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NAME: Lawrence F. Lyles, in-house counsel at Ericsson Inc. TITLE: Vice president, general counsel and secretary AGE: 49 ORGANIZATION: Plano, Texas-based Ericsson Inc. is the American subsidiary of the Swedish firm Telefonaktiebolaget LM Ericsson, the world’s leading supplier of equipment used to build telecom networks for voice and data communications. It dominates the mobile phone equipment business in particular. About 40 percent of all mobile calls pass through Ericsson systems. Its U.S. clients include AT&T Wireless, Cingular and VoiceStream. The company started out as a modest telegraph repair shop in 1876, the same year the telephone was invented. The company has 76,221 employees worldwide, including 6,776 in the United States, and reported a net loss of $2.3 billion in 2001. LEGAL DEPARTMENT: Lyles oversees 13 in-house attorneys: two intellectual property rights lawyers in Research Triangle Park, N.C., and 11 others in Plano, where Lyles is also based. The Plano staff includes five business attorneys who deal with customer contracts and mergers and acquisitions; three IP lawyers who do patent and licensing work; two litigation attorneys; and an employment lawyer. The department includes 12 paralegals and seven administrative assistants and has a budget of $7.24 million this year. HIS RESPONSIBILITIES: Lyles spends much of his time implementing the U.S. segment of transactions made by the parent company. “We may have an acquisition or divestiture that has some significant component in the U.S. that requires subsequent negotiations in the U.S.,” he says. He also handles disputes involving liabilities the company has retained after the sales of some of its businesses, such as environmental liability. In addition, Lyles administers Ericsson Inc.’s pension and 401(k) plans and takes care of all U.S. corporate legal affairs, including maintaining Ericsson’s corporate entities. He advises management on issues such as conflicts of interest, insider trading, sexual harassment and employment discrimination as well. BIGGEST CHALLENGE: The most difficult part of Lyles’ job is trying to coordinate among the competing interests within his multinational corporation. “Ericsson is a very large and complex company, and in any particular transaction or situation there are likely to be quite a few individuals in Ericsson representing different constituencies that need to be consulted with. … Everybody has their own set of issues. … I have to understand their views and … chart the appropriate course for the company. Understanding all those different constituencies is a real challenge sometimes,” he says. For example, a transaction by the parent company in Sweden may create unanticipated risks in the United States. “I have to work that through,” he says. TELECOM MELTDOWN: Since the tech market bubble burst, Ericsson stock has fallen from an all-time high of $25.62 on March 3, 2000, to a nine-year low of 52 cents on Sept. 18, 2002, and Ericsson Inc. has cut 4,760 employees from its work force through layoffs, outsourcing and spin-offs. The in-house employment attorney made sure that the layoffs were handled in a way that minimized the company’s exposure to litigation and that they also complied with federal regulations covering significant layoffs. The in-house business lawyers helped negotiate the terms of the transfers of Ericsson employees to new enterprises as part of the company’s agreements to outsource certain operations. RIGHTS OFFERING: The company issued roughly 7.9 billion new stock shares for existing shareholders to buy in August, and Ericsson Inc. attorneys had to find a way to distribute the purchase rights to its own employees, whose 401(k) plans are prohibited from holding them by Department of Labor regulations. Lyles and his staff came up with a solution. The 401(k) plan trustee sold the employees’ rights on the open market, then used the proceeds to buy them new shares. The company raised roughly $3.2 billion from the offering, which will strengthen its balance sheet and protect its leadership position in the market during these difficult times. LITIGATION: Ericsson Inc. currently has about three dozen pieces of litigation, with intellectual property rights cases forming the largest category. Ericsson is usually the defendant in such cases. It also has a handful of class actions seeking millions of headsets from Ericsson to diminish the health risks its cell phones allegedly pose. The company says the plaintiffs can buy their own headsets. Ericsson subsequently began including headsets with the cell phones it sells, however, since that’s what consumers want now, Lyles says. The rest of the company’s litigation involves commercial or employment disputes. The case most potentially damaging to Ericsson is a patent infringement lawsuit filed against it in 1993 by InterDigital Technologies, based in King of Prussia, Pa. InterDigital wants Ericsson to pay it royalties on sales of Ericsson cell phones and systems, which InterDigital claims use its technology. The case was on hold for two years while InterDigital Technologies had its patents reissued after having lost a similar lawsuit against Motorola Inc. in March 1995. Ericsson denies any wrongdoing. The trial is set to begin Feb. 10, 2003, in the U.S. District Court for the Northern District of Texas, in Dallas. Meanwhile, the parties have been participating in court-ordered mediation administered by a female rabbi since last year. The judge put the case proceedings under seal, so neither party can discuss it. One of Ericsson’s litigation attorneys is overseeing the work of lead outside counsel McKool Smith, a Dallas-based firm. “My involvement … has been generally more indirect,” Lyles says. “I’m not a litigator. I’m a transaction lawyer.” OUTSIDE COUNSEL: Ericsson Inc. plans to spend roughly $22.5 million on outside counsel this year. About two-thirds of that total, $14.85 million, is for litigation. Four Dallas law firms earn the big bucks to litigate on behalf of Ericsson Inc.: Jenkens & Gilchrist, which does the bulk of its intellectual property litigation; Jackson Walker; Hughes & Luce; and McKool Smith. Hughes & Luce also helps with business and transactional matters, mainly bankruptcy and insolvency issues, as does Akin, Gump, Strauss, Hauer & Feld’s Dallas office. ROUTE TO TOP: Lyles initially resisted becoming a lawyer, as his father and grandfather had been. After graduating from Washington and Lee University in 1975, he started a doctoral program in organizational psychology at the University of Michigan, only to drop out one year later. He realized he’d make a better lawyer than a psychologist and enrolled in the University of Texas School of Law, graduating in 1981. He became a corporate lawyer, first at the former Dallas firm of Johnson, Bromberg and Leeds, and then at Akin Gump’s Dallas office. After five years of law firm life, he grew restless and responded to a blind ad in the Dallas Morning News that had been placed by Ericsson Inc. The company had only one lawyer in the United States at the time, and Lyles was hired to be its second. He’s worked at the Texas headquarters for his entire time at Ericsson except for the year he spent at the home office in Stockholm, Sweden, in the mid-1990s. Perhaps the higher-ups were taking a closer look at him, because Lyles was named the new general counsel in 1997, when the previous general counsel returned to his native Sweden. “I never would in my wildest dreams have predicted where the job has taken me,” he says. LAST BOOK READ: “Atonement,” by Ian McEwan.

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