When hedge fund billionaire Bill Ackman’s family office became too costly to run, he asked his nephew to help trim the fat. The result was a 30 per cent reduction in headcount earlier this year, including an expensive in-house lawyer, who was replaced with a fractional alternative.

Ackman’s family office, named Table, had been set up 15 years earlier to manage a portfolio of passive investments. Ackman concluded that the in-house lawyer had “just too much horsepower for what is largely an administrative legal role”. The lawyer rejected a three-month severance package, demanded a two-year pay-off (roughly $2 million), and threatened to sue for gender discrimination.

Ackman took to social media to criticise the lawyer and refused to settle the claim. He vowed to “fight this nonsense to the end of the earth in the hope that it inspires other [family office] CEOs to do the same.”

The situation at Table offers a cautionary tale for wealthy families about which services their family offices should keep in-house and which they should outsource, and the risks involved. We take a look at which option is better for some of the main family office services.

Legal services and tax planning

“While no two family offices share identical needs, legal and tax work is usually outsourced,” says Nick Ritchie, senior director and wealth planner at RBC Wealth Management. Most family offices don’t have enough ongoing legal or tax work to justify hiring a full-time specialist across the various disciplines (e.g. cross-border investments, estate planning, mergers and acquisitions, and regulatory compliance).

“Jurisdiction-specific [guidance] for structuring and navigating cross-border tax rules can vary widely and evolve quickly. This makes it difficult for an internationally mobile family office to maintain genuine expertise in-house,” Ritchie adds.

Jo Bateson, partner at Mercer & Hole, points out that although outsourcing to accountancy and legal firms can be more expensive, they “will have their own internal risk and review processes that are not easy to replicate within a family office unless it’s very large.” In evidence, 75 per cent of 307 family offices surveyed for the UBS Global Family Office Report 2026 outsource their legal work, while 59 per cent opt to do this with their tax planning.

Cybersecurity

Families generally sit on a huge amount of wealth data, much of it sensitive, from balance sheets to details of physical assets and residences. A data breach could result in blackmail, extortion, and even threats to life. Families may be wary about who has access to the data – and handing it over to third-party cybersecurity specialists could increase the attack surface. This elevates cybersecurity from a mere IT function to a personal safety one.

“Family offices and their principals can be attractive targets for fraud and digital threats. A chief information security officer (CISO) is becoming an essential hire for many families, even where elements of the IT infrastructure are outsourced,” says Ritchie.

Despite this, just over half (52 per cent) of the family offices surveyed by UBS still outsource their cybersecurity. This is largely because they've been unable to hire senior cybersecurity professionals with high-level technical skills.

Perhaps surprisingly, nearly a quarter (23 per cent) of the family offices admitted they didn’t offer a cybersecurity service. This chimes with data from Ocorian showing that a big cyber awareness and readiness gap exists: three-quarters of family offices have taken action to protect themselves from cyberattacks, but 19 per cent don’t have any defence plans in place.

Asset allocation

Strategic asset allocation is the service family offices are most likely to keep in-house, with nearly nine in 10 (86 per cent) of the family offices surveyed by UBS doing so. This figure falls to 55 per cent for investment research. However, it’s not always a case of either or; in fact, family offices may find a hybrid model works best.

“Building a full in-house team is rarely the most efficient use of resources. Working with external wealth managers gives families access to a breadth of expertise that is difficult to replicate internally until assets reach a truly significant scale,” argues Ritchie.

Until an investment portfolio has scaled up, an outsourced chief investment officer (CIO) can help to reduce fixed costs, such as those that would be accrued during market downturns where assets under management (AUM) decline, he adds. Once family offices are ready to hire an in-house team, however, they may want an internal investment professional “who acts as internal gatekeeper, commissioning and evaluating external research provided by banks and hedge funds”, to work alongside external professionals.

Succession planning

Succession planning is another service that family offices prefer to oversee in-house, with 62 per cent of those surveyed by UBS choosing this approach. It makes sense that families would want to keep advice on sensitive matters regarding inheritance, trusts and gifting strategies within reach. Nevertheless, in-house succession planning can be a challenge, warns Bateson. The job can be made difficult if families fail to keep up to date with tax changes, for example. Rectifying mistakes can be a time-consuming administrative headache.

“I took over as an external provider to a family office where an in-house advisor had been in post for over 30 years, so they needed to find a replacement upon his retirement,” says Bateson. “Unfortunately, there was very little in the way of file notes and records, so getting up to speed had its challenges.”

A final note

With each family office having different priorities, there’s no one-size-fits-all, as the adage goes. Ultimately, whether to keep a service in-house or to outsource it could come down to access to talent, as highlighted by J.P. Morgan’s 2026 Family Office Report. There’s also the impact of artificial intelligence (AI) to consider, which is increasing the scope of what can be done in-house.

Bateson’s advice is “to be nimble and keep things under review as the best practice is constantly evolving, especially with the disruption of AI.”

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