The FAMILY OFFICE – a term that is surrounded by mystique.

It conjures notions of massive wealth, mahogany infused offices, private jets and money that has reached escape velocity. When one probes deeper, it connotes secrecy, exotic opportunities and risks, mixed with rigid control and discretion.

But what is the reality behind the term “family office”?  At what level of wealth do families bring it all in house?  What functions do they actually perform?  How much do they cost?

For families that are intrigued, what questions should they ask before going down that process and what should they focus on? 

We’re going to speak with EDWARD MARSHALL, Head of the Global Family Office at Dentons, the international law firm.  Ed has deep experience in the space and is a terrific starting point for families looking to engage the process of developing their own structure.

Ed and his white papers and research can be found at DENTONS' site here: ED MARSHALL and his twitter account is here: ED MARSHALL TWITTER. A link is here for his informative book (with Bill Woodson): FAMILY OFFICES: A COMPREHENSIVE GUIDE FOR ADVISORS, PRACTITIONERS, AND STUDENTS

Here are some of the areas we hit on:

When a client comes to you looking for a family office, what problems are they trying to solve?

What is your process for helping them define what they need?

Why not outsource everything?

How do you make this a digestible process?

Build, Buy, or Partner?

Cost

Talent

Confidentiality

Regulation

Scope Creep

The Rule of 3:

It's could take 3 years to build

It could costs $3 Million

You will probably want to shut it down 3 times before it's up and running

Below is a brief summary of the question and answer process from Dentons to help families get their bearings around the family office process:

Focus areas

Getting started

General Investing

Investing and owning real estate

Venture capital and private equity

The Lender Management strategy (US-based family offices)

Taxes

Litigation

Operations and governance

Employment

Impact investing and philanthropy

Trusts, estates and wealth preservation

Public policy

Risks and threats

Specialty areas

Getting started

What experience do you have working with family offices and family businesses?

Is your experience local, national or global?

What are the legal services that you typically provide to family offices that look like ours?

Does your experience with different family offices provide you with best practices that you can share with us?

What are the key legal issues to consider before, during and after a liquidity event?

Are all of your legal services billed hourly or can you deliver work on a flat-fee-per-project basis?

How would you build a team to handle the legal and non-legal matters relating to my family office?

Do you (or your firm) have access to a network of family office general counsels?

Are the business entities currently affiliated with our family office optimally structured across all areas that we should consider, such as income tax, estate tax, securities regulation, privacy, etc.?

What legal considerations and potential pitfalls exist with respect to embedded family offices (i.e., where employees of the family business perform the same function as a single-family office)?

If members of the family are investing together and/or separately, what legal structuring should we consider?

Would our family office benefit from a holding-company structure? Should one or more trusts own the family office legal entity? What is a family office management company? Should we consider using a holding company for our investments?

What are the advantages and disadvantages of using a family limited liability company (FLLC) or a family limited partnership (FLP) in our family office or family business?

How can we exercise optimal control of a family office or family busine...