Many of my clients own successful business and use large law firms for their business legal work. The clients often say that their big firm attorneys provide excellent advice about business planning and tax planning, but that they do not seem able or willing to provide help with their personal asset protection planning (which is why they seek help from me). I have talked to many “tall building” attorney about asset protection, and I find that most do not feel comfortable helping even their best individual clients in this area.
In my opinion, there are two principal rational explanations why big firms do not provide asset protection advice. First, big firms represent, or want to represent, banks, insurance companies, and other similar institutional clients who loan money and most often find themselves trying to collect money from debtors. Attorneys may feel that doing even a small amount of creditor protection work may antagonize these potential institutional clients.
Second, there is case law in Florida that attorneys and other third parties cannot be held liable for assisting in what is later deemed a “fraudulent conveyance.” Other states do not have case law which is similarly protective of asset planning. In fact, there are cases in some states including California and New Jersey that have held attorneys liable for their clients’ fraudulent transfers. If one attorney in a large firm is held liable, the entire firm may be held accountable. Therefore, attorneys around the country, in general, fear providing asset protection advice that involves transactions which could later be challenged under fraudulent conveyance law. Most Florida attorneys avoid asset protection because they believe, incorrectly, that they may be civilly liable for assisting with asset protection.
As a result, most asset protection attorneys practice by themselves or they are members of very small law firms. Business people who seek asset protection advice from their large business law firm are likely to get watered down legal advice that protects the law firm as much as it protect’s the client’s assets.