The attorneys at Schlichter Bogard & Denton have aggressively represented the interests of individuals for decades. In roughly the last decade alone, the firm has obtained relief on behalf of individuals subject to corporate wrongdoing that has been valued at more than $300 million and brought down fees in the entire 401(k) industry by over $2.2 billion annually. Jerry Schlichter, Founding and Managing Partner of the firm, pioneered the Employee Retirement Income Security Act (ERISA) excessive fee litigation. Schlichter and his firm were the first in a series of cases to file on behalf of employees and retirees.
Schlichter is deeply involved in advancing the St. Louis region. He successfully initiated and spearheaded the passage of the Missouri State Historic Tax Credit which has been widely acknowledged for its role in revitalizing the urban core of St. Louis. Schlichter and his wife founded Mentor St. Louis, Inc., a nonprofit organization which places adult mentors in the lives of minority elementary-aged students in underserved areas. Schlichter also co-founded Arch Grants, a nonprofit global competition for startup businesses in which winning entrepreneurs receive $50,000.
When asked about his passion to make a difference, Schlichter responded, “It’s all about living your values in what you do. If you set high goals you may not reach them, but you still can accomplish a lot. I believe that passion and conviction are things that should drive what people do. For me, it’s a labor of love.”
Tell us about your background.
I come from a blue-collar family and was the first to go to college. I went to the University of Illinois and was in a hurry, don’t ask me why, but graduated in three years. I had a full scholarship to go to the University of Illinois College of Law, and I turned that down. My thrifty father of five was astonished, but I wanted to go to one of the coasts and so I worked and borrowed to go to UCLA.
I was a student activist in law school, protested the Vietnam War, marched in demonstrations for civil rights and felt I wanted to live my values through what I did as a lawyer. Initially I was intimidated at the thought of appearing in front of a jury and telling 12 strangers you want them to do something for your client. But then I saw you could make a difference with law and people’s lives.
How did you get involved with the 401(k) industry?
Some years after I founded the firm, we started getting more and more questions from individuals not understanding their 401(k) plan or realizing they may not able to retire when they thought they would be able to. I decided we would take a deep dive into the 401(k) space. What we found was employee money in a dark closet with no financial incentive for the employer to make sure fees were reasonable because it didn’t affect anyone’s bonus or the company’s bottom line. The duty of the employer is similar to a trustee handling someone else’s money. The employer has to make sure the fees are reasonable and not excessive and that investments are prudent. Yet we saw people paying 1 percent or more when they could command a much lower rate.
My two partners and I pledged our houses, our assets – everything. This was like nothing we had done before. It was astounding to me there had been no litigation of any type for excessive fees and no regulatory action in the history of 401(k) plans. We knew the insurers for these companies would aim their cannons at this little Midwestern law firm and try to bury us financially. And that’s exactly what they did, or what they tried to do. We won, but not without many sobering nights. It’s something we’ve been battling for the last 11 years.
How did Arch Grants start?
It was the same motivation as other things I’ve done which is to try and make St. Louis a better place. The history we’ve had with these large Fortune 500 companies being acquired or moving is depressing, and I wanted to do something that would reverse that trend. We are not going to at- tract Fortune 500 companies here, that’s a fact. We have to grow our own – organically, from the ground floor.
I looked into business plan competitions around the country – there are a number of them – with the idea of considering starting one here. All of them take equity in the company, but I wanted to do it differently. I wanted to have a global competition, not just national or local to see if that could be done as a nonprofit without taking any equity in the companies, for two reasons. First, to make this opportunity in St. Louis more attractive to entrepreneurs all over because they wouldn’t be giving up a piece of their company. Second, to make the companies themselves more attractive for follow on investors after venture capital firms because they would have 100 percent of their equity to deal with in negotiating funding.
What’s the long-term vision?
We are working very hard to build Arch Grants to be a permanent part of the landscape in St. Louis. If we do that, we can say that St. Louis is a place where you want to invest because it’s going to be a burgeoning community of entrepreneurs year after year. We want to be able to say to venture capitalists who are considering investment, ‘plant your flag in St. Louis because you are going to have opportunities to invest in high-quality companies that are winners of a global competition.’
What inspired you and your wife to start the not-for-profit Mentor St. Louis?
Mentor St. Louis arose out of our own personal experiences. Going back to my college days, I had meal jobs in an underserved school in Champaign, Illinois where I was a playground supervisor. It gave me an opportunity to see what a little bit of time and attention from a caring adult means in the lives of some of these kids, especially in single-parent homes and with boys. There was a yearning for that kind of care. My wife Sue and I had some similar experiences, and we decided to start a mentoring program in the St. Louis Public Schools calling it Mentor St. Louis. Ultimately it became the largest volunteer program in the St. Louis Public Schools. Today, Mentor St. Louis remains its own entity; however, it’s the mentoring arm of the Boys and Girls Clubs of Greater St. Louis.
Advancing St. Louis highlights local leaders of small businesses and large corporations that are impacting the St. Louis region from a variety of industries. These leaders are Advancing St. Louis by inspiring change and starting conversations. Are you interested in having your story told? Contact Jennifer Mason, who coordinates marketing content, at firstname.lastname@example.org.