Family business focus of legal seminars
The legal profession has been urged to improve its service to family businesses by attending a series of training sessions aimed at raising understanding of the huge and complex sector.
Seven in ten Scottish companies describe themselves as family businesses, including iconic names like Baxters, Tunnocks and Walkers – and family firms employ 50 per cent of Scotland's private sector workforce.
Yet such firms are often “invisible” because companies are always identified by size or the type of their business and not if they are based on a family unit, said Martin Stepek, Chief Executive of Scottish Family Business Association (SFBA).
The SFBA has joined forces with The Law Society of Scotland in a unique project to look at the distinctive legal services required by family-run businesses.
Mr Stepek said providing a good service to family businesses was not just about the bottom line – it was about “trust, people and relationships”. He added: “You have to get to know the family deeply because they are deep, deep businesses. The wrong advice can destroy the family and destroy the business.”
Alan McLaren, a commercial partner at Lindsays who is involved in the collaboration project, said: “Many people are shocked by the scale of family business and can't quite get their head around its values.”
The project aims to identify the level of awareness among lawyers of the family business sector and its specific legal needs. It will then provide tailored training to Law Society members to enable them to fulfil these needs, with the aim of building up a “stable and sustainable customer base to survive the recession, and ‘recession proof’ themselves in the future”.
Mr McLaren added: ”There is without doubt a lack of understanding among lawyers about the specific needs of the family business sector. They are run for profit but they are not necessarily solely for-profit organisations. That's a huge issue to get your head around; the whole concept of family first is quite foreign to lots of professionals – not just lawyers, but also accountants, surveyors, insurers and stockbrokers.
“One of the big issues family businesses have is succession. The reality is that the business will end or have a new manager – irrespective of what the patriarch might think. You really have to understand a family business to be able to give good advice and help. What are the firm's values, what are the matters of the heart? If you understand them, you can help them to help themselves.”
Mr Stepek added: “As the most prevalent type of business in Scotland, family firms present a huge market opportunity for the legal sector. Family businesses are of key importance to the economy in Scotland and beyond. They take a long-term approach to building their business, not the boom and bust approach, which may have contributed to the current, and previous, recessions.
“But they have very specific needs and you have to get to know the whole family as a client – the patriarch who might not be able to let go, the matriarchal figure who is often known as the Chief Emotional Officer, and the siblings and in-laws who can have very different ideas about where the business should go.”
Mr Stepek added: “A significant problem for family-run businesses is that typically, only 33 per cent survive to the second generation and 9 per cent to the third. Better understanding between business clients, their solicitors and other advisers will help to reduce this difficulty and enable the sector to flourish.”
Laura Malcolm, of the Law Society's Professional Support Team, said: “The family business sector is a huge market and this is potentially a great opportunity for the profession at large to engage more fully with it.”
The project began with a consultation period, which ended in January, followed by discussions in Edinburgh, Glasgow and Dundee where solicitors and family business representatives met to plan the most effective training for solicitors advising family-run businesses. The training will be provided at short breakfast seminars for 40 solicitors each, starting in Edinburgh on 25 May, with subsequent events in Dundee, Aberdeen and Glasgow.
In August and September four more workshop / networking events will take place across Scotland, while an international conference is planned for October. In parallel to this specialised training, The new Forum for Family Business Advisors (FFBA) met for the first time in April, and plans to develop training courses with Strathclyde University Business School.
13 May 2010
For details of the training events, see http://www.lawscot.org.uk/update/events.aspx
FOR FURTHER INFORMATION: Please contact Suzy Powell on 0131 476 8115 or Val McEwan on 0131 226 8884 in Corporate Communications at the Law Society of Scotland.