Since our founding, we’ve focused on representing private and public family-controlled businesses. Based on our years of experience, we believe that family-owned and closely held businesses should be viewed as a separate industry with its own special set of issues and opportunities. Our expertise gives us unique insights into the best practices for families to structure and operate these companies in a manner that enables the business to flourish while avoiding family conflict. Having represented families through multiple generations, we understand how to work with each generation and help provide an institutional memory that preserves the cultural values of the company while allowing succeeding generations to continue to grow the business.
Recognized by Chambers USA, Super Lawyers, Best Lawyers and Best Law Firms, we understand the special needs of a family-owned or -controlled business and take a holistic approach in representing both the families and the businesses they own or control. The issues facing such businesses extend beyond estate and succession planning and include the full scope of business and legal issues. Having legal representation under one umbrella provides additional benefit to the family and the business, allowing us to build a base of knowledge about the entire business and the family-related considerations. In turn, this enables us to be proactive in identifying opportunities for, and risks to, the business and related family matters, and to serve as a trusted adviser.
Examples of potential concerns in a family-owned or closely held business:
- Children in and outside the business. A business owner plans to transition ownership in the family business to his two children, one of whom is the Chief Executive Officer of the business and the other of whom is a school teacher who will depend for support on the income from the ownership interest in the business. Issue: How can the family mitigate the risk of discord between the two siblings arising out of the operation of the company (control issues, compensation, risk, distributions, etc.)?
- Transition. A business owner wants to transition the ownership of the family business to a future generation, but is concerned about maintaining his standard of living. Issue: How can sufficient liquidity be obtained without unduly sacrificing the family’s control over the business?
- Planning for a sale. The family patriarch has decided that it is time to sell the business. Issue: At what point in time, relative to the sale transaction, should the family start the planning process for wealth transfer, tax and other considerations?
- Attracting and retaining key employees who are not family members. The family wants the company to employ non-family members in key positions, but for the foreseeable future, the family is not willing to allow non-family members to have equity in the company. Issue: What steps can the company take to retain key employees who might be solicited to public companies with equity and other success-based rewards? How should corporate governance be structured to allow the non-family executive officer to have adequate discretion in executing his or her duties at the company?
- In-laws working for the company. The son-in-law or daughter-in-law of the owner works in the family business. Issue: How can the company anticipate and avoid potential issues between the spouse and the other children of the owner, whether or not such other children work in the business? How does the owner address the possible issue of a divorce between such in-law and the child of the owner?
- The “over planning” problem. Over several years, a family business owner has transferred 80 percent of the ownership of her company to her children. After deciding to sell the company, she becomes concerned that, due to her prior planning, she will not receive enough from the sale of the business to support herself in the manner to which she has become accustomed. Issue: How can the owner’s problem be solved on a tax-efficient basis?
- Multi-family businesses. A company is owned by two families. The children of both families work for the company; however, the children of one family do not have the same work ethic or skills as the children of the other family. Issue: What steps can be taken to mitigate inter-family conflict arising out of the differences between the children of the two families?