BW Online | June 21, 2000 | Oh Brother! This Is a Sticky One

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JUNE 21, 2000

WORK & FAMILY
By Jill Hamburg Coplan

Oh Brother! This Is a Sticky One
Stakes in a family business aren't equal — and two brothers want more

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My father went into partnership with my two older brothers in 1977. At that time, my younger brother and I were still minors. We began working in the company soon after and are now in management. Since our father retired in 1986, the company has grown and expanded tremendously. Neither I nor my younger brother has been made a partner. Whenever we raise the subject, it escalates into a major conflict. The company's attorney and accountant have told me it's too late.

Recently, three of our older brothers' children began working in the business. My younger brother and I would like to become equity partners, and I would also like to establish a succession plan and regulations about family members' roles, including spouses and the next generation. How can we do this without creating more hard feelings? --D.C., Winona, Mo.

Your accountant and lawyer are wrong. There's nothing you can do legally to wrest an interest from your older brothers -- assuming that when your father transferred his interest, "he was competent and not subject to fraud or undue influence," says Steven Chill, trusts and estates attorney with Golenbock, Eiseman, Assor & Bell in New York. But you can do plenty else to foster communication and prompt peaceable action. You will need some highly qualified assistance, however.

Contact Loyola University's Family Business Center in Chicago for an initial assessment and a referral to a family-business consultant in your area. "It's unlikely you'll be able to resolve the problems on your own," says professor Clayton Alderfer, who directs the Organizational Psychology Program at Rutgers University and Rutgers' Family Business Forum.

Such consultants are usually teams of two -- an organizational consultant who's knowledgeable about family issues and a business-savvy family therapist. They'll meet one-on-one with each of you and then discuss their findings with everyone. You can expect to pay at least $1,500 a day for these services. Their next step will probably be to help you form a family council that over the course of several years can hammer out these difficult issues.

Your brothers will probably not agree to this easily. In a thoughtful, serious way, you need to convince them to participate. I suggest:

Enlisting mom -- if possible. "Mothers' roles are often are very significant and unacknowledged in family businesses. They're usually very influential. She's often the 'chief emotional officer,'" Alderfer says.

Asking your brothers flat out whether they want to remain in business together. If they say yes, you're on your way. "You can begin to develop a framework for promoting that objective," says lawyer Scott Friedman, a consultant to family businesses and the author of The Successful Family Business (Dearborn, 1998).

Making it clear you think they deserve a majority stake. They did build the company, points out Kimberly Dana, associate director at Loyola's family center. A majority is a long way from a monopoly hold.

Being prepared to walk away. If your older brothers don't seem to care much, heed the message: Family harmony and closeness just aren't that important to them. "If the feedback you get is tough luck to you, it's good to know that now," Friedman says. "You can begin to do your own thing and not lose precious years on the basis of false hopes and expectations."

Send your questions to frontierlife@businessweek.com.

Jill Hamburg Coplan has covered work, family, business, and finance for the past decade as a writer and editor for newspapers, magazines, and wire services. She left Working Woman magazine, where she was senior editor, when her first child was born and now works solo from a home office in Brooklyn, N.Y. You can e-mail her at Jill Hamburg Coplan