May 2019 Te Contractor’s Advantage
www.HarrisonLawGroup.com (410) 832-0000 jwyatt@harrisonlawgroup.com
A Learning Experience
I’m fortunate to have been able to work with many great attorneys throughout my career. I got my start at a medium- sized corporate firm in Baltimore. There, I learned from many talented attorneys who each had their own perspectives on the practice of law. As I’ve grown in my own career, I’ve reached a point where my role has become more and more that of a mentor. I take time to work with other attorneys to help them move forward in the practice of law, whether it’s discussing the business behind the firm or the nuances of construction law. In construction law alone, there is no shortage of topics I can talk about with other attorneys. As a parent of two small children, it’s interesting how my perspective on education and learning has changed over the years. Kids spend most of their week with their teachers. These people's livelihoods are the education of the next generation, and it’s astonishing how much influence they have. We invest a lot of trust in our children’s teachers. Our kids are under the guidance of a person who is often a complete stranger or starts out as one. But trust them we must. At the beginning of every school year, and certainly when our children start school for the first time, there’s a huge weight on our shoulders: We wonder if their teachers will serve as good guides for our children. Of course, as the school year winds on and our children come home to tell us what they’ve learned, the weight goes away, and the trust between parent and teacher becomes more significant. We watch as our
children come into their own and discover what they love most in life.
This is like the relationship I have with other attorneys. As a mentor, these interpersonal relationships become more significant as I impart my own experience and knowledge. There are many other attorneys who put their trust in me, and I do what I can to deliver for them. A lot of people who don’t work in law, including law students, often assume the profession is loaded with conflict, that it’s attorney versus attorney all the time. This couldn’t be further from the truth. Law is a collaborative profession. We take our position on a case, sometimes we need to be assertive, if not forceful, about it, and arguments are common. But the collaboration never goes away. In speaking with other attorneys, particularly younger ones, I can’t stress enough how beneficial collaboration is. One thing that comes up time and time again is the minor favor: If another attorney asks for a favor, and it in no way hurts any of your clients, grant it. Favors are a great way to build up goodwill with colleagues and other attorneys. Plus, there will be a day when you need a favor in return. A second collaborative principle I try to impress upon younger attorneys is to pay attention. It may seem like common sense, but it gets overlooked all to often. The client is coming to you and spending a significant sum of money with you in order to solve a problem. It’s on the attorney and the firm to know the issues better than the other side. It isn’t just about knowing the letter of the law; it's paying attention to every single detail.
It’s listening to every word the other side speaks or poring over every document. Skipping over one line or misreading one piece of information can change the trajectory of the entire case. As I share my knowledge with other attorneys, as well as my clients, I continue to learn. Law is organic. There is always something new to discover.
-Jeremy Wyatt
jwyatt@harrisonlawgroup.com | www.HarrisonLawGroup.com | 1
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THE GOOD KIND OF GOSSIP How to Cultivate Valuable Customer Reviews
No matter how much someone loves their job, at the end of the day, most people come to work to get a paycheck. But providing steady income to your employees doesn’t mean they will automatically feel appreciated and stick around, and it shouldn’t! If you’re struggling with employee churn and an unhappy workplace, it’s time to look at how you can create a culture of gratitude. If you want to cultivate a culture of gratitude, you need to lead the charge. This doesn’t have to be a big production; a quick, genuine “thank you” when you’re passing through the break room can go a long way. A study from the University of Pennsylvania found that when leaders expressed gratitude to their employees, those employees were 50 percent more successful. Plus, employees that feel appreciated tend to have a higher degree of job satisfaction, which is crucial for longevity. Offering good benefits shows employees you’re invested in their overall health and futures. If you find yourself losing good employees to your competition, it might be time to look at what they offer that you don’t. Are you paying employees a fair wage for their work — or better? Do the benefits go beyond the legally required minimum? Are they the kinds of benefits your employees actually want and need? Having a reputation for offering the best benefits in your area will attract quality employees and make your current employees feel valued, keeping them from seeking greener pastures. Why You’re Experiencing Churn Instead of Gratitude THE CURSE OF THE UNGRATEFUL EMPLOYEE BE A LEADER KEEP COMPENSATION AND BENEFITS CURRENT Respect is one of the top three things employees look for in the workplace. In fact, a 2012 survey of social workers found that a lack of respect is a large contributing factor of voluntary turnover. Paul Marciano, organizational psychologist and author of “Carrots and Sticks Don’t Work,” outlines a few critical ways managers can show respect. • Equip employees with the tools they need to be successful. • Set clear expectations and hold employees accountable. • Practice thoughtfulness, empathy, and kindness. • Trust in your employees’ abilities — don’t micromanage. Employee happiness doesn't have to come at the cost of company profit — just look at Salesforce! This global CRM leader was voted the No. 1 spot on Forbes “100 Best Companies to Work For” list in 2018. More often than not, happiness translates to overall success. Look around and see how you can start building a culture of gratitude and happiness at your own company. PRIORITIZE RESPECT
When you’re thinking about buying a new product or service, what’s the first step you take? If you turn to the World Wide Web in search of reviews, then you’re in good company. According to a survey conducted by BrightLocal, 85 percent of consumers regard the customer review to be the single most credible and trustworthy source of advertising. That same survey found that 68 percent of customers surveyed were willing to provide feedback for a company. So, how do you get your customers to write the glowing reviews that help close deals? Don’t rely on customers to go to your website to leave reviews. There are numerous websites you can utilize that make leaving feedback more convenient for your clients. What’s more is that these other platforms are highly trafficked. BrightLocal found that Facebook and Yelp were consumers’ most trusted sources of user reviews in the U.S., but you can also use Google My Business or the Better Business Bureau. Most importantly, be sure you are active on all the platforms you use. DIVERSIFY YOUR PLATFORMS
OFFER INCENTIVES
Give your clients a reason to write reviews. Consider offering incentives like a discount or coupon code, coffee gift card, or an entry to win a contest for an even bigger prize.
ASK THE RIGHT QUESTIONS
Think of the review process as a conversation rather than a request to be met, and use open-ended questions to start. Before you even request a review, you can ask customers questions like “How was your recent experience with us?” or “How are you liking your product?” That way, you can gauge their satisfaction before they leave any feedback.
RESPOND, RESPOND, RESPOND
The last thing you want to see is a scathing one-star review. But no matter how hard you work, they are still bound to happen. When you receive one, take the time to respond thoughtfully — without being defensive — and try to come up with a possible solution to the complaint. And be sure to respond to your positive reviews as well. When you show that you engage with all of your customers, prospective ones will be more likely to give you a shot.
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Monday–Thursday
Are 4-Day Workweeks the Secret to Productivity?
Could you get more done with one less day in the week?
a problem in the United States, providing employees with a better work-life balance may be the secret to a happier, more productive workplace. After the successful trial, Perpetual Guardian opted to stick with the four-day workweek permanently. They provide several tips for implementing a four-day workweek at your company. • Do your own web and local research. • Speak to your staff and be clear about your objectives. • Ensure policy is well-supported and resourced. • Create a policy that can flex depending on workloads, projects, or customer requirements. • Let your customers know what’s going on and assure them there will be no drop in service. • Ensure the new employment structure doesn’t cut across legal requirements. • Be clear that the aim of the initiative is to benefit the company as well as the employees. • Recognize that flexible working initiatives aren’t magic bullets. If you’re interested in learning more about Perpetual Guardian’s four-day work week, check out the white paper written by The University of Auckland researchers at 4DayWeek.co.nz/four-day-week-trial.
HAVE A Laugh After the trial, employees at Perpetual Guardian also reported feeling 7 percent less stressed and a 24 percent improvement in work-life balance. Considering the fact that burnout — and the sick days that come with it — is such Of course not! Most of us need more time in the week, not less. At least, that’s the assumption. But a New Zealand company recently proved that when it comes to company productivity, less may mean more. In March of 2018, Perpetual Guardian, a finance management company in New Zealand, began testing a four-day workweek for its 240 employees. Researchers from the University of Auckland and Auckland University of Technology studied the firm before, during, and after the trial. Perpetual Guardian isn’t the first company to test-drive a four-day workweek, but during the trial period, they did something unusual: They didn’t reduce employees’ salaries. Paying employees for five days of work while only requiring four days sounds like a surefire way to bankrupt a company, but researchers found the change had the opposite effect. By trimming the hours down and maintaining pay, Perpetual Guardian saw a 20 percent increase in productivity. The shorter workweek motivated employees to get their work done quicker by cutting down meeting times, becoming more self-motivated, and telling their colleagues when they were being distracting.
PUZZLE
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o
Jeremy Wyatt jwyatt@harrisonlawgroup.com www.HarrisonLawGroup.com (410) 832-0000
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Inside This Edition
1.
A Learning Experience
2.
How to Cultivate a Culture of Gratitude The Value of User Reviews and How to Cultivate Them Is Your Company Ready for the 4-Day Workweek?
3.
Have a Laugh
* 4.
Using Chatbots in Small Business
Level With Me: SB 853 Maryland's New, Harsh Law ‘How Can I Help You?’ How to Incorporate Chatbots Into Your Business People have long been curious about what robots could do for humans. Historians have even traced robotic inventions all the way back to 400 B.C.! Since then, the field of robotics has come a long way and brought modern society inventions that change how people live, learn, and even run their businesses. One such robotic innovation that has increased in popularity in recent years is the chatbot. According to Entrepreneur.com, Facebook found that over 2 billion conversations were held between customers and the 100,000 chatbots on its messenger platform in 2017. But though chatbots have only become mainstream in the last few years, they’ve been around for decades. Chatbots go all the way back to 1966, when Joseph Weizenbaum’s ELIZA terrified and mystified the masses. ELIZA was the first chatbot to master short, human-like conversations until various improvements were made in the following decades, including ALICE in 1995. ALICE’s capabilities were so profound that she paved the way for today’s widely used artificial intelligence inventions. Amazon’s Alexa, Apple’s Siri, IBM’s Watson, and the Google Home are all forms of AI chatbots that utilize human-like linguistics, but according to Murray Newlands, CEO of chatbot company Chatty People, bots can also take on scripted forms. These bots are ideal for answering common, simple questions from customers. Today, implementing a chatbot for your
business is more convenient than ever. According to Newlands, you can even create your own bot on Facebook Messenger without having to design a code. To dip your toes into the chatbot world, start by establishing a part-time bot during a busy season, or use one to ease the number of common and simple questions your employees have to answer. This delegation of inquiries will allow your employees to focus on more pressing tasks. Additionally, your chatbots can bridge language barriers and assist clients who struggle with verbal communication. While chatbot technology has various benefits, it also has various limits. Before you dive right in, make sure you’re aware of how much your chatbot can do for your customer before a human customer service representative has to step in. Many inquiries require human interaction, so monitor your chatbot’s responses, program your chatbot to direct customers to you or your team, and let customers know your bots are only designed for certain tasks. Your bot has to be easy to understand, or no one will use it. A lot has changed since 400 B.C. Technology is advancing fast, and when businesses don’t keep up with the times, they fail. If you use it effectively, chatbot customer service is a phenomenon that will surely keep your business a bot above the rest.
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May 2019
Level With Me By JeremyWyatt
SB 853: Avoiding Liability for Subcontractors’ Employment Claims Under Maryland’s New, Harsh Law
could leave the general contractor liable for that employee’s unpaid wages and attorneys’ fees.
What is it?
In October, 2018, a new law came into effect in Maryland — SB 853 —making general contractors potentially liable for the unpaid wages of every employee on Maryland construction projects, regardless of whether the general contractor employs the unpaid person or a subcontractor (at any level) does. That’s a huge change. Previously, general contractors were only responsible for paying their own employees, and subcontractors were responsible, in turn, to pay their respective employees. Subcontractors aren’t spared SB 853’s wrath either, as they now have a statutory duty to indemnify (defend and protect) general contractors for the subcontractor’s “violation” of Maryland wage and payment laws, whatever the court will interpret that quoted term to mean. The bottom line for what is known about the new law at this point is that SB 853 spreads liability for unpaid wages all over Maryland construction projects, tacking on to the existing wage payment structure of Maryland law. And that existing structure (now applicable to general contractors and their indemnitors) provides that employees can recover not only unpaid wages, but also triple damages and their attorneys’ fees. That’s nothing to sneeze at.
That new risk is compounded by the potential that a subcontractor who is alleged to have failed to pay its employees may not have sufficient records for general contractors to review and defend themselves from a wage payment claim. Without good records, any wage payment claim becomes more uncertain and volatile. Finally, for general contractors, the likelihood is that if a particular subcontractor fails to pay its own employees, then that subcontractor is probably experiencing financial difficulties, making reimbursement to the general contractor (indemnity or not) unlikely. In essence, the buck will often stop with the general contractor. We all know that crap rolls downhill, and it should come as no surprise that general contractors (wisely) have already begun finding ways to shift the risks for SB 853 liability down to subcontractors. In light of the new liability, subcontractors should expect a few new problems. First, general contractors may exercise rights to withhold larger amounts of retention for longer periods (subject of course to Maryland’s statutory retention limitations). The timing aspect of retention may become particularly important, because Maryland’s wage payment claims have a three-year statute of limitations, meaning that an employee of a subcontractor could sue a general contractor up to three years after going unpaid. That’s a long time to hold retention! Second, as general contractors’ subcontractor-related risks increase, we should expect their demands for subcontractor bonds to increase correspondingly. Again, this may include not only a “size- What are SB 853’s new risks for subcontractors?
What are SB 853’s new risks for general contractors?
While SB 853’s relative youth means we do not have a complete risk profile yet, the biggest risk is obvious: General contractors will now be liable to pay for the faults of others. Even if a general contractor promptly pays all amounts due to their subcontractors, the bad/ negligent acts of a single subcontractor in not paying an employee
Continued on back ...
jwyatt@harrisonlawgroup.com
www.HarrisonLawGroup.com
(410) 832-0000
... continued from front
of-bond” aspect but also a timing aspect. If I were drawing up dream subcontractor bonds for a general contractor client, I would want a three-year timeline, within which the general contractor could sue the bond for payment-related claims. Third and finally, our office has already started to see extraordinarily burdensome indemnity clauses in subcontracts, where subcontractors indemnify the general contractor for all wage payment-related claims and certify that sub-subcontractors have paid their employees properly and retained sufficient paperwork to defend the general contractor against payment claims. That is not only a liability burden but also a significant administrative burden, as well. How can construction companies manage these new risks? For general contractors, suggestions read parallel to the subcontractors list of risks: • Protect yourself by tightening up your subcontractual indemnity clauses. For this new liability, build new indemnity coverage into your subcontracts. • Require more bonding, especially in length of coverage. If a downstream employee can sue you for triple damages and attorneys’ fees three years after a project winds up, then get your subcontractors to bond all of that. • Increase project reporting requirements. If subcontractors are properly paying their own employees, it is not much more of a
burden for those subcontractors to provide documentation that they have been doing just that. And if a claim does arise, that documentation could be helpful in defending against that claim. For subcontractors, the risk management requires some more creativity, such as: • Fighting up front to limit your indemnity obligations to scenarios where you are the guilty party, as opposed to your own subcontractors. • Keep better records. If a claim does arise in the future, make sure you are ready to combat that claim with clear, timely record- keeping of all wage payments. • Push the risk downhill. For your own subcontractors, add the indemnity, bonding, and reporting requirements recommended for general contractors above. I understand that for both general contractors and subcontractors, these fixes might not always fit into real-world scenarios, but they can be tools in your toolbox to take out and use as appropriate. This column is intended to provide educational material only and is not intended to provide legal advice. Before proceeding with or defending any claim, you should carefully evaluate your contract and related legal rights and seek the direct counsel of a construction attorney. If you want to learn more skills and tips about avoiding construction claim pitfalls, you can receive a free copy of my book, “The Subcontractor’s Roadmap to Getting Paid for Extra Work” by emailing me at jwyatt@harrisonlawgroup.com.
-Jeremy Wyatt
jwyatt@harrisonlawgroup.com
www.HarrisonLawGroup.com
(410) 832-0000
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