In the course of events in multigenerational family businesses, a family member may suggest bringing an inlaw into the business. These requests can often cause great anxiety for the family members already in the business, especially for the member in charge. Family members may consider the inlaw incompetent or simply not ready to assume an active role in the business. Sometimes family members think that only blood relatives are entitled to join the business, similar to European royal family members who are born into succession. And sometimes blood relatives relegate a highly competent inlaw to a position of lesser importance because of jealousy or distrust.  These scenarios commonly occur in family businesses faced with integrating an inlaw into the company — with disastrous results for the family and the business if the situation is not dealt with properly.


Handling Family Dynamics
To handle all aspects of an inlaw joining a family business, understanding the dynamics of the situation as well as the people involved is critical. Newcomers first brought in are likely to be subject to “power plays” by some family members who take an active role in running the business. Many family businesses are, in fact, run more like a European monarchy than a capitalistic organization — heirs to the throne must be born into the position, and everyone else is of lesser importance. An inlaw’s suggestions and decisions may be overridden by family members simply to exert their authority. And sometimes, in situations when no one wants to deal openly with their problems, the inlaws simply leave. This can cause marital problems and further friction between the spouse and the rejected inlaw and the rest of the family.

Another situation that could cause problems is when an inlaw who is not equipped to handle a high ranking company position is put in it anyway. This can disrupt the family and lower employee morale when an undeserving person is unfairly rewarded. This is especially disheartening for key nonfamily employees who deserve higher positions but suspect that only family members will advance into them.Even more problems are created by subsequent marital difficulties or divorce. When the inlaw is the heir apparent — which is often the case with an only child, a divorce can be disastrous to the business. Sometimes, the former inlaw continues in his or her present capacity. But a divorce often creates an untenable situation.

What You Can Do
All of these situations are real and common. To avoid complications, some family business advisors recommend that inlaws never be included in the family business. But many family businesses successfully handle these potential problems openly and properly. Here are some precautions you can take:

• Insist that the new inlaw work elsewhere for a few years,
• Use an employment contract, even if just as a temporary means of making communications clear,
• Assign the inlaw specific goals to accomplish — such as increasing sales of  a particular product line within a specific time frame,
• Create measurable tasks where success does not dependent on other family members,
• Seek family counseling before you take the inlaw on board, and
• Include the inlaw in discussions about succession and consider the issues that may arise if he or she is not included among the persons considered to be a successor.

Early planning can save you a lot of grief. We have helped family businesses through similar situations. Our experience may be helpful when you find yourself mixing business and family. Please call us to discuss your situation.