Case Study

Sibling Rivalry Splits Company But Saves Family

November 14, 2022
3:02 pm

This situation involved a respected law firm in Phoenix, Arizona. There was conflict in the family and business. We helped them keep the family together.

The founder and senior attorney had two daughters and a dedicated associate attorney. The founder (senior attorney) wanted to plan for the future of the law firm. The two daughters wanted to work as little as possible. The non-family attorney was devoted to the law firm. However, because he was not “blood related,” he was never going to be part of the family.

The Situation.

The law firm had an annual revenue of $1.8 MM. This would normally be really good for a two-person law firm. But there were four lawyers.

The family members working in the business consisted of Father (Senior Attorney), two daughters (Partner Attorneys), and a Non-Family Member (Partner Attorney).

Father wanted to the plan future of law firm. The daughters and non-family attorney were at odds over division of expenses and allocation of new cases. The two daughters rarely if ever spoke with each other at work. The mother of the two daughters (the wife of the senior attorney) seemed to have a favorite daughter and was putting pressure on the senior attorney to work well past his retirement age.

Initial Goals:

Create an agreement whereby the law firm could be passed to the next generation, while keeping the non-family attorney engaged.
Create plan for senior attorney to stop working as much, yet still have revenue coming in.
Improve the relationship between the two daughters.

What We Did.

We assessed the situation and met with all relevant parties and selected employees.

We also conducted multiple meetings to resolve the communications and conflict issues.

Outcomes: We Helped Keep The Family Together By Splitting The Business.

The relationship issues between the two daughters and non-family attorney were not resolvable. In order to keep the family together, one daughter and the non-family attorney left the law firm. (One sister started her own law firm, and can now enjoy life without pressure of having to participate in the family business.)

Family harmony was improved once the two daughters were no longer in business together.

Lessons Learned:

To keep the family together, and also save the family enterprise, required treating the relevant parties fairly. Or, there needed to be a clear path for the relevant parties to be able to achieve fair treatment. In this case, it was clear that was never going to happen.

To Keep The Family Together, We Needed To Define “Family”.

When a family patriarch says they treat a non-family member “like family,” watch out. That may not mean what you think it means. This family already has a culture of picking favorites. The patriarch treated the non-family member “like family” by favoring the daughters.

The Business Was Split Up Because There Was No Commitment To It.

The business partners split up because there was no common commitment to the business’ long-term success. At the end of the day, if there was a choice between business success and family favoritism, the business always lost.

Do You Want Help To Keep The Family Together?

If your family is experiencing family conflict, and you want to keep the family together, let’s talk. We created How To Create A Legacy so we can help with family dynamics when it comes to family continuity and wealth.

We would love to help you. Just schedule a strategy session.

About the Author

Michael Zolno has an MBA and MA in research psychology and almost 40 years’ experience as a consultant. He is also a co-founder of How to Create a Legacy, LLC.