Your questions answered: Pre-design to post-construction; strategies that maximize profits for engineers

The Q&A from this webinar reviews each step of the ideal project process to help architecture and engineering firms achieve financial stability and increase profit margins, which will not only alleviate financial stress but also enable firms to recruit top talent, attract the right clients and grow.

By Gary Cohen November 13, 2023

Are you an architect or engineer seeking to enhance your client and project management abilities while securing long-term success for your firm?

The primary objective for every firm is to generate value. This value stems from the loyalty and trust you cultivate with your clients. From initial interactions with potential clients to delivering exceptional service through effective project management, your responsibilities extend far beyond the completion of a project.

The Q&A from this webinar, originally aired on Aug. 24, 2023, reviews each step of the ideal project process to help firms achieve financial stability and increase profit margins, which will not only alleviate financial stress but also enable your firm to recruit top talent, attract the right clients and grow.

Additional questions were answered by Steven Burns, FAIA, Founder, The Well-Designed Firm.

Question: Projects that have long schedules for design tend to start and stop unexpectedly. Team members end up overcharging jobs because of this, inflating original estimates for billable hours. How do I accommodate or plan for these?

Answer: You should have a clause in your contract that addresses this issue. Many projects have periods of low activity, either due to review/approval periods. This doesn’t always mean that all work stops, and your schedule should anticipate these standard events. However, if you have projects that suddenly (and without warning), go on delay, your contract should describe how this negatively impacts your ability to deliver the project to your standard and what will be required by the client. Some projects go on hold for months (or years). It is not possible for the firm to guarantee continuity with the team in these events, and a “start-up” fee should be required to get the team up and running. Firms can also charge fees for shutting down a project. This is another reason why having a retainer from your client is valuable. If they put a project on hold (for example), for six months, you can charge $X to put it in mothballs, reallocate the team, etc. Penalties must exist to protect the firm. If the project is cancelled, I should hope you have a clause in your contract to address what happens, as well.

Question: How do you differentiate commercial from industrial proposals?

Answer: It isn’t just the difference in project type (commercial or industrial) that would require adjustments to your contracts. Every project could have special considerations, and your proposal letters and contracts need to address these. No doubt, the boilerplate language should be consistent, but you need to review your contracts carefully with your client and attorney. As an example, you may have an industrial project that will require some type of NDA to protect trade secrets that you may have access to. There could be special consideration for insurance. The list goes on. This is why your contracts shouldn’t just be a thoughtless formality before beginning the work.

Question: Please address integrated change control (PMI’s phrase); how to track and charge for changes; how to find a realistic balance between whatever it takes to keep the client happy and managing to a budget.

Answer: Change happens. We all know clients that believe they make decisions, and once made, they will never change. This never, ever happens in reality. It is important that regardless of what a client thinks, you have clearly spelled out in your contract the process your firm follows in order to properly execute changes. Depending on the timing and nature of the change, it can be simple to enact and have no consequences to time and cost. Other, seemingly simple changes can wreak havoc. Ensuring that every change is documented in the manner that follows your firm’s process is critical. This is a reason why it is so important to carefully document the scope of work, the program, budget, etc., and then receive formal sign-off from the client at appropriate stages. As soon as a change is considered or requested, your client must be told, “This is a change,” and how it is to be processed.

You talk about keeping the client “happy and managing to a budget,” but please don’t confuse that with having your firm ending up paying for your client making changes to previously approved decisions. Many firms will give the first change to the client (provided it is reasonable) at no charge, but you must document it and make sure the client understands that what is being done (without charge) is, in fact, a change, and if future changes happen, either fees will be incurred and/or changes to the budget will happen. DOCUMENT EVERYTHING.

Question: Discuss how to implement QA in all the project management phases.

Answer: I am a keen believer in using a checklist system for every phase of a project. The PM should review this at least weekly. This regular review not only ensures QA, but helps with resource allocation, scheduling, budgeting and invoicing. Just because an item is marked as completed in one phase doesn’t mean it shouldn’t reappear in a future phase. For example, zoning and code analysis is often done at the earliest stage of a project. Just because it has been completed doesn’t mean it shouldn’t be revisited during each subsequent phase. Design decisions are often made throughout a project, and if they are not checked against the zoning and code analysis, you might not learn you made an innocent mistake until submitting for permit — or during a construction inspection.

Question: A lot of the advice given today revolves around being very socially engaged with everyone involved. What would you say to those people who don’t have an extroverted skill in their wheelhouse?

Answer: For people who are uncomfortable in social situations or find it difficult to “schmooz,” there are many options for them to consider. A public-facing persona is essential for a successful firm.

  • Leverage Digital Platforms: Online platforms like LinkedIn, Architizer and similar AE forums provide an avenue for networking without face-to-face interactions. By sharing work, commenting on others’ posts and engaging in online discussions, one can build a professional network.
  • Seek a Business Partner: Consider partnering with someone who complements your skills. Find a business partner who excels in client relations and networking.
  • Practice Makes Perfect: Social skills, like any other skills, can be improved with practice. Consider joining a group like Toastmasters, which provides a supportive environment to practice speaking and improve communication skills.
  • Hire a Communication Coach: Professional coaches can provide tools and strategies to overcome social awkwardness or anxiety.
  • Focus on Small, Intimate Settings: Instead of attending large networking events, focus on one-on-one or small group meetings. This can feel less intimidating and more manageable.
  • Empathetic Listening: While speaking might be intimidating, listening is equally important in communication. Focus on being a good listener, understanding client needs and responding thoughtfully.
  • Leverage Written Communication: If face-to-face or phone communication is intimidating, focus on written forms. Emails, proposals and other written communications can be crafted with care, allowing for more thoughtful and articulate interactions.
  • Delegate: As your business grows, consider hiring or contracting someone to handle client relations, leaving you to focus on design and other areas of your expertise.

Question: What is a recommended best practice for communication?

Answer: Great question. It’s not something I can answer easily. It’s more like a webinar topic for one hour. However, if I had to state the two most important communication practices, they would be:

  • Regular Meetings: Schedule consistent team meetings to update on project progress, discuss any challenges and ensure everyone is aligned. This includes internal team meetings as well as client meetings.
  • Clear Documentation: Always maintain thorough documentation. Whether it’s client requirements, design changes or team discussions, having everything documented ensures clarity and helps prevent misunderstandings.

Question: What checklists do you provide to younger staff to ensure that they are asking the correct questions on site surveys and when working with a new client to gather requirements?

Answer: First of all, you should not have inexperienced staff attending these types of meetings without the guidance of an experienced colleague. It’s important that they observe the proper behavior in these situations before being sent out unaccompanied. Assuming they have already received “in-the-field” training, the checklist is something your firm should establish based on experience. It’s a fantastic idea to have everyone, regardless of experience, attend these events with a checklist. This isn’t just needed by inexperienced staff. The analogy I provide is to think about pilots. Even the most experienced pilots still follow the routine of the checklist. This happens for brand-new pilots but also for those with 40-plus years of flying experience.

Question: How do you protect your firm’s fee with increasingly shortened design windows that cut out feasibility studies and schematic design phases?

Answer: If I understand your question, you are engaging in projects that bypass schematic design and move directly into DD or CD phases. First of all, your firm needs to decide if this is the kind of work that makes sense, both economically as well as meeting your own strategic goals. Assuming it is, then you really simply need to budget the time it will take to execute the work and use this to project your costs. This will lead you to determine the fees you will require to do the work and earn a profit. If the economics don’t work, don’t take the job, plain and simple. If your client pushes back, include them in the calculations you have used so they understand the scope of your work and the appropriateness of your fees.

Author Bio: Gary Cohen is senior editor and product manager at WTWH Media LLC.