Governance and succession-planning will be the primary offerings of a new family office consulting firm being launched on Tuesday by Withers, the giant international law firm.
Withers Consulting Group, which will be run as an independent business unit, will specialize in effective governance and succession-planning for single- and multi-family offices as well as with family-owned businesses, says Amy Renkert-Thomas, who will head the new business U.S. office, operating out of New Haven, Conn. Kenneth McCracken will head the London office.
Many family offices were founded by successful entrepreneurs and investors whose practices are very sophisticated investment machines, Renkert-Thomas says. But when control of the family office passes from a founder to another family member or a group, the family office often has no experience making the necessary decisions, she notes, leading to a lot of destruction of wealth while people battle for control.
FOCUS ON PROFIT MARGINS
Family offices also need to bolster profit margins, Renkert-Thomas says, by guarding against service creep -- the continual addition of client services without commensurate fees.
Many family offices use services as a marketing concept without thinking through the long-term cost of doing it, she says. Anything you give away for free is going to be undervalued by the recipient. Until family offices figure out a way to charge for services in a transparent manner and communicate the values, they will be stuck in a race to the bottom.
Renkert-Thomas, an attorney and a former partner at Withers, ran her own consulting firm for wealthy families and family offices for the past three years. She also ran Ironrock, her familys fifth-generation ceramic tile business, for 12 years; her grandfather founded Fisher Price Toys.
Withers' London-based managing director, Margaret Robertson, calls the new consulting group a natural business progression for the law firm.
Withers Consulting Group will not be competing with family offices," Robertson said in a statement; neither will it be "providing concierge, compliance, banking advice or managing assets. Rather, the new business aims to help families articulate their strategic objectives and decide what they need to do to achieve them," Robertson said.