Rich’s legal practice crosses a wide range of business law, however his expertise and passion lie in serving family businesses and privately held businesses.
Q. How did your practice evolve to focus on family businesses?
In this arena I have a huge advantage because I have personally been a part of two family businesses. My parents had a very successful multi-state business that manufactured concrete pipe and ready-to-mix concrete, steel products, plus they owned warehouses and industrial real estate. My in-laws owned what at one point was one of the largest independent family-owned newspaper and media groups in the U.S., made up of 70 newspapers in 12 different states. I have served as outside general counsel for both companies, from the time I passed the bar until now—nearly 40 years. I understand the complexities and nuances of family dynamics and succession planning. I’ve lived it. And I enjoy working with the various generations.
Q. Anyone with either kids or siblings knows that each sibling has different strengths and weaknesses, and what motivates or inspires one may not be what motivates or inspires the other. How do you balance the normal but inevitable family tensions with the needs of the business?
I have found that the business must be treated like the goose that lays the golden egg for the entire family. It can’t be a personal slush fund just for those working in the business. It’s best to treat family as family, and business as business; but when there is no clear delineation it’s family that always seems to win. There can be legitimate business reasons to do things or not do things, but often-times family dynamics trump those reasons. When that happens, it’s my job to provide sound business and legal advice and to help the family dynamics play out to achieve the best result.
Q. What makes this work so compelling and gratifying for you?
Part of what I love about it is that it’s not just strictly law. It requires an understanding of family dynamics; really getting to know the clients and the family well. There’s a lot of psychology involved, and a lot of conflict resolution required. I had a situation a while ago where the parent and adult child were in business together and they got to the point where they pretty much hated each other. The child, who had children, wouldn’t allow the kids to see their grandparents. It was awful. I convened two hours-long meetings between these two smart and strong-willed individuals. By the end of the second meeting, we had resolved a lot of the outstanding issues, and the business went on to have even greater success. So that’s the fun stuff. It’s taking care of the family, taking care of the family wealth, taking care of the family dynamics, and then also doing the business and business law aspects.
Q. What are some of the typical business and business law aspects you handle?
Pretty much the entire range of corporate law as applied to the family business. We’re talking about starting up new businesses or new ventures, doing joint ventures between the family business and others, buying and selling companies or divisions. It requires a lot of contract work and bank work. For most of these businesses I’ll serve as the outside General Counsel, basically their legal quarterback for whatever is needed: shareholder agreements amongst family members to determine who gets what; agreements as to what happens if somebody dies or if there’s a divorce or someone is or becomes disabled; how to handle spouses or kids that join the business; how to handle distributions for those in the business vs. those not in the business. The scenarios are endless and are custom to the business and the family. That’s what makes it so interesting.
Succession planning is huge right now because baby boomers are at retirement age. Some of the boomers got their retirement backed up a bit because of the pandemic, but we are at an inflection point. There will be a major wealth transfer. Succession planning is critical and there’s a great deal of it that needs to be done—especially in family businesses trying to succeed to the second or third generation or beyond.
From my personal perspective, it’s also an opportunity to help families solve or mitigate potential problems. For instance, we might create shareholder agreements that state family members do not get to come into the company until they’ve worked for someone else for five or 10 years. That prevents someone from coming into the business before they’re ready. Or suppose one of the family members has a serious addiction problem. It could be drugs, alcohol, gambling, whatever. You can’t bring a family member with that type of issue into the family business. As the General Counsel, I am often the one to have those hard discussions with the family member. This allows the parents or relatives to remain family and provide support.
Q. What other types of professionals do you work with, typically?
Most of the time I work with accountants, business advisors, bankers, and insurance brokers. There are a few times where I’ve recommended family counseling, and generally clients benefit immensely from it.
Q. In your role, you’ve observed many different types of parenting styles in family businesses, with a range of results. Do you have any observations about what makes a healthy, successful family business, or what communication styles work best?
Transparency is key to effective and successful businesses, especially if you have groups of family members or third-party owners. A very highly functional family business values communication. And it’s regular communication. Meeting together at least once a quarter. Discussing family issues and business issues.
I will also say that ‘command and control’ as a communication or even a leadership style is now a completely and utterly ineffective style–except in the military.
Q. How does your work with these family businesses overlap with what else is going on at MPS?
It has been wonderful to have the breadth and depth MPS offers, especially in litigation, commercial real estate, and M&A. Our litigation group is very good and very practical. It’s beautiful to have people who specialize in commercial real estate, people who are subject matter experts. The resources we have at MPS are outstanding and I can tell my clients are already very happy with the transition and the added capabilities available at MPS.
Q. What do you like doing when you’re not at work?
I love spending time with my family and travelling. It’s so much fun hanging out with my wife and adult kids plus I have a new granddaughter who was just born in September and a grandson due in February.