were none, but we are in the investment business,” he says. Sobol explains that investor disputes are difficult to characterize, but that they typically involve an allegation that the investment was unsuitable for the investor or that its risks were not adequately explained. One risk-management policy discourages firm brokers from trading the most litigation-prone investment products, such as commodities, penny stocks, options and margin accounts. But these efforts cannot always prevent one of the company’s 8,500 brokers from misdeeds, such as account churning or ignoring client directives. “It happens everywhere, and it sometimes happens at Edward Jones,” he says. “But we deal fairly with clients if their accounts were mishandled. We don’t play games. We try to make them whole.” REGULATION PROBLEMS: The company also has run afoul of regulators recently. In December 2000, it was fined $200,000 by the New York Stock Exchange for inadequate supervision of 87 brokers selling variable-rate certificates of deposits (CDs). The NYSE charged that from 1994 to 1997, the brokers did not adequately inform 104 customers of these CDs’ fluctuating interest rates and long-term maturity, which made the purchase questionable for risk-averse or elderly investors. Edward Jones consented to the findings without admitting liability. According to Sobol, less than one in 1,000 investors complained to regulators, and none suffered any financial losses, since the CDs at issue were all called within a year because of falling interest rates. PRINCIPAL OUTSIDE COUNSEL: Edward Jones uses midtier firms throughout the country, says Sobol, hiring on the basis of expertise and jurisdictional factors. Sobol regularly relies on three St. Louis firms: Bryan Cave for general corporate matters; Greensfelder, Hemker & Gale for arbitrations; and Goldberg, Katz & Stansen for cases involving hiring of brokers and related claims. ROUTE TO THE TOP: The Kansas City native earned a B.A. in accounting from the University of Texas in 1972 and graduated from the University of Missouri law school in 1975. Edward Jones, then a 300-employee firm, hired Sobol directly from law school as general counsel and the firm’s first in-house lawyer. Although the new responsibilities were frightening for the newly minted lawyer, Sobol says the transition from law student to GC was eased by his training in finance and securities law and by a law school clerkship at a small company that was putting together an IPO. While studying for the bar exam, he also studied and passed the licensing requirements to become a registered broker. SPORTS STORY: Sobol was involved in the recent renaming of the local professional football arena (formerly the Trans World Dome), which is the home of the St. Louis Rams. TWA’s bankruptcy put naming rights to the stadium up for grabs. After reviewing other stadium naming agreements and consulting with attorneys experienced in the area, Sobol negotiated the deal with AMR Corp., the American Airlines parent that had acquired naming rights along with other TWA assets. The agreement, announced Jan. 25, obligates the company to pay $2.65 million a year for 12 years. Next year, Sobol hopes to see the Rams reclaim the NFL championship from a luxury box in the Edward Jones Dome. FAMILY: Sobol lives with his wife, Maureen, in the St. Louis suburb of Town & Country, Mo. Their son David, 23, is in his first year at New York University School of Law, and his brother, Kevin, 18, is a freshman at the University of Southern California. LAST BOOK READ: “The Black House,” by Stephen King.

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