Attorney Partnerships: Weighing the Pros and Cons for Financial Advisors
The Power of Professional Trust
Attorneys bring significant credibility to any professional partnership. In annual trust surveys, they consistently rank higher than financial advisors in client confidence, though slightly below CPAs. This established trust creates valuable opportunities for advisors seeking to enhance their credibility and expand their service offerings.
The natural overlap between legal and financial services creates numerous opportunities for collaboration. Whether it's a business attorney handling M&A transactions that lead to investment needs, or estate planning work that reveals insurance requirements, the synergies are clear and compelling.
Building on Shared Values
Most attorneys demonstrate a genuine interest in adding value to their clients' lives. Despite common jokes about the profession, experienced advisors often find attorneys more receptive to strategic partnerships than other professionals. Their willingness to explore new approaches and expand their service offerings creates fertile ground for collaboration.
However, any successful partnership must be built on mutual benefit. Attorneys, like all business owners, need to see tangible returns for their additional effort. Whether through shared revenue, increased billable hours, or expanded service opportunities, the partnership must create clear financial benefits for all parties involved.
Understanding the Challenges
The primary challenge in attorney partnerships stems from their transactional nature. Unlike CPAs or financial advisors who maintain regular client contact through reviews and ongoing planning, attorneys typically engage with clients on a project basis. A client might see their estate planning attorney once every few years, or their business attorney only during specific transactions.
This irregular engagement pattern creates communication challenges. Without consistent client interaction, attorneys often lack the deep, ongoing relationships that characterize CPA-client partnerships. This difference can impact the effectiveness of collaborative efforts and limit opportunity recognition.
The Go-To Professional Dynamic
Perhaps most significantly, attorneys rarely occupy the "go-to professional" role that CPAs often fill. When clients face important financial decisions, they typically turn to their CPA first. Even in situations where an advisor and attorney bring joint strategies to the table, clients often still want their CPA's approval before proceeding.
The Strategic Solution
Rather than viewing attorney partnerships as an alternative to CPA relationships, successful advisors should pursue both as complementary elements of a comprehensive service model. Think of it as building a three-legged stool: the advisor provides financial expertise, the CPA offers tax guidance, and the attorney handles legal matters, all working in concert to support the client's needs.
The ideal scenario often involves all three professionals sitting at the table together, having already established trust and clear communication channels among themselves. This approach creates a powerful service delivery model that maximizes value for clients while leveraging each professional's unique strengths.
Moving Forward
While attorneys can indeed make valuable strategic partners, they should typically complement rather than replace CPA relationships in an advisor's professional network. The key lies in understanding each relationship's unique dynamics and structuring partnerships that play to everyone's strengths while maintaining clear communication and revenue-sharing agreements.
Success in this area requires patience, professional respect, and a genuine commitment to collaborative client service. When properly structured, these multi-professional partnerships create superior client outcomes while generating additional revenue opportunities for all parties involved.
