Questions for counsel before a billionaire family office serves outside clients
Built on Chapter 16 of The Single Family Office by Richard C. Wilson. Full chapter text: FamilyOffices.com.
Before an office offers services to another family, its lawyers need a factual description of the proposed business. A question about whether conversion is possible leaves too much unspecified. Explain what the employees will do, who will pay them, and which decisions they will make for the outside household.
Chapter 16 treats professional assessment as an essential part of conversion. For a billionaire family, I would organize that assessment around the work being proposed and the family assets that could become exposed through it.
Give professional advice a clear role
In discussions of decision tools, I emphasize checking consequential work with a real attorney and accountant. Software can help organize questions. It should not receive responsibility for the professional judgment behind a transaction.
I would apply that principle here by using an internal working paper to prepare the facts for counsel. The office can collect information and describe its intentions. Counsel should assess the legal consequences and the work needed before services begin.
Describe the proposed activity accurately
Begin with the service list. Will staff recommend investments, make decisions under an agreed mandate, or coordinate information for professionals engaged directly by clients? Explain how money and instructions move. Activities described casually as introductions or assistance can have responsibilities that need examination.
Identify the people and entities involved. Include the intended client contracting entity and the people who own or control it. Describe any shared employees and shared systems. Counsel needs to understand where the existing private office ends and the proposed business begins.
Supply prospective-client facts through an appropriate confidential process. Different households may bring different locations and relationships into the assessment. Avoid assuming that an answer given for one proposed engagement applies to every client the business might eventually seek.
Connect the advice to an operating task
Ask counsel to identify the conditions that must be satisfied before each service is offered. Management then needs to assign the resulting tasks. A legal memorandum sitting in a folder cannot ensure that the employee speaking with a prospect understands what the office can currently promise.
Create a responsibility schedule using ordinary language. Each item needs an owner and evidence of completion. If professional advice depends on the business remaining within a defined scope, make the scope visible to the staff who negotiate engagements.
Keep unresolved questions open until the responsible advisor answers them. Commercial enthusiasm can turn a tentative interpretation into an assumed clearance as it moves between employees. Record the actual advice and its factual assumptions so management can distinguish an answer from a discussion still in progress.
Examine separation and communications
Ask professionals to assess the proposed relationship between the private office and the service business. Consider contracts and insurance alongside how people actually work. An organizational diagram is incomplete if employees continue using shared access and informal instructions that contradict it.
Have appropriate advisors examine how the business describes itself to prospects. Claims about the founding family's investment experience deserve careful handling, especially if the same people will not deliver the outside service. Permission to use private family information should be established separately from the decision to start a business.
The office should also understand who can approve a change in service. A relationship manager may see a client's request as a small accommodation. The change could alter the activity professionals originally assessed. Staff need somewhere to take that question before agreeing to perform the work.
Maintain the factual record
Save the version of the proposed service that counsel examined. Link the resulting engagement terms and operating instructions to it. If the office later adds a new activity, the change should be easy to compare with the original description.
Schedule reassessment when relevant facts change. That might include a new kind of client or a different decision mandate. The event should lead to a specific question for the appropriate advisor, with management responsible for implementing the answer.
I would make readiness a release decision. The person approving the first engagement should be able to see which professional conditions have been met and which services remain unavailable. A prospect's preferred start date should not replace that evidence.
Questions and answers
Does this page establish whether an office can serve outside families? No. It describes questions and preparation for qualified counsel to assess the proposed activity using the office's facts.
Who should coordinate the assessment? A named internal leader who can obtain accurate information, work with the appropriate professionals, and make the resulting conditions part of daily operations.
This page is general information, not legal advice. Family governance documents and dispute processes should be reviewed by a qualified attorney.