Milken's former secretary builds business book publishing firm.

Her life had been inextricably linked with the world of high-yield bonds, Drexel Burnham Lambert and, yes, Michael Milken.

Lorraine Spurge's former life - a Drexel secretary who worked her way up through the ranks and, according to Spurge, eventually raised $100 billion in financing for various corporations - has helped her bankroll her current career in the world of publishing.

Spurge's Santa Monica-based company, Knowledge Exchange, has not strayed far from what she knows best - business. Nor has Spurge completely left behind her Drexel connection; Milken owns about 50 percent of the company.

Knowledge Exchange, which began in 1989 as a marketing consulting firm, now exclusively focuses on publishing business books and creating other related products, a venture that brought the company $2.5 million in fiscal 1996 revenues.

The company's catalog of books includes both trade tomes - books on industries and company histories, such as the success story of Staples Inc. - and reference books.

The latter category includes the company's biggest project to date, the "Business Encyclopedia: Master Reference." The encyclopedia, scheduled for debut at the L.A. Festival of Books in April, was developed as a user-friendly guide to business terms and concepts. It also provides real-world examples of the terms and concepts it defines.

Spurge came up with the idea for the Business Encyclopedia when her daughter, then a business major at USC, asked for help in understanding one of her textbooks. Upon reading the book, Spurge understood her daughter's confusion. The book, she says, failed to simply explain the terms it used.

By developing the encyclopedia and other books in Knowledge Exchange's catalog, Spurge says she is fulfilling her lifelong philosophy: "The more you know, the more you're worth."

Spurge has based her own career on this motto. She began as a secretary in Drexel's New York office after she and her husband split up in 1980, leaving her with two kids to support and just a high school education.

She soon moved to Los Angeles with her daughters to work with Milken in Drexel's high-yield office. Working from "before five in the morning until after nine at night," Spurge quickly climbed up through the ranks, learning much of her trade from a clerical position in which she manually prepared a record of which companies were buying which stocks.

That job eventually led to her being promoted to the head of new issues and to her success at raising more than $100 billion for corporations, including a $5 billion financing for R JR Nabisco Holdings Corp.

"From my job recording purchases, I knew who would buy what and how much they would buy," said Spurge. "When you think a job is menial, don't. When Mike left in 1989, I was the only one who knew anything in the office."

Spurge left Drexel in 1989 and began Knowledge Exchange as a consulting firm. But she became interested in publishing when she and Milken considered writing his autobiography. That project never came about, but the extensive research got her hooked on publishing.

Since 1992, Knowledge Exchange has created an interactive CD-ROM case study on MCI Communications Corp. (which is being used as part of the curriculum at 30 universities around the world, according to Spurge), and published various business books, including "Customer Intimacy" by best-selling author Fred Wiersema.

Spurge believes the market for business books and other materials - especially training materials - is wide open. "There s always a need to train people - people are increasingly changing careers and people are often hired with no training," said Spurge.

Others in the publishing business agree.

"Business books are very popular," said Adrian Zackheim, a publishing director at HarperBusiness, the business division of Harper Collins Publishing. "Work is on people's minds. People have gotten the message that they can get a lot from these books from comic relief to information they can take to the bank."

Spurge is planning to take advantage of this popularity, which began in the early '80s and has grown ever since.

She said the company plans to follow what she calls the "Disney model," in which a product is created and then spin-off products are created based on that core product.

"We won't just put out a book. With the encyclopedia, we will make calendars, cards with business tips, flash cards and other products based upon the book," said Spurge. She also, said that the company is planning a complete line of encyclopedias in each of the business disciplines.

In this expansion of Knowledge Exchange, Spurge said, Milken will remain a relatively silent owner. She is quick to point out that her connection to Milken has not hurt her, but she dislikes the public's interest in the company's connection to him. "Everyone is more interested in him than in what we're doing," she complained.