Monday, January 15, 2007

Is estate planning becoming a niche speciality?

Attorney Joel Shoenmeyer comments in his Death and Taxes blog that the big law firms in his area seem to be getting rid of their trusts and estates departments. Not enough money in estate planning, apparently.

Similarly, Professor Gerry Beyer reports that planning superstar Roy Adams has left Sonnenshein Nath and Rosenthal, where he had headed the the Trusts and Estates Practice Group.

Shoenmeyer doesn't see any lessening in the need for estate planning, though he expects that smaller specialty law firms may be picking up more of the business. But if these trends are real at the biggest firms, does it suggest that the conviction is taking hold that federal estate taxes are on their way out?
Posted by Jim Gust at 1:37 PM

2 comments:

JLM said...

With over 500 billionaires and at least 3,000,000 mere millionaires in this country, estate planning isn't going away.

One guess, estate planning may become increasingly two-tiered. One tier for the superrich, the other for the rest of us.

Joel Shoenmeyer probably has it about right: Large law firms don't need relatively low-profit estate planning groups, but neither do estate-planning lawyers need large firms.

4:26 PM
Andrew Oh-Willeke said...

Big firms exist to serve big businesses, because small and medium sized firms can't devote enough people to the myriad detailed legal needs of big corporate clients in a single firm.

Estate planning and high asset family law practice has always been a fringe benefit these firms have provided to the senior executive of the big businesses. Economies of scale aren't now, and never have been necessary for this kind of representation in personal financial matters.

There is a consensus that the exemption amount will be under a compromise considerably higher than the $600,000-$1,000,000 figures it was previously and is scheduled to revert to, and the rates are very likely to be lower. This drains something like 80-90% of the business for high end estate planning, and reduces the stakes in many remaining cases. With reduced demand, the fringe is no longer worthwhile to enough people at corporate clients to make doing it through the big firm worthwhile.

3:37 PM

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