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When former Georgia Gov. Roy E. Barnes switched from politics back to the practice of law, he didn’t join a powerhouse Atlanta firm. Instead, he set up shop with two young associates whom he knew well and trusted: his daughter and son-in-law. Now Barnes runs a small firm in Marietta, Ga., with his daughter, Allison Barnes Salter; his son-in-law, John F. Salter Jr.; and one associate who’s not related to the Barnes clan. The Barnes Law Group is just one example of a high-profile, Atlanta-area, family-owned firm. Others include The Steel Law Firm, headed by the husband-and-wife team of Brian Steel and Colette Resnik Steel, and Steinfeld & Steinfeld, composed of family lawyer Bruce R. Steinfeld and bankruptcy specialist Shayna M. Steinfeld. Practicing in a family-owned firm has its advantages: You know and trust the other lawyers, as Barnes noted. Division of profits may be easier — especially in a husband-and-wife firm where everything goes in the same account. And it may be easier to run a flexible practice designed to allow for more time with children. But those advantages easily can turn into problems. The fairness of profit-sharing and compensation systems can become a battleground, especially in firms with both family and nonfamily employees. Leaving work at work is difficult if your partner in law is also your partner in life. And handling disputes gets tricky — especially if they occur with or in front of unrelated employees. Kristi S. McMillan of the Cox Family Enterprise Center at Kennesaw State University says family members should present a united front when dealing with unrelated employees. Arguments should occur behind closed doors, she said. Otherwise, visible divisions between family members may provide fertile ground for other employees to play one family member off another. The keys to success for a family-owned firm, said McMillan, co-author of “Conflict and Communication in the Family Business,” are open communication, a clear and established set of policies and procedures, and the availability of neutral third-party intermediaries to deal with disputes. One reward of making a family business work: It tends to outperform other businesses financially, said McMillan. She explained that family members are more concerned with the business’s reputation, and they focus on the long-term success of the business and the family. Also, they tend to be greater risk takers and are less bureaucratic, which means they can act quickly to seize an opportunity. Finally, their business and social relationships often overlap, which means they’re more trusted by clients. DIVVYING UP PROFITS Even though family firms may have more financial potential than their nonfamily competition, money can present a special challenge in a family-owned firm where some members aren’t relatives. Any compensation or profit-sharing system should be clear, fair and not biased toward family members, McMillan said, a sentiment shared by attorneys practicing in family firms. Barnes is his firm’s sole shareholder. His daughter, son-in-law and an unrelated associate, Jennifer Auer Jordan, all receive guaranteed, negotiated salaries and share in the firm’s profits. Barnes said that consistency in compensation is the key — a single, experience-based salary scale is very important — to keep the peace among the firm’s members. After his daughter and son-in-law joined his practice, Barnes was faced with a situation where he considered hiring an associate who had a great deal more legal experience than his family members. Paying that unrelated associate a higher salary based on experience wasn’t even a question for Barnes — it was purely a business decision. Barnes added that the firm’s experience-based salary scale is known by all who work there. “In a family business, there should be no secrets,” he said. Allison Barnes Salter added that the associates’ salaries are based on “what we provide and our levels of experience.” At one point, the former governor said, the firm considered hiring a more-experienced, unrelated associate who’d have earned more than his daughter and son-in-law. Though the associate wasn’t hired, Barnes Salter said she would not have had a problem with his higher pay. She pointed out that her father is the firm’s sole shareholder, and the ultimate decisions on hiring and pay belong to him — even though she and her husband have some input. Other family firms handle things differently. Marietta lawyer Matthew C. “Matt” Flournoy, who formerly practiced with his father and brother, said that in that firm, his father, Robert E. Flournoy Jr., “was the captain of the ship, and we were his lieutenants.” As far as profit-sharing was concerned, Flournoy recalled that receivables were divided according to the income generated: “We ate what we killed.” At husband-and-wife firm Steinfeld & Steinfeld, division of profits is not a point of contention. Bruce Steinfeld said that in the typical firm, “how you split the pie is the big issue,” but in his practice, it is a “no-brainer — all the profits go into our joint checking account.” WHO’S IN CHARGE OF WHAT? A subject almost as important as division of profits is division of responsibility. Husband-and-wife lawyers Brian Steel and Colette Resnik Steel have practiced together since 1997. Colette Resnik Steel, who maintains a sizable general practice in addition to her administrative responsibilities, said that the partners struggled to define their respective roles during the firm’s infancy. A short time after the firm’s founding, the partners’ strengths and weaknesses became “readily apparent,” she said. She was better at using technology than was her husband, who had been handwriting the firm’s checks and ledgers. As a result, she said, she computerized the firm’s finances — saving time, money and headaches. Resnik Steel said that she and her husband “took off our married hats” during the period where the firm’s structure was being cemented and addressed the issues as business partners. It didn’t take long for the Steels to arrive at their current business model, which she termed a “fabulous arrangement.” Now, said Brian Steel, “Colette totally runs the office. All I do is focus on my cases.” HEADING OFF PROBLEMS Other issues, such as personality differences and an uncertain chain of command, also have the potential to cause problems in a family-owned firm. Charles E. “Chad” Hoffecker, a former associate with The Steel Law Firm, said that the couple “made it very clear” to whom he should report if he had questions or problems: If the issue related to a case, he would go to the attorney on that case, and if the issue related to an administrative matter, he would report to Colette Resnik Steel. Hoffecker said that the clear direction provided by the firm’s principals made for a satisfying work environment. Barnes recalled a conversation with his associate, Jordan, where he assured her that she could talk to him about any subject, including conflicts with members of the Barnes family. “This is all business,” Barnes told the associate. “If you ever have a problem, come in to my office, close the door and we’ll talk.” Jordan, who joined the firm in June, acknowledged that she had been concerned about how well she would mesh with the Barnes’ family-firm dynamic. She said that those concerns soon evaporated. “They have brought me into the family as much as possible, which is something that I didn’t expect,” she said. Jordan added that she and her husband have been invited to join the Barnes family on vacation later this year — and they intend to go. Of course, intrafamily firm relations aren’t always so peaceful. Matt Flournoy recalled that when he was part of a family firm, he and his brother, sitting Cobb County, Ga., Superior Court Judge Robert E. Flournoy III, would “yell and scream at each other a lot.” They made sure, however, that such disputes were short-lived. “We could have disagreements and still meet for dinner that night,” Matt Flournoy said. SHARING SPACE: UPS AND DOWNS Practicing law with the person you’ll be having dinner with later presents its own problems: How do you preserve your autonomy and your personal space? Colette Resnik Steel said physical space is one reason her firm’s dynamic works; the couple’s offices are at opposite ends of a hallway. Another problem is not so easily solved. Despite their best efforts to leave work at work, “that’s just not the nature of our practice. … Things come up on an emergency basis.” Bruce and Shayna Steinfeld keep separate offices. Hers is at home; his is in a space a few miles away. One advantage of this setup is that, according to Bruce Steinfeld, “We don’t get sick of seeing each other all day. It might be a bit more difficult if we shared space.” John R. “Jack” Martin, an Atlanta criminal defense attorney who used to practice with his brother James F. Martin, now with the Georgia Public Defender Standards Council, views the space issue as a double-edged sword. “The good news is that you see a lot of each other. The bad news is that you see a lot of each other,” he said. Regardless, Jack Martin noted, “I miss practicing with my brother.” Some lawyers in family-owned firms say the closeness strengthens familial bonds. Bruce Steinfeld said he recently took a vacation day to fish with his children at Lake Lanier. “My law partner was thrilled that I took the day off and spent time with my kids,” he said, “and that’s not the case at most law firms.” For Steinfeld, “this arrangement allows me to be the best husband and father that I can be.” At the Barnes Law Group, the family-firm concept soon will give the former governor the chance to spend time with his new grandchild — without leaving his office. Allison Barnes Salter is due to give birth this month, and a nursery is under construction at the firm’s offices. Barnes said he’d have offered this benefit even to an associate who wasn’t his daughter. “Employers ought to make these accommodations to retain good minds and good folks,” he said. His grandchild will be just the latest family member to join the line of Barnes family businesses, which have spanned four generations. Even with that history, he summed up his family-firm philosophy this way: “I love you all, but this is about business.”

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