Family Office Explodes in Popularity - But No Moats for Law Firms Serving Them

 The wealth-creation edge of the family office has become obvious to those not at the billionaire point. High-net individuals with "only hundreds of millions" are grabbing onto this advantage.

So, no newsflash, the amount of funds in family offices has grown 67% in five years to $5.5 trillion. By 2030, that could reach $9 trillion." Also, no surprise, a growth-driven elite law firm such as Paul, Weiss has been in this space with a specialized practice for years.

Essentially, as Investopedia defines it, the "family office's is: 

" ... a private wealth management advisory company that serves ultra-high-net-worth individuals ... [They] offer a wider range of financial services than most wealth management shops. In addition to investment planning and management, many ... manage their clients' budgets, insurance, charitable giving, wealth transfer planning, tax services, and more."

The "more," as The Wall Street Journal points out can include, for example, guidance on art collecting and treatment by psychologists. All that occurs on a confidential basis. And unlike pension fund investments the decisions don't have to be justified to investors. Those decisions can include competing for deals against establishment giants in finance. The money is there to get into that game.

Paul, Weiss describes its practice as:

"Our work often begins with individual or family considerations, such as estate and tax planning, and evolves into comprehensive, solutions-oriented advisory roles, whether related to complex investments and transactions, regulatory matters or risk mitigation ... Our approach is collaborative, business-savvy and built on relationships of trust; client confidentiality is of paramount importance."

Other law firms with family office practices include Holland & Knight, Dentons, Duane Morris and Ropes & Gray.

Since the human touch is embedded in the guidance/transactions this niche is unlikely to become a commodity as could happen to other practices because of AI. In a talk with The Lawyer Monthly chair of Paul, Weiss Brad Karp envisions that commodity evolution.

In a Bloomberg Law interview Sullivan & Cromwell co-chair Robert Giuffra provides concrete examples of how that could play out. He predicts the possibility that, in time, AI can perform due diligence on an IPO and draft a merger agreement. It could also do a lot of the heavy lifting in litigation, right down to generating the slides for the courtroom.

Given the growth potential, more law firms are likely to set up this kind of practice. That will make the competition to develop new business and prevent churn fierce among law firms.

In intuitive coaching I warn the peril of seeking any professional "moats." There is no sustainable edge. 

Success is a mental game. Failure comes from being done in by the “committee” in your head.

Together, we reprogram your thinking. Then we change your story.

Intuitive Coaching. Special expertise with transitions, reskilling and aging. Psychic/tarot readings, upon request. Complimentary consultation with Jane Genova (Text 203-468-8579, janegenova374@gmail.com). Yes, test out the chemistry. Zero risk.

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