This presentation will help attorneys understand the benefits of collaborating with psychologists who work as family business advisors.

1. Family Business Advisor
Collaboration
How attorneys can be more effective with their family
business clients by collaborating with psychologists
Kalli Matsuhashi, MA, Licensed Psychologist
Executive Confidante
www.ExecConf.com | Kalli@ExecConf.com

2. Why collaborate with a psychologist?
• If you’re not concerned about the quality of a
relationship once the legal action or work has been
completed, don’t!
• When dealing with families or people with an
ongoing relationship, the quality of the relationship
matters.
• The more successful you are in helping your client
maintain positive relationships, the more successful
you will be in building a long-term relationship with
that client.

3. Psychologists and family businesses
• Many attorneys are already quite good at handling
the “human element”
• It’s time to call on the aid of a psychologist FBA
(family business advisor) to help when:
• dealing with the conflict or emotional issues goes
beyond the scope of your professional
competency
• you are stuck
• your client is stuck
• you can see the rocky road ahead...

4. When should you involve them?
• Ideally, at the beginning of the process (but it usually
doesn’t happen this way)
• In crisis (usually because of conflict between 2 or
more family members)
• Have at your disposal a list of trusted colleagues
who can help you as the trusted advisor
• Concerns about cost...

5. Assumptions about conflict - True or
False?
• People are fighting about what they say they are
fighting about...
• People want to solve their problems rationally...
• Family members conspire - consciously or
unconsciously - to sustain conflict because it helps
them avoid something even worse.
• Families often argue to distract them from critical
issues.

6. The Conflict Cycle
Unspoken,
but shared fears
Peace returns Conflict ignites
Conflict subsides Conflict escalates
Conflict peaks (too
much conflict
threatens
relationships)

7. The Conflict Cycle
Bob, 58, has terminal
cancer, but hasn’t yet
taken care of
succession of the
business.
Anxiety about this for his
The brothers
sons is too
cooperate (for a
uncomfortable, and
while)
they pick a fight.
For Dad’s sake, The fighting escalates,
everyone agrees to the rest of the family
calm down. chimes in.
Dad yells and
threatens, Mom says,
“See what you’re
doing to your father!”

8. The Conflict Cycle
Bob, 58, has terminal
cancer, but hasn’t yet
taken care of
succession of the
business.
Anxiety about this for his
The brothers The real fear:
sons is too
cooperate (for a Dad will die, that
That uncomfortable, and
while)
past conflict will tear pick a fight.
they
the brothers apart,
that Mom won’t befighting escalates,
For Dad’s sake, The
everyone agrees able to function rest of the family
to the
calm down. chimes in.
without Dad.
Dad yells and
threatens, Mom says,
“See what you’re
doing to your father!”

9. Working with family businesses
• Many of your clients may be owners of or members
of a family business
• Intersection of the legal and psychological can occur
with estate planning, succession, developing buy-
sell agreements, leadership development,
organizational growth, etc.
• Each of these have accompanying emotional and
relational effects and potential issues
* Hilburt-Davis, J. and Dyer, W.G (2003) Consulting to Family Businesses.

10. Emotional issues
• Estate planning: facing one’s mortality, fear of not
having enough, uncertainty about values, tax
benefits vs. family benefits
• Succession: feeling useless, feeling old, fear of
being pushed out, afraid the children won’t be as
successful, concerned about financial reward, fear
of sufficient income after retirement
• Buy-Sell agreements: sense of fairness, fear of not
having adequate funds for a buy-out, fear of what to
do next

11. The 3-Circle Model for Family
Businesses
Ownership
Business Family

12. The people
1. Family members
2.Non-family, non-owner 3
employee Ownership
3.Owner, neither family nor
employee
4.Family with ownership
interest
5.Family employed in
business 6 4
6.Non-family owners
employed in business 7
7.Family with ownership 2 1
interest employed in
business Business 5 Family
Each will respond
differently to
change

13. The systems
Ownership/Governance System
Ownership Values/vision
Legal structure
Ownership transfer
Board
Family System
Roles & relationships
Family values
Business Family Myths/mores
conflict transformation
Clarity of communication
Business Management & Leadership System
Mission & strategy
Culture of the organization
Org structure
Compensation system
Decision-making system

14. Advisors to the family business
Ownership
Lawyers
Estate Planners
Accountants
Financial Advisors
Family
Business Family
Therapists/Psychol
Business/OD
ogists
Consultants

15. The good news about family businesses
• Family businesses represent 80 - 90% of all businesses in
the North America
• They hold a tremendous amount of wealth, and have a
6.65% greater ROA than non-family firms
• Independently owned family businesses (IOFB) contribute
nearly 65% of the GDP and employ 62% of the US workforce
• Outperform non-family owned businesses in shareholder
value and revenue growth
(Raymond Institute/MassMutual, American Family Business Survey, 2003

16. The bad news...
• More than 30% of these family businesses survive into the
2nd generation, but only 12% make it to the 3rd
generation; 3% to fourth and beyond
• In a 2003 survey, more than half of the CEOs due to retire in
5 years had not yet selected their successor
• 19% of the companies surveyed had not completed any
estate planning other than a will
• Only 37% had a written strategic plan
(Raymond Institute/MassMutual, American Family Business Survey, 2003

17. Over and over...
• It is the intangibles that cause failures*:
• Family conflict and boundary issues
• Lack of clarity about goals and values
• Family communication problems
• Family behavioral problems
• * Habbershon& Astrachan. (1997) “Research Note Perceptions are Reality: How Family Meetings lead to
• Collective Action” Family Business Review, X(1), 37.

18. Multigenerational succession success
• Family meetings
• Functional board
• Strategic planning
• Collaboration of advisors
• *Adapted from Astrachan, J. and McMillan, K.(2006) “United States”, in Handbook of Family Business and
• Family Business Consultation, Kaslow, Ed.

19. Recognizing life cycles
• Are the life cycles and stages of development in or out of
synch?
• Individual
• Family
• Ownership
• Business
• Transitions = High risk for conflict, stress, problems

20. Family vs business systems
Family System Business System
Emotional system Task based system
Mission is to nurture off-spring into Mission: produce profitable goods and
competent adults services (effective strategy)
Equality rules Competency prevails
Acceptance is unconditional Acceptance is based on objective
performance
Relationships are permanent
Relationships are temporary and
Power: generational/birth order contractual
Power is primarily based on authority
and influence

21. Healthy family businesses - Ownership
• Mission and goals are clear
• Functional board of directors with outsider members
• Sound plan for succession and transfer of ownership over
the generations

22. Healthy family businesses - Management
• Decision making based on knowledge and expertise
• Responsibility and authority are balanced
• Leadership is spread throughout the company/family
• Succession is planned early
• The organization makes use of knowledge to adapt to
changing environments for sustainable, competitive
advantage

23. Healthy family businesses - Family
• Family members are able to resolve conflicts with support
and trust
• Boundaries between work and family are appropriate and
respected
• Communications are open and clear
• Family is clear about goals and navigates toward goals
• Family has good direction and leadership
• Intergenerational boundaries are appropriate, respected

24. Healthy family businesses - Family
(cont’d)
• Effective procedures are in place for managing conflict
• Decisions made by fair and effective processes
• Guided by shared core values
• Family council or other formal regular family meetings

25. Importance of structure & process
• They play a critical role in long-term growth of company
• Help companies get things done effectively and efficiently
• Have an impact on succession
• Regulate the interaction between family and business

26. Unhealthy family businesses
• Poor communication, unable to manage conflict
• Low trust between family members
• Goals and values of the family are unclear
• Lack of sufficient expertise - the family tries to do it all
• Little thought to succession planning
• There is not a functioning board of directors
• Family issues spill over into business issues (and vice versa)

27. Entry points for intervention
Family Business Ownership
Goal setting Coaching Leave or stay
Career planning Skill sets/goals Inactive shareholders
Counseling/ Mentoring Stock ownership for
Individual coaching Executive coaching
Performance reviews
nonfamily and inlaws
Conflict Role clarification Boards of directors
Family role 360-degree feedback Board of advisors
Family dynamics Education Ownership councils
Boundaries Organizational structure
Interactive Retirement
Relational issues
Team building
Family councils Strategic planning Goal setting
Family retreats Leadership Career planning
Nonfamily members Counseling/
Compensation coaching
System Professionalization of the
business/firm
Company culture

28. Types of intervention
Emotional Role clarification
Conflict
Conflict management
360-degree feedback
Family role Individual values
Sibling team building
Education
Family dynamics
Coaching/mentoring structure
Organizational Self-esteem
Boundaries
Performance building
Team
Retirement
Identity issues
management &
Relational issues Family relationships
development for family Addictions issues
Compensation & benefits Therapy
planning for family
Couples counseling
Family council
Business roles meetings
Ownership structure Family retreats
Balance sheet Career counseling
Strategic planning Values-based
Compensation strategic planning
Performance Integrated
Management succession planning
Technical Skill development Team building
Content Process