You Have to Make the Tough Calls

David Sherman — the attorney that set up the Team Gleason Foundation — offers his advice to family businesses looking to continue their legacy.


There’s no right time or wrong time, but what I have seen is when clients start approaching their 60s, that’s when they’ll want to sit down and talk about business planning. I don’t think it’s ever too early. Really the key is not how old the older generation is, the key is when the children get to the point where you’re comfortable starting the process.


Small family businesses have plenty to worry about on a day-to-day basis, which makes planning for the future a serious challenge. But one thing about the future is that it always gets here, whether planned for or not, and few issues are trickier or more vital than business succession planning.

As a business founder and attorney, Founding Partner David Sherman of Chehardy, Sherman, Williams, Recile & Hayes is immersed in family business challenges every day. During his 40-year career, Sherman has helped businesses and nonprofits literally from A to Z: the Audubon Foundation to the Zulu Social Aid and Pleasure Club. Sherman specializes in transactional work. He has a master’s degree in tax law from Boston University, and in addition to tax work and business transactions, he does a lot of estate planning.

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One of Sherman’s ongoing high-profile clients is the Team Gleason Foundation. Sherman talked with Biz New Orleans about his background, his work, and how he helps family businesses sustain themselves across generations.

Tell us a little about the work of your firm.
Years ago, there was a personal injury firm called Gautier Murphy. Wendell Gautier was considered one of the finest personal injury lawyers in the country. Gautier Murphy had a wonderful personal injury practice, but they started getting concerned that the Legislature was going to cap personal injury lawyers’ fees. So, they decided to start a business section. They recruited Lawrence Chehardy and me — we were best friends since law school — they recruited us to start a business section. It grew to the point where we started having conflicts between personal injury and business, so Lawrence and I started our own firm, along with four other lawyers. We’re now up to 40, 45, and do a whole array of work.

One of the things that makes us unique is we believe in specialization. Everyone in the firm has a niche and specializes. We do just about every type of legal work that a single firm can do. But one of the things that I think distinguishes us is that we really believe that it important to be involved in the community, to do our share of charity work, and we’ve done that since the firm’s inception.

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Looking at the field of business succession planning, what are the issues a family business should consider? Why is this so important?
I think the most critical issue is succession planning, because you’ve got a generation that is running the business. What happens when they’re no longer able to run the business? You have two different issues. One issue is, you’ve got a generation running a family-owned business, but you have no one in any younger generation involved. The question becomes, “If I’m running a business, and no one in the family is involved, and I can no longer run it, is the business sold to a third party?” Do you sell it to your employees? There’s a whole array of issues when you have no one else in the business.

A bigger challenge, believe it or not, is when you’ve got a parent running a business, and some children are involved in running the business, and some aren’t. That’s a very difficult issue, because a lot of families believe “We’ve got to share everything equally, so all of our children have got to have an ownership interest in the business.” That, 10 out of 10 times — the ones who were working are going to feel like, “It’s our blood, sweat and tears making the business go. Our siblings aren’t involved, why should we have to share the profits with them?” The siblings are going to feel like, “Well, this was an asset that our parents owned, so we should get our share.” What I have preached to my clients is where you have that type of situation, leave the business to the children who are involved. If you’re fortunate enough to have other assets, balance things with other assets.

Why is it so important to do this type of planning ahead of time?
First of all, under Louisiana law, if you run a business, and you die without a will, it goes to all of your children equally, and that leads to the problems we just discussed. One of the keys in family-business planning is to have a will that lays everything out. A lot of family businesses I represent, the older generation has survived long enough to where they’ve been able to transfer the business while they’re alive, and make sure everything’s done smoothly. That’s always the best way to do it. But you’ve got to have a will in the event you are not able to complete that process.

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When is the best time to begin this type of planning?
There’s no right time or wrong time, but what I have seen is when clients start approaching their 60s, that’s when they’ll want to sit down and talk about business planning. I don’t think it’s ever too early. Really the key is not how old the older generation is, the key is when the children get to the point where you’re comfortable starting the process.

What are some of the most common obstacles or challenges you come up against in helping family businesses with succession planning?
The biggest challenge is we all think we’re going to live forever. That’s the challenge with estate planning, to have somebody focus on sitting down and doing their will. Doing business planning is never anyone’s top priority. Their top priority is things that are happening now. Second-biggest challenge is where you have children who are in the business and children who are not in the business.

What is the one most important thing family business owners should know, or think about, in terms of succession planning?
It’s everything we’ve talked about, but the single most important point is to remember that someone is ultimately going to have to make the decision on continuing the business. So, when you have multiple children in the business, the tendency is to make them equal owners, but that often leads to irreconcilable issues and disputes. I think the most important issue is to pick the one person whom ultimately you have confidence in to make the final decision.

Every team must have its leader.
That’s exactly right.

One of your most high-profile clients is Steve Gleason and the Gleason Foundation. How did you first become involved with them?
A very close personal friend of mine, Tom Capella, who is the assessor in Jefferson Parish, is also probably one of Steve Gleason’s two or three closest friends. Tom is also an attorney, and he does general legal work for Steve. When Steve was diagnosed, the family wanted to set up the foundation and do estate planning, and Tom recommended me. I’ve done a lot of nonprofit work; I’ve set up a lot of nonprofits in this city. I met with Steve and Michel, and Michel’s father, Steve’s father-in-law, Paul Varisco, and we just hit it off. I was so moved at the meeting with Steve, Michelle and Paul Varisco that I ended up volunteering my services to set up the foundation. We all worked together and put together the foundation, which has been a huge success, thanks to Steve and Michel and Paul Varisco.


DID YOU KNOW? David Sherman’s relationship with Steve Gleason is far from his only sports affiliation. Sherman is co-chair of the 2022 NCAA Men’s Final Four Local Organizing Committee and has worked closely with the Greater New Orleans Sports Foundation for more than 20 years, serving as chairman of the board numerous times. He is also a past president of the University of New Orleans Athletic Association.

Tell us a little about the work involved in setting up the Gleason Foundation, as well as the ongoing work with it.

The first thing we had to do was set up the corporation, Team Gleason. We had to set up the entity, talk about managing the entity, who would be the leader of the team. At the time, nobody thought Steve was going live six more months, so we had to talk about all the succession planning. Second obstacle was that we then had to obtain tax-exempt status from the IRS, because we had to qualify as a charitable foundation. That way donors could deduct their contributions. It was absolutely a team effort, but everything worked out smoothly.
And then ongoing, if you’re a charitable foundation, one of the toughest things from an attorney’s standpoint is there are so many rules and regulations, dos and don’ts, that you almost have to monitor it on a weekly, if not daily, basis. The people running it don’t have the expertise to know, yes, we can write a check for this, no, we can’t write a check for that. That is the ongoing work, along with a lot of contractual work. Team Gleason is sought after by all kinds of businesses, enterprises, so there is a lot of transactional work there.

How do you help ensure the sustainability of the foundation and its work?
(laughs) I don’t do a single thing in that regard, that’s Steve Gleason, and Michel Gleason, and Paul Varisco. Really Steve has created such an incredible awareness now of ALS, and he’s become such an icon, received the Medal of Honor, it’s just incredible. And his wife, Michel, is every bit as strong and as visionary as Steve is. So, I have no concerns about the sustainability. But it’s not a result of anything I’ve ever done.

Do you have any last thoughts or advice you would give to someone about operating and sustaining a family business?
I think the key from my perspective is not overstaying your welcome. [I’m going to] stay as long as I can help to lead the firm, and as long as I can do my job, but I don’t want to be one of these attorneys or businesspeople who stays longer than he should and causes all kinds of conflict among the younger people. I want to turn over the reins when I should turn over the reins. We’ve all seen people stay too long, and I just don’t want to be in that category.

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