A Relationship With An Attorney Takes Time — But It’s Well Worth It

Advisors can elevate their business substantially by working closely with an attorney by attracting and serving high-net-worth clients with complex cases, but it isn’t simply a matter of knowing an attorney to send business to.

Drew Shumski knows that well because his office is right across the hall from Craig La Rocca, the attorney Shumski works with. Shumski is an advanced estate, business, investment and insurance planner in Lansdale, Pa.

Shumski and La Rocca plan to discuss “Joint Planning With Attorneys” on Tuesday at NAIFA’s 2020 Performance + Purpose virtual conference.

Their relationship is more than a referral arrangement and more of a partnership on cases to ensure that important details don’t fall through the cracks.

“We both look at it with a different set of eyes,” Shumski said. “Especially when my job is to fund the documents and his job is to make the documents, to make sure the wishes of the client happen properly.”

They rely on the other to fill in the gaps in clients’ plans. La Rocca pulls Shumski in when a legal client needs insurance or financial products. Shumski consults with La Rocca on complex cases and estate planning. They find that even sophisticated clients often have a surprising lack of planning.

Shumski had a recent example when he discovered an acquaintance had advanced cancer and was clearly in need of guidance in financial and legal matters.

The person had taken more than $700,000 out of his 401(k), which socked him with a penalty and pushed him into the 39.5% tax bracket.

“No one advised him properly. There wasn't an attorney involved,” Shumski said. “It was stage four colon cancer that he had and he wasn't doing that great, and he didn't have a will.”
The client had a couple of term policies and La Rocca said at least one of the policies was close to expiring.

“Craig said, ‘Oh God, he might outlive the term,’” Shumski said. “I said, ‘Not necessarily. We can convert this and there are other options with his life insurance policy. So that's what we did there on that situation.”

The client’s wife had stayed at home to raise their children and did not have a career of her own.

“So, when he gave her the paperwork to sign, he says, ‘Yeah, sign here.’ She didn't understand. She just listened to her husband,” Shumski said. “Well, when he finally passed away and we got all this, we were able to remove the tax bill because she was an unknowing spouse. So that helped a great deal. That was a six-figure savings alone.”

It is not unusual for clients to lack estate planning as well as a will.

“Even with my clients, I tell them, ‘Hey, you need to get a will,’” Shumski said. “And so the will's not a simple will anymore, as I explain to them. And they understand and say, ‘OK, you're right. I need to do this and get it taken care of.’”

Enter La Rocca to set things up.

So all this seems to make sense to have an attorney or two for reference. But Shumski said it isn’t simply saying “I know a guy.”

It takes time and effort to build a relationship to the point of mutual trust.

In Shumski’s case, he and La Rocca have become close friends, going skiing together along with doing other things outside the office. As they worked together on more cases, it became clear that they should get neighboring offices to be efficient.

But that took years of working together, Shumski stressed. It is not as simple as exchanging business cards.

“A lot of people, what they do is they go to the estate planning council meetings and they say, ‘Hey, we have to do joint work,’ and they start talking about product or they start talking about other things,” Shumski said. “Well, that attorney's personality might not be a match with you.”
Then an advisor cannot assume the attorney is actually qualified to provide the service clients need. Advisors need to do the due diligence and find out if the attorney is the expert they claim to be.

And the feeling has to be mutual.

“The attorney also needs to get to know you,” Shumski said. “He has to know your professionalism. He needs to know what your background is, how you work and what's your philosophy.”

When an advisor-attorney relationship works well, it is the client that benefits most. Quite simply, things get done.

“Clients like it that they go to one place,” Shumski said. “Because even when Craig said he was working with other advisors, it seemed like the work would never get done, like on ownership changes or beneficiary changes. But because this is in-house, it gets done quite easily, and we get it taken care of.”

Steven A. Morelli is editor-in-chief for InsuranceNewsNet. He has more than 25 years of experience as a reporter and editor for newspapers and magazines. He was also vice president of communications for an insurance agents’ association. Steve can be reached at [email protected].

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