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Consulting work for another architecture firm

tomsmith18555

I own a small practice, but have a few offers from various offices around town I'm friendly with to do consulting work for them while I build up my own backlog of work.

They've asked me to put together hourly proposals through my company for each project they request my help on. I'm hired just like any other consultant on a project, except in this case I won't be stamping anything and am more just a hired gun to help them produce CDs under their cover/stamp.

Is there anything specific I should be thinking about or including in my proposal? My typical project proposal is pretty robust with terms and conditions, but with review/stamping/drawing issuance being covered by my client (architecture firm hiring me), I feel like I don't have much to worry about.

What am I not thinking of? Any thoughts would be appreciated.

 
Nov 19, 19 8:26 pm
Formerlyunknown

Because your business offers the same type of service that theirs does, there tends to be increased scrutiny by state and federal departments of labor about this type of arrangement - and in recent years architecture firms have been a target of particular scrutiny.  This is more for your clients' protection than yours, but: in order for your client firms to be able to demonstrate that they are indeed your clients and not your employer, the contracts need to contain several things:  a description of the nature of the work, explicit identification of a contractual relationship, a finite timeframe during which the contract is in effect, no "automatic renewal" agreements (i.e. if the project runs beyond the agreed-upon dates there needs to be a new contract - you can't just continue the work without that), a description of the services and payment associated with them, explicit granting of your rights to determine your own working hours, your rights to hire and utilize employees, and your rights to simultaneously do work for other clients.  

Even if you include all of those items, and you are working on your own premises with your own equipment, sometimes the DOL still decides that an employer relationship exists, if your work is determined to be "pivotal to the operation" of your client's business, or if there are "behavioral conditions" such as your client firms controlling your work means and methods.  


Nov 19, 19 9:00 pm
tomsmith18555

Thank you. I put some specific language in there about the specific project, deliverables, and timeline. I will probably need to revisit this if they want to continue the relationship on another (bigger and longer) project, but this is a good start.

tomsmith18555

They asked me this morning to send them my professional liability certificate with them added as a co-insured party. If I am working underneath their stamp and not issuing drawings myself this seems unnecessary. Standard procedure?

sameolddoctor

No fucking way. You/your firm are hired draftsmen for this project. You dont owe them anything other than drawing support and your expertise.

atelier nobody

You need to make it very clear in your contract that, for these projects, you are working "under the responsible control of ___________" (or whatever the language is in your state).

Nov 19, 19 9:18 pm
tomsmith18555

YES. Thank you -- I had some similar language, but this tightens it up nicely to be parallel with my state's regs.

sameolddoctor
Seriously, the DOJ and State is looking into architects? Lol.

That said, this is a good point, and If the OP is not working on the client’s premises (the client being the architectural firm in this case), it’s not an issue at all. In the rare event that the client gets audited, it wouldn’t be the OPs responsibility to pay payroll tax etc.

Where this may get sticky is if the end client likes OP a lot, and want to work directly with her/him to avoid going thru the larger firm. This happened with a friend of mine, and it completely soured the relationship between himself and larger firm, even though he didn’t take the job.
Nov 19, 19 9:21 pm
Formerlyunknown

Yes, seriously. In 2010 the IRS started hiring auditors for the dedicated task of examining 1099s issued by architecture firms. There was a lot of AIA education on it at the time, and since then many architecture firms have had to pay the employer shares of SS, unemployment, worker's comp, and fines for people they classified as independent contractors. Not working on the premises is not enough on its own, to keep the consultant from being ruled to be an employee.  There are three separate categories of tests for an employee relationship: financial, behavioral, and contractual, and any one factor in any of them alone can tip it.  

The IRS specializes in low-hanging fruit.

RickB-Astoria

It should be noted:

There are these three:

1. Conventional employees.

2. Contracted employees

3. Independent contractors.


Nov 20, 19 1:09 am
tomsmith18555

What situation do you think I fall under?

kjdt

The differences between conventional and contracted employee aren't really relevant to this thread.

What's relevant to your situation is the IRS's determination of employee (of any type) vs. independent contractor. As others noted, it's not a one-size-fits-all situation. 1099's tend to invite audits, particularly when they're issued to someone who has only one or two clients in that year. The IRS evaluates them on a case-by-case basis. In recent years architects have been a repeat target for fines for mis-classification. If you're determined to have been wrongly classified as a consultant, it's true that it's the firm that paid you that will owe any back taxes, fines, etc., but it often leads to audits of all of that firm's recent consultants, and even if that doesn't lead to any financial consequences for you an audit is always a time-suck and paperwork extravaganza that you should want to avoid.

Here are the IRS rules: https://www.irs.gov/newsroom/understanding-employee-vs-contractor-designation

tomsmith18555

Thank you.

Volunteer

Assume the building will have a major problem resulting in major lawsuits (even though your part was not at fault). What is your exposure? Check with your insurance carrier. In fact, you should be on a first-name basis with him.

Nov 20, 19 11:06 am
tomsmith18555

Good rule of thumb. Thank you.

thisisnotmyname

If the firm is truly hiring you as a subconsultant on par with a consulting engineer, landscape architect, etc., then their insurance request is reasonable and customary.   Such a relationship would be established with an architect/consultant agreement and a defined scope of work, schedule, and deliverables.   If you are a sole proprietor or LLC, the client firm sends you a 1099 for each tax year.

If the client firm wants you to come into their office on a set schedule and do whatever they tell you to, then you are getting into employee territory, where you need to be added to their payroll, even if it's just temporarily.  

You and the client firm need to establish how the work will be credited in the future and if you can use the project in your own portfolio and advertising.   I have both consulted for other firms and hired independent consultant architects to help me and the crediting/publication issue can be problematic if not defined and agreed upon early on. 

Nov 23, 19 2:15 pm

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