On the Family Business Lawyer as Trusted Advisor

My favorite rule under the American Bar Association’s Model Rules of Professional Conduct—and, yes, I have a favorite rule—is the one that describes the lawyer’s role as an “advisor.”  The owners and managers of a family-owned business need their lawyer to be something more than a legal resource and even something more than an advocate.  They need their lawyer to be a counselor and a trusted advisor. The ethical standards of the legal profession allow and even encourage this.

What are the ABA Model Rules of Professional Conduct?

The American Bar Association (“ABA”) is a voluntary membership association for lawyers and law students.  In part, the ABA operates to promote competence, ethical conduct, and professionalism in the legal profession.  In pursuit of that objective, the ABA drafted and maintains annotated Model Rules of Professional Conduct (the “Model Rules”).  Here is a link to the Model Rules and ABA commentary:


Each state in the US has codified its own rules of ethical conduct that govern the lawyers practicing law in that state.  The Model Rules do not govern lawyers in a particular jurisdiction.  Rather, they serve as a model for the ethical rules adopted by the various states. Virtually every US state has adopted a form of the Model Rules. Therefore, the ABA’s annotations and commentary regarding the Model Rules can be helpful in construing similar rules governing lawyers practicing in a particular state.

So, what is my favorite rule?

My favorite rule in the Model Rules is Rule 2.1 “Advisor.”  It appears in a section titled, “Counselor,” and it states, “In rendering advice, a lawyer may refer not only to law but to other considerations such as moral, economic, social and political factors, that may be relevant to the client’s situation.”  This rule gives the lawyer express permission to be more than just a legal resource for the client.

The comments that accompany Rule 2.1 are even more explicit.

“Advice couched in narrow legal terms may be of little value to a client, especially where practical considerations, such as cost or effects on other people, are predominant. Purely technical legal advice, therefore, can sometimes be inadequate. It is proper for a lawyer to refer to relevant moral and ethical considerations in giving advice.”

Rule 1.2, Cmt. [2].

The rule and commentary encourage the lawyer to advise the client as to what might be the “best” course of action with regard to more than just the legal consequences of the client’s decision.  For example, in counseling the client, the lawyer may take into account the economic effects on the client’s business and the practical or emotional effects on the client’s family members.

The lawyer, however, is not expected to “go it alone” in fields outside of his or her legal training.

“Matters that go beyond strictly legal questions may also be in the domain of another profession. Family matters can involve problems within the professional competence of psychiatry, clinical psychology or social work; business matters can involve problems within the competence of the accounting profession or of financial specialists.  Where consultation with a professional in another field is itself something a competent lawyer would recommend, the lawyer should make such a recommendation.”

Rule 2.1, cmt. [4].

The lawyer is even encouraged to advise the client as to what might be the “right” course of action, from a moral standpoint. Comment [16] in the Preamble and Scope section of the Model Rules says, “The Rules do not…exhaust the moral and ethical considerations that should inform a lawyer, for no worthwhile human activity can be completely defined by legal rules.” (Emphasis added.) That last clause is a beautiful statement, coming from the legal profession’s premier association.

Finally, the comments to Rule 2.1 also suggest that the lawyer can be a source of emotional support for the client. “In presenting advice, a lawyer endeavors to sustain the client’s morale and may put advice in as acceptable a form as honesty permits.” Rule 2.1, cmt. [1].

What does this mean for family business owners?

Rule 2.1 and its comments allow family business owners to seek a lawyer who will serve as a trusted advisor, not just a provider of legal services.  Family business owners can have a lawyer who will try to honor their values and help them protect and pursue all of the things that are most important to them, including family health, happiness, and prosperity.  Family business owners can have a lawyer who will help them keep up their morale in the toughest times and be a source of energy and emotional support.  Family business owners can have a lawyer who is a counselor in the broadest sense, a trusted advisor, a friend.

Especially at a times like the present, when the world is in crisis and when leading a family business is more difficult than ever, it is important for family business owners to have allies they can count on.  Ideally, their lawyer is one of those allies.

Gregory Monday
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