I was recently thinking about this and I'm not sure if there is a way the Owner can protect himself from such situations, so here's a hypothetical (albeit ubiquitous) scenario:
The Architect is midway through a project and staff leave the firm. A new person or two start working on the project, but they need to get caught up to speed. Naturally, there is a certain amount of inefficiency related to this. In some cases, the people inheriting the project discover that the instruments of service are not prepared well and need to be "fixed" (example: an improperly constructed BIM model).
Now: I know that on fixed fee projects or percentage of construction projects, the above might not have a tremendous impact because the Architect is contracted for the agreed-to-fee and it would be hard to argue for more money due to staff turnover, BUT what about contracts that are either hourly or hourly not-to-exceed?
Separately, and this is more of a legal question (I guess), since most states are at-will states, how does the law reconcile an Owner's right to have entered an agreement with an Architect based on a certain schedule requirement, yet not place undue burden on the Architect to meet that schedule if the Architect's staff decide to jump ship?
Please understand that I am not asking here about whether or not an Owner would not be "reasonable" in such situations with respect to the schedule, but in some situations, not meeting schedule due to staff turnover, can cause some serious issues.
Scenario: say that there are four people on a project team (Principal In Charge, Project Manager, Job Captain, and Drafting Staff), all working on a school project. the PM and the Job captain go on a job site visit one day and get into a car crash and both need to take some medical time off. The project needs to be submitted for last round of plan check next week so that the contractor can pull his permit in a month. The construction schedule is 6 months, and if the project is not completed in time, kids won't be able to use the new facilities.
Genuinely curious how Owner and Architect can protect themselves from such situations.
Why does the client have to pay extra because the Arch has staffing and/or scheduling issues? That's the risk of doing business... agree to a fee and work within it. Do you pay more for a meal if a restaurant is short staff for an evening... or because it's booked solid?
The architects has to 'eat' the cost of repairing the work. There is no way around that and there is no way that the architect could legally charge the client for the re-work.
The “eating” part as far as fee I get. But what about potential liquidated damages due to exceeding project schedule due to staff turnover?
Sep 8, 24 6:06 pm ·
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Non Sequitur
Seems fair to me if the client can show significant damages/costs due to extended schedules. Maybe a week or two is ok, but why should the client bare a few extra months while the arch gets their shit together?
Sep 8, 24 8:31 pm ·
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pj_heavy
I know our insurance policies cover all sort of things that would affect our delivery /output i e fire , data breach etc. Staff turnaround or shortage probably not one of them . Client should not bear the consequences of this unfortunate circumstance either… my 2c
Sep 8, 24 9:05 pm ·
·
smaarch
Never heard of such a thing. Fee is negotiated on deliverables and personally would consider it highly unprofessional to even consider additional fees. Architect should consider themselves fortunate not to be sued for delays, which, in this scenario - is a high probability.
Nope. Read your contract. If a schedule is prepared, the architect either revises it over the duration of the project, or is bound by it. If a team member suddenly leaves, and the architect doesn't update the schedule, then the architect is still bound by the schedule. Sometimes this schedule cannot be altered, such as in critical move-in dates (say a school facility needs to be open by a certain date). In such cases, there's a real problem, and this is what I am talking about.
I'm probably just misinterpreting your comment BulgarBlogger, however I'm not sure what you're 'nope(ing)' to.
The architect cannot simply change the project schedule at their own choosing. There has to be an outside reason from the owner or something outside of the architects control. Staffing is under the architects control.
Sep 11, 24 12:52 pm ·
·
BulgarBlogger
Ok, let me clarify. Here's a sample of the clause related to the schedule:
I think you guys are misinterpreting my question or maybe I’m not clear enough. I’m not at all saying the architect should seek or should be entitled additional services based on staff turn around. What I am asking is how the architect and Owner can protect themselves (contractually) from staff turn over
I can't imagine any client ever agreeing to something like that but then again, there are good clients out there and if a firm owner is honest with them AND have a solution prepared, then it's easier to negotiate for time extension. We've had plenty of problems with sudden issues... from death of GC (on the way to site) to heart attacks, to family member disappearances all the way down to regular old staff quitting.
What Non Sequitur suggests is how you handle this. A negotiated time extension is the best that you can do. "Protection from staff turnover in the architecture firm affecting the project" is just not a customary clause in design contracts.
I suppose you could try to develop such a clause and see if any of your clients are willing to sign it.
I occasionally see a "key staff departure" provision that lets the Owner terminate the contract if staff determined to be essential to the design of the project leave the firm. That usually means licensed professionals working as project leads.
Some contracts do have an "act of God" clause in case of some kind of catastrophe. That would protect both parties in case something happens that is out of their hands.
This basically happened to me, with me as the key staff member.
Putting myself in the owner's shoes, you can't do much to meddle in the internal affairs of the office without upsetting something, or short-circuiting contractual obligations.
If they would have discretely offered me a direct bonus of $2-300,000 to stay on til the end, I probably would have done that. And it would have been good value for them. But I wasn't going to approach them with the idea and the mythology of the starchitect office conveys that the peons are replaceable while the grand idealist is what drives the success of the project.
Otherwise you are talking about writing something into the contract that would require the firm to pay me more or compensate me differently from everyone else. And that also upsets the mythology of the firm model.
I was in a similar position once. I was the staff member who took over the project after another left. In this case, the work done up to that point was fine but the project was waaaay over budget and the owner didn't want to change anything to come under budget. The owner was pissed that their architect left, was in deep denial that the project was over budget, and used the opportunity to lay full blame on me and file a lawsuit. It was settled out of court for an amount that was just over my annual salary at the time. I had been on the job a week or two when we got notice of the suit. Not sure how I or the firm could have headed that off. It's just part of the risk.
I don't have direct experience, so my thoughts are admittedly vague. But I think what you're observing is the fact that the way we do business in a capitalist model (the contracted parties own their company and hire labor to operate that company) involves a lot of costly risk. Many get a thrill out of it, I suppose. And lots of wealth (for themselves alone).
Instead of contracts magically negating this disconnect between owning risk and selling labor, I think it's more productive to look at different internal company structures. Like archanonymous points out, much volatility could be addressed with simple negotiation, but isn't, because the mythology of these roles is so ingrained. They could protect themselves by being different from what they are.
I'm not trying to promote any specific alternate model. I'm just suggesting that your faith in the power available to business owners is unrealistic.
Sep 11, 24 1:08 pm ·
·
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Owner Architect Agreement: Compensation Issue due to Turnover
I was recently thinking about this and I'm not sure if there is a way the Owner can protect himself from such situations, so here's a hypothetical (albeit ubiquitous) scenario:
The Architect is midway through a project and staff leave the firm. A new person or two start working on the project, but they need to get caught up to speed. Naturally, there is a certain amount of inefficiency related to this. In some cases, the people inheriting the project discover that the instruments of service are not prepared well and need to be "fixed" (example: an improperly constructed BIM model).
Now: I know that on fixed fee projects or percentage of construction projects, the above might not have a tremendous impact because the Architect is contracted for the agreed-to-fee and it would be hard to argue for more money due to staff turnover, BUT what about contracts that are either hourly or hourly not-to-exceed?
Separately, and this is more of a legal question (I guess), since most states are at-will states, how does the law reconcile an Owner's right to have entered an agreement with an Architect based on a certain schedule requirement, yet not place undue burden on the Architect to meet that schedule if the Architect's staff decide to jump ship?
Please understand that I am not asking here about whether or not an Owner would not be "reasonable" in such situations with respect to the schedule, but in some situations, not meeting schedule due to staff turnover, can cause some serious issues.
Scenario: say that there are four people on a project team (Principal In Charge, Project Manager, Job Captain, and Drafting Staff), all working on a school project. the PM and the Job captain go on a job site visit one day and get into a car crash and both need to take some medical time off. The project needs to be submitted for last round of plan check next week so that the contractor can pull his permit in a month. The construction schedule is 6 months, and if the project is not completed in time, kids won't be able to use the new facilities.
Genuinely curious how Owner and Architect can protect themselves from such situations.
Why does the client have to pay extra because the Arch has staffing and/or scheduling issues? That's the risk of doing business... agree to a fee and work within it. Do you pay more for a meal if a restaurant is short staff for an evening... or because it's booked solid?
The architects has to 'eat' the cost of repairing the work. There is no way around that and there is no way that the architect could legally charge the client for the re-work.
This is regardless of the type of contract.
The “eating” part as far as fee I get. But what about potential liquidated damages due to exceeding project schedule due to staff turnover?
Seems fair to me if the client can show significant damages/costs due to extended schedules. Maybe a week or two is ok, but why should the client bare a few extra months while the arch gets their shit together?
I know our insurance policies cover all sort of things that would affect our delivery /output i e fire , data breach etc. Staff turnaround or shortage probably not one of them . Client should not bear the consequences of this unfortunate circumstance either… my 2c
Never heard of such a thing. Fee is negotiated on deliverables and personally would consider it highly unprofessional to even consider additional fees. Architect should consider themselves fortunate not to be sued for delays, which, in this scenario - is a high probability.
Nope. Read your contract. If a schedule is prepared, the architect either revises it over the duration of the project, or is bound by it. If a team member suddenly leaves, and the architect doesn't update the schedule, then the architect is still bound by the schedule. Sometimes this schedule cannot be altered, such as in critical move-in dates (say a school facility needs to be open by a certain date). In such cases, there's a real problem, and this is what I am talking about.
I'm probably just misinterpreting your comment BulgarBlogger, however I'm not sure what you're 'nope(ing)' to.
The architect cannot simply change the project schedule at their own choosing. There has to be an outside reason from the owner or something outside of the architects control. Staffing is under the architects control.
Ok, let me clarify. Here's a sample of the clause related to the schedule:
I think you guys are misinterpreting my question or maybe I’m not clear enough. I’m not at all saying the architect should seek or should be entitled additional services based on staff turn around. What I am asking is how the architect and Owner can protect themselves (contractually) from staff turn over
Treat you team members well so they don't quit mid project.
I can't imagine any client ever agreeing to something like that but then again, there are good clients out there and if a firm owner is honest with them AND have a solution prepared, then it's easier to negotiate for time extension. We've had plenty of problems with sudden issues... from death of GC (on the way to site) to heart attacks, to family member disappearances all the way down to regular old staff quitting.
What Non Sequitur suggests is how you handle this. A negotiated time extension is the best that you can do. "Protection from staff turnover in the architecture firm affecting the project" is just not a customary clause in design contracts. I suppose you could try to develop such a clause and see if any of your clients are willing to sign it.
I occasionally see a "key staff departure" provision that lets the Owner terminate the contract if staff determined to be essential to the design of the project leave the firm. That usually means licensed professionals working as project leads.
Some contracts do have an "act of God" clause in case of some kind of catastrophe. That would protect both parties in case something happens that is out of their hands.
This basically happened to me, with me as the key staff member.
Putting myself in the owner's shoes, you can't do much to meddle in the internal affairs of the office without upsetting something, or short-circuiting contractual obligations.
If they would have discretely offered me a direct bonus of $2-300,000 to stay on til the end, I probably would have done that. And it would have been good value for them. But I wasn't going to approach them with the idea and the mythology of the starchitect office conveys that the peons are replaceable while the grand idealist is what drives the success of the project.
Otherwise you are talking about writing something into the contract that would require the firm to pay me more or compensate me differently from everyone else. And that also upsets the mythology of the firm model.
I was in a similar position once. I was the staff member who took over the project after another left. In this case, the work done up to that point was fine but the project was waaaay over budget and the owner didn't want to change anything to come under budget. The owner was pissed that their architect left, was in deep denial that the project was over budget, and used the opportunity to lay full blame on me and file a lawsuit. It was settled out of court for an amount that was just over my annual salary at the time. I had been on the job a week or two when we got notice of the suit. Not sure how I or the firm could have headed that off. It's just part of the risk.
I don't have direct experience, so my thoughts are admittedly vague. But I think what you're observing is the fact that the way we do business in a capitalist model (the contracted parties own their company and hire labor to operate that company) involves a lot of costly risk. Many get a thrill out of it, I suppose. And lots of wealth (for themselves alone).
Instead of contracts magically negating this disconnect between owning risk and selling labor, I think it's more productive to look at different internal company structures. Like archanonymous points out, much volatility could be addressed with simple negotiation, but isn't, because the mythology of these roles is so ingrained. They could protect themselves by being different from what they are.
I'm not trying to promote any specific alternate model. I'm just suggesting that your faith in the power available to business owners is unrealistic.
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