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Steven L. Scheinthal says he literally put his bar card on the line when he was a young lawyer trying to impress client Tilman Fertitta, who was then embroiled in a courthouse battle over a promissory note with a former partner in a restaurant. Scheinthal can’t recall the name of the visiting judge at that hearing about a dozen years ago. But he does clearly remember pulling his bar card out of his wallet and telling the judge he’d quit practicing law if the judge didn’t agree that Scheinthal filed a timely response to a summary judgment motion. Scheinthal’s courtroom theatrics didn’t cost him his license to practice law, but he believes it did help cement his relationship with Fertitta. That suit ultimately settled, but until Scheinthal left Houston’s Stumpf & Falgout, where he became a partner in 1991, Scheinthal worked on a number of other suits for Fertitta and his restaurant company. “A couple restaurants didn’t do too well, creating all kinds of liabilities and work for me,” he recalls. In 1992, Scheinthal accepted an offer from Fertitta to become general counsel of Landry’s Restaurants Inc. (then known as Landry’s Seafood Restaurants), which Fertitta has built into the nation’s second largest seafood restaurant chain. Fertitta says Scheinthal impressed him because he worked hard and was an advocate. “When he represented you, you did not feel like he was just a lawyer out there, trying to collect a fee,” Fertitta says. “You felt like he had your best interests at heart.” When Scheinthal joined Landry’s, it was a private company, and he was one of only 10 employees at the corporate office. But 10 years later, it employs 27,000 in 34 states. In 1992, revenues were around $25 million, Scheinthal recalls, in contrast to the $746 million in revenues Landry’s posted in 2001. Scheinthal and Fertitta forecast more than a billion in revenues by 2003. Scheinthal came to Landry’s with a litigation background, but he says he learned during his first day on the job that the role of a general counsel is much broader. He helped buy a restaurant in Dallas that first day, a task he’s repeated many times since as the company completed several large restaurant chain acquisitions over the past decade. But on that first day, Scheinthal says a sticky issue arose, and he had to consult with outside counsel to close the deal into escrow as a protection. “I learned I can’t do it all,” Scheinthal says. But his company is in some ways trying to do it all. Fertitta, Landry’s CEO, got his start in the restaurant business in 1986 when he acquired an interest in popular Houston seafood restaurants Landry’s Seafood House and Willie G’s Seafood & Steak House. By 1988, with some help from Scheinthal and other lawyers, Fertitta bought out his partners and began expansion. After going public in 1993, Landry’s bought a number of restaurant chains, including Joe’s Crab Shack, The Crab House, Rainforest Caf� and Chart House restaurants, and expanded. The company also developed the Kemah Boardwalk, a restaurant/entertainment complex that includes an Aquarium restaurant and a Ferris wheel, and it’s building a second Aquarium restaurant in downtown Houston. Scheinthal is working to close Landry’s planned acquisition of the Saltgrass Steak House and Seafood restaurants from MetroNational Corp., a $75 million deal that was announced on Sept. 11 and is expected to close within 30 days. MORE THAN A LAWYER Scheinthal says he liked being a trial lawyer, but he went in-house because he enjoys working with Fertitta. “Tilman is a real dynamic person. I could see early on he was special,” Scheinthal says. As general counsel at Landry’s, Scheinthal says he is not only responsible for the legal operations, but also oversees risk management, human relations and compliance. He’s a member of Landry’s board of directors and one of its highest-paid executives. According to information in Landry’s 2002 proxy statement, Scheinthal’s compensation in 2001 totaled $789,500, including stock options with a present value of $224,500. During the year, he exercised his option to buy 33,500 shares of stock and realized a value of $299,825 from it. Scheinthal has three staff counsel working for him. Katrina Hamrick works in the Human Resources Department, and Edward Engel and Barney Stagner work in the development department. He says he hired his first in-house lawyer in 1995 or 1996 because the company was expanding so much he couldn’t do it all and it wasn’t necessarily efficient to hire outside counsel. “The problem is, they [outside counsel] are not dedicated solely to doing your work. It’s a whole lot easier for somebody to walk next door versus picking up the phone, scheduling a meeting and having to take time out to educate somebody on a project,” he says. He’s not just the company’s lawyer. Scheinthal says he is a part of the executive management and has a role in the company’s decision-making. All that comes at a cost. People in the restaurant business tend to work long hours, and the executive management team at Landry’s isn’t any different. “I’m on 24/7,” Scheinthal says. “I’ve definitely missed my fair share of birthday parties and baseball games. I have no regrets. The other side is, financially I’ve been able to provide,” he says. Scheinthal and his wife, Julie, have sons ages 15 and 13 and an 11-year-old daughter. Scheinthal is a Miami native who graduated from the University of Florida at age 19. He wanted to be a lawyer since he began to enjoy debate at age 9, and graduated from the University of Houston Law Center at age 22. He joined a small Houston firm, now known as Stumpf Craddock Massey & Pulman, right out of law school in 1984 to do litigation. As an associate there, Scheinthal started doing some work for Fertitta in 1989 assisting Tilman Fertitta’s cousin, Tilman “Skip” Falgout, then a partner in the firm. SHORT LIST OF LAWYERS Scheinthal, 41, had a heart attack in January. His long workdays — he typically doesn’t get home before 10 p.m. — probably contributed to it, he says, adding that he also needed to lose some weight and didn’t exercise enough. He’s been working on his health by eating better and working out more, but says he’s still keeping long hours on the job. Scheinthal says he, Fertitta and Paul West, the company’s chief financial officer, work together closely. They comprise the company’s executive committee. They talk all day long — hourly is a more apt description than daily. They go to a late afternoon lunch together nearly every day. “For the most part, I’m in the loop,” Scheinthal says. He says that when the executive committee authorizes a project, such as a land acquisition for a set dollar amount, it’s his job to oversee the negotiations and sign the proper contracts. Scheinthal says employees in the development department do the groundwork on the deal, and then he runs the deal through a checklist. The checklist includes items such as permits, signage, zoning and building regulations and provisions for an exit strategy. Because of the company’s far-flung operations, Scheinthal says he uses about 50 firms around the country for local matters. But he has a short list of go-to lawyers for the bulk of matters in Houston. Arthur Berner, a partner in Haynes and Boone in Houston, does securities work and works on acquisitions. For big litigation, Scheinthal says he uses Daryl Bristow, a partner in Baker Botts. For other litigation, the firm also uses Edward Perkins and James Ware, partners in Sheehy, Serpe & Ware in Houston. It’s not Scheinthal’s style to simply pass off the litigation to outside counsel. “On significant litigation, I’ll look at everything. I’ll look at pleadings. I won’t let anything get filed without me looking it over,” he says. Bristow says Scheinthal is “no shrinking violet” about expressing his view about how some litigation should be handled. While respectful, Bristow says Scheinthal demands to know what’s happening. “For as big of a company as that is, and as many different issues as a general counsel like Steve has … I don’t know how the guy finds enough time in the day to do it,” Bristow says. Scheinthal hired Bristow to handle some big federal-court litigation in Galveston stemming from the company’s battle with Galveston developer Robert Moody and the Moody Foundation over the right to develop a convention center in Galveston. The litigation in U.S. District Judge Sam Kent’s court ultimately settled, and in February, the Galveston City Council and the Galveston Park Board of Trustees approved a contract to build a $30 million convention center adjacent to Fertitta’s San Luis Resort and Conference Center. Perkins, the Sheehy, Serpe lawyer, says his firm started doing some litigation for Landry’s in 1997 in connection with the Kemah project. Since then, the firm’s work ranges from slip-and-fall suits to complex copyright and trademark litigation, he says. Perkins says Scheinthal is sharp. “He’s actually got a really good business sense because so much of his work is built around running the business,” he says. William E. King, a lawyer who is mayor of Kemah, says Scheinthal is hardworking and a “pretty good lawyer.” “Obviously a lot of times the city and Landry’s have divergent interests, so we’ve had issues we’ve had to resolve, and sometimes those are hotly contested, but overall we’ve had a pretty good relationship with Landry’s and, specifically, Scheinthal,” says King, managing partner of the Houston office of Linebarger Goggan Blair Pena & Sampson. “In Kemah, they pretty much have done what they said they would do,” King says. King, who was a councilman in Kemah for six years before he became mayor in 1991, says Scheinthal is aggressive, but has shown signs of mellowing some since his heart attack. Scheinthal says the one way outside counsel can lose Landry’s as a client is by over billing. “I know the value of work. We sell a shrimp dinner [at Joe's Crab Shack] for $9.95. We make, when it’s all said and done, $1.50 off that dinner. You’ve got to sell a lot of shrimp dinners to pay some of the legal bills,” he says. Scheinthal also says he gets upset if an outside counsel files something without sending it to him. The outside lawyer gets one warning or risks losing the business, he says. “I hate it when a lawyer says, ‘I’m trying to save you money.’ That means the lawyer isn’t doing his job,” Scheinthal says. “If I’m in litigation, it’s because we think it’s the appropriate thing.” Because of the nature of the restaurant business, Scheinthal says his typical day is fraught with interruptions and pressing matters. He tries to but usually doesn’t have the luxury of spending five hours straight drawing up a contract. That’s why he has other in-house lawyers to help out. “That’s my problem. I can make a list of things to do, but it doesn’t matter. We’re building 30 restaurants a year. We’re doing the Saltgrass acquisition now. … I don’t have the ability to stay on task because there’s so much going on,” he says. He says the executive committee might agree it’s OK to spend $3 million to buy a piece of property, for example, but it’s his responsibility to make sure all the details of the deal are negotiated to Fertitta’s satisfaction. “Tilman used to do that, but Tilman shouldn’t have to. He approves the deal,” Scheinthal says. Fertitta says Scheinthal’s judgment and quick mind make him an effective general counsel. He notes, “What Steve has become is probably one of the top GCs I’ve ever met.”

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