So, what makes me, a lawyer who is not trained in counseling or psychotherapy, think I am qualified to write or talk about the human side of succession planning? It’s very simple—I’m not. My opinions and ideas are borrowed and come from on the job training. Nothing more.
I grew up the youngest of four children — the only boy. My mom and dad had a terrific marriage, caring, doting, and loving on each other in a way that makes my wife envious. My sisters and I get along well. But, like many sibling relationships, there are points of tension. Some of those points are pretty sharp.
My mom took care of the home. My dad was a family business owner, concentrating his efforts on land development, construction, and real estate investments. He dabbled—albeit less successfully—in other areas as well, such as new and used car dealerships.
A year before graduating from college, I told my dad that I wanted to return to El Paso to work for him. The Tax Reform Act of 1986 had just been enacted, and he was beginning to see its impact on the economy and his business. He told me to go to law school, saying it would “buy time” and be good training for eventually going into business. After finishing law school, I took a job with Kemp Smith, thinking I would work six or seven years as a lawyer and then go to work for my dad. Twenty-seven years later, I’m still a lawyer at Kemp Smith.
As the years passed, one of my sisters went to work for my dad. I never did. She loved the time she spent with him. His feeling was mutual. As he approached the end of his life, my dad recognized that there was not a successor in place to run the family business. Consequently, he began selling off properties and winding down his business. He finished his last construction project a few months before his death.
As will be discussed below, my family is a seventy percenter—that is, my family represents the seven out of ten families that see a once successful family business fail to survive to the next generation. In our case, however, it was a choice by my dad—although a forced choice.
In addition to being fortunate enough to have grown up in a family that was sustained by a family business, I have been fortunate in my legal career to represent numerous family businesses—some small, some very large. I also sit on the boards of several family companies and work closely with the owners on business, tax, succession planning, and a multitude of other issues.
It is against this background, along with a host of life experiences, working with trained professionals, and a fair amount of reading, that I write this article. The purpose of this article is to provide an advisor or family with a framework for thinking about the human side (or, as my colleague Mike Bourland calls it, the “adhesion” side) of family business succession planning.
The Practical Lawyer
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