TZL 1356

T R E N D L I N E S A u g u s t 1 0 , 2 0 2 0 , I s s u e 1 3 5 6 W W W . T H E Z W E I G L E T T E R . C O M

Overhead spending

Takeaways from a truly exceptional virtual discussion experience. Virtual best practices

Using Zweig Group’s newest product, the Operating Expenses Benchmarking Tool, firms can compare their spending in overhead departments to thousands of other firms in the AEC industry. Furthermore, firms can select certain attributes to compare themselves to companies similar to them. For example, the chart above shows overhead spending for four separate departments as a percentage of net service revenue for firms with staff sizes between 50 and 99 employees. Marketing spending leads the way at 4.9 percent while HR is the lowest at 2.1 percent. Participate in a survey and save 50 percent on the final or pre- publication price of any Zweig Group research publication. F I R M I N D E X Acuren Inc.. ............................................8 DBR Engineering Consultants, Inc.........12 DCI Engineers.........................................1 Dewberry................................................4 Fleis & VandenBrink. .............................12 Montrose Environmental Group, Inc.. ......8 Wendel. ..................................................6 MO R E A R T I C L E S xz MARK ZWEIG: Design a successful design business Page 3 xz Alignment: Stewart Haney Page 6 xz ROB HUGHES: Managing receivables and collections now Page 9 xz DAVID BLUHM: Manage workloads across multiple offices Page 11

L ast week I was afforded the opportunity to participate in a panel hosted by SMPS’ Austin chapter. I’ve participated in about half a dozen virtual panel discussions in this Zoom world we’re all experiencing, and this one was truly exceptional. I wanted to share a few takeaways from this experience as all of us are increasingly part of virtual meetings and panels with internal and external stakeholders and we are all learning “best practices” in real time. ❚ ❚ Set brand standards for virtual meetings, from dress code to virtual backgrounds to agendas. Our marketing team armed us with digital backgrounds to avoid the chaotic distractions of our personal levels of taste. I have also been given free advice on lighting after presenting a financial management seminar that upon rewatching appeared to have been inspired by The Blair Witch Project . ❚ ❚ Virtual conferences and events have got to reflect your personality and your firm’s culture. The brilliant moderator of the panel who inspired this article is Janki DePalma, associate and business development manager with DCI Engineers and member of Zweig Group’s 2020 ElevateHer cohort. She introduced the panelists to each other a couple of weeks ahead of the meeting. She did this not just with our resumes and professional profiles, but she also took the time to explain why she invited each one of us to participate in the conversation and how she was connected to each of us. Her welcoming tone set a foundation of downright friendliness, which made it so much easier to have a conversation with total strangers. This may seem like a small detail, but as someone who has more public speaking anxiety than your average monk who has taken a vow of silence, this was a wildly inclusive action. ❚ ❚ The best panels I have been part of are those in which the moderator briefs the participants on the audience demographics, the promotional efforts and positioning, learning objectives, and what we ought to prepare to discuss. ❚ ❚ Prepared, empowered speakers are impactful, and a great moderator does what they can to make that happen without being overly scripted or formal. Janki shared half a dozen questions with the group of panelists via email in advance, and then asked us to tell her if there were any specific subjects that we would like to opt out from contributing. It was more helpful to know what I wouldn’t have to stress about than if she would have asked us to volunteer to speak to specific topics. ❚ ❚ A terrific moderator also provides the framework for how the conversation will be structured, telling us who might expect to be “called on” for specific topics. ❚ ❚ Extend graciousness by scheduling a 10-minute platform dry run, like my colleague Olivia Thomas, our marketing and events coordinator, does before every one of our now-virtual learning experiences. Olivia

Jamie Claire Kiser

See JAMIE CLAIRE KISER, page 2

T H E V O I C E O F R E A S O N F O R T H E A E C I N D U S T R Y

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OWNERSHIP TRANSITION IN THE AEC INDUSTRY Zweig Group examines the ever-complex environment of ownership transition in an AEC firm. The presentation covers a range of topics, giving attendees a new view of ownership transition and how an effective plan can be put into place. Whether the attendees are young, up and coming project architects/engineers/scientists or principals looking at their impending transition, the content gives everyone an introspective view of their career.

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JAMIE CLAIRE KISER, from page 1

walks through the presentation and animation details, the agenda, the start and end time, the participant feedback process, and she comments on what she sees and hears, which helps with the details like voice inflection before we “go live” and embarrass ourselves to the two people who show up to one of my accounting seminars. ❚ ❚ Create a PDF or image of the “ground rules” for the panel so the participants can read over the topics as they join the meeting, since some people hop on earlier or later in the conversation. The ground rules, such as how to ask questions during the panel, how to follow up for more information, muting yourself except when speaking, etc., should not just be displayed right at the launch, but ideally available in a “waiting room” or otherwise visible throughout the meeting. To really nail the details, brand the ground rules with a “thank you to our sponsors” to maximize visibility for the sponsors of the conversation. ❚ ❚ For presentations with slides, moderators need to get these in advance. You never know when an errant shih-tzu, in my case, may lose their aforementioned “shih,” or when your internet may be uncooperative. Knowing that a moderator is fully armed with my content is one less weight on my shoulders as a very frequent presenter who hates presenting. This protocol also ensures a set of fresh eyes on your content for the kind of typos you don’t notice until you’re preserved for all time like an insect in the amber that is a recorded Zoom meeting. ❚ ❚ My last tip is to have a moderator who is aware of the end time of a conversation. As a panelist, I feel obligated to prioritize the conversation I am having, and I just hate to wrap up the meeting, even when I am over-committed. Giving the moderator true insight into your schedule (“I can stay until noon, but I’ll be missing a weekly touchpoint call that starts 15 minutes before that”) is an expectation we need to set for the panelists we invite into our discussions. I try to carve out hold times on my public calendar to prepare for and calm down after panel conference calls if possible (to be direct: I have to rock back and forth after public speaking for at least five minutes before picking my day up). The panel itself was on the topic of “diversity, inclusion and equity: beyond the buzzwords” – rest assured that I will dive more into the takeaways from this conversation in another article. For now, and as we work toward planning a virtual conference, it seems important to capture the things I’ve learned so far as a virtual panelist. JAMIE CLAIRE KISER is managing principal and director of advisory services at Zweig Group. Contact her at jkiser@zweiggroup.com.

1200 North College Ave. Fayetteville, AR 72703 Chad Clinehens | Publisher cclinehens@zweiggroup.com Sara Parkman | Senior Editor & Designer sparkman@zweiggroup.com Christina Zweig | Contributing Editor czweig@zweiggroup.com Liisa Andreassen | Correspondent landreassen@zweiggroup.com

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THE ZWEIG LETTER AUGUST 10, 2020, ISSUE 1356

O P I N I O N

What your firm becomes should be the result of a plan, of deliberate efforts. You can and should “design” your design firm. Design a successful design business

T here are many different forms that a business plan can take. There’s no one best way to do business planning. But regardless of that fact, developing a plan may be the best way to design your business – be that for a new “build” or for a significant “renovation” of an existing business. And as I have written before, there isn’t one best way to do most things you have to do in your business. Many different strategies or approaches to various issues can lead to success in the A/E business.

Mark Zweig

2) Don’t hesitate to do something else that falls in your lap if it’s good. Just because you focus on becoming good at doing something doesn’t mean you have to say “no” to all other opportunities. If they are related to your special area of expertise or help you get into another market, you can do them if you like. But it should be a conscious decision to do so and not just a reaction to chase every single opportunity that presents itself. 3) Love your clients. If you want loyal clients you need to be loyal to them. You have to treat them as your friends and make them feel really special. Be super-responsive. Be helpful. Treat them as a priority. Shower them with love and appreciation. Don’t nickel and dime them for the small stuff. It

But the real point is, what your firm becomes should be as a result of a plan, of deliberate efforts. You can and should “design” your design firm. Here is some of my best advice if you are an owner in either a new or existing business: 1) Be really good at doing something and market that. This is so fundamental and a lot of design firms don’t get it. Or perhaps I should say a lot of SMALL firms don’t get it. They take any work they can get and never focus on something so they can become really great at doing it. This virtually ensures they will become a firm that only gets a small percentage of the jobs they pursue, are dependent on their local market, and will have to compete based on price. In order to build that specialty you have to focus your marketing efforts on that specific market.

See MARK ZWEIG, page 4

THE ZWEIG LETTER AUGUST 10, 2020, ISSUE 1356

ON THE MOVE DEWBERRY WELCOMES THREE ARCHITECTS TO CALIFORNIA OFFICES Dewberry , a privately held professional service firm, announced that design professional Jason Chao has been hired in the Pasadena office, while senior project manager Sue Akiyama, RA, and project architect Edgar Reyes, AIA, have joined the Sacramento office. Chao brings more than 10 years of experience to his new position and has a strong technical background in commercial architecture. He has worked on a variety of projects, including commercial and retail, mixed-use, hospitality, housing, and healthcare facilities. Chao holds a bachelor’s degree in architecture from California Polytechnic State University. Akiyama brings more than 35 years of experience to the firm. Prior to joining

Dewberry, she owned her own firm that supported public-sector clients with program and project management. Akiyama has also spent the last five years teaching architecture at State University of New York, Alfred. She will use her diverse background to cultivate relationships and deliver projects for public- sector clients. Akiyama earned a master’s degree in architecture from the University of California and a bachelor’s degree in architecture from Miami University. Reyes has worked on a variety of transportation and infrastructure projects in California and the Pacific Northwest. He brings deep Revit knowledge and participation in design-build procurement. He earned a master’s degree and bachelor’s degree in architecture from the University of Idaho and is licensed in California.

“We are pleased to welcome Jason, Sue, and Edgar to Dewberry,” says Dewberry Associate Principal Erica Nelles, AIA, LEED AP. “The wealth of knowledge and varied experience they bring will be a huge asset to our growing California architecture practice.” Dewberry is a leading, market-facing firm with a proven history of providing professional services to a wide variety of public- and private-sector clients. Recognized for combining unsurpassed commitment to client service with deep subject matter expertise, Dewberry is dedicated to solving clients’ most complex challenges and transforming their communities. Established in 1956, Dewberry is headquartered in Fairfax, Virginia, with more than 50 locations and more than 2,000 professionals nationwide.

MARK ZWEIG, from page 3

no one else in your shadow can shine because the spotlight is always on you. You don’t want to create a firm full only of those who are good order takers and willing to always take a back seat to your will. It’s not the way to grow something that will eventually allow you to exit because it can stand on its own. “There are many different forms that a business plan can take. There’s no one best way to do business planning. But regardless of that fact, developing a plan may be the best way to design your business.” 9) Remember every bad thing that happens to you – every setback – has a lesson for you. If you learn those lessons you will find these negative events can lead to something positive. This is so important. Bad things will happen and what determines your ability to survive and prosper after those events is how you respond to them. Do you let them crush you? Or do they make you stronger because you are learning? 10)Don’t sweat the small stuff. You can’t let every little thing bother you. We were talking a couple weeks ago at a client business planning session about the firm the founder of our client company used to work for prior to starting his business. The guy was so wound up – such a control freak – he would lose his temper if employees used what he deemed was the wrong color paper clip on something going out to a client. If that is the way you operate, no one good will want to work with you and you will be very unhappy most of the time. Not good. I could go on here, but hopefully the point is made that whatever you want your firm to become has to be the result of conscious planning and very specific actions. You can “design” your design firm just as you design projects for your clients. So what are you waiting for? MARK ZWEIG is Zweig Group’s chairman and founder. Contact him at mzweig@zweiggroup.com.

always costs more to get a new client than it does to keep an existing client. 4) Be relentless self-promoters. Forget the idea that “word of mouth” is the best advertising. If no one ever works with you, they cannot say anything good about you. You need to be your own best advocate. Get involved in the client associations your clients belong to. Send out a weekly press release. Write a blogpost every week. Get your people writing blogposts. Start a podcast. Build a client and potential client database. Do marketing emails. Make calls. I have been talking about this stuff for 40 years. It works. 5) Take less out of the business than it earns. If you ruin the business by draining all of its working capital because you can’t control your personal spending you will kill the goose that lays the golden egg. This is much more common in design firms than it should be. I can’t tell you how many discussions I have had with firm owners over the years where I have had to tell them they cannot take as much money out of the firm as they are. They always tell me about their personal “needs,” often that includes their overhead from having kids in Ivy League colleges and vacation homes. I have had to remind people they will have zero income at some point if they constantly drain their firms. 6) Hire for character, train for skill. You cannot change someone’s character, but you can teach them how to do something. If you want to build a business that is not entirely based on what you can do personally, you will need people who are good communicators, ethical, know how to work with other people, and are conscientious. Those qualities are not the same things that you will see listed as the typical employee search criteria which are based on education, registration, and years of experience. 7) Take really great care of the people who work for you. Show appreciation. Pay them well. Keep them informed on how the business is functioning. Solicit and listen to their concerns. Promote them to the outside world. Don’t make them feel they have to leave you to have a decent career. Give them that in YOUR firm. 8) Be a great leader, but don’t let your ego run out of control. There’s nothing wrong with being charismatic and inspirational – unless, that is, your ego is so dominant that

THE ZWEIG LETTER AUGUST 10, 2020, ISSUE 1356

Leadership is Everything How to Successfully Lead Your Team and Firm Through Crisis and Change LEADERSHIP DEVELOPMENT PROGRAM PROGRAM STARTING ON AUGUST 11, 2020 A four-part Leadership Development Webinar and Discussion Series. There are four key elements needed for success today: Projects, Profits, People, and Purpose. This program is designed to focus on a number of the most important “People” aspects that are increasingly critical to our success both individually and organizationally. Goal: Especially during this time of significant crisis and great change, provide essential tools and insights to current and aspiring leaders and managers to improve our individual and collective success, growth, and resiliency. Format: four-part live and online webinar and discussion series; each with a 60-minute presentation followed immediately by 30 to 60 minutes of group discussion and Q&A. Schedule: This webinar series begins on August 11, 2020. Continuting Education: This webinar series is worth 6 PDH/LU/CEU. Taught By:

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THE ZWEIG LETTER AUGUST 10, 2020, ISSUE 1356

P R O F I L E

Alignment: Stewart Haney CEO of Wendel (Williamsville, NY), an innovative AEC and energy efficiency firm that collaborates with clients for a holistic project approach.

By LIISA ANDREASSEN Correspondent

A s CEO of Wendel, Haney focuses his time on the firm’s strategy, growth, and culture. His participation in several professional and community boards are a reflection of his passion for achieving goals through the collaborative efforts of talented people. His favorite quote is by former professional hockey player and head coach, Wayne Gretzky: “You miss 100 percent of the shots you don’t take.” “Failing can actually be a good thing,” Haney says. “We fail small, and often. We like to try a lot of things and have an open mind while keeping our head up without making enormous investments. You can learn a lot from failure, and often something great will emerge from it.” A CONVERSATION WITH STEWART HANEY. The Zweig Letter: Under your direction, Wendel has increased in size by about 25 percent in the past three years. What do you attribute that to? Stewart Haney: I largely attribute that to an aggressive

growth strategy. We expanded our interior design and architectural presence in the Midwest and southern regions of the United States. We’ve also taken the concept of being a one-stop-shop or multidisciplinary firm to another level. We’ve developed an intense tool called Immersion which helps to develop project scope in greater detail than what is typical. It’s a superior process. It provides a greater project understanding achieved through discovery workshops; buy-in from key stakeholders, achieved through inclusion at the project’s onset; and consensus on budget and project direction, achieved through heightened project understanding. It leads to an accelerated project timeline achieved through a condensed pre-design phase. We also created what’s called “Master Builder” which integrates construction and design. TZL: What type of leader do you consider yourself to be? SH: A servant leader. I like to say that I have 300 bosses. I strive to be a level five leader – as outlined in Jim Collins’ book Good to Great . I try to lead by example,

THE ZWEIG LETTER AUGU

listen generously, and make the difficult decisions when I have to. “[I’m] a servant leader. I like to say that I have 300 bosses. I try to lead by example, listen generously, and make the difficult decisions when I have to.” TZL: Is change management a topic regularly addressed by the leadership at your firm? If so, elaborate. SH: It makes sense economically to continue to shift ownership. We have a living and breathing company and culture and need to realize that. We have 300 employees and 65 owners. Employee ownership hovers at around 25 percent. There are three levels: associates, senior associates, and partners. For the superstars, it takes about eight to nine years to move through the different phases – you have to continue to age out and age in. It’s a constant cycle. TZL: How do you handle a long-term principal who is resting on his or her laurels? What effect does a low- performing, entitled principal or department head have on firm morale? SH: This ties to leadership and making those difficult decisions. By and large these people don’t have bad intents. And, our company culture makes it difficult for someone to do this. However, it does – it’s akin to an iceberg. You may only see the tip of it, but the overall effect can be devastating. It can quickly permeate morale and much more. It needs to be tackled quickly. The first step is to confront the person – in a productive manner – and show that you want him/ her to succeed. Sometimes, we’ll get outside coaching to get the expectations moving along. Sometimes it works, sometimes it doesn’t. No one gets a pass. TZL: Ownership transition can be tricky, to say the least. What’s the key to ensuring a smooth passing of the baton? What’s the biggest pitfall to avoid? SH: The firm has navigated a few in its history. The one in 2013 was a bit tricky because there was a large concentration of ownership in just a few people. As a result, we now have a policy that states no one can own more than 10 percent of the company. We also have a well-defined age out plan. If a person has 10 percent, they

need to start aging out at 61 and by the time they are 70, they are completely out. So far, it’s worked well. TZL: You are a sought-after national presenter. What are some specific topics you enjoy talking about most and why? SH: I’m passionate about company culture. I also speak a lot on organizational structure, delivery models, and marketing. TZL: They say failure is a great teacher. What’s the biggest lesson you’ve had to learn the hard way? SH: Failing can actually be a good thing. We fail small, and often. We like to try a lot of things and have an open mind while keeping our head up without making enormous investments. You can learn a lot from failure, and often something great will emerge from it (i.e., the Master Builder program). A somewhat recent small fail had to do with compressed natural gas. We made investments and were well positioned when gas prices were high. Now that they have dropped significantly, our model has pivoted to public transportation – so we took lemons and made lemonade. A greater failure had to do with the pursuit of design- build work at risk. We were the designer and did a great deal of work that never panned out. As a result, we’ve banned this approach and learned a lot. “We need principals who are project managers with strong client leadership and rainmaking abilities. We also need principals who have technical backgrounds and resource management skills. It’s not just about having a book of business.” TZL: What are some ways that Wendel provides transparency for its clients? SH: The Master Builder approach helps in this effort. It’s nonself-performing and shows that we’re completely an open book. We share all information and make decisions together. This approach delivers more value. It’s a professional- led delivery model that leverages our cross-disciplinary proficiencies to execute facility and infrastructure projects from See ALIGNMENT, page 8

HEADQUARTERS: Williamsville, NY

NUMBER OF EMPLOYEES: 300

YEAR FOUNDED: 1940

NUMBER OF OFFICE LOCATIONS: 15

SERVICES:

❚ ❚ Architecture

❚ ❚ Engineering

❚ ❚ Civil engineering

❚ ❚ Energy efficiency

❚ ❚ Construction

MARKETS:

❚ ❚ Public safety

❚ ❚ Water resources

❚ ❚ Surface transportation

❚ ❚ Public transportation

❚ ❚ Private development

❚ ❚ Municipal government

❚ ❚ Multi-family housing

❚ ❚ Mission critical

❚ ❚ Healthcare

❚ ❚ Hospitality and gaming

❚ ❚ Energy efficiency

❚ ❚ Education

❚ ❚ Alternative fuels and CNG

UST 10, 2020, ISSUE 1356

BUSINESS NEWS MONTROSE ENVIRONMENTAL GROUP ANNOUNCES LAUNCH OF INITIAL PUBLIC OFFERING Montrose Environmental Group, Inc. announced that it has commenced an initial public offering of 10,000,000 shares of its common stock, all of which are being offered by the Company. The initial public offering price is expected to be between $15 and $17 per share. The Company expects to grant the underwriters an option to purchase up to an additional 1,500,000 shares of common stock. The Company has applied to list its common stock on the New York Stock Exchange under the symbol “MEG.” The company intends to use the net proceeds from the offering in connection with the redemption of all outstanding shares of its Series A-1 preferred stock and the remainder for general corporate purposes, including future investments in innovation and acquisitions in its highly fragmented industry. BofA Securities and William Blair are acting as joint leading book-running managers and representatives of the underwriters for the offering. BNP PARIBAS, Capital One Securities and Stifel are acting as joint book-running managers, and Needham & Company is acting as co-manager for the offering. The offering of these securities will be made only by means of a prospectus. A registration statement relating to these securities has been filed with the Securities and Exchange Commission, but has not yet become effective. These securities may not be sold, nor may offers to buy be accepted, prior to the time that the registration statement

becomes effective. This press release shall not constitute an offer to sell or the solicitation of any offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. Montrose is an environmental services company that supports government and commercial organizations with a range of services, from air measurement and laboratory services to regulatory compliance, permitting, engineering, and remediation. ACUREN ACQUIRES SUSPENDEM Acuren Inc. , the global provider of nondestructive testing, inspection, engineering and rope access integrated services, announces the acquisition of Suspendem, a leading provider of wind turbine maintenance and inspection services in North America. The acquisition combines Acuren’s substantial experience and capacity in rope access, NDT and engineering with Suspendem’s specialized expertise in wind turbine services to provide a comprehensive solution to the wind industry. Suspendem will continue to be led by Bill Talbot and the entire Suspendem team will remain in place. “I am excited to welcome the Suspendem team to Acuren,” stated Talman Pizzey, President of Acuren. “Suspendem is a highly capable service provider with significant knowledge and experience in the wind turbine industry. The addition of Suspendem aligns well with Acuren’s strategic focus of providing integrated, value-added services to safety-critical infrastructure that reduce

our customers’ cost of operation. Acuren and Suspendem customers will benefit substantially from our complementary and scaled service capabilities. I am also excited about the additional opportunities for our collective employees.” Bill Talbot, Managing Director for Suspendem, commented: “We are very excited about the acquisition of Suspendem by Acuren as this supports Suspendem’s continued growth in the United States and Canada through leveraging Acuren’s extensive geographic footprint, substantial rope access manpower, and complementary advanced NDT and engineering service capabilities. Suspendem is already a recognized leader in North America’s wind energy service industry, and this acquisition will allow us to enhance the depth and breadth of our services. We are certain this relationship will provide significant value for our customers and opportunities to our valuable employees. Importantly, Acuren shares our commitment to safety, quality, productivity and continuous improvement.” Acuren provides state-of-the-art nondestructive testing, inspection, engineering and rope access enabled industrial services delivered through more than 80 locations and more than 4,000 employees throughout North America and the United Kingdom. Committed to delivering a higher level of reliability, Acuren provides an unrivaled spectrum of services to support the safe operation of industrial assets.

ALIGNMENT, from page 7

SH: We have different tracks to get to principal. We need principals who are project managers with strong client leadership and rainmaking abilities. We also need principals who have technical backgrounds and resource management skills. It’s not just about having a book of business. We don’t currently have any partners in their 20s or 30s, but we do have some senior associates. “It makes sense economically to continue to shift ownership. We have a living and breathing company and culture and need to realize that. We have 300 employees and 65 owners. Employee ownership hovers at around 25 percent.” TZL: In one word or phrase, what do you describe as your number one job responsibility as CEO? SH: Alignment. I work to ensure we’re all pulling the rope in the same direction.

design through build. A proprietary combination of the best of design/build and design-bid-build, Master Builder ensures our clients a single point of contact, consistent team, accelerated schedule, owner oversight, competitive subcontractor pricing, and fully transparent cost controls through all phases of work. TZL: Research shows that PMs are overworked, understaffed, and that many firms do not have formal training programs for PMs. What is your firm doing to support its PMs? SH: We do a number of things. We really try to take away administrative burdens and have project accountants and project administrative assistants (who can bill out hours). We provide project management offices, and external and internal boot camps. We’re focused on having our PMs push their licenses to the top. TZL: How many years of experience – or large enough book of business – is enough to become a principal in your firm? Are you naming principals in their 20s and 30s?

THE ZWEIG LETTER AUGUST 10, 2020, ISSUE 1356

O P I N I O N

In the current economic environment, avoid costly payment disputes and counterclaims by choosing clients carefully and staying on top of your receivables and collections. Managing receivables and collections now

D uring the COVID-19 pandemic, many design firm clients are facing financial challenges. In this environment, AEC firms should closely monitor their receivables and diligently manage any collections. It’s not just a matter of your firm getting paid; pursuit of outstanding fees often can prompt clients to allege your work was somehow deficient, leading to errors and omissions claims.

Rob Hughes

Here are some best practices to help design firms avoid and manage collection issues: ❚ ❚ Be diligent about accepting projects. Many design firms conduct periodic credit checks on clients from which they have large upcoming receivables and all new clients. Those subscribing to popular credit reporting services may be able to obtain credit reports on current or prospective clients at nominal costs. Additionally, you can ask for references – typically from clients’ banks and firms they’ve worked with in the past. ❚ ❚ Know your contact at the client. Be sure the contact is empowered both to authorize your services and to pay you for them. ❚ ❚ Watch relationships with slow-paying clients. Be wary of accepting work from historically slow-paying

clients. If your firm accepts the work, consider requiring a retainer to apply against the final bill. If the client is not the project owner, try arranging to be paid directly by the owner. ❚ ❚ Communicate internally. Senior professionals and managers in your firm should know of any potential financial exposures associated with their clients. If one or two clients represent the bulk of your receivables, monitor them more carefully. ❚ ❚ Insist on written, signed agreements for all projects. The contract should include: the client’s (correct) legal name; individuals authorized to bind the client; timing and frequency of your firm’s invoices; timeframe for the client to question them (but an obligation to pay you for

See ROB HUGHES, page 10

THE ZWEIG LETTER AUGUST 10, 2020, ISSUE 1356

ROB HUGHES, from page 9

not pay, you can file a claim or lawsuit seeking payment. A well-drafted contract may include an expedited process for resolving payment disputes, as well as the right to recover your attorney’s fees. ❚ ❚ File a lien. Sometimes, just the threat of a lien on the project can trigger payment. Depending on the state, the time for filing a lien can be short. Investigate your deadlines as soon as you have a payment problem. A lien may secure preferred rights if the client declares bankruptcy. “It’s not just a matter of your firm getting paid; pursuit of outstanding fees often can prompt clients to allege your work was somehow deficient, leading to errors and omissions claims.” ❚ ❚ Go to the owner. If your firm works for an AEC firm or contractor other than the owner, you can threaten to contact the owner about the payment problem. If the owner has paid them, but they haven’t paid your firm, this might change the discussion. ❚ ❚ Engage a professional collection. While this puts some distance between your project personnel and the enforcers, the downside is that your firm must incur additional overhead or give up a portion of any funds collected. And these firms can be somewhat strong-armed, which may adversely reflect on you. ❚ ❚ Write off the receivable. At the start of any formal collection procedure, determine if your costs to pursue payment may exceed your maximum probable recovery. In some cases, it may be best to cut your losses and move on. MANAGING COUNTERCLAIMS. Professional negligence often is part of a counterclaim to a claim for fees. As soon as you learn of a potential counterclaim, contact your insurance broker and/or insurer. If your insurer provides pre-claims assistance, consider contacting it before initiating formal legal action. Some carriers include an additional coverage in the professional liability policy that allows for payment directly to the insured design firm for resolving a fee claim that extinguishes a potential E&O claim. Note: This coverage is not universally offered, typically is sub-limited and may be subject to additional limitations. In the current economic environment, choose clients carefully and stay on top of your receivables and collections. Along with implementing formal and consistent procedures, these measures can help your firm maintain productive client relationships and avoid costly payment disputes and counterclaims. ROB HUGHES, senior vice president and partner, Ames & Gough. He can be reached at rhughes@amesgough.com.

unquestioned portions of any bill); payment timing and terms; consequences to the client for failure to make timely payments (such as interest charges, reimbursement of collection costs, and your firm’s right to stop working); and the process for dispute resolution. ❚ ❚ Take added precautions on international projects. Firms doing business internationally should know their options upfront for collecting from clients outside the U.S. Failure to be paid remains a nearly universal concern among AEC firms doing international work, prompting some to withdraw completely from that market. ❚ ❚ Submit bills promptly. Establish a billing and invoice follow- up schedule, and stick to it. Be diligent about enforcing internal procedures for submitting all billable hours and invoicing clients on a timely basis – expect delays on some payments and plan, accordingly. ❚ ❚ Understand the elevated risks of billing delays. A client’s staff and financial condition can change quickly. If your firm has a slow invoicing process, you may fall down the list of firms they owe; and delays may result in a more difficult environment for collection. ❚ ❚ Watch additional services. Payment disputes often arise from additional services – change orders. A common complaint: the architect or engineer performed services not ordered. Thus, avoid negotiating requests with anyone other than an individual the client authorized to amend the scope of services and only accept written requests. ❚ ❚ Know when to suspend services. Receivables can mount simply because the design firm keeps working while ignoring ever-increasing outstanding invoices for a client. Set an amount or number of days outstanding as triggers – once exceeded you stop working (assuming you have that right contractually). ❚ ❚ Check clients promptly regarding any payment delays. Whenever a client’s payments lag or cease, contact the client to determine the root cause. If the client cites service issues as the reason they’re not paying, get details and address them. Once you resolve an issue document it in writing. “During the COVID-19 pandemic, many design firm clients are facing financial challenges. In this environment, AEC firms should closely monitor their receivables and diligently manage any collections.” ASSESSING FINAL COLLECTION OPTIONS. When receivables have exceeded 120 days and your firm hasn’t been paid, you might consider the following options: ❚ ❚ Negotiate a settlement. Depending on the circumstances, you may agree to a discounted lump sum, a payment plan or deferred payment, with the latter two defined in a promissory note. ❚ ❚ Make a claim for payment. When it’s clear your client will

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THE ZWEIG LETTER AUGUST 10, 2020, ISSUE 1356

O P I N I O N

M anaging workloads across multiple offices has never been more challenging; especially with many staff also working remotely during the unexpected COVID-19 pandemic. The ever-changing technological advances have certainly helped, especially with collaborative platforms like Microsoft Teams or Zoom. COVID-19 has pushed leaders in the design industry and beyond to develop new strategies to manage an increasingly untethered workforce. Manage workloads across multiple offices

David Bluhm

Everyone should develop their own style of managing workloads and project teams across multiple offices. What works for one does not necessarily work for all. But here are some strategies that will most likely cause you to fail. Don’t: ❚ ❚ Be hands-off ❚ ❚ Delegate all the responsibility and none of the authority ❚ ❚ Fail to communicate ❚ ❚ Let technology replace face-to-face communication COVID-19 is pushing us to develop new strategies to manage our increasingly untethered workforce, and, from my experience, there are many best practices you should be utilizing for project success across multiple offices. But managing

really begins and proliferates with a great first kickoff meeting. Our teams are often assembled with staff of differing specializations – a challenge for sure, but also an excellent opportunity to develop synergy and relationships. The kickoff meeting ensures that everyone not only knows their own role, but each other’s roles as well. Getting everyone on the same page at the beginning is vital to having successful communication throughout the project’s lifecycle. Some of the tools we use to develop staff, create team synergy, and bond as a company across our nine offices include: ❚ ❚ Building time into projects for face-to-face collaboration early on in a project. This improves

See DAVID BLUHM, page 12

THE ZWEIG LETTER AUGUST 10, 2020, ISSUE 1356

ON THE MOVE DBR ENGINEERING CONSULTANTS, INC. NAMES FOUR NEW PARTNERS DBR Engineering Consultants, Inc. is proud to announce the elevation of four talented individuals to partner. Together they demonstrate their unwavering commitment to excellence and knowledge to our clients. The following new Partners include:

❚ ❚ Will Meister, PE ❚ ❚ Adam Jones, PE, LEED AP

clients by delivering engineering solutions that create healthy spaces and minimize our carbon footprint,” said Randy Curry, PE, chief executive officer of DBR Engineering Consultants, Inc. Founded in 1972, DBR is a consulting engineering firm providing mechanical, electrical, plumbing engineering with seven offices throughout Texas. The firm offers additional expertise in commissioning, low voltage technology, and sustainability.

“The leaders of DBR are excited to announce the elevation of four individuals to Partner who will help guide the future of the firm. Each of them has played an integral role in the growth of the firm and exemplified the DBR core values through their leadership. We feel confident that they will embrace this new responsibility and continue to lead the firm in serving our

❚ ❚ Kenny Roland, PE ❚ ❚ Erik MacDonald, PE

DAVID BLUHM, from page 11

From the get-go, my approach is to be hands-on – knowing and understanding each team member’s strengths and weaknesses. It’s critical that those working in other offices, or remotely, be engaged and enjoy what they are doing. You should provide staff with the task goal/objective, timeline, and budget, but empower them to lead and take ownership of their tasks. Communicate, communicate, and communicate. There is no substitute for great communication in managing workloads and project teams no matter where they are located, especially if they are working remotely. You also need to stay connected, and regular check-ins work best. Schedule and hold progress meetings via Zoom or similar video-conferencing tools. We are all learning quickly the value of this tool with the current COVID-19 crisis. Project reporting is another form of communicating, but it’s also the project manager’s job to review reporting on a regular basis. Let your staff tell you what they have completed and then follow up – trust, but verify. Roll up your sleeves and see for yourself if the work is done. Routine quality assurance checks are also important throughout the project. Finding issues early and communicating them before too much time and effort is spent going down the wrong track is critical for any project to be successful. Don’t wait until 80 or 90 percent completion. By then, it could be too late. And finally, even though you should stay current on the latest technology, there is no substitute for face-to-face communication. We strive to be a “face-first firm,” even though we have multiple offices and project teams in two states. You should, too. Reliance on email, text, instant messaging, and other forms of electronic communication has generally resulted in greater team communication, more project efficiencies and higher profit, but it does not paint a full picture of the best communication styles. A reliance on electronic communication can negatively impact professional relationship building and integration into the company culture. It also limits staff to critical exposure needed for professional growth and career diversification. DAVID BLUHM, PE, is the West Michigan Group Manager and an Associate at Fleis & VandenBrink. Contact him at dbluhum@fveng.com.

collaboration during the project and leads to more efficiently executed, innovative, and profitable projects for the company. ❚ ❚ Having all team members work at the office closest to the project site for a day or two to get familiar with the project location and develop relationships with other team members. ❚ ❚ Encouraging managers to schedule time to work at remote offices and develop relationships with remote office staff. ❚ ❚ Planning out of office activities with other staff will not only benefit the development of younger staff, but it will also help them integrate into the culture of the company more thoroughly. How do you strike a balance that will enhance staff growth and produce a successful project execution that maximizes productivity, efficiency, and greater profit? The costs of working remotely in person hours, office space, overnight lodging, and travel time are all real. It is important to establish a plan that is implemented early in the project to maximize initial team face-to-face communication and “set the stage” for communication throughout the rest of the project. “COVID-19 is pushing us to develop new strategies to manage our increasingly untethered workforce, and, from my experience, there are many best practices you should be utilizing for project success across multiple offices.” This initial step should be limited in its duration with a goal of establishing relationships and project knowledge that can build through the rest of the project as team members work from their home offices. It’s incumbent on project managers to maximize the benefits you get from working remote – team lunches, project site visits, and introductions to other non-team staff. Ultimately, you want to build long-lasting relationships. These new relationships will provide the company with many additional benefits including employee retention in a market where good people are hard to find. This approach to initial project team development will also benefit staff with a deeper understanding of the diversity of work the company provides.

THE ZWEIG LETTER AUGUST 10, 2020, ISSUE 1356

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