Better by Design
Managing Professional Liability with Internal Policies: Architects and Engineers

Imagine a project needs to be changed halfway through construction. It's not a huge change, but it will cost more. Though the client agrees to the tweak, he sues your firm after the building is finished, alleging you breached the contract and racked up costs he never agreed to.

Such a scenario can be a nightmare for your business. But if your firm has internal policies in place that outline how to educate clients about project changes and how to document their consent, you could avoid a lot of headaches and maybe even prevent the lawsuit from occurring in the first place.

Let's take a look at some policies your architecture or engineering business may want to adapt to help manage internal affairs.

Internal Policies and Managing Client Expectations

Internal Policies and Managing Client Expectations

The majority of claims brought against architects and engineers come from clients. (For more on that, read "Architect Professional Liability Considerations When Working with Clients.") It's an unavoidable fact that most people expect absolute perfection. They want the best and fastest service for the lowest cost. With your experience, you know that's impossible.

It's your responsibility to educate the client and have them accept realistic goals for the project before you even begin designing. If you don't, you may be liable down the line when a client feels misled.

By having proper policies in place to keep the client informed and updated, you mitigate that risk and increase the chance that you'll leave your client satisfied. When managing their expectations, consider the following:

  • What is the client's highest priority for the project? Cost, scope, or schedule? Let them know they can't get comprehensive service and a low price and a fast completion time. But do discuss what priorities you can fulfill. By understanding your clients' needs, you can better meet them.
  • Review the contract. Make sure your client knows exactly what you are and aren't offering in terms of scope of service. Additionally, review the contract after the client has signed it to make sure nothing has been changed.
  • Communicate and document. During the life of a project, continually update the client on decisions or changes made, and document their approval. Have a policy for acquiring the client's signoff when needed. Write memos or letters when decisions have been made verbally, and get a signature. It can even be a good idea to offer a weekly newsletter to keep the client informed.
  • Assign a "gatekeeper." This can be the one or two people who handle the responsibility of client management during a project. The gatekeeper is the person whom the client goes to with concerns and questions and is the one who can make decisions on behalf of the firm.

Not only does managing a client's expectations protect you from lawsuits down the road, but it also lets the client know you understand their needs and that you're working with them. For more client management tips, read the article, "5 Ways to Protect your Architecture, Engineering, or Design Business."

Additional Policy Considerations

Additional Policy Considerations

Here are some other risk management considerations that can best be addressed by creating and following internal procedures:

  • Selecting clients. Working with problematic clients can make your job harder and increase the likelihood of facing a lawsuit. Don't be afraid to turn down a job when the client is a liability nightmare.
  • Selecting projects. Know the capability of your firm and what project types you are able to handle. Weigh the risk vs. reward for taking on unfamiliar work.
  • Forming your own scope. Have a process to finalize exactly what services you both can and cannot offer to your client. Don't promise them something you can't deliver.
  • Quality control. Who is responsible for checking work? Get the process in writing and require that at least two staff members sign off on the work.
  • Identifying and allocating risks. Evaluate what risks you aren't addressing or can't address. What risks do you want to take responsibility for, and what can you allocate to other parties?
  • Time management. Have policies that make it possible to adhere to tight schedules, should that be the client's highest priority.

Are you a lone architect who freelances? Then you have to take care of the all the above considerations by yourself. Do you own a firm with a large staff? Then you face the challenge of delegating and streamlining these responsibilities among them. Either way, addressing these concerns can lead to good risk management practices no matter the size of your business. With the right internal policies, you ensure a job well done and a client who won't sue. That's a win for any design professional.

For more tips on managing your liability, read "Contracts to Manage Architects' Professional Liability."

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