We are often asked whether it is really necessary for a wealthy family to retain a “Private Wealth” lawyer?   Here we speak with Jonathan Riley, who heads the private wealth team at Fladgate LLP, a London law firm that specialises in advising wealthy families on their personal and business affairs, about what a lawyer should do and how can they be used most effectively.

Does a wealthy family really need a retained lawyer?

Families and their businesses can benefit from using the same lawyer for legal transactions, such as buying and selling a company or a property. However, greater value can be achieved in retaining the right lawyer to provide on-going involvement (in addition to managing transactions) – that can deliver tangible and immediate strategic and commercial benefits.

“On-going involvement” – what do you mean by that?

If the lawyer is involved regularly in the strategy of a family and their business, that lawyer can bring much greater value.   It’s like visiting a doctor – if you see the same doctor every year, they will join up the dots of your medical history and, in all likelihood, provide more valuable advice as a result.  This is less likely to be delivered from a stand-alone “briefing” to address a “one-off problem.”  The briefing might contain only what the person providing that briefing thinks is important or wants to tell you.

This is often achieved by all parties investing in the relationship at the outset and having regular meetings with your lawyer and close advisory team members.  This can generate opportunities and ideas that are unlikely to be achieved by a sporadic “task specific” engagement.

Cavendish often manages a family’s advisory spend; your suggestion sounds like an additional cost – is it?

Yes, it is an additional cost – but, by developing this relationship you get lasting benefits.  For example, our largely entrepreneurial client base expects us to show entrepreneurial thinking – not just about their businesses but also about their family’s personal affairs.   They expect agility and creativity informed by experience - and it is that approach which can bring greater value.

In my view, charging clients for every phone call or email presents a barrier to the development of information flows and trust – both of which are so important.  Of course, when we provide advice, we need to charge properly for that work.

That being said, the costs of a family dispute, claims on divorce, or an avoidable tax event (all of which can often be mitigated by effective planning) usually make the costs of a regular meeting with your lawyer insignificant.

How should a family get the best from their lawyer?

I would encourage the lawyer to contribute their expertise more generally, not just in response to “legal questions” because often the true value of a lawyer can be found in experience and judgement acquired through an extensive career.   Achieving this requires the family and the advisory team to create a space for exchanging ideas in a constructive environment.   Our clients are often familiar with the benefits of this approach in their businesses and quickly recognise its value when applied to the family.

This relationship of trust will make it easier for your lawyer to speak using normal language rather than legal jargon.  It will also allow your lawyer to evaluate commercially the benefits of one course over another – not just presenting an analysis of “risk”; risk is one part of the evaluation but so is opportunity.

This environment is one where “2+2 = 5” and real value can be achieved for the family.   I have worked with families to create this outcome - seeing the benefits it provides them is hugely rewarding.

How to find the right lawyer?

Personal recommendations are of course important.  It is essential that the lawyer and you “get each other”.  That sounds very non-specific for a lawyer (!) but if you have shared commercial and governance values and the lawyer has the right experience to help achieve your objectives you will be on the way to creating a relationship of trust and therefore value for your family.   As one example, Fladgate’s client base is particularly economically active; our clients have commercial expectations that mean our role is not just to protect a client’s position but also to identify opportunities – and we know this is what our clients value in particular.

Can’t artificial intelligence (AI) do all this now at a fraction of the cost?

Ahhh the AI question!   AI is increasingly a great tool for managing “process tasks” efficiently. Having said that, when our advice requires an evaluation of motivations, personalities, and relationships it seems clear that for now, there are some things that a human can still do more effectively.

Any closing thoughts?

Martha-Lane Fox name-checked one of our team, Mark Spash, in a recent article (2023) in the Times – she explained the importance of Mark “pulling down barriers and not putting them up.”  A decent lawyer to a wealthy family should be there to make their business and family great – as someone once said, we should be the “greasy rag” that makes the engine purr. I like that.

Conclusion

As can be seen from the answers above, a Private Wealth lawyer can be an asset to the team and bring financial benefit. If you are seeking the right lawyer for your family and its businesses, please do get in touch, we would be happy to help.

‍

Mark Estcourt

CEO at Cavendish Family Office