ESOP Advisor Hall of Fame - Remembering Bob Socol
ESOP Advisor Hall of Fame is honored to recognize the significant contributions Bob Socol has made throughout his years of work within the ESOP community. This interview with Dennis Long, John Kober, and Gordy Vaughn took place after Bob Socol’s passing.
Please share your earliest recollections of Bob.
Dennis Long: Talking about Bob is interesting from the perspective that we had a relationship that was business oriented, and it grew to a long-term friendship. So, I've known Bob for a long time. Bob started out in the industry with Houlihan Lokey located in Los Angeles. I did not know him then, but when he moved to Chicago. He started working with Willamette Associate, a business valuation firm. We had some early interactions at that time. A couple of cases that we worked on that were, I think examples of Bob's early and lasting impact in the community were larger ESOP transactions, more complicated, ESOP transactions and that's what I generally like to work on. So, we worked on Ferrell Gas in 1998. We worked on Appleton Papers transaction, which was the first public offering of debt after 9/11. That was in November of 2001.
Then Bob moved on to start the ESOP valuation practice at Stout, Risius, and Ross (now, Stout) That firm had been around for a long time.
Vaughn Gordy: If I can jump in there.
Dennis Long: Go ahead.
Vaughn Gordy: I was the trustee for the Ferrell Gas transaction, working with Bob and Dennis. When Bob decided to change firms from Willamette to Stout Risius Ross, Willamette took him to court. I provided Bob with a letter asserting that he had not had any discussions with me about his decision to change firms.
Dennis Long: Yeah, I mean he was with Willamette which was a very well-respected firm at that time, a little less involved in the ESOP community now, but he went over to Stout. While he's not a founder of a company, he was definitely the founder of the ESOP advisory practice within an already established firm. So, I think of Bob as an entrepreneur in that regard. I think of him as someone who, without him that practice would not be around today.
That was in 2004 and today Stout is probably the leading firm in the country for ESOP advisory services, definitely top tier. We could argue about who's number one. Bob built that practice, and did an outstanding job in bringing new people into the fold, mentoring them, and training them.
One of the things that I recall about Bob is that he was always curious - with his clients, with his questions of them during the due diligence meetings; even personally, always curious, always wanted to learn, always wanted to know what's going on. I think that really helped him as a mentor to younger people and as an advisor to his clients.
Vaughn Gordy: There were a couple of people that were very important in my development in the ESOP world, and Bob was somebody who took me under his wing and taught me how to read a valuation report.
He would always finish a meeting with saying, “Is there any question we haven't asked?” or “Is there anything about this report that bothers you that you haven’t mentioned?” It was always a question with an open-ended invitation for a discussion.
Dennis Long: The people that listened and learned well from him because they still conclude a meeting with that general question.
John A Kober: I had the honor to meet Bob sometime in the mid-1990s. I had been working on a number of ESOPs, but most of my clients were public company ESOP transactions or private equity related transactions back in the early 90s. I attended the ESOP Association and I went to a valuation session that Bob sit on the panel. I was so impressed with the way Bob handled himself not only as a professional but from the knowledge standpoint. He was setting up there with a number of Houlihan Lokey professionals, and he was at Willamette at that time. After his panel discussion, I went up to him thinking, maybe if I could just ask one question, because I was starting to get into the private company ESOP area. He was so kind and professional. We went outside, and he spent as much time with me talking about not only the ESOP profession and community but also his practice and the types of deals he was involved in. About a year later, I referred Bob into a matter, a fairly complex matter, in Dallas, Texas. We worked through that transaction. It was a successful transaction and a to this day a successful company. After that matter, I continued to work with Bob and he introduced to me to Dennis and Vaughn. As we worked on more matters together, II got to know them better working on a variety of transactions, small deals, medium-sized deals, and some very large deals. By working with Bob, a personal friendship relationship grew, and I've enjoyed that friendship for many, many years. Bob would always take your call. It didn't matter if he was in a meeting, at dinner, or on the golf course. That's one thing I'd say about Bob Socol, it didn't matter when you called him. He responded very promptly and was very professional at all times. This captures my early experience with Bob.
Dennis Long: One of the things that you will get out of this interview is that we all enjoyed a deep friendship with Bob. I happen to have about 85 mutual client relationships with Bob, but also a deep friendship. So, to John's point, we used to play golf every year at Desert Mountain, where John and Bob are members. I don't know if we ever had a round of golf. Where one of us wasn't on a conference call, and sometimes they would last three four or five holes or longer. I guess you could conclude that, we never let golf get in the way a business, and we never let business get in the way of golf.
What kind of person was Bob?
Dennis Long: He was a friend for a long time. He was someone you could always count on. John mentioned the word ‘kind,’ I would also think of ‘generous.’
Vaughn Gordy: He was also very excited to be a new Grandpa.
Dennis Long: Yes. Yeah.
Dennis Long: To me he was like a brother. He was married to his wife Lynn for long time. I don't know 40-some years. I don't know the exact number. He has a daughter, Lauren, and his son, Brian, and a grandchild, William.
He was very committed to all of his friends, and he was a real advocate for and within the ESOP community. The ESOP community is small, and we do a lot of work together. So you couldn’t help but be friends with some of the people. Not friends with everyone in the industry. Sometimes it's just business, but it was easy to become a friend to Bob because of his kind giving nature. He was someone that you could joke around with. We could do a whole interview on that.
Vaughn Gordy: He was also very charitable. There was one charitable auction where he obviously contributed a lot of money and got us all a boat ride from Chicago. I think there were eight of us on the boat over to one of the premier golf clubs over here in Michigan. It was all because of his charity. I was on the board of a couple of charities. He'd always be a big contributor to my charities and always invited me to theirs to celebrate his efforts in charity work. He was also a very giving person
John A Kober: As I walked down the pathway of life with Bob, this journey can be summarized into two words - Bob Socol was a man who “cared” and “shared.” He “cared” about a lot of people and he “shared” his success with a lot of people.
He cared a lot about his wife Lynn, his children, and his grandson. He was very close to his brother and his mom and dad. I remember one time early on I came up to Chicago for a meeting and invited Bob to dinner; and Bob could not do the dinner because he had a commitment with his dad, and like he should, he went and played bingo with his dad - which was very, very important character of Bob. I think that was a very telling sign. Also, he cared about his fellow colleagues (at work and professionally) and his friends. He was very close to a lot of people who he considered friends. He cared about his firm and its people. Bob was committed to his colleagues. I always said to Bob -some people have a job and work in a profession, - you are a professional that is engaged, committed, and care about your professional, your firm, your people, and made friends with people in your professional (as well as your community).
He was very, very close to all his fellow colleagues, as Dennis mentioned. I mean, he took an interest in every one of those individuals both as a person and as a professional. It didn't matter whether the person was new to his group or had been part of his group for 20 years. He took an interest in their success, and he was always sharing his wisdom. He cared about his clients. Matter of fact, he was very solution focused without jeopardizing the quality of his work or his integrity. And I will say, he cared about the ESOP community, the community of Chicago, and his friends at Twin Orchard Golf Club (as evidenced by the charitable contributions he made). One thing about Bob, he loved golf, and he loved cars – fast cars. He'd always go to the car show up in Chicago, and he never missed an opportunity to play a round of golf. Bob enjoyed is profession and his friends, and he was always sharing something with someone that was pretty special to him.
Vaughn Gordy: I think you were there Dennis (and I think you were too John) when the Brookshire guys came over with Bob to play my golf course in Lakeside, Michigan. One of the Brookshire guys wanted to drive Bob's cute little sports car back to Chicago. Approaching Chicago, he took the wrong exit and went right through the Cabrini Green section of Chicago, which was rampant with crime.
Please talk with us about the Bob’s professional contributions to the ESOP community.
Dennis Long: Bob was involved with the ESOP Association the National Center for Employee Ownership, the Employee Owned S Corporations of America. He had a leadership role on various committees in each of them, so he was very involved in growing awareness of understanding of ESOPs. He was a speaker at all of those organizations at their conferences throughout the years. And he was a collaborative guy. So, if you were on a panel with Bob, he wasn't there to tell you he was the smartest guy in the room, but he probably was.
He was just a very delightful guy to work with. Again, I mention that I think he's an entrepreneur within a bigger firm. I think he's a pioneer in growing the ESOP valuation practice and its standards of excellence. And the people that he is brought along that continue that practice today.
He’s made a big impact. He was a Relentless worker. He was always not only working on clients but working to get clients.
I don't know of anyone that was a marketing/technical mix other than Bob. Usually, you're either a sales guy or your technical guy. He was very good at being technical when that was required, and his people skills, his ‘bedside manner’ if you will and his networking with other advisors; I don't think I've met anybody as good as Bob.
John A Kober: I echo everything Dennis said, Bob was very committed to the betterment of his profession and the ESOP community. One thing I will say, which would be in addition to what Dennis discussed, is that if you had a complex situation and you wanted to talk to somebody about the valuation impact, whether it made sense to do an ESOP or not, Bob would spend hours with you sharing his wisdom - both good and bad. As Dennis discussed, Bob, not only was a person who would invest time in you and your professional needs. He also was a technician and had a common sense approach to approaching a matter. . He would come back and say, “You can not do it this way, but we may be able you can do it in this fashion.” He was very creative and transparent (which was one of his strengths because so many people in the valuation profession are very much like an accountant that's preparing an audit). He was very focused on doing the right thing.
Dennis Long: The two examples that I mentioned are 25 years or more in difference in their age, but they are examples of not your typical ESOP. Take Appleton for example. Not only the timing, (it’s the first company with public debt offering after 9/11) but also it was one of the early KSOPs. It was a 401K plan where the employees used their money to invest in the new company which was a acquisition foreign-owned company at the time.
There are a lot of complications when you do that with ERISA law, Securities Law, evaluation issues, etc. So the employees use their 401K assets and then the company at a dead offering on Wall Street. It was a fairly large deal, like a 800 million dollar deal.
And Ferrellgas, I don't know of another one like it where it's a limited partnership. Mr. Ferrell sold some of his interest in his limited partnership So, it’s a limited partnership publicly traded company that has an ESOP, again, a lot of complicated issues. Bob never shied away from those. In fact, he was drawn to them. As John said, Bob was always solution oriented. Answering the question, “How can we make this happen or the benefit of everyone? - the employees who are now going to be owners, the sellers. There's a solution that is right, and Bob looked for that at all times.
Who were Bob’s influences in the industry?
Dennis Long: Early on, he worked for Shannon Pratt, Atlanta. That would be an early influence.
Vaughn Gordy: I know Jerry Kaplan was an influence but not, of course, on the valuation side of things.
Dennis Long: Jerry Kaplan has an influence on all of us in the community. He was a real pioneer.
I would put Bob and we haven't used the word pioneer, but I'd use that and describing Bob as well. I would mention Greg Brown in there as well, another lawyer in Chicago area.
Did Bob have a hand in developing any of the early ESOP legislation?
John A Kober: Probably the only one that he had an impact on legislation (and Dennis kind of led the march), he played a role was in 1997 when Congress changed the law to permit ESOPs to become shareholders of S-corporations. Before 1997, ESOPs could not own stock in an S-corporation. The law changed and there were abuses. As a result of these abuses, there was a huge push for regulation to address these types of abuses. As a result of work by a lot of professionals, a new statute was enacted to basically deal with these abuses. Bob had a lot of input on the new law along with Dennis leading the charge and Vaughn playing a big role.
Dennis Long: Yeah, so that game about after ESCA was formed, and we worked with Linda Carlisle at the time. She was at ESCA with some of the people writing the regulations for the government. I was on a committee of advisors for ESCA that contributed to that. So, it wasn't like any one person. but there's a group of people. The people involved in ESCA did an awful lot of good work and a great job in protecting the interest of employee-owned S Corporations. I know in the days leading up to the formation of ESCA Jerry Kaplan, Greg Brown, myself, and others were aware that we needed some organization that would take this change in the law and protect it. We met at the Hilton Hotel in1998 and from there, little while later, ESCA was formed. Today, Stephanie Silverman does a great job of leading that organization.
What do you see as Bob’s lasting impact on the industry and individuals?
Dennis Long: I think every one of the people that spent time working in the Advisory Group would say to a person that they owe what they're doing to the work that Bob did early on. You can pick any one of them go through the directory of employees, and without Bob's work, they'd be doing something else. He certainly had a big impact on me, and the firm that I started and grew PCI Group and later, in 2003, sold it to Principal Financial Group. But as I said, we had 85 Mutual clients. That was a big deal. I think I had, maybe had 250 clients. So, it's a lot of shared activity. The confidence that he had in us and us in him; it was a mutual respect.
I'm involved today with the company called Verit Advisors. We're 15 years old, a little boutique investment advisory firm in Chicago. In the early days, when we were just getting started, Bob was very generous with officer space. No one even knows that, but he was generous. It’s fifteen years later that still has a big impact, those early signs of kindness.
Vaughn Gordy: Three years ago Bob sort of retired and we brought him on the board at GreatBanc Trust. So in regard to ongoing impact, he continued to be very invested and involved with ESOPs and with us in particular. So, we continue to benefit from that.
Dennis Long: I mentioned Verit, Mary Joseph is the CEO of Verit, and I'm sure she could attest to the impact that Bob has had and her on him. I mean it's one of those things. We all worked together. Another pioneer that's not with us is Dave Ackerman. He had an early influence on Bob. I'm positive.
We're losing too many of the old guard. and it makes it kind of nice that Jack Veale has started the ESOP Advisor Hall of Fame. It kind of memorializes some of those early efforts. It's nice to see.
John A Kober: I would say that when David Ackerman and I started assembling our team, Bob had a great impact on how we brought our teams together and run the practice. We were very focused on building a large practice group comprised of interdisciplinary skills - ERISA professionals, tax professionals, corporate professionals, and SEC professionals. Bob was a virtual resource on how we blended all these components together. Even David and I came from different backgrounds, David was a tax and ERIS professional, and I was a tax, Securities, corporate transactional professional. Bob played a role in how David and I put our practices together and thought about things. Both David and I learned, we watched and listened to Bob on how you put all these talents together and how you move in the same step. The really hard hurdle (which is a high hurdle) as Dennis has stated many times that there are people that can build pods and there are people that can build practices. Bob built a practice and a sustainable business. Many professionals are not equipped and only build a single focused pod that ceases when the professional retires. I would say one thing about Bob Socol - He was in the business to build something that's lasting and continues to have an impact on the ESOP community. As Dennis talked about Stout and Bob’s team, those team members continue to move forward in the same step - maybe a better step or faster step, however, it's all based on Bob Socol and the gift he gave them. He was a professional who cared, and he shared. Bob had a very positive impact on a lot of people.
Dennis Long: He has a lasting impact on the game of golf, too.
John A Kober: He enjoyed the game, and he shared the game with a lot of people.
Dennis Long: Those of us on this call have a love for each other, a brotherhood, and we celebrated that through golf many, many times.
What concluding thoughts about Bob do you want to convey to the Hall of Fame audience?
Dennis Long: I lost a friend. He was someone that I enjoyed working with - I enjoyed playing with - lots of good times on the golf course. Lots of good conversation over a glass wine. He was thoughtful, caring, giving, sharing. A guy that I admired wanted to be like in so many ways.
When October 7th happened, I called Bob. I wanted to understand from a Jewish point of view what he was going through, what was happening, because he was always so willing to talk, and be open, and give. He was just that kind of guy.
Vaughn Gordy: Bob was a good partner to me in so many ways like our charitable activities, our ESOP activities, and our family activities. I have two boys and they go periodically through issues and Bob would never hesitate every time we met, he would find an opportunity to pull me aside and get an update on both of my boys.
He was a wonderful father to both his daughter and his son, and he and Lynn had a wonderful relationship. Lynn was often a part of the 20 years that the four of us would get together for these golf outings. Lynn was often there, or she would recognize that the language that's going to get very interesting, and another place to be that evening. She was a wonderful partner to Bob. was important to me as a mentor and as a friend.
John A Kober: I was extremely sad to learn of Bob’s passing when I learned from his college roommate and from Vaughn, quite frankly, at the same time that Bob had unexpectedly passed. Bob was a friend of mine, my wife, and my children. Bob took the time to visit with both my children when they both were deciding on which law school to attend. I remember Bob saying - there is a limited list of law schools on page one (and expressing they were lucky enough to be able to attend some of those schools), and the others are on page 2 and thereon. When they let Bob know their decisions, Bob was then happy to hear both of them followed his advice. He has been impactful on our lives both professionally and personally.
Also when I look back, I’ve always viewed Bob as a pioneer. There are different types of pioneers in the ESOP profession. There's ones that were first to show up that moved the ESOP industry employee forward, and then there is a group that have, not only moved the ESOP industry forward but that have taken the ESOP industry to another level.. Bob would be classified in my mind as a true pioneer that moved and took the ESOP industry to another level. I say this because he had such an positive and forward thinking impact on the ESOP community, not only from a growth standpoint and service standpoint, but he broadened the profession, the use of ESOPs, and impact on how professional conduct themself in dealing with the challenges that come with tax saving structures, such as an ESOP. He had many friends. He was a leader. People respected his opinion, and people looked to him for leadership. Like Dennis and Vaughn (who also are pioneers in the ESOP industry), Bob was one of those great pioneers that took the ESOP from point A and moved it to the next level. His impact will be everlasting on the people, the industry, and the future of the ESOPs. It takes a very gifted and special person to be one of those individuals.
Dennis Long: One thing that I just wanted to add at the end. We use a lot of words to describe Bob in his professional and personal life, but one word that we haven’t mentioned was “joy.” I mean, Bob was just a joy to be around.
