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NAME AND TITLE: James M. Shelger, senior vice president and general counsel AGE: 53 ORGANIZATION: Houston-based Service Corp. International (SCI) is the world’s largest funeral business with a revenue of $2.51 billion in 2001. The company, with 33,340 employees, held more than 700,000 funerals, burials and cremations last year and has conducted funeral services for Elvis Presley, Jackie Onassis and Frank Sinatra. In all, SCI owns 2,466 funeral homes, 459 cemeteries and 154 crematoria in the U.S., Canada, France and six other countries. The company also owns ancillary flower shops, limo services, casket manufacturing facilities and a separate sales organization that markets prearranged funerals and graves. LEGAL DEPARTMENT: Shelger oversees 11 in-house attorneys in Houston who deal with matters in the United States and Canada. SCI doesn’t have much legal work outside of North America and has just one other lawyer in Paris. The Houston office includes two transactional attorneys, who work on the company’s divestitures; two litigation attorneys, including managing counsel Albert Lohse, who oversees all the litigation; one attorney who specializes in securities and financial matters; and six attorneys who handle the legal affairs of operations in a particular region of the U.S. or Canada and also help with litigation within their region. Managing counsel Joe Hayes oversees the latter group. “We require all of our lawyers to spend a day in one of our funeral homes when they join the company” so they not only understand the business operations, but also realize that they’re dealing with actual families in grief rather than just abstract legal issues, Shelger said. HIS RESPONSIBILITIES: While the staff attorneys deal with the company’s day-to-day operations, Shelger works mostly on matters of importance to senior management, such as the company’s recent reorganization of its management, as well as major litigation. “If something is really important it’s brought to my attention, like a really sensitive project … or even a routine matter, like a lawsuit that looks like it’s turning sour,” he said. He handles any major legal matters that arise overseas as well. Shelger also participates in management decisions as one of the six top executives who serve as members of the office of the chairman. BIGGEST CHALLENGE: Shelger said his biggest challenge is staying on top of everything at thousands of SCI locations and finding out about things early enough to head off potential problems, or at least minimize their consequences. “It’s tough when your client is so geographically dispersed. … It’s ultimately my job to make sure that our businesses are complying with all applicable (state and federal) laws,” Shelger said. For instance, managers in Arizona didn’t know they needed to get the state’s approval before they could run a new advertising campaign. “We found out about it and were able to ensure that the proper state approvals were secured” beforehand, he said. CREATING A BRAND NAME: Shelger oversees the legal work related to the company’s efforts to create a recognizable brand name. SCI acquired all of its cemeteries and funeral homes and each still has its original name. SCI recently added the words Dignity Memorial onto all the different names to give them a single corporate identity. Shelger screened potential brand names to make sure they weren’t already registered by another party and that they weren’t too descriptive, because those names can’t be registered. He also hired outside counsel to file the trademark application. LITIGATION: SCI is involved in more than 350 lawsuits, nearly all in the U.S. The two biggest categories of cases are employment- and consumer-related. The company is a defendant in three high-profile lawsuits centering on allegations of abuse at two Jewish cemeteries both named Menorah Gardens that it owns in Florida’s Palm Beach and Broward counties. Among the claims: multiple sales of the same plots and the digging up and discarding of remains to make room for new bodies. Families of the deceased filed lawsuits in both counties in December 2001 and April 2002. Florida’s attorney general filed a third lawsuit in March 2002. The Florida Department of Law Enforcement is also conducting a criminal investigation into the matter. SCI agreed to the appointment of an examiner to oversee the cemeteries. Two law firms represent SCI in all three lawsuits: the Miami office of Hunton & Williams and Fort Lauderdale, Fla.’s Wicker Smith. “We’re devoting significant effort to defending the company” against all charges, Shelger said, declining to discuss specifics. Managing counsel Lohse is overseeing all the litigation. “He reports to me and he briefs me on matters of significance and we work very closely together,” Shelger said. He said he is making sure that SCI’s numerous insurers pay their share of the legal bills. “I personally have devoted substantial attention to notifying insurance carriers and securing their part in the defense of this litigation,” he said. He’s being helped by Irell & Manella, based in Los Angeles. The Menorah case “has significantly added to the burden on our department and on me personally,” Shelger said. “As a result of the publicity surrounding the Menorah litigation, we have seen a spike in the number of contacts by law firms asserting an array of different kinds of claims. It’s produced a wave of claims that we don’t view as necessarily meritorious in other parts of the country. We’re dealing with those aggressively. We investigate them very carefully. And where there does appear to be some merit, we try to reach a fair resolution with the family. And where we conclude that the claim is spurious, we decline to offer any settlement.” Generally, the staff attorneys handle the complaints. But he also gets involved if “the lawyer handling it seeks my advice or it’s of such potential significance that they want me to be aware of it,” he said. OUTSIDE COUNSEL: Shelger may engage more than 100 outside law firms in a year, most of them for litigation. He also uses outside help on real estate transactions and development, and corporate, regulatory and employment matters. “We really look for the right lawyer, regardless of the firm they’re associated with,” he said. SCI’s primary outside counsel for corporate matters is Locke Liddell & Sapp. ROUTE TO THE TOP: Shelger earned his bachelor’s degree from the University of Southern California in 1971 and started out as a solo practitioner after graduating from the California Western School of Law in 1975. “What I really wanted to do was entertainment work. I got one group a record contract. But the starving part of it didn’t appeal to me,” he said. Seeking financial stability, he took a job with IFS Industries in 1978, the second-largest funeral company in the United States. The company was in the process of moving its headquarters to San Diego at the time and the previous general counsel didn’t want to relocate. So Shelger became general counsel at IFS the following year. SCI acquired IFS in December 1981 and Shelger remained in San Diego as counsel for SCI’s cemetery division. He was named GC a decade later. “I’m proud of the industry. But I had no idea I’d be in it,” he said. FAMILY: Shelger’s wife, Marti, is a homemaker. Their son, Reed, is 20, and their daughter, Elyse, is 17. LAST BOOK READ: “The Darwin Awards: Evolution in Action,” by Wendy Northcutt. “I have so much death in my life, almost everything I read is humor.”

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