The law firm that controls Dow Jones

Joshua Chaffin of The Financial Times takes a look at the Boston law firm of Hemenway & Barnes that does the legal work for the Bancroft family that controls Dow Jones & Co. and writes that the lawyers are the ones that actually control the owner of The Wall Street Journal.

The law firm’s work is coming under scrutiny in the wake of News Corp.’s $5 billion offer to acquire Dow Jones, which also owns Barron’s and Marketwatch.

Chaffin wrote, “Some legal observers say aggrieved family members and hedge fund investors could sue Hemenway & Barnes if Dow Jones shares, which have gained more than 50 per cent on the Murdoch offer, plummet in the wake of a Bancroft rejection.

“‘Hemenway & Barnes is in an interesting pickle,’ said one lawyer who knows the family. ‘They have been for a long time.’

“The Bancroft trusts and the great sway they give to lawyers such as Mr Elefante are unique to Boston. The practice originated in the 19th century, when whalers and merchants took to the sea, sometimes leaving their families for years at a time. In their absence, they would entrust their finances not to their wives but their lawyers.

“‘It started here with the lawyers long ago because the lawyers – not the bankers – had the skills to deal with it,’ said Frances Miller, a trusts expert at the Boston University School of Law.

Read more here.