The Fractional General Counsel: A Key Member of an Elite Advisor’s Team – Episode 54
When it comes to serving HNW clients, your team of experts is everything. And increasingly, one of the key members of high-impact advisors’ teams is a fractional general counsel who works with entrepreneur clients.
This week, Koby Wilbanks, founder of Continuum Legal, shines some light on the world of fractional general counsels—what they do, who can benefit and why advisors should consider working with them to advocate for their business owner clients.
The fractional general counsel difference
Traditionally, your entrepreneur clients might deal with one or more people at a law firm on a specific project and once it’s done, they might not deal with those attorneys again for months or years.
In contrast, a fractional general counsel is someone entrepreneurs talk to all the time—at least monthly, but often daily—and who does a lot of work for those entrepreneurs beyond a single project. Their real value is that they understand everything that’s going on in the business, and so they can be the bridge between all the other experts an entrepreneur works with. It’s an actual collaborative long-term relationship versus project-based expertise.
Who benefits?
Kobi highlights three types of businesses that often are great candidates for fractional general counsels.
- Entrepreneur-led businesses that are privately owned that are struggling to scale. They need someone at the executive level to give advice, but also someone to just hold themselves accountable and help build out the legal function and make it a true part of the business.
- Entrepreneurs who have sold their business already and now they have the funds to self-grow multiple things at the same time. They might have some philanthropy, or another business they have an active investment in.
- 3. Existing family offices that need help with modernizing and creating the structure to help bring in the next generation and see how that’s going to be a good fit.
How a fractional general counsel can add value
Kobi also highlights three areas where fractional general counsels tend to add the most value to affluent business owners’ lives:
- Estate and succession planning. It can be valuable to have another fiduciary involved during the transition period after a patriarch or matriarch dies—someone who knows the business well and knows where the key documents are filed, and who can essentially bridge the gap between the operating business and the estate plan.
- Pre-sale and M&A prep. This is often one of the best use cases for a fractional general counsel. They can be crucial resources in the area of due diligence—making sure you own your IP, auditing for employment law violations, looking for tax liens, and so on—so that the deal moves forward and closes rather than falls through.
- Generational transition in a business. This is about understanding the people involved and the different personalities involved in handing off the business to a particular heir. Fractional general counsels who work with the family all the time will know the family dynamics—something that a large, traditional law firm that has a transactional relationship with the family won’t know as deeply. As a result, they can better advise both the first generation owners and the upcoming generations about opportunities and risks that exist.
Finding a good fit
Advisors who are considering adding this type of attorney to their teams should look for a few key characteristics in the relationship.
- Ideal client match. Make sure the attorney is a good fit for the types of clients you have. You want someone who is at least somewhat tailored to your firm and client base.
- Passion. You want a professional who is passionate about what they do and who they do it for. You don’t want someone who operates on autopilot or isn’t really invested in getting great results for the clients.
- Communication style. Does the attorney communicate and interact in the same ways you—and most important, your clients—prefer? Example: If your clients greatly prefer in-person meetings, look to work with an attorney willing to do so instead of one who mainly does online meetings.
- Transparency and fees. Understand the law firm’s structure. Are there multiple attorneys and associates who share the tasks your clients need done, or is there one person assigned to each client? Each approach has its pros and cons, of course—the key is to be aware of how the firm is set up to serve clients so you and your clients aren’t surprised down the road if you find yourself always working with an associate instead of a partner. Likewise, clarity about the fees and fee structure—hourly, subscription, flat rate, etc.—is vital to avoid surprises and discomfort.
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