TZL 1338 (web)

T R E N D L I N E S M a r c h 3 0 , 2 0 2 0 , I s s u e 1 3 3 8 W W W . T H E Z W E I G L E T T E R . C O M

Value per net service revenue

“It will take everything we have as leaders to get our firms and ourselves through this.” Demonstrate your leadership

In Zweig Group’s 2020 Valuation Report of AEC Firms , valuation ratios were analyzed by firm staff size over the last three years. In relation to value per net service revenue, we see that firms see a general increase in value with growing staff size. The median value for firms with less than 25 employees was 0.54, meaning that they were valued at around 54 percent of their annual NSR. F I R M I N D E X CHA Consulting, Inc................................2 CMTA. ..................................................12 Daft-McCune-Walker, Inc........................8 EES Consulting, Inc................................4 GDS Associates, Inc...............................4 GH2 Architects.......................................6 LACO Associates....................................8 McCracken & Lopez. ............................12 PCS Structural Solutions.........................4 Pennoni................................................10 MO R E A R T I C L E S xz TED RYAN: Get it done Page 3 xz Working together: Michael Hall Page 6 xz JOSEPH VISCUSO: Smarter solutions (Part 2) Page 9 xz STEPHEN KEEFE: Intellectual property (Part 2) Page 11 Participate in a survey and save 50 percent on any Zweig Group research publication.

N ow is the time we are all being tested. None of us has been through anything like this before. It will take everything we have as leaders to get our firms and ourselves through however long the virus-related slowdown lasts. Unlike most situations A/E firms could find themselves in, I won’t pretend to have the answers for this one. It’s not like a typical turnaround situation or recession that I have experienced many times in the past. This is different. It is an immediate nationwide – even worldwide – slowdown at best and a stoppage at worst. This will test us as individuals and organizations. Here’s some of what I am thinking that I hope will be helpful to our readers: 1)Survival is number one. We can’t achieve our purpose-driven missions or lofty visions if we aren’t in business to do so. This has to be at the forefront of every decision we make for our companies. We are all going to have to make some hard decisions. Decisions on who to lay off and who to keep. Who to pay and who not to pay. What we can cut that allows us to keep the doors open one more day because tomorrow things could be better. The sooner we come to grips with the idea that this is not going to go away in the future and it’s going to be real ugly, and make the tough decisions now with that in mind, the more likely we will be in business when it ends. 2)Survival also includes us, as the individual owners and managers in the organizations we work in. We have to take care of ourselves and our families. That means our individual health is beyond crucial. I won’t use my space here to review the CDC guidelines for social distancing or hand washing in this article – not that I won’t keep following them long after this virus has supposedly run its course – as we are all seeing them 20 times a day from so many different sources. But beyond staying alive (which could be challenging enough for us older folks), we have to stay psychologically healthy. That means we need to eat right, rest, exercise, and we can’t be too attached to our identities and our stuff. When this ends we may not have everything we had before it started. If we are still healthy – physically and mentally – we can get all that back (if we still want it). 3)Looking back now won’t do you any good. We can all long for the good old days and lament decisions we made or didn’t make in the past. Instead, as a leader you have to look forward. What clients need you the most now? What can you do for them that will help them survive this thing? Those and many more are the questions you need to be finding the answers to quickly if you are going to be able to make it through the current and coming storm. 4)Just like a combat pilot will tell you, being a helpless passenger will get you killed. You can take control of your airplane. It may be damaged right now and you may not have the control over it that you

Mark Zweig

See MARK ZWEIG, 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

COVID-19 IMPACT AEC INDUSTRY OUTLOOK & RESPONSE TO COVID-19 PANDEMIC

3/25/2020

This document contains data gathered by voluntary respondents to a survey administered by Zweig Group on 3/12/20. Updates to these results will be provided as necessary to account for the fluidity of this situation. Please contact research@zweiggroup.com for further information.

IMPACT ON TRAVEL POLICIES

% 

Business travel is to be conducted on a case-by-case basis All business travel has been suspended No impact Voluntary business travel has been suspended Other Business travel is limited to or prohibited from certain locations

43% 27% 16%

5% 5% 4%

BUDGET DECREASE PERCENTAGE

IMPACT ON BUDGET

% 

Median Mean

My firm is considering changes to the 2020 budget No changes have been made to my firm's 2020 budget and none are currently planned My firm has altered the 2020 budget due to COVID-19

56% 38%

27%

20%

15%

REVENUE DECREASE PERCENTAGE

IMPACT ON REVENUE

% 

20%

Median Mean

16%

The impacts of COVID-19 will likely cause a decrease in my firm's revenue by this percentage compared to the previous year COVID-19 will not likely impact my firm's revenue in any way COVID-19 will likely cause my firm's revenue to increase

67%

10%

32% 1%

IMPACT ON EDUCATIONAL EVENTS & TRAINING

% 

Employees at my firm are not allowed to attend business conferences and trainings My firm supports employees individual decisions to not attend events or trainings but has not issued a change to formal policy

33% 28% 17% 15% 7%

Business conferences and trainings are approved on a case-by-case basis No changes have occurred to my firm's policy on educational events and trainings Other

Data is from the March 25, 2020 report with 149 respondents.

1200 North College Ave. Fayetteville, AR 72703 Chad Clinehens | Publisher cclinehens@zweiggroup.com Sara Parkman | Senior Editor & Designer sparkman@zweiggroup.com Liisa Andreassen | Correspondent landreassen@zweiggroup.com 17% 5% 3% 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 © Copyright 2020, Zweig Group. All rights reserved. 75% 65% 95% Lower Quartile Median Mean Upper Quartile MARK ZWEIG, from page 1 normally do, but you still have the controls and it is still in the air. Fight to get that plane back to safety! Don’t allow your mind to tell you that the situation is hopeless and you can’t do anything about it. Grab those controls. Reflect on your training. Take every action you need to to land that aircraft. Don’t give up. 5)Try to be optimistic. Sure, no one wants to go through a situation like this where we could have a third or a half of our population get a weeks-long illness and have potentially millions die, and have 20-30 percent unemployment. But we are smart. And we are resourceful. We will figure it out and emerge better and stronger in the end. And the most resourceful people will be the ones who figure out how to solve the problems of the day and make life better for everyone else. Be one of those people. Not one of those who thinks this is the end. It’s critical that you be optimistic if you are going to lead others. It doesn’t mean you are stupid, or are burying your head in the sand, but instead you CHOOSE to not give up. You can do that. You must do that. I could go on now but won’t. My (productive) day is wrapping up and it’s time for me to mix up a stiff drink and spend some time with my fabulous wife in our beautiful home while we still have it. But you know what, our lives won’t be measured by the quantity and quality of stuff we have. They will instead be measured more so by the quality and quantity of relationships we have – and what we can accomplish in our lives. MARK ZWEIG is Zweig Group’s chairman and founder. Contact him at mzweig@zweiggroup.com. IMPACT ON CLIENT ENTERTAINMENT & NETWORKING %  My firm supports the decision of employees to refrain from public networking but has not issued a formal policy My firm has mandated that employees refrain from entertaining clients in social public settings (restaurants/bars/events) No cha ge Other My firm is considering asking employees to refrain from entertaining clients in social public settings (restaurants/bars/events) IMPACT ON TELECOMMUTING & WORKING REMOTELY %  COVID-19 has changed my firm's policy on telecommuting to allow any employee to telecommute at any time. COVID-19 has changed my firm's policy on telecommuting to allow only certain employees to telecommute currently. My firm allows for telecommuting for certain employees and has not changed its policies in response to COVID-19. My firm allows for any employees to telecommute at any time and has not changed its policies in response to COVID-19. My firm does not allow for telecommuting and has not changed its policies in response to COVID-19. 37% 18% 18% 15% 11% 0% 20% 40% 60% 80% 100% 45% 1/1 45% 30% Tel: 800-466-6275 Fax: 800-842-1560 WHAT PERCENTAGE OF YOUR FIRM's WORKFORCE CAN EFFECTIVELY WORK FROM HOME?

THE ZWEIG LETTER March 30, 2020, ISSUE 1338

O P I N I O N

Get it done

W e’re getting busier, but are we getting more done? Endless cycles of email followed by meetings and telephone calls consume whole days and even weeks. The cycle costs us the ability to feel we are moving forward productively. It causes us stress. So, why are some people able to be more productive than their peers and to consistently make their days more valuable to them and their companies? What are the circumstances that produce really productive periods of work? First, make the decision not only to do more, but to do more good. Implementing a few simple ideas can transform our overall productivity. By putting energy into the power of habit, deep work, productivity tools, and daily scheduling, you will see immediate and lasting productivity gains. Ted Ryan

❚ ❚ The power of habit. Forming new habits and breaking old ones takes energy, yet the power of habit is a critical tool for consistently performing at a high level. As Duhigg explains, a habit loop consists of a cue, routine, and reward. One habit I knew I wanted to break was time wasted on thoughtless social media surfing. I noticed that any time I had a short wait time, I’d open my social media. One consistent theme was during my ferry-boat commute. The routine was to spend the 25-minute boat ride surfing social media. I’d pull up social media as soon as I sat down – sitting was

Three books have been the catalyst I needed to greatly improve the productivity in my daily, weekly, and monthly routines: Do More Better by Tim Challies, Deep Work by Cal Newport, and The Power of Habit by Charles Duhigg. The changes I’ve made have resulted in enduring and significant shifts in my professional and personal life. By harnessing the power of habit, deep work, productivity tools, and daily scheduling, I’ve learned to direct my talents to maximum effect. I saw immediate results and turned them into lifelong productivity gains.

See TED RYAN, page 4

THE ZWEIG LETTER March 30, 2020, ISSUE 1338

TRANSACT IONS GDS ASSOCIATES ANNOUNCES ACQUISITION OF EES CONSULTING GDS Associates, Inc. , an engineering and consulting firm in the electric utility industry, has announced its acquisition of EES Consulting, Inc. , an engineering and consulting firm based in Kirkland, Washington, that has been providing services to electric utilities on the West Coast for the past 30 years. Both companies provide engineering and consulting services predominately to public power electric utilities and this acquisition creates a combined nationwide presence. “GDS has been fortunate to know Gary Saleba for many years and EES is a wonderful addition to the GDS family, as both companies have similar skill sets, cultures, and visions for serving public power utilities,” stated GDS President David Brian. “With our combined expertise and service offerings, we look forward to creating a nationwide presence in the electric utility industry and expanding GDS services to existing and potential public power clients on the West Coast.”

Going forward, EES will operate as “EES Consulting, a GDS Associates Company” and current President Gary Saleba will continue to manage EES offices in Washington and Oregon. All existing EES employees are remaining in their current roles, with the additional benefit of offering clients extended capabilities, expertise, and resources from GDS skilled professionals nationwide. “I’m excited about the opportunity to merge EES with GDS which allows the EES personnel the ability to continue to do what they do best – provide high-quality services to our electric utility clients on the West Coast,” stated Saleba. “Our existing clients will continue to receive the same excellent, personal service EES has been known for, with the added benefit of having access to additional service offerings and experience of the GDS team.” GDS Associates is headquartered in Marietta, Georgia, with offices in Alabama, Florida, Maine, New Hampshire, Texas, and

Wisconsin. Since 1986, GDS has been a multi-service engineering and consulting firm providing services to a broad range of clients associated with, or affected by, electric, natural gas, water, and wastewater utilities. Services provided include power supply planning; wholesale and retail rates; regulatory and financial; transmission planning and NERC/ CIP compliance; distribution system planning and line design; DSM and energy efficiency; utility distribution services; natural gas; and other specialized services including renewable energy, sustainability, emerging smart infrastructure, data analytics, electrification, and DER integration. EES Consulting is a multidisciplinary management consulting firm providing a wide array of economic, engineering, and environmental services to clients in electric, natural gas, and water related businesses. Their offices are located in Kirkland, Washington, and Portland, Oregon.

TED RYAN, from page 3

Start by distinguishing between information, tasks, and events. Use a specific tool for each and don’t mingle them. There are many tools out there – choose your favorite. I use Todoist for tasks, Outlook calendar for events, and both OneDrive and Evernote for information. It’s very tempting and may seem efficient to use a calendar for both events and tasks, but don’t do it. The day I separated events and tasks from each other, my calendar was no longer full of nagging reminders of all the things I didn’t get done. My task management improved instantly by using a dedicated tool better suited to the purpose. ❚ ❚ Daily routines. Plan your day. Yeah, I know, you’re already thinking about why this won’t work. I too was skeptical at first. Why plan at all when I knew that the minute I walked in the door, I’d be thrown off? Consequently, my old habit was to show up to the office with a few critical tasks I knew I needed to tackle and meetings I needed to attend. Beyond that, I took the day as it came. I have discovered a far more effective strategy is to break up a day in half-hour chunks, and plan them out on paper. Fill those time slots, and include at least one longer period for a deep-work session. You’ll be surprised at how much you’ll be able to stay on task. And if you don’t, that’s OK. There will always be a percentage of your day that gets rescheduled. Adjust as needed. Cross things out and reassign as you go, perfection is not the goal. The value of the plan is in forcing yourself to reconcile the time you have available and prioritize what must come first. You will see a shift in your daily productivity. We spend most of our life doing. How we go about the activities of our daily lives can contribute or take away our feelings of contentment. By putting energy into the power of habit, deep work, productivity tools, and daily scheduling, not only will you see immediate productivity gains, but you’ll turn them into lifelong gains. TED RYAN is an associate principal at PCS Structural Solutions, which provides structural engineering services to clients across markets. Ted can be reached at tryan@pcs-structural.com.

my cue. The reward was the endorphin high gained from pointless surfing and clicking. What was ultimately successful for me was to change the routine. The cue was the same, but instead of pulling out my phone, I grabbed a book. Persistence was necessary but within a week or two I successfully replaced what I considered a bad habit with a good one. The reward? I now read an additional six to eight books per year. So, break the loop to interrupt bad habits, and create new loops for habits you want to add. ❚ ❚ Deep work. Newport describes deep work, as an “ability to focus without distraction on a cognitively demanding task.” The nature of our work in the AEC industry requires us to perform cognitively demanding tasks for our clients. It’s important to note that these sessions of deep work can’t be created in 10-minute chunks. Newport argues that 90 minutes is a good session length for really digging in to a task. I agree and find that if I go past 90 minutes, I reach fatigue quickly. If I go for much less than 90 minutes, I don’t hit peak flow. To create high-productivity, deep-work time, set aside at least one period in a day – and no more than two – for your most demanding tasks. Remove distractions. You’ll be astonished at what you can do. ❚ ❚ Productivity tools. Productivity tools help us organize our tasks and get consistent results. Challies writes that there should be “a home for everything” and “like goes with like.” harnessing the power of habit, deep work, productivity tools, and daily scheduling, I’ve learned to direct my talents to maximum effect.” “The changes I’ve made have resulted in enduring and significant shifts in my professional and personal life. By

THE ZWEIG LETTER March 30, 2020, ISSUE 1338

Work From Home Learning Opportunities

KEEP YOUR CAREER DEVELOPMENT A PRIORITY

NEW ON-DEMAND WEBINARS

CHANGE MANAGEMENT WEBINAR PRICE: $49 LEARN MORE

OVERVIEW: The way we work, do business, and interact is constantly evolving and changing. Leaders are the first we look to when we need to adopt a change or under- stand how change affects us personally. You and your team must understand how to lead and adapt to an ever-changing environment.

DRIVING FINANCIAL RESULTS PRICE: $49 LEARN MORE

OVERVIEW: Solid financial management is crucial to the success of any company, and firms in the AEC industry are no exception. This short course provides an overview of business financial management – specifically tailored to our industry – to help firm leaders make informed decisions that drive results.

RECRUITMENT & RETENTION WEBINAR PRICE: $39 LEARN MORE

OVERVIEW: Zweig Group’s research shows that recruiting and retention are the #1 chal- lenges AEC firms have faced in the last few years. This webinar discusses current data from exclusive industry survey results that can be used to effectively develop your firm’s recruitment and retention strategy in any type of job market. UNDERSTANDING KEY FINANCIAL STATISTICS IN THE AEC INDUSTRY WEBINAR PRICE: $39 OVERVIEW: This webinar highlights several key financial statistics, how they are calcu- lated, and what the industry trends for each measure look like over the last five years. Learn how to compare your firm’s performance against industry norms, comparable firms, and specific performance categories. THE ZWEIG LETTER PODCAST LEARN MORE

The Zweig Letter Podcast is back! With new episodes weekly, stay up to date with AEC trends in the TZL podcast hosted by Zweig Group’s Randy Wilburn

LISTEN NOW

Zweig Group is an approved provider by the AIA & SHRM

THE ZWEIG LETTER March 30, 2020, ISSUE 1338

P R O F I L E

Working together: Michael Hall Principal at GH2 Architects (Tulsa, OK), an international architecture and design firm founded in 1973 that’s flexible, engaging, and fun.

By LIISA ANDREASSEN Correspondent

H all directs the operation of the firm and is responsible for design, production, and management of architectural services provided on many of the company’s projects. He believes that great design and cost control go hand in hand. “The safety of our team members is our number one priority,” Hall says. “We are on a remote work protocol, and actively practicing social distancing recommendations. We are limiting in-person meetings and setting limitations on site visits. We have put a halt to all travel unless it’s related to critical or essential projects identified by our government clients.” A CONVERSATION WITH MICHAEL HALL. The Zweig Letter: How has COVID-19 impacted your firm’s policy on telecommuting/working remotely? Michael Hall: We have been on a work from home protocol

for almost two weeks, and overall, it seems to be working well. I think our experience with this situation is going to make everyone more productive and agile in the future. We’ll be able to give our team members more flexibility when things return to “normal” after this crisis. We’re already asking ourselves bigger questions about what we really need in terms of traditional office space moving forward. Our clients need us to be responsive and do good work – with good people on your team that can happen from the North Pole if it has to! They also need our active presence at their offices and jobsites, and sometimes a place to meet. Our teams need a place to collaborate and meet in person. Everything else is on the table for discussion moving forward. TZL: How far into the future are you able to reliably predict your workload and cashflow?

THE ZWEIG LETTER Ma

MH: We are typically pretty comfortable looking at six to eight months out. Over the last 20-plus years, the only time that this has not been the case was 2008, when things seemed to turn negative overnight. Our challenge is that we seem to be facing a lot of situations where we have three or four proposals out for major projects – all of which could be successful. We could also lose all of them. That is when forecasting and planning are most difficult. TZL: How much time do you spend working “in the business” rather than “on the business?” MH: It’s about 35 percent “in” and 65 percent “on.” TZL: What role does your family play in your career? Are work and family separate, or is there overlap? MH: It is huge for me. I am very lucky that my wife is also a principal at GH2, and we have worked to grow the firm together – with the other principals and firm leadership. Working together each day has been a blessing for us and has allowed us to have flexibility when needed for our family. “We’re already asking ourselves bigger questions about what we really need in terms of traditional office space moving forward.” TZL: What measures are you taking to protect your employees during the COVID-19 crisis? MH: The safety of our team members is our number one priority. We are on a remote work protocol, and actively practicing social distancing recommendations. We are limiting in- person meetings and setting limitations on site visits. We have put a halt to all travel unless it’s related to critical or essential projects identified by our government clients. TZL: Are you using the R&D tax credit? If so, how is it working for your firm? If not, why not? MH: We are and it has been fantastic. The time we invest is minimal compared to the return which is really a bonus that goes straight to the bottom line. We will continue to use this and try to maximize it as long as it is available to us.

TZL: What novel approaches are you bringing to recruitment, and how are your brand and differentiators performing in the talent wars? MH: We are trying to broaden our recruiting base by getting in front of prospective employees as soon as possible, even years before they might enter the profession. If high school or middle school students want to visit or hang out at the GH2 office, the answer is an emphatic “yes!” Any time our team members can participate in special programs at local schools (many of which are our clients), the answer is “yes!” We have an excellent retention rate from our summer internship program. It truly puts students in the middle of fast-paced project teams and real firm situations. One summer I realized that when our interns were about to return to school that we never did any orientation meeting; they were engaged from the minute they walked in the door. They all wanted to return to GH2 as soon as possible. TZL: Does your firm work closely with any higher education institutions to gain access to the latest technology, experience, and innovation and/or recruiting to find qualified resources? MH: This is definitely the case with recruiting. We try to maintain connections to the design schools in our region by participating as guest lecturers, serving on advisory boards, and participating in project critiques. TZL: What financial metrics do you monitor to gauge the health of your firm? MH: We try to keep this simple (and these aren’t complex metrics with acronyms). We look at overall profitability with our mix of projects, knowing that a healthy mix of project and client types will have various profitability levels, but will also add strength and sustainability as we move forward. We focus on: 1) Keeping our base costs to run the office down; 2) Keeping the net fee that GH2 keeps on projects at a high percentage of the gross fee; and 3) Keeping net revenue per team member at a high level. That does it for us and has put us on Zweig Group’s Hot Firm List several times. See WORKING TOGETHER, page 8

HEADQUARTERS: Tulsa, OK NUMBER OF EMPLOYEES: 71 YEAR FOUNDED: 1973 NUMBER OF OFFICE LOCATIONS: 3 PROJECT TYPES: Hospitality, education, equine, historic preservation, government, healthcare, public safety, transportation, office buildings, animal welfare, retail, municipal, conference centers, athletic and wellness, arenas and event centers, veterinary, residential SERVICES: Due diligence, site analysis and selection, feasibility studies, master planning, existing facility evaluation, architecture, interior design, landscape architecture, cost estimating and control, project management, permitting, construction procurement, construction administration, building information modeling, ADA compliance, sustainability, renderings and animations, project marketing, preservation planning, bond issue planning THEIR APPROACH: Flexible, engaging, and fun. AVERAGE WEEKLY CUPS OF COFFEE: 436

ch 30, 2020, ISSUE 1338

No changes have occurred to my firm's policy on educational events and trainings Other formal policy Business confer nces and trainings are approved on a case-by-case basis No changes have occurred to my firm's policy on educational events and trainings Other

15% 7% 7 15% 7%

3/25/2020 COVID-19 IMPACT AEC INDUSTRY OUTLOOK & RESPONSE TO COVID-19 PANDEMIC %  My firm supports the decision of employees to refrain from public networking but has not issued a formal policy My firm has mandated that employees refrain from entertaining clients in social public settings (restaurants/bars/events) No change Other My firm is considering asking employees to refrain from entertaining clients in social public settings (restaurants/bars/events) 45% 30% 17% 5% 3% IMPACT ON CLIENT ENTERTAINMENT & NETWORKING %  fir supports the ecision of employ es to refrain from publi networking but has not issued a formal policy My firm has mandated that employees refrain from entertaining clients in social public settings (restaurants/bars/events) No change Other My firm is considering asking employees to refrain from entertaining clients in social public settings (restaurants/bars/events) 45 30 17% 5 3 IMPACT ON TRAVEL POLICIES %  Business travel is to be conducted on a case-by-case basis All business travel has been suspended No impact Voluntary business travel has been suspended Other Business travel is limited to or prohibited from certain locations 43% 27% 16% 5% 5% 4% This document contains data gathered by voluntary respondents to a survey administered by Zweig Group on 3/12/20. Updates to these results will be provided as necessary to account for the fluidity of this situation. Please contact research@zweiggroup.com for further information. IMPACT ON CLIENT ENTERTAINMENT & NETWORKING

BUDGET DECREASE PERCENTAGE WHAT PERCENT GE OF YOUR FIRM's WORKFORCE CAN EFFECTIVELY WORK FROM HOME? HAT PE NTAG OF YOUR FIRM's WORKF RC CAN EFFECTIVELY WORK FROM HOME? 20% 15% 27% Median Mean

IMPACT ON BUDGET I P T

%  % 56% 38%  37%  37% 6% 18% 18% %  15% 18% 67% 11% 15 11% 32% 1% 18%

TELECOMMUTING & WORKING

My firm is considering changes to the 2020 budget No changes have been made to my firm's 2020 budget and none are currently planned My firm has altered the 2020 budget due to COVID-19 REMOTELY COVID-19 has changed my firm's policy on telecommuting to allow any employee to telecommute at any time. COVID-19 has changed my firm's policy on telecommuting to allow only certain employees to telecommute currently. My firm allows for telecommuting for certain employees and has not changed its policies in response to COVID-19. My firm allows for any employees to telecommute at any time and has not changed its policies in response to COVID-19. My firm does not allow for telecommuting and has not changed its policies in response to COVID-19. IMPACT ON TELECOMMUTING & WORKING REMOTELY COVID-19 h s chang d my firm's policy on telecommuting to allow any employee to telecom ute at any tim . COVID-19 has changed my firm's policy on telecommuting to allow only certain empl yees to telecommute currently. My firm allows for telecommuting for certain employees and has not changed its policies in response to COVID-19. My fir llows for any employees to telecommute t any t e and ha t c ang d its policies in response to COVID-19. My firm does not allow for telecommuting and has not changed its policies in response to COVID-19. IMPACT ON REVENUE The impacts of COVID-19 will likely cause a decrease in my firm's revenue by this percentage compared to the previous year COVID-19 will not likely impact my firm's revenue in any way COVID-19 will likely cause my firm's revenue to increase IMPACT ON DISCRETIONARY SPENDING 3/25/2020

0% 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% 10% 20%

Lower Quartile Median Mean Upper Quartile Lower Quartile edian Mean Upper Quartile

95% 95%

75% 75%

65% 65%

REVENUE DECREASE PERCENTAGE 45%

45%

Median Mean

16%

10%

1/1

% 

COVID-19 IMPACT (CONT'D)

IMPACT ON EDUCATIONAL EVENTS & TRAINING No changes have been made to my firm's 2020 discretionary spending and none are currently planned My firm is considering devoting discretionary spending to challenges created by COVID-19 My firm has suspended all discretionary spending My firm has devoted discretionary spending to challenges created by COVID-19 Other Employees at my firm are not allowed to attend business conferences and trainings My firm supports employees individual decisions to not attend events or trainings but has not issued a change to formal policy

46% 32% 13%

% 

33% 28% 17% 15% 7%

8% 2%

Business conferences and trainings are approved on a case-by-case basis No changes have occurred to my firm's policy on educational events and trainings Other CANCELLED OR DELAYED PROJECTS

% 

WORKING TOGETHER, from page 7 %  My firm supports the decision of employees to refrain from public networking but has not issued a formal policy My firm has mandated that employees refrain from entertaining clients in social public settings (restaurants/bars/events) No change Other My firm is considering asking employees to refrain from entertaining clients in social public settings (restaurants/bars/events) 17% 5% 3% No projects have been cancelled and we do not anticipate cancellations or delays Clients have cancelled or delayed a project We have not yet cancelled or delayed a project, but are considering it Yes, my firm has cancelled or delayed a project 39% 34% 22% 9% INVESTMENTS IN RESPONSE TO COVID-19 %  Data is from the March 25, 2020 report with 149 espondents. IMPACT ON CLIENT ENTERTAINMENT & NETWORKING 45% 30%

TZL: In one word or phrase, what do you describe as your number one job responsibility as CEO? MH: Be a positive, stabilizing force and look at the big picture. “We have worked closely with Zweig Group to implement project management training for everyone, and we are working to clarify and separate the role of project architect and project manager as we move forward.” 37% 18% 18% WHAT PERCENTAGE OF YOUR FIRM's WORKFORCE CAN EFFECTIVELY WORK FROM HOME? 75% 65% 95% Lower Quartile Median Mean Upper Quartile 63% 28% 10% 2% %  51% 16% 16% 15% 14% TZL: What happens to the firm if you leave tomorrow? MH: Without hesitation, and because of the people we have on staff, I can confidently say that GH2 would continue to grow and prosper and serve our clients well. 1/1 %  15% 11% 0% 20% 40% 60% 80% 100% 45% 7% 5% 5% 4% 3%

TZL: They say failure is a great teacher. What’s the biggest lesson you’ve had to learn the hard way? MH: Choosing project consultants who don’t have the same level of dedication and desire to provide great service to your clients will end badly every time. 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? MH: This is something we work on every day at GH2. We work hard to communicate and share workload challenges through weekly team leader meetings and central schedule coordination. We have worked closely with Zweig Group to implement project management training for everyone, and we are working to clarify and separate the role of project architect and project manager as we move forward. IMPACT ON TELECOMMUTING & WORKING REMOTELY COVID-19 has changed my firm's policy on telecommuting to allow any employee to telecommute at any time. COVID-19 has changed my firm's policy on telecommuting to allow only certain employees to telecommute currently. My firm allows for telecommuting for certain employees and has not changed its policies in response to COVID-19. My firm allows for any mploye s to telecommute at any time and has not changed its policies in response to COVID-19. My firm does not allow for tel commuting and has n t changed its policies i response to COVID-19. We have not made any significant investments We have hired additional cleaning services Other We have hired outside contingency consultants I P RSONAL TRAVEL I've stopped all non-essential personal travel I'm avoiding travel to certain locations I'm not planning on trav ling outsid of my im ediate town/city I'm not planning on traveling outside of the country No impact I'm not planning on traveling utside of m state I'm not plann ng on leavi g my home Othe My f rm has ask d me to refrain from pe sonal travel I've stopped all pers nal trav l but m traveling for business

RATE THE FOLLOWING IN TERMS OF IMPACT ON A 1 TO 5 SCALE WITH 5 BEING A HIGHLY NEGATIVE IMPACT

RATING



THE ZWEIG LETTER March 30, 2020, ISSUE 1338 Ability to obtain new work Ability to collaborate with subcontractors / consultants on projects

2.5 2.3

O P I N I O N

Smarter solutions (Part 2)

I n September 2018, I wrote an article for The Zweig Letter about tech trends and innovation. While not a lot of time has passed, there have been many subsequent developments in the smart space. To keep up with the “smart revolution,” AEC firms must embrace emerging technological solutions, innovate, and lead clients into the future.

building automation systems, and more 10 times faster than its predecessor 4G. Companies like Verizon are already incorporating 5G into smart solutions, with a recently announced goal of becoming the first carrier to use its 5G network to connect 1 million drone flights. How will this affect the AEC industry? In our designs we are already starting to see the 5G influence with our greater amount of knowledge, love, and expectation for the technological changes we will undertake. I for one can’t wait to see where it will lead us.” “The incoming generation of professionals will bring an even

We are living in the fast-paced world of the “smart revolution” with changes to smart technological solutions occurring almost daily. Firms, companies, governments, and institutions that don’t embrace the smart movement will be left behind very quickly. This has already occurred for some companies that we knew quite well, such as Blockbuster and Radio Shack. On the flip side, Uber and Lyft both came about seemingly overnight and have changed the way people move around the world. Even these companies have not stood still and are finding new and creative ways to innovate, including by utilizing drivers’ downtime through new applications such as Uber Eats. Where was Amazon five years ago and where are they today? The deployment of 5G, which is the fifth generation of wireless technology, will deliver data to internet connected devices including mobile phones, security cameras, cars, traffic systems,

Joseph Viscuso

See JOSEPH VISCUSO, page 10

THE ZWEIG LETTER March 30, 2020, ISSUE 1338

BUSINESS NEWS WITH CLAIMS RISING, ARCHITECTS/ENGINEERS PROFESSIONAL LIABILITY INSURERS PLAN MODEST RATE INCREASES Most insurers providing architects and engineers professional liability insurance continued to see significant premium growth last year. However, increasing concerns about deteriorating claims experience are prompting many insurers to consider rate actions this year on clients with higher risk disciplines, project types and even geographic locations, finds a new survey by insurance broker Ames & Gough. Indeed, as they look ahead to 2020, all insurers in the Ames & Gough survey of 15 leading insurance companies (which, on a combined basis, represent a significant percentage of the overall marketplace providing professional liability insurance to architects and engineers in the U.S.), are planning rate increases. Among them, 82 percent are seeking modest increases of up to 5 percent, while the remaining insurers are planning to raise rates by 6 percent to 10 percent. “Without consolidation within the insurance marketplace, insurers are going to be hard- pressed to achieve significant rate increases. That said, insurers reported an increase in claims activity in 2019, which in turn will affect how insurance underwriters assess a design firm’s risk profile,” said Joan DeLorey, senior vice president and partner, Ames & Gough, a co-author of the survey. “With losses mounting, insurers are zeroing in on higher risk disciplines, projects, and geographic locations where they’re seeing not only more claims but higher claim severity.” Claims activity is on the rise. For the first time in several years, claims activity was on the rise last year as 40 percent of the insurers surveyed reported a worsening of their claims experience. By contrast, only 6 percent

reported adverse claims results in last year’s survey. Altogether, this year’s survey found an increase in severity, frequency and expenses among those reporting negative changes in claims patterns. Furthermore, the majority of these insurers indicated their losses increased by as much as 10 percent. Among the insurers surveyed, 33 percent had more claims in 2019 related to certain project types, such as residential and infrastructure. With respect to specific disciplines, architects and civil engineers were seen as having the highest frequency of claims, followed by structural engineers and mechanical engineers. In terms of claim severity, the insurers overwhelmingly singled out structural engineering as the discipline with this highest severity, followed by architecture, mechanical engineering and civil engineering. When asked about their largest claim payments in 2019, 47 percent of the insurers surveyed reported paying between $1 million to $5 million for a single claim; nearly 34 percent paid up to $1 million for a given claim. “There’s a correlation between the increases in claims and the supply of the AEC workforce as compared to the demand in the construction industry,” said Jared Maxwell, vice president and partner, Ames & Gough, and a co- author of the survey. “Although the continued competition in the professional liability insurance marketplace for AEC firms has kept rate increases to a minimum, that may be unsustainable if the heightened claims activity continues.” With respect to their underwriting assessments, 93 percent of the insurers surveyed cited structural engineering as the top discipline in terms of risk; meanwhile, mechanical engineering, geotechnical

engineering and architecture were also cited by multiple insurers as having significant risk. Other areas of concern for insurers from an underwriting standpoint include construction complexity and increased costs, design resiliency as it relates to climate change, and state laws adversely impacting design firms. “As insurance market conditions begin to evolve, it’s critical for design firms to be proactive about adopting and adhering to sound risk management protocols, especially in their due diligence for any potential merger or acquisition,” Maxwell noted. Insurers concerned about social trends. Some insurers surveyed are watching how “social inflation” and legal financing are affecting claim severity. The former is linked to higher litigation costs driven by sympathetic jury awards; the latter, with prolonged litigation ratcheting up defense costs. With more than 1,500 architects, engineering firms, and other construction professionals of all sizes as clients, Ames & Gough is the leading insurance brokerage and risk consulting firm serving the needs of these professionals. Ames & Gough also has established itself as a committed, superior resource for law firms and associations and nonprofit organizations in need of professional liability, management liability, and property/casualty insurance and risk management assistance. Established in 1992, the firm has offices in Boston, Massachusetts; Philadelphia, Pennsylvania; Orlando, Florida; and Washington, D.C. Clients throughout the U.S. are served by a team of more than 40 professionals and staff located in the four offices

JOSEPH VISCUSO, from page 9

efficiency. We are deploying new generations of GIS applications in our projects involving surveying, transportation, and more. We have partnered with a company focused on the use of artificial intelligence in pavement analysis. There are many others on our list with many more being developed. In our industry, smart solutions will continue to grow exponentially as we move further into this decade and beyond. To keep up with the pace, the AEC industry must embrace the smart movement, innovate, and lead our clients into the future. On a personal note, I find this an exciting time to be an engineer. The incoming generation of professionals will bring an even greater amount of knowledge, love, and expectation for the technological changes we will undertake. I for one can’t wait to see where it will lead us. Enjoy the ride! JOSEPH VISCUSO is Pennoni’s senior vice president and director of strategic growth. He can be reached at jviscuso@pennoni.com.

municipal clients in permitting carrier installations, and in our traffic signal designs in the implementation of adaptive signals connected vehicles and sensor deployment. “We are living in the fast-paced world of the ‘smart revolution’ with changes to smart technological solutions occurring almost daily. Firms, companies, governments, and institutions that don’t embrace the smart movement will be left behind very quickly.” What other smart solutions can we expect to see developed? At Pennoni, we have developed software applications in the energy field to provide more accurate monitoring and continuous commissioning for energy

THE ZWEIG LETTER March 30, 2020, ISSUE 1338

O P I N I O N

Intellectual property (Part 2)

C ivil and structural engineers can easily lose sight of the basic premise that intellectual property, such as trademark and copyright, ultimately boils down to legal property. Like any other form of property, the law operates to determine the legal owner of trademarks and copyrights. In certain situations, the law may operate to deny civil and structural engineers the ownership of what should have been their IP. Innovators should consider following these best practices to ensure that what they believe to be their trademarks and copyrights actually are their legal property.

Stephen Keefe

A few IP ownership best practices and pitfalls follow, which civil and structural engineers can consider keeping in mind in managing their enterprises. This second article in this series covers ownership issues in trademark and copyright. The previous article in this series covered ownership issues in patent and trade secret, which provide the other main legal pillars of IP protection. TRADEMARK OWNERSHIP. Trademark provides critical protection to stop others from misusing the brands and goodwill that innovators build up over years and decades of hard work promoting their goods and services. Although civil and structural engineers create common law rights merely by using their marks in commerce, these property rights suffer from significant geographic

restrictions and place the burden of proof on the mark user. That is, common law trademark rights do not confer an initially strong presumption of ownership on would-be plaintiffs hoping to enforce those rights. In addition to state common law trademark rights, U.S. federal law provides a strong body of trademark law that civil and structural engineers can leverage to protect their brands and goodwill in the marketplace. Innovators can apply for federal trademark protection through the United States Patent and Trademark Office. Similar to patent applications, the USPTO examines trademark applications to ensure applicants’ desired marks meet legal requirements for

See STEPHEN KEEFE, page 12

THE ZWEIG LETTER March 30, 2020, ISSUE 1338

TRANSACT IONS CMTA AND MCCRACKEN & LOPEZ JOINING FORCES IN THE CAROLINAS MARKET CMTA has expanded its operations to the Carolinas by acquiring McCracken & Lopez of Charlotte, North Carolina, and Columbia, South Carolina. This joining of like-minded engineers who are dedicated to providing high-quality, client- focused service will revolutionize the practice of engineering throughout the Carolinas. Like McCracken & Lopez, CMTA has a strong background in higher education, K-12, local government and community facility design and

adds expertise in the Healthcare and Federal markets. In addition to expanding McCracken & Lopez’s MEP and commissioning services, CMTA brings a unique differentiation of services, including zero energy engineering, performance contracting, and technology design. Recognized as one of the top 25 engineering firms in North America and the nation’s expert on zero energy design, CMTA has designed some of the most energy-efficient hospitals and K-12 schools in the country, including the first Zero Energy school. We apply a proven

process that seeks unexpected solutions to challenging problems, including inventing new products, setting national standards, and performing research all while delivering exceptional results on all our projects. CMTA leadership are excited for this joining of like-minded engineers who are dedicated to providing high-quality, client-focused service and will revolutionize the practice of engineering throughout the Carolinas! CMTA is a multi-services corporation founded in 1968 as a consulting engineering firm.

STEPHEN KEEFE, from page 11

covers works ranging from prose scrawled on napkins to blockbuster films. Though the copyright laws do not require registration of copyrighted works, they certainly incentivize authors to take the extra step of filing for a copyright with the U.S. Copyright Office, which falls under the umbrella of the Library of Congress. Typically involving a simple online form wizard and costing a little over $50, many authors can easily handle their own copyright registrations. Registering a work bolsters the author’s copyright by providing a presumption of ownership and allowing for statutory damages. Recent case law also appears to make copyright registration a requirement for bringing a federal cause of action. Civil and structural engineers should consider filing for copyright registration for at least each set of plans they create, subject to any agreements that may be in place regarding copyright ownership with clients. Engineers may also copyright inhabitable three-dimensional buildings to prevent copying of those structures. As with many areas of copyright, authors should be careful to delineate whether they are working in a capacity of a work for hire made in the course of employment or as an independent contractor, as these relationships dictate ownership of the work. In general, independent contractors retain ownership of their copyrights in the absence of an agreement to the contrary, while the law generally considers the works of an employee as owned by his or her employer. CONCLUSION. Civil and structural engineers should remember that the legally operative word in intellectual property such as trademarks and copyrights is property. Innovators should consider following some of the exemplary best practices mentioned above to try to ensure that what they believe to be their trademarks and copyrights actually are their legal property, which they can enforce if necessary against infringers. STEPHEN KEEFE, P.E., Esq., is a principal attorney of Stephen L. Keefe LLC. After graduating from West Point with a degree in civil engineering and serving in the U.S. Army, he earned a master’s degree in civil engineering from Columbia University and practiced as a structural engineer in New York City and Virginia for six years. He served as a patent examiner at the U.S. Patent & Trademark Office, received a Juris Doctorate from the George Washington University Law School, and has practiced patent and IP law for over 12 years at leading IP law firms and as in-house corporate patent counsel. He can be contacted at skeefe@ keefeip.com.

protection. Only after the USPTO registers a trademark can that trademark owner use the circle R, denoting a registered federal trademark. Federal trademark registration on the USPTO principal register grants a robust bundle of IP rights to the owner, including the legal presumption of ownership of the trademark and a legal presumption of exclusive use of that mark across the entire United States, along with a host of other rights. After five years, owners may apply to make their trademark incontestable, which makes it invulnerable to many types of legal challenges. “Civil and structural engineers should remember that the legally operative word in intellectual property such as trademarks and copyrights is property.” To maintain federal trademark ownership, federal law expects trademark owners to vigilantly watch over their property. The law leaves it to individual trademark owners to monitor the marketplace for infringers and competing marks that might cause a likelihood of confusion with their own marks. Owners must also be careful in managing their marks and the legal structure used for owning them. Only the legal owner of a mark may apply to the USPTO for registration of that mark. Getting ownership wrong at the USPTO or failing to notify the USPTO of ownership changes such as legal entity changes may result in cancellation of the mark. Also, civil and structural engineers must conduct any licensing of a trademark and its associated goodwill carefully to avoid ownership pitfalls that may have grave legal consequences. Despite the challenges and complexities that accompany federal trademark ownership, innovators should not overlook federal trademark registration as a robust form of IP ownership and protection against competitors looking to hijack brands and goodwill in the marketplace. COPYRIGHT OWNERSHIP. At least nominally, copyright ownership provides a relatively user-friendly framework to civil and structural engineers. Stemming from the same clause in the U.S. Constitution as patent law, material meeting the relatively low bar for originality becomes copyrighted subject matter as soon as the author fixes the work in tangible form. This generous grant of copyright

THE ZWEIG LETTER March 30, 2020, ISSUE 1338

Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12

Made with FlippingBook Annual report