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W W W . T H E Z W E I G L E T T E R . C O M

Celebrate to elevate

A u g u s t 2 0 , 2 0 1 8 , I s s u e 1 2 6 1

T R E N D L I N E S

W e are one month away from the biggest and best awards gala in our industry, the Hot Firm + A/E Industry Awards Conference. The buzz is increasing in the halls of our office, and you can sense the energy in the market as winning firms tout their success through social media and press releases. Celebrating is good, and we need to look for every opportunity to enjoy and recognize our accomplishments. Let’s face it, as an industry, sometimes we forget to focus on having a good time. There are plenty of examples out there of bad awards programs and ceremonies. Just ask your spouse or a guest that you have taken to one of these so- called celebrations in the past, and they’ll tell you I’m right. That’s why we invest so much in our event, making it more like the Oscars. Why should Hollywood get to have all the fun? And the truth is, we have something to celebrate that’s far more important than original scores, scripts, and directors. We are the designers of the world. The development of communities, quality of life, and economic growth depend on our professions. We are the AEC industry, critical to the advancement of civilization. Now is the time to come together, congratulate ourselves and our peers, and revel in our collective achievements. In other words, let’s celebrate! But while we have fun, let’s remember that much deeper purposes are being realized: 1)Creating momentum. Firms that celebrate success beget success. As the momentum grows, the firm develops an increasingly

Incentive compensation

“Now is the time to come together, congratulate ourselves and our peers, and revel in our collective achievements. In other words, let’s celebrate!”

Chad Clinehens BRAND BUILDING

According to Zweig Group’s 2018

survey of Best Firms to Work For,

72 percent of firms offer both

performance bonuses and referral

compensation for employee hires ;

64 percent of firms offer unscheduled,

one-time spot bonuses ; and 60

percent offer signing bonuses for

MORE CONTENT xz Best Firm focus Page 3 xz 2018 Hot Firm/Best Firm snapshot Page 4 xz Conference call: Dickerson Wright Page 6 xz Corporate Tax Advisors Page 9 xz 2018 Marketing Excellence Award winners Page 10 xz Wintrust Commercial Banking Page 11

key employees . Only 18 percent offer

retention bonuses .

OPEN FOR PARTICIPATION zweiggroup.com/survey-participation/

T H E V O I C E O F R E A S O N F O R A / E / P & E N V I R O N M E N TA L C O N S U L T I N G F I R M S Page 7 The complete 2018 Hot Firm list See CHAD CLINEHENS, page 2

ABOUT THE CONFERENCE 2018 ZWEIG GROUP HOT FIRM + A/E INDUSTRY AWARDS CONFERENCE The 2018 Zweig Group Hot Firm + A/E Industry Awards Conference is the AEC industry’s largest and most comprehensive business conference for leaders and aspiring leaders of AEC firms in the U.S.

top firms in the U.S. and Canada based on workplace practices, employee benefits, retention rates, and much more. ❚ ❚ Marketing Excellence Award. Recognizes outstanding and effective marketing in our industry. Categories include: External Communication, Holiday Marketing, Social Media, Special Event, Integrated Marketing, Website, Internal Marketing, Proposal Presentation, and Video Marketing. ❚ ❚ Jerry Allen Courage in Leadership. Given each year to someone who has made tremendous impacts on their firm through courageous leadership. ❚ ❚ Trifecta Award. Recognizes the exceptional firms that have received three awards in the same year. ❚ ❚ Rising Stars in Civil + Structural Engineering. Recognizes younger professionals whose exceptional technical capability, leadership ability, effective teaching or research, or public service has benefited the civil or structural engineering professions, their employers, project owners, and society. The Hot Firm Conference will culminate with a black-tie awards banquet and ceremony where awards will be presented to firms on the 2018 Hot Firm List, the 2018 Best Firms To Work For, 2018 Marketing Excellence Award, and the Jerry Allen Courage in Leadership Award winner.

Come network, gain knowledge, and celebrate with the top firms in the industry. The conference agenda includes topics on technology, leadership challenges, business planning, marketing methods, recruiting and retention, and growth strategies. The success stories of Zweig Group award winners will be shared at the event, along with a variety of speakers from a range of industries, all guaranteed to challenge and inspire you to achieve even greater success. Zweig Group offers the following awards programs focused on A/E/P and environmental consulting firm achievement: ❚ ❚ Top New Venture. Zweig Group’s newest award is based, in part, on the Hot Firm Award and will honor a group of the fastest growing start-ups. Top New Venture will be judged on revenue growth in addtion to what makes that firm a top new venture in the industry. ❚ ❚ Hot Firm. For more than 20 years the Hot Firm List has recognized the 100 fastest- growing architecture, engineering, planning, and environmental consulting firms in the U.S. ❚ ❚ Best Firms to Work For. Recognizes the

1200 North College Ave. Fayetteville, AR 72703 Mark Zweig | Publisher mzweig@zweiggroup.com Richard Massey | Managing Editor rmassey@zweiggroup.com Christina Zweig | Contributing Editor christinaz@zweiggroup.com Sara Parkman | Editor and Designer sparkman@zweiggroup.com Liisa Andreassen | Correspondent landreassen@zweiggroup.com

CHAD CLINEHENS, from page 1

positive energy that is critical to further growth and evolution. Celebrating the accom- plishments of individuals and organizations can have a profound impact on both cul- ture and operations. When we win awards, it tells our people they are important. That perception becomes reality as the firm adopts a more positive outlook. 2)Being good to oneself. The act of celebrating brings the mind, body, and spirit into harmony, releasing endorphins that make you feel good. This conditions you to seek more rewards in daily work and life. If we fail to celebrate, we are robbing ourselves of important reinforcing benefits. It’s kind of like bonuses and other perks. Why give any of these great things up? 3)A learning opportunity. Celebrating helps us understand what works. It tells the firm what is good and shows us what we should focus on. Celebrating with other firms enhances, exponentially, the educational value of the fest, as we learn how other firms take care of their staff and their clients. I encourage you to find new ways to celebrate the accomplishments of your firm and its people. The benefits are not just numerous, but enormous in effect. Indeed, we need to take our celebrations to a new level, gaining greater exposure for our industry. This helps to not only elevate our firms, but the entire industry, and enables us to attract much needed talent to fill the increasing demands of infrastructure. Come help us elevate the industry by honoring your people and their success, and recognizing the tremendous impact the AEC industry is having on the world. Grab your hat and boots and come to the Hot Firm + A/E Industry Awards Conference on Sept. 20-21 in Dallas at the Fairmont Hotel. Let’s celebrate! CHAD CLINEHENS is Zweig Group’s president and CEO. Contact him at cclinehens@zweiggroup. com.

Tel: 800-466-6275 Fax: 800-842-1560

Email: info@zweiggroup.com Online: thezweigletter.com Twitter: twitter.com/zweigletter Facebook: facebook.com/thezweigletter Published continuously since 1992 by Zweig Group, Fayetteville, Arkansas, USA. ISSN 1068-1310. Issued weekly (48 issues/year) $250 for one-year print subscription; free electronic subscription at thezweigletter.com/subscribe Article reprints: For high-quality reprints, including Eprints and NXTprints, please contact The YGS Group at 717-399- 1900, ext. 139, or email TheZweigLetter@ TheYGSGroup.com. © Copyright 2018, Zweig Group. All rights reserved.

THE ZWEIG LETTER August 20, 2018, ISSUE 1261

P R O F I L E Top Best Firms to Work For Leaders of employee-friendly firms talk about how being a Best Firm affects culture, recruiting, and team building.

A RCHITECTURE AND CIVIL: BRIAN BOWERS, PRESIDENT, BOWERS + KUBOTA Our goal in being a Best Firm to Work For is to create a culture where employees are engaged, work togeth- er as a team, and ultimately produce superior service for our clients. Once you have that culture, it can be self-sustaining and you are able to attract and retain the best people who will continue to provide the best service to our clients re- sulting in repeat business. ENVIRONMENTAL: PAUL W. GROSSER, CEO, P.W. GROSSER CONSULT- ING Over the years our reputation as an employee-friendly company has allowed us to attract and retain the best and brightest people in our field. GEOTECHNICAL: EILEEN PANNETIER, PRESIDENT, COMPREHENSIVE ENVI- RONMENTAL INC. By developing a culture emphasizing staff sup- port, professional growth, and life balance, CEI has created a brand known for superior client service in both techni- cal excellence and responsiveness. Providing top-notch resources and professional support needed for successful projects results in a circle of success that includes repeat cli- ents and happy staff. Ultimately, the combination of happy clients and happy employees is easy to market. MULTI-DISCIPLINE: DAN WILLIAMS, PRESIDENT & CEO, GARVER While recruiting, we seek out those who are passionate about what they do and remove any possible roadblocks between them and their opportunities. Employees who are vocal about their passions are the best ambassadors to our cul- ture, and they’ve allowed us to grow organically in geogra- phy, employee count, and service offerings. STRUCTURAL: BRENT WRIGHT, CEO, WRIGHT ENGINEERS The biggest benefit of having an employee-friendly firm is the ability to attract and retain the best talent. You can’t have sustained success in a professional services business if you can’t get top performers and then keep them for the long-term. Be- sides making it a nice place to work, an employee-friendly firm provides people the freedom, resources, and opportu- nities they need to thrive. Then they reach out and bring in their high-performing friends. As long as you have the right people, everything else will take care of itself.

ARCHITECTURE 1. Bowers + Kubota Consulting 2. Taylor Design 3. Huckabee 4. Bennett Benner Partners 5. Randall-Paulson Architects, Incorporated CIVIL ENGINEERING 1. Bowers + Kubota Consulting 2. Choice One Engineering 3. Delta Airport Consultants, Inc. 4. Provost & Pritchard Consulting Group

5. Matthews Design Group ENVIRONMENTAL ENGINEERING 1. P.W. Grosser Consulting

2. Ecosystem Planning & Restoration 3. Comprehensive Environmental Inc 4. Alta Environmental, LP 5. Langan GEOTECHNICAL ENGINEERING 1. Comprehensive Environmental Inc. 2. Langan 3. GeoDesign, Inc. 4. Geotechnical & Environmental Services, Inc. MULTI-DISCIPLINE 1. Garver 2. Bowers + Kubota Consulting 3. Fitzemeyer & Tocci 4. TNP, Inc. 5. TowerPinkster STRUCTURAL ENGINEERING 1. Wright Engineers 2. Baldridge & Associates Structural Engineering, Inc. 3. Mulhern & Kulp Structural Engineering, Inc. 4. Sideplate Systems, Inc. 5. O’Donnell & Naccarato, Inc.

Visit zweiggroup.com/2018-best-firms-to-work-for-winners/ for the complete list of Best Firms To Work For winners.

THE ZWEIG LETTER August 20, 2018, ISSUE 1261

P R O F I L E A sterling year

One-two punch of growth, big incentives for 2018 Hot Firms and Best Firms to Work For.

By RICHARD MASSEY Editor

E ach year, Zweig Group names the 100 fastest growing Hot Firms in the country, as well as the top Best Firms, across multiple AEC categories, where people want to work and build their careers. These lists always yield a trove of eye-popping statistics, and this year, the 19th for Hot Firm, is no different. Mete- oric growth, both in percentage value and in dollar value, huge bonuses, opportunities for professional development, and generous benefits for employees are once again the hall- marks of Zweig Group’s Hot and Best firms. This year, attendees of the annual conference will convene in Dallas at the Fairmont Hotel on Sep. 20-21. Prior conferenc- es have been held in Boston, Phoenix, and Seattle. The Hot Firm list was modeled after the Inc. 500 list, and was founded to bring an element of fun and celebration to the otherwise straight-laced reality of succeeding in the compet- itive AEC industry. If you work hard, you also need to play hard, and the annual Hot Firm conference, filled with smiling faces and plenty of good will, is a great way to generate posi- tive exposure for the industry. The Best Firm list is all about what a firm can do for its most important asset – its people. Based on employee surveys that annually generate as many as 1.6 million data points, Best Firm captures the evolution that is taking place in many AEC companies as they strive to acculturate and mold three gen- erations of workers – baby boomer, Gen X, and millennial – into a cohesive and productive whole. In total, 242 firms are being honored this year, and that’s not counting the firms recognized for marketing excellence. Con- ference organizers agree that the most meaningful aspects of the conference are the friendships that are made, the busi- ness partnerships that are formed, and the education to be had through speakers, sponsors, and intense break-out ses- sions. For Chad Clinehens, president and CEO of Zweig Group, the professional calendar revolves around the annual conference and the firms it celebrates. “Hot Firm recognizes the firms that are achieving a real met- ric of business success and growth, which fuels job creation and builds the communities they serve,” he said. “Best Firm awards companies with a powerful endorsement of great cul- ture and workplace conditions. In this historically competi- tive labor market, this award arms companies with an incred- ibly powerful differentiator that empowers their recruiting efforts.”

THE ZWEIG LETTER August 20, 2018, ISSUE 1261

zweiggroup.com/seminars/ LOCATION: DoubleTree by Hilton - Charleston Historic District professional AEC service rm. It’s the most impactful two days you can spend learning about principal leadership, nancial management, recruiting, marketing, business development, and project management. Charleston, SC Oct 25-26, 2018 The Principals Academy is Zweig Group’s agship training program encompassing all aspects of managing a

The Successful Successor roundtable is an exclusive event for income strategic leaders of rms and newly-minted strategic leaders of these rms. The purpose of this seminar is to discuss the highest-level issues facing newcomers to the c-suite and to individuals who are preparing to take on a CEO role in today’s AEC rm. NEWORLEANS MAR 13-15, 2019 zweiggroup.com/seminars/

THE ZWEIG LETTER August 20, 2018, ISSUE 1261

P R O F I L E

Conference call: Dickerson Wright Chairman and CEO of NV5 (Hot Firm #1 for 2018), a 2,000-person global engineering firm headquartered in Hollywood, Florida.

By RICHARD MASSEY Editor

“I must convey to every employee that we are in this together,” Wright says. “We are all share- holders and partners. I must be approachable. I find my No. 1 responsibility is to convey a message of inclusion to every employee of NV5.” For the second year in a row, NV5 sits atop Zweig Group’s Hot Firm list of the 100 fastest growing AEC firms in the nation. Powered by a 2,000-per- son workforce, a well-oiled system of mergers and acquisitions, and a global presence, NV5 is a com- pany over which the sun never sets. Amid a banner year – the firm reported Q1 total revenues of $95.5 million – NV5 is active from Massachusetts to Macau, and is involved with proj- ects in the multi-millions to the multi-billions. A publicly-traded company, NV5 (NASDAQ: NVEE) competes with the industry’s titans – AECOM, Ja- cobs, and Hill International, to name a few – and is more than holding its own. Dickerson Wright, the firm’s chairman and CEO since 2009, has been in the business for four de- cades, giving him a profound understanding of both his company and the industry at large. The Zweig Letter reached out to Wright with questions about various topics. Here is his response. A CONVERSATION WITH DICKERSON WRIGHT. The Zweig Letter: NV5 was featured on the NAS- DAQ Tower Marquee at Times Square on June 12. How did this come about, and tell us about the feedback your firm received from clients,

potential clients, and across your marketing and social media channels? DickersonWright: There is a very interesting story behind our name appearing on the NASDAQ Tow- er Marquee. Actually the catalyst was the Zweig Group Hot Firm award. NASDAQ contacted our in- ternal public relations person, Jenna Carrick, and said they would like to display this on their mar- quee. Publicity is always positive and we have been contacted and asked to do many interviews as a re- sult. TZL: Hot Firm No. 1 for the second year in a row. Tell us about the strategy that has fueled the firm’s sustained growth over the last few years. DW: We have a very simple strategy. We are an or- ganization of key engineering consultants to our clients. Our best people must be the face to the cli- ent. When you are perceived to add value, you grow along with your clients. TZL: There are currently more than 100 job open- ings posted on the NV5 website. In a tight labor market, all firms are having trouble hiring the people they need. What are the key challenges in recruitment and retention for NV5, not just do- mestically, but globally? DW: We look at the openings as something posi- tive. It is very basic: If you want to attract people, your organization must be attractive. We want partners, not just key employees. We therefore

Dickerson Wright, Chair- man & CEO, NV5

See CONFERENCE CALL, page 8

THE ZWEIG LETTER Aug

The complete

1. NV5 Global, Inc. 2. CMTA 3. CRB 4. Ardurra-King 5. Hargrove Engineers + Constructors 6. McMillan Pazdan Smith 7. Huckabee 8. Ware Malcomb 9. Partner Engineering and Science, Inc. 10. VHB 11. WGI 12. Hastings Architecture Associates, LLC 13. VLK Architects 14. ISG 15. LJA Engineering, Inc. 16. Rincon Consultants, Inc. 17. BKF Engineers 18. Woolpert Inc. 19. McClure Engineering Company 20. Ross & Baruzzini, Inc. 21. Maser Consulting P.A. 22. EN Engineering LLC 23. Patel, Greene and Associates, PLLC 24. Long Engineering, Inc. 25. Environmental Partners Group, Inc. 26. CALYX Engineers and Consultants 27. McAdams 28. ECS 29. P2S, Inc. 30. Coffman Engineering 31. Milhouse Engineering & Construction, Inc. 32. Mabbett & Associates, Inc. 33. Bowers + Kubota Consulting, Inc. 34. WSB & Associates, Inc.

35. The Vertex Companies, Inc. 36. CME Associates, Inc. 37. TLC Engineering for Architecture, Inc. 38. The Cadmus Group 39. Bernardon 40. Traffic Planning and Design, Inc. 41. Garver 42. Arora Engineers, Inc. 43. ATI Architects + Engineers 44. SSOE Group 45. 4 S.T.E.L. Engineering, Inc. 46. Parametrix, Inc. 47. SWBR Architecture, Engineering & Landscape Architecture, D.P.C 48. Humphreys & Partners Architects, L.P. 49. Calvin, Giordano & Associates, Inc. 50. WestLAND Group, Inc 51. Fleis & VandenBrink 52. SEPI Engineering & Construction 53. Caldwell Assocaites 54. Pennoni 55. Halff Associates, Inc. 56. Olsson Associates 57. GEI Consultants Inc. 58. J2 Engineers, Inc. 59. OHM Advisors 60. HELIX Environmental Planning 61. Langan Engineering & Environmental Services 62. Alta Environmental 63. Sullivan Engineering 64. HILGARTWILSON, LLC 65. DCI Engineers 66. Metro Consulting Associates, LLC 67. Sam Schwartz Engineering

68. Harley Ellis Devereaux 69. Woodard & Curran 70. JSD Professional Services, Inc. 71. C.A.P. Government, Inc. 72. Binkley & Barfield, Inc. 73. Karins and Associates 74. The Mannik & Smith Group, Inc. 75. Mead & Hunt 76. The Thrasher Group 77. Apex Companies, LLC 78. LeCraw Engineering, Inc. 79. Matthews Design Group, Inc. 80. Lea & Braze Engineering, Inc 81. Cherokee Enterprises, Inc. 82. Atwell, LLC 83. BSB Design, Inc. 84. ADC Engineering, Inc. 85. SME

86. BIG RED DOG Engineering | Consulting 87. Mulhern & Kulp Structural Engineering, Inc. 88. Chen Moore and Associates 89. Tectonic Engineering & Surveying Consultants P.C. 90. Slater Hanifan Group 91. EDG 92. CobbFendley 93. YU & Associates 94. RTM Engineering Consultants, LLC 95. G2 Consulting Group, LLC 96. HGA 97. EMC Engineering Services, Inc. 98. W&M Environmental Group, LLC 99. Wade Trim 100. JQ Engineering, LLP

gust 20, 2018, ISSUE 1261

8 distribute stock as equity deep into our organization. Ev- ery employee has the readily available opportunity to be an owner of NV5. TZL: NV5 had a fantastic Q1 – $95.5 million in total rev- enues, a 47 percent increase year-over-year. You men- tioned two key indicators of why the firm was so suc- cessful, and why the 2018 outlook was raised: cross-sell- ing within existing offices, and an optimized integration process for acquisitions. Can you elaborate on those two points and discuss how they work, and the processes that are in place that make cross-selling and acquisition inte- gration so important for your business model? DW: Cross-selling is a key process of NV5, not only to drive organic growth, but to promote a team concept with all of our offices. We structure biweekly conference calls with all offices and the services they offer. Cross-selling is not only promoted but rewarded. The office with the highest organ- ic growth through cross-selling is recognized and awarded. Integration of new companies is essential to the success of NV5. Prior to the acquisition the culture of the acquirer and the acquired must match. NV5 believes in a culture of part- ners and fellow shareholders aligned with the same goals. TZL: NV5 acquired Butsko Utility Design Inc. in Janu- ary, and followed that up with the acquisition of CSA in February. In 2017, your firm reported seven acquisitions. Since at least 2015, the aggregate value of acquisitions has seen a dramatic increase. What is the M&A outlook for the rest of 2018 and 2019? DW: The M&A outlook for our market and sector remains robust. The valuation when the reduced tax rate is taken into consideration remains basically stable. There still tends to be a good market for viable buyers that do not require ex- ternal financing. We envision this continuing through the remainder of 2018 and 2019. TZL: Through Q1, the firm has also grown organical- ly by 10 percent, a huge increase compared to organic growth through Q1 2017. Why has organic growth been so strong? DW: Our organic growth has been driven principally by three factors: our intentional integration of all our offices by a pragmatic cross-selling initiative; our purposefully flat organization that insists on our key leaders being the di- rect contact with clients; and benefits derived from a strong backlog and project weather delays that spilled over to Q1. TZL: NV5 has specialized capabilities across five verti- cals: construction quality assurance; infrastructure; en- ergy; program management; and environmental. What segment is the firm’s bread-and-butter? Which segment do you see increasing in the future, and what area might cool down? DW: Our organization is structured to embed ourselves with our clients. We feel that infrastructure design is the first interface with the client and feeds other support ver- ticals. We see an increasing demand for infrastructure im- provement projects. Infrastructure in turn supports the or- ganic growth of all our verticals, in particular programman- agement and energy verticals. Some of our verticals will CONFERENCE CALL, from page 6

grow faster than others, but we do not see a decreasing or cooling down of our offerings. TZL: The majority of NV5’s contracts originate in the public sector and the quasi-public sector. However, NV5 has also expressed an interest in obtaining more private work. What’s the broad-brush strategy to gain more pri- vate-sector clients? DW: We have found that a healthy mix of public and quasi- public and private clients allows for continuity of revenue and organic growth. However, we feel that public and qua- si-public clients are not as susceptible to down cycles in the economy. We also strive to be an organization built on cli- ents and client relationships, not just projects. Having a strong civil engineering and survey practice as well as geotechnical and material testing gives visibility with the private sector client base. TZL: For a firm like NV5, integration of acquired compa- nies is crucial. Communications, logistics and marketing, employee morale, culture, client relationships, and geog- raphy all figure into the equation. Based on your experi- ence, what is the single most difficult aspect of integrat- ing an acquired firm? DW: Integration of acquired companies just doesn’t happen on its own. From experience, we know that you must have a process that is clearly understood by the acquired firm. We have to be perceived as approachable as well as transparent, and convey that the integration is a collaborative effort. The most difficult aspect is developing a relationship of trust, that we do not have all the answers, and that change that may include their recommendations would be positive. TZL: As the owner of approximately 20 percent of the firm’s stock, you have a great amount of influence on the direction of the firm. What’s your leadership style? DW: I must convey to every employee that we are in this together. We are all shareholders and partners. I must be approachable. I find my No. 1 responsibility is to convey a message of inclusion to every employee of NV5. TZL: NV5 went public in 2013. How has being a publicly- traded company affected the firm’s access to capital and growth trajectory? Privately held firms have to play by a different set of rules than those with publicly traded stock. Would you recommend going public to other in- dustry titans that are generating more than $100 million in revenue? DW: A publicly traded company has much easier access to capital than a private company. We continually strive to uti- lize this capital to grow in a non-dilutive way. Publicly traded firms have many shareholders that are uni- formly interested in growth and profitability, both of which are good for all companies. Revenue of $100 million, though large for a private com- pany, is considered relatively small for a public company. A company must want to grow if they wish to be publicly trad- ed. Going public must be viewed as an entrance for a com- pany, not a means for an exit.

THE ZWEIG LETTER August 20, 2018, ISSUE 1261

S P O N S O R S H I P

The human touch

Tax consultancy looks at people, not just price and product, to develop new business while serving existing clients.

Editor’s note: Corporate Tax Advisors, Inc. is a sponsor of the 2018 Hot Firm + A/E Industry Awards Conference in Dallas. T hings are still cruising along for Corporate Tax Advisors, Inc., the niche consultancy that specializes in just three facets of the tax code, the Research & Development Tax Credit, Cost Segregation, and the 179D Green Energy Incentive. As more and more AEC firms warm to the opportunity of using incentives to improve their bottom lines, the busier the firm becomes.

Mike Woeber

But when potential clients do pick up the phone, CTA has plenty to say. The 179D energy efficiency incentive, for example, applies to commercial buildings, as opposed to residential, and includes both privately and publicly owned structures when allocated to the energy efficient designer. Deductions of $1.80 per square foot in some cases, and $.60 per square foot in others, are triggered by efficiencies in lighting, building envelope, and HVAC. The 179D incentive is still temporary. Also, the incentive is not as well known in the design “You have to stay relevant. You still have to find a way to stay top of mind, and as you grow, that becomes more challenging.”

Dawson Fercho, vice president of business development and co-founder at CTA, says that while the 179D incentive is gaining ground, the R&D piece is still the bread and butter for his firm, especially now that the tax is permanent. “Since the permanence of this tax incentive and strategy (Jan. 1, 2016), it is now being more widely discussed than it was just a couple of years ago,” Fercho says. “It has gained more interest with the CPAs. They’re more bullish on this. It pollinates. If the advisor is more comfortable, so will the client.” For firms qualifying for the R&D tax credit, the benefits are reduced costs for research, labor, and an overall lower taxable income. With greater interest in the AEC industry has come greater interest in what CTA does. Anticipating growth, CTA made a big move – the firm upgraded its website. “Growth initiated the change,” Fercho says. “With more firms learning about us, and desiring to at first window-shop, we felt we needed a refreshed platform with more and clearer content as to who and what we are. We didn’t feel like the former site answered the right questions, and did not inform potential clients and inspire them to ‘pick-up-the- phone’ action.”

Dawson Fercho

Rob Kling GUEST SPEAKERS

industry as the R&D tax credit. But that will probably change.

“Not everyone knows about it,” Fercho says. “But there’s still a lot of space to grow in R&D and 179D.” Business development is Fercho’s strength, as he has no fear of getting out and about to meet with

See WOEBER, FERCHO, & KLING, page 10

THE ZWEIG LETTER August 20, 2018, ISSUE 1261

2018 MARKET ING EXCELLENCE AWARD WINNERS

Zweig Group’s MARKETING EXCELLENCE AWARD recognizes outstanding and effective marketing in the AEC industry. There are nine categories: External Communication, Holiday Marketing, Social Media, Special Event, Integrated Marketing, Website, Internal Marketing, Proposal Presentation, and Video Marketing. To enter, firms had to submit the marketing piece they used in the category they were competing in. If they were not able to submit the actual piece, they submitted a document that explained the marketing piece, what the goals were, and what the results were. The volume of entries Zweig Group received shattered all records from previous years! Our judging panel spent many hours deliberating over the numerous entries we received and the competition was intense. Winners will receive awards at this year’s conference. A handful of firms placed across multiple categories. Below, you will find the top-five finishers in the 2018 competition.

EXTERNAL COMMUNICATION 1. Pond & Company 2. Garver 3. BIG RED DOG Engineering 4. LJA Eningeering, Inc. 5. Chen Moore and Associates HOLIDAY MARKETING 1. Westwood Professional Services 2. LJA Eningeering, Inc. T-3. HFA T-3. Walter P Moore 4. ISG 5. JQ Engineering SOCIAL MEDIA 1. LACO Associates 2. Miyamoto International 3. ATI Architects and Engineers 4. Halff Associates, Inc T-5. Chen Moore and Associates T-5. DAVIS Construction

SPECIAL EVENT 1. Miyamoto International T-2. EAPC Architects Engineers T-2. HFA 3. Fleis & VandenBrink 4. BHC RHODES 5. ISG INTEGRATED MARKETING 1. DAVIS Construction 2. Arrow Engineering 3. ECS 4. P2S Inc. 5. Harley Ellis Devereaux WEBSITE 1. ATI Architects and Engineers 2. WT Group 3. KLJ 4. Falcon Engineering, Inc T-5. Arrow Engineering T-5. ECS

INTERNAL MARKETING 1. Pond & Company 2. Huckabee

3. LJA Eningeering, Inc. 4. Halff Associates, Inc 5. EAPC Architects Engineers PROPOSAL PRESENTATION 1. ATI Architects and Engineers 2. ISG 3. Mott MacDonald 4. Patel, Greene & Associates, PLLC 5. SWBR VIDEO MARKETING 1. Miyamoto International 2. HFA 3. Westwood Professional Services 4. ECS T-5. P2S Inc. T-5. VLK Architects

WOEBER, FERCHO, & KLING, from page 9

Even in pressure-packed and competitive situations like a CFO conference in New York, Fercho doesn’t forget the little things, the human things by which people can relate. It’s part of the way he does business. “I know these people start the same day in a similar way as mine,” he says, referencing kids, marriage, a cup of coffee, and brushing your teeth. The human approach works. CTA recently out-did a competitor to sign an important client. And Fercho did it his way. “I don’t want to just talk about price and product,” Fercho says. “It’s not selling. It’s developing business. It’s looking at the human you are building a relationship with.” MIKE WOEBER is president and co-founder; DAWSON FERCHO is vice president of business development and co-founder; ROB KLING is vice president of client services and a co-founder of CTA. They can be reached at mikew@corporatetaxadvisors.com, dawsonf@ corporatetaxadvisors.com, and robk@corporatetaxadvisors.com.

current and potential clients. But keeping the clients CTA already has while bringing in new business isn’t easy. “You have to stay relevant,” Fercho says. “You still have to find a way to stay top of mind, and as you grow, that becomes more challenging. Today more planning is involved because we need to continue our focus on new clients. Not lost on us is that it costs so much more to gain a new client than it does to maintain those you have.” Founded in 2014, CTA is based in Huntsville, Alabama, but has offices in Atlanta, Detroit, Houston, Kansas City, and Los Angeles. Since last year, the CTA staff of 15 attorneys, CPAs and engineers has been augmented by at least four additional sub-consultants. The firm has plans to open satellite offices in Orlando and New York. CTA clients range from those with $5 million in annual gross receipts to those with $250 million, and in addition to the design firms, CTA works with companies in manufacturing, GIS, software development, and medical devices.

THE ZWEIG LETTER August 20, 2018, ISSUE 1261

S P O N S O R S H I P

ESOP ebullience

Employee stock ownership plans are rewarding for your staff, allow for continuity, and can enhance a firm’s culture and legacy.

Editor’s note: Wintrust Commercial Banking is a sponsor of the 2018 Hot Firm + A/E Industry Awards Conference in Dallas. W intrust is excited to be making its first appearance at the Hot Firm + A/E Industry Awards Conference, hosted by Zweig Group, this year in Dallas. Our focus is to bring current ESOP finance information to the engineering profession. Our dedication to both ESOP and AEC firms creates significant advantages for the design industry, and we look forward to sharing our expertise with the conference’s attendees.

James Swabowski

Second, in most successful businesses, ownership has created a strong culture, and ownership is not ready or willing to dismantle what it’s built. In fact, with focused attention when transitioning a business to an ESOP, we most commonly see an enhancement of the legacy. Importantly, a driving factor behind maintaining the company’s values lies with the fact that most selling shareholders not only remain active in leading the business they just sold, but oftentimes maintain the same role post-transaction as they held pre-transaction. ESOP ownership allows for consistency, which does not necessarily exist in other ownership transition alternatives. strategic buyer, private equity, the management team, or an ESOP.” “When it comes to transitioning a business, a selling shareholder has finite options, including a

When it comes to transitioning a business, a selling shareholder has finite options, including a strategic buyer, private equity, the management team, or an ESOP. None of these options are created equal, so the idea of selling all or a part of your business to an ESOP may make sense for many reasons. First, because an engineering firm’s primary assets are its employees – not its equipment or facilities – the ESOP alternative is a natural fit for rewarding them. In people-driven businesses, we find that this ownership vehicle serves the surviving company, post-sale, very well through strong accountability and attention to detail in all business aspects. Further, ESOP ownership assists with both recruiting and retaining its employees. There is no other ownership transition alternative that allows for all qualified employees to benefit, without monetary contribution, to ownership of the company. When properly communicated, this benefit has a significant and positive influence on your talent.

Pat Stoltz

Matt Doucet GUEST SPEAKERS

See SWABOWSKI, STOLTZ, & DOUCET, page 12

THE ZWEIG LETTER August 20, 2018, ISSUE 1261

CONFERENCE SPONSORS

pre-transaction in order for the selling shareholders to utilize the Section 1042 deferral. However, there are certain restrictions governing the time periods for converting back to an S-corp. Depending on the transactional structure, a selling shareholder may participate in the ESOP and/or receive synthetic equity to further enhance the return to a selling shareholder. It is important to surround your engineering firms with banking partners who are experts in your industry, and understand the day-to-day challenges business owners face. Wintrust is among a few commercial banks that, on a national basis, brings a dedicated team of professionals to provide financing to both the ESOP and AEC space. Consequently, we remain enthused about bringing ideas and much needed education to a business transition alternative that has long been misunderstood. We look forward to meeting you in Dallas in September. JAMES SWABOWSKI is senior vice president; PAT STOLTZ is managing director; and MATT DOUCET is managing director in the commercial banking group at Wintrust Financial Corporation. They can be reached at jswabowski@wintrust.com; pstoltz@wintrust.com; and mdoucet@ wintrust.com. “ESOP ownership offers significant tax advantages to both the selling shareholders as well as the surviving company. These tax advantages should be well understood before a shareholder commits to a preferred sale path.”

SWABOWSKI, STOLTZ, & DOUCET, from page 11

Finally, ESOP ownership offers significant tax advantages to both the selling shareholders as well as the surviving company. These tax advantages should be well understood before a shareholder commits to a preferred sale path. ESOPs can only take the form of a C-corp or an S-corp. Because in its simplest form an ESOP is a qualified benefit plan, the contributions it makes to the trust, established to house the employees, are tax deductible, thereby reducing taxable income. A further benefit in a C-corp scenario is offered to the selling shareholders. In the case where at least 30 percent of the company is sold to the ESOP, the selling shareholders have the ability to elect a tax deferral of the capital gains of the transaction. In the case of an S-corp ESOP – assuming a 100 percent sale – the surviving S-corp ESOP is a federal tax exempt entity, and therefore is not subject to federal taxation. In this scenario, the selling shareholders are not eligible for the election of tax deferral under Section 1042 of the Internal Revenue Code. It is important to note that an S-corp has the ability to convert to a C-corp “It is important to surround your engineering firms with banking partners who are experts in your industry, and understand the day-to-day challenges business owners face.”

THE ZWEIG LETTER August 20, 2018, ISSUE 1261

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