Family-owned businesses have a hard time letting go of underperforming employees – harder than other businesses might. At least this is the thesis of Wayne Rivers of the Family Business Institute in his recent article in The Wall Street Journal. Mr. Rivers does not cite any statistics to support the prevalence of this issue, but it is not counterintuitive. Family-owned businesses – especially in their early days – are primarily staffed by family members. For many, the only thing harder than terminating an employee is terminating an employee that is also a member of your family. And even through substantial growth, many family-owned businesses retain some of this culture, for better and for worse. To be certain, there are real legal and business parameters on how and when to terminate employees. Mr. Rivers suggests, however, that many family-owned businesses could do a better job at making the hard decision to let someone go when the time is right. Read Mr. Rivers’ article here.
Drew Steen is a business transactions attorney at Davis Wright Tremaine, LLP. He represents both buy-side and sell-side clients in mergers and acquisitions, venture capital investments, joint ventures, equity co-investments and restructurings. He also serves as regular corporate counsel for several closely-held and family-owned companies. Drew can be reached via email at firstname.lastname@example.org or directly at 206.757.8081