Family businesses frequently look to outside advisors to fill important needs in running their businesses. According to a recent article in Forbes, the most important advisor named by 16% of family businesses was their attorney, second only to the business' accountant (named as the most important by 2 out of 5 businesses).
According to the Forbes article:
Successful middle-market family business relies on a number of different professional to deal with a usually broad and diverse array of business and family-related matters. While they many times engage quite a number of different professionals, when they are looking for advice that addresses important issues impacting the family and the business (especially the business) the advisor identified most often relied upon are the firms’ accountants.
In an international survey of 336 C-level executives managing their family firms, slightly more than two out of five of them reported that their accountants were identified as their most important type of advisor. About 16% cited their attorneys. One in 10 identified their bankers or other business owners filling the role. Around 6% said it was their business coach or their family business consultant. Less than 5% of those surveyed cited management consultants, or financial advisors/wealth managers, or other professionals.The article notes that the relationship is typically a personal one with the individual professional providing the service, not the firm he is with. When asked, 30% of the businesses interviewed said that when the individual professional changed firms, the businesses follows.
For middle-market family businesses, when looking for a business attorney, it is important to keep in mind that while good technical skills are important, the ability to build a long-term trusting relationship is critical.
“Good advisors are not only highly technically proficient, they build strong relationships with key personnel at the family business. These relationships are based on integrity and trust as well as a deep understanding of their requirements and preferences,” says John Bowen of AESNation. “The relationship is usually with the professional, not his or her firm. So, it’s only to be expected when that professional changes affiliations, they bring their clients along.”