Legal
Learning The Legal Lessons From “Succession”

In this detailed analysis of legal questions generated by the HBO television drama, law firm Squire Patton Boggs walks readers around the issues.
The television drama series about a wealthy family and their ruthless machinations has not just been great drama, but it also raised the debate about intergenerational business and wealth transfer – core subjects for this publication. In the following article, law firm Squire Patton Boggs explores the topic. The author is Geoffrey G Davis, a partner in its Washington DC office. The article was written with assistance from Squire Patton Boggs’ summer associate Meagan Holloway-Ragland.
The editors at this news service are grateful for permission to re-publish this commentary from Squire Patton Boggs. The usual editorial disclaimers apply. To comment further, email tom.burroughes@wealthbriefing.com
What is “Succession” and what can we learn from the Roy
family machinations?
On Sunday, May 28, 2023, the hit HBO series Succession
aired its final episode of the five-season saga following the
fictional Roy family and WayStar RoyCo, one of the largest
family-controlled media and entertainment conglomerates in the
world. The show depicts the corporate politics and family
conflicts in the struggle to earn the favor of the calculating
CEO and family patriarch, Logan Roy (Brian Cox). Logan
experiences a decline in health as he ages. His children, Connor
(Alan Ruck), Kendall (Jeremy Strong), Shiv (Sarah Snook), and
Roman (Kieran Culkin) work to position themselves to inherit the
company as their father’s successor.
Not only do they have to compete amongst themselves, but they must also out-maneuver the corporate executives hoping to gain control, such as Tom (a corporate executive who is also Shiv’s husband), Greg (a nephew trying to climb the corporate ladder), and Gerri (the longtime general counsel).
While the show is fictional, many of the plotlines that unfold in Succession are prime examples of the legal challenges that family offices can face and the need to prepare for these challenges to handle them when they arise. By reviewing some of the most significant moments of the show, we have identified ways in which the Roy family could have benefited from having independent, sophisticated legal advisors closely assisting the family office organization.
Knowledge of goals and how to run a business is not
hereditary, family offices need mission statements and user
manuals
To help avoid conflict as the result of the demise or
incapacitation of the founder or controlling person of a family
office, independent legal advisors can help establish a plan and
rules for succession to meet the goals of the family, which can
vary from case to case. Some family offices often seek capital
appreciation while providing current income to some or all of the
members. Some family offices simultaneously have charitable or
social goals that need to be taken into consideration. Careful
consideration needs to be given to the specific goals and
priorities of the family office.
Often, this requires canvassing the relevant stakeholders and gathering information. Once those goals have been identified and prioritized, the family can create a written charter or mission statement. This should be a living document, like a constitution, which can be amended from time to time.
Family charters, or mission statements, are created by some level of consensus on how to operate and flourish. It governs the decisions of the family regarding the operations of the business and the management of wealth.
A provision in a family charter can establish critical values,
such as:
-- A firm mandate for legal compliance and ethical business
operations;
-- Prioritizing the collective business interests over
individual personal interests;
-- Identifying future business goals, such as
diversification;
-- Identifying charitable and strategic social
investment objectives;
-- Hiring practices and the requirements and obligations of
family members acting in leadership roles;
-- Establishing a formal leadership succession plan; and
-- Specifying the rights and expectations of family members
who may hold an interest in the family business but do not
participate in day-to-day operations.
This type of mandate would have helped prevent the often destructive but entertaining scramble for power and internal conflicts that drove the plot of Succession.
Once the proper conceptual framework has been agreed to, expert advisors can help assist in developing the most efficient protective structure, carefully considering goals, potential taxes, insulation from corporate liabilities and other relevant legal factors.
Maintaining the independence of the legal function from
business pressures is key
Upon starting his new role as the head of the WayStar’s Parks and
Cruises division, Tom Wambsgans (Shiv’s husband) is given secret
documents confirming a massive cover-up of crimes committed on
the company’s cruise line by his predecessor – including
theft, sexual assault, rape, and potential murder. (At the
funeral of the former cruise line executive, it is revealed
through discussion between the Roys and the inner circle of the
company that his real name is “Lester.” His nickname “Mo” is
a play on the word “molester,” as he was known to be one by
other executives and the family.) Tom plans to go public about
the scandal, but Gerri, WayStar’s general counsel, advises
against it. Instead, she orders Greg to burn the documents.
His efforts prove futile when New York Magazine publishes their exposé of the scandal, and a former employee blows the whistle, implicating Tom, Gerri and Kendall in the cover-up.
Soon after, a congressional investigative committee summons the company’s senior officials to testify at a hearing as part of their investigation into the scandal. It is contemplated that criminal charges will be filed, and Tom prepares to take the fall and face jail time. When the family learns that Congress has a witness who will testify, they send Shiv to coerce/bribe the sexual assault victim to take the generous settlement in exchange for silence. (2)
Why did Gerri provide such corrupt and improper legal
advice?
Gerri, the longtime general counsel, was appointed interim CEO
when Logan Roy was ill. Throughout the show, it was apparent that
Gerri had her own ambitions to become the permanent CEO and was
driven more by politics and covering for Logan than respect for
the law. She clearly had an inappropriate level of involvement in
the politics of the company. At one point, Gerri actively
competed with the Roy children for the position of permanent CEO.
She also had several personal relationships that clouded her
judgement.
Gerri is Shiv’s godmother and treated like a family member. Roman’s perverse sexual fascination with her further complicated the dynamic.
The Department of Justice continually stresses the importance of having a strong corporate compliance program.
Any criminal investigation will consider all prior misconduct to determine an appropriate resolution and individual accountability, regardless of the individual’s position. Ideally, a company’s legal counsel should avoid conflicts of interest and intimate personal relationships with family members. (4)
If legal counsel has political goals to rise in the ranks of the company and personal alliances with family members, this can undermine the independence of the legal function and fundamentally compromise its critical role. The role of a properly independent general counsel can be assisted and reinforced by having impartial outside counsel vetting important decisions.
Having transparency and outside counsel up to speed and involved
assures the highest level of integrity and helps avoid high risk
shortcuts.