In today’s podcast we sit down with Kwame Christian, Esq., an attorney specializing in family- and business law. We will discuss

Business Operations Planning and Continuity

Business Succession Planning

If you want to jump to a particular topic in the podcast click on the timestamp below.

00:00  Why do we need succession planning? When an owner dies what is next? Who takes care of the business after the owner dies?

03:00 The funeral home is not the best time or place to start answering those questions. If left unaddressed issues from the past that need time and negotiations to resolve come to the surface and usually cause damage. Better to plan when everything is okay.

05:00 What are reasonable expectations of an attorney?

07:38  Set the stage for success by talking with your attorney before there is a problem. They attorney can guide you through the process of succession planning.

08:12  Kwame discusses ethical issues attorneys must address. This includes knowing when to withdraw due to lack of agreement between the owner and (future) survivors or between the eventual survivors themselves.

10:43  The law works best when used to create agreements before hand rather than as a means to resolve disputes after the owner(s) death.

11:50  Kwame relates the “Game of Thrones” metaphor one of his associates uses to describe how few family-owned businesses make it to the third generation.

13:43  Succession planning works best when started at the beginning of a business. This includes:

putting an operation agreement in place

having a buy-sell agreement.

15:15  The difficulties associated with the owner(s) looking at their own death is discussed with regards to business succession planning and estate planning.

17:00  There are benefits associated with planning when all is going well, the two greatest being clarity and peace-of-mind.

18:40  Unresolved issues with regards to planing for the future can lead to costly mistakes in the business today.

19:49  Kwame discusses the toxic impact of arrogance and fear. Gary discusses some change management issues that arise in such situations – usually a sense of invincibility on the owner’s part. During family/business meetings a blanket denial of the “elephant(s) in the room” can occur making the attorney’s job that much more difficult and the number of wasted billable hours increases.

26:55  Kwame discusses the need to negotiate and suggest going to his podcast (Negotiation For Entrepreneurs) at one of his websites, the American Negotiation Institute.

28:24  The discussion shifts to humor and it reflects the challenge associated with keeping the humanity of the situation included in the legal transactions in order to avoid getting lost in the law. Kwame discusses how the law is meant to keep people within certain boundaries. The key is combining the two (humanity and law) to get to a negotiated deal that meets the participants needs.

29:46  At least three different frame-of-mind are running through the situation:

operational “truth” – the way the family-owned business runs

emotional  “truth” – the frame-of-mind and emotional state each individual has in terms of how they perceive the situation and respond/react to that situation

legal “truth” – the possibilities, options, and limits present under the law

Successful negotiations are achieved when, for everyone involved, there is alignment between the three different systems.

32:30  The more work done ahead of time to resolve the emotional issues the better the legal part of the work will go.