This week, Musings welcomes

The Noisette Rose – A Triple Bottom Line Approach

For the Noisette Development in North Charleston, SC, via a collaboration of BNIM and Burt Hill Architects, we created a framework called the Noisette Rose. Based on the Triple Bottom Line concept, project goals combined concerns for Prosperity and People as well as the Planet. The Rose signifies the qualifications and rates the success in meeting those criteria as radial arms around the circle.

The Noisette Rose effectively illustrates the complexity of sustainable design. While LEED and other models establish minimum standards for energy use, waste management, and so on, many experts consider sustainability environmental criteria along will not achieve sustainable development. The Noisette Rose and Triple Bottom Line method describe that larger vision.

What is Sustainable Design?

Several organizations have defined sustainability in the spirit of the Triple Bottom Line,

• United Nations: Development that “meets the needs of the present without compromising the ability of future generations to meet their own needs.” They added the three mutually reinforcing pillars of economic development, social development, and environmental protection.
• US Office of Federal Environmental Executive: “The practice of 1) increasing the efficiency with which buildings and their sites use energy, water, and materials, and 2) reducing building impacts on human health and the environment, through better siting, design, construction, operation, maintenance, and removal — the complete building life cycle.”
• USGBC: Certification defines “green building” as primarily environmental components and identifies five areas – site, water, energy, materials, and indoor environmental quality.
• Cascadia Green Building Council: “A built environment that is socially just, culturally rich and ecologically restorative.”

In other words, while USGBC has focused on environmental “green building,” several other organizations embrace social and economic terms as well. Consequently, it seems likely that sustainable development in coming years will extend beyond strictly environmental concerns and include all three areas of the Triple Bottom Line.

What Will That Mean to Our Practices?

The broadened goals warrant even greater clarity and precision in metrics, and ultimately establishing appropriate jurisdictions for compliance. Like the Noisette Rose, the value of each goal will be judged by how carefully we define excellence and track performance, and how effectively the combined criteria create true sustainability.

If environmental performance, being the most readily measured, is covered by building codes and regulations, it removes the question of the short-term marketplace. Similar to other life safety mandates that are the foundation of building codes, everyone plays to the same minimum standards. While individual heroics suffice for pushing knowledge during innovation, only mass adoption creates true environmental change. Voluntary efforts will always fall short.

As building owners, design professionals and users are discovering, we no longer can imagine sustainable design is achieved at occupancy.

The built environment no longer sits passively as a collection of boxes for shelter; experts, owners, and users collaborate with buildings and cities everyday to achieve environmental, social, and economic goals. The aggregation of individual choices determines performance.

True Green

Based my sustainable design work, research, and analysis, I am writing a series called True Green. A number of public challenges highlight the shortcomings of our current practices. Those questions range from inadequate energy performance and design conflicts to green washing and user complaints. These reactions are healthy so long as we respond and improve our practices. In particular, a lack of well documented, shared data and user education emerge as weaknesses.

As Benjamin Franklin said, “When the well’s dry, we know the worth of water.” It’s our collective job to make certain the well remains full. If we can do it forever, it’s sustainable.

Cindy and I welcome your comments below.  Also, please subscribe to keep up with this and other Guest Post Friday Musings.

© Construction Law Musings- Richmond, VA is licensed under a Creative Commons Attribution-No Derivative Works 3.0 U.S. license.

This week Musings welcomes Scott Edward Anderson.  Scott is founder of VerdeStrategy and the popular blog “the green skeptic.” He has held management positions with Ashoka and The Nature Conservancy, is co-founder of the Cleantech Alliance Mid-Atlantic, and a frequent commentator on Fox Business Network. VerdeStrategy is a consulting and advisory firm focused on the clean tech, energy, and environment sectors.  You can follow Scott on Twitter at @greenskeptic.

“LEED buildings are great, until the tenant moves in,” the head of a large, international construction company once said to me.  “Once the tenant moves in, the environmental sustainability of the building goes out the window.”

The Leadership in Energy and Environmental Design (LEED) rating system, developed by the U.S. Green Building Council (USGBC), has done a great job providing standards for environmentally sustainable construction.

LEED now encompasses more than 14,000 projects in the United States and 30 countries covering 1.062 billion square feet (99 km²) of development area, according to the USGBC.

But what happens after the building is occupied?  Is there a way to monitor and improve the performance of a LEED building throughout its life-cycle?

An interview in Energy Priorities Magazine may provide a clue.  Editor Denis Du Bois was talking with Erin Rae Hoffer of AutoDesk, a developer of Building Information Modeling (BIM) software.  Hoffer suggested that BIM and LEED were “two of the three big trends that seem to be converging.”

Du Bois later added that “one of the promises of BIM is, potentially, to be able to do continuous commissioning on a building.  LEED is leaning this way toward looking more at the performance of a building after it’s occupied rather than solely at the attributes of the building at the point where the plaque is hung in the lobby.”

But, as Matthew Millan, a Philadelphia-based architect pointed out to me, “BIM doesn’t really have a feedback mechanism.  You can enter information about how you think the building will perform once it’s occupied, but it is still speculative.”

So how to pull data from the building as it is being operated?  You’ll need smart meters to pull the data, analyze it, and make suggestions to the building occupants or managers to make changes.

“BIM works very well when properly implemented during design and construction,” Millan says. “But once a building is complete, the building performance is largely dependent on the building’s occupants.”

“During use, building automation systems (BAS) can provide sophisticated feedback to its occupants, helping them to maximize the building performance,” Milan explains.

Potentially, you could also automate the process so that changes can be made from a remote location or without any human intervention at all.

That got me thinking about the opportunities for investors if this harmonic convergence of BIM and LEED takes off, and collides with changes in regulatory and reporting requirements related to CO2 output.

With buildings consuming 40 percent of energy in the US, according to the USGBC, and the prospect of energy efficiency design or retrofitting tackling that usage and its associated greenhouse gas emissions, it seems there will be plenty of opportunities for investors to get on the efficiency bandwagon.

This “perfect storm” of LEED, BIM, and the low-hanging carbon fruit of efficiency could lead to advances in data and systems needs, which in turn could drive further adoption of advanced building materials, LED lighting, demand management and energy management software, smart metering and smart grid technologies.

This isn’t your Jimmy Carter-sweater efficiency.  We’re talking highly sophisticated software systems and metering installations, from simple smart meters and online portals to fully integrated, networked building automation systems that can actually control the usage, improve building performance, and save money for building operators.

Bright green investors are wise to keep an eye on developments in green building.  It may yield a whole new arena of opportunities.

As always, please comment below and let Scott and I know what you think.  Also, please subscribe to keep up with this and other Guest Post Fridays here at Construction Law Musings.

© Construction Law Musings- Richmond, VA is licensed under a Creative Commons Attribution-No Derivative Works 3.0 U.S. license.

This week, Musings welcomes Mark Buckshon of the Construction Marketing Ideas blog to Guest Post Friday.  Mark publishes several regional construction industry newspapers and websites. He can be reached at 888-432-3555 ext 224 or by email at buckshon@cnrgp.com.

If you can imagine a table or structure which needs foundation “legs,” you will appreciate how to apply these four supporting construction marketing concepts.

Properly measured and in alignment, all four will ensure your success, but you can get away with three (and in fact, your structure will be quite stable). Less than three, though, and you won’t stay above ground very long.

I tried to develop these concepts into an acronym, but the closest I could come up with is RIMC. Think of “hockey rink” but turn the N into an M for “Money” and you’ll have it.

It doesn’t matter which order these elements are available, but you need at least three to succeed.

R — Relationships

Your ability to develop and maintain relationships with employees, clients, and influencers is certainly a cornerstone of effective marketing. If you don’t have much relationship-creating power, you can blast your way with lots of Intensity, Money and Consistency (but you had better be sure to have lots of money!)

I — Intensity (or Focus)

If your relationships (and business) are all over the place, scattered here and there, without much energy applied to any element, just whispers in the wind, you won’t leave much of an impact, and you won’t achieve much in terms of marketing results. But if you have plenty of relationships, money and consistency, you”ll probably still succeed, simply because the cash will ‘buy’ you some intensity and if people like you, they will do business with you.

M – Money

Of course, money can “buy” the other categories, or help you work around them. No relationships, intensity, or consistency: You can bribe someone, or spend a fortune on advertising, or hire someone for great pay who is good at relationship-building. You can overcome deficiencies with lots of money (or waste it!).

C – Consistency

Your clients need to see you for who you are; you need to convey some consistency, even if that consistency is unpredictability. In other words, if your image one day is of a staid and secure organization appealing to quiet, mature people, you will not have much success if you jar them suddenly with an appeal to youthful exuberance. But you can overcome inconsistency with cash, relationships and intensity. (Think “rebranding” initiatives.)

What is the best way to achieve construction marketing success? Without spending much (if any money) build your relationships, intensity and consistency. Then, when you have the money, add it to the pot. You’ll dominate your market.

As always, please join the conversation with a comment below and contact Marc for more.  If you enjoy what you’re reading, please subscribe to keep up with the latest Construction Law Musings and check out the other Guest Post Fridays here at Musings.

© Construction Law Musings- Richmond, VA is licensed under a Creative Commons Attribution-No Derivative Works 3.0 U.S. license.

For this week’s Guest Post Friday, Construction Law Musings welcomes Danielle Rodabaugh. Danielle (@DaRodabaugh) is a principal for Surety Bonds.com, an agency that issues surety bonds to individuals and businesses across the nation. She writes articles to clarify bonding rules and regulations for those who have a stake in the surety bond industry–from contractors to telemarketers, and every professional in between.

In construction we often value performance and payment bonds when considering how to protect the financial investments put into a project. We do so because these bonds provide a legal financial guarantee that the selected contractor will fulfill the contract. However, a third, equally protective kind of construction bond is often overlooked.

Before an official contract has been agreed to and successfully executed, bid bonds guarantee that the selected low-bidder will officially enter into the contract at a later date. Bidders must submit a bid bond with their bid. Without doing so, the bidder becomes non-responsive–or an invalid candidate. Sometimes we overlook the benefits provided by this kind of Virginia surety bond, and yet they frequently act as the only legal protection for a project prior to groundbreaking.

The purpose of bid bonds
The primary purpose of a bid bond is to assure the client funding the project that the low bidder will enter into a contract for the price quoted in its bid. This has two major benefits:

1. The low bidder is now unable to increase its bid on the project.
2. If the contractor refuses to enter into the official contract with the client at a later time, the bond allows the client to recover the difference between the accepted bid and the next-lowest bid.

Bid bonds also mandate that the bidder will secure other required performance and payment bonds as necessary, reaffirming that the contractor will fulfill its duties to the developer.

Bid bond forfeiture
If the principal should decide to opt out of the contract, then the entity will be held accountable for paying reparation in the amount of:

• the difference between the amount of the faulty bidder’s bid and the next-lowest bid or, if a lesser sum:
• the face value of the bond

If a principal breaks the contract, the obligee usually collects damages in the amount of how much more they now have to pay to contract the next-lowest bidder for the project. In such collection cases it’s not unusual for courts to base their decisions on precendent rather than legal stipulations, as regulations in the bonding industry are constantly evolving.

Bid bond costs
If you’re a bidder, you need to check to see whether a bid bond is needed before you start preparing a bid so that you can estimate what the approximate penal sum will be. As with other construction bonds, all publicly-funded projects in Virginia that exceed $100,000 require a bid bond. A bond’s penal sum varies for many reasons, including:

• the project’s total projected cost
• contract terms
• the area in which the contract is executed

Depending on the jurisdiction, the principal usually needs to provide between 5 and 10 percent of the bid upfront to guarantee its accountability to the client. Federally-funded projects usually set a higher standard of 20 percent. For example, if a contractor bids $100,000 on a project, the entity will need to provide a $5,000 to $10,000 (or $20,000 for a federally-funded project) bid bond prior to beginning work. This cost is calculated to protect the owner in case the low-bidder opts out of the contract, and the surety will not pay more than this amount if the principal defaults on the bond’s payment.

For construction professionals working on a smaller scale, the U.S. Small Business Administration offers a surety program for small businesses. The SBA can also guarantee bonds for contracts up to $2 million for riskier principals. Small and emerging contractors who cannot obtain surety bonds through regular commercial channels can take advantage of the SBA to back their bid, performance, and payment bonds.

© Construction Law Musings- Richmond, VA is licensed under a Creative Commons Attribution-No Derivative Works 3.0 U.S. license.

For this week’s Guest Post Friday, Musings welcomes ABCO Fire Protection (@abcofire).  ABCO Fire Protection is a regional provider of fire protection services in Ohio, Michigan and Pennsylvania.  ABCO provides fire safety products that protect life and property.

While most people pay close attention to fire safety in homes and public buildings it is also important to note fire safety precautions and regulations when building on a job site.

On a job site there are a number of items to pay close attention to. First and foremost, it is important to have a fire protection plan. Floor plans should identify all evacuation routes, on-site fire extinguishers and a name and phone number in case of emergencies. Fire protection plans must be approved by the fire department prior to proceeding past foundation work for new buildings and demolition work.

On a build site it is also vital to make sure emergency vehicles have open and clear access to all roadways. All roads shall have a minimum 13 ½ feet (13 feet and 6 inches) of vertical clearance. In case of an emergency, vehicles must be able to quickly and easily identify the location. Thus all properties must have address numbers or project location visible and legible from street facing property at the fire apparatus access point.

Sites must also have all flammable and combustible liquids in a storage area that is kept free of weeds, extraneous combustible material and kept away from open flames and smoking. Combustible material must be stored a minimum of 20 feet from buildings under construction or undergoing remodel. In addition, all gas containers must be kept a minimum of 10 feet from combustible materials.  (Code information noted above is based on the California Fire Code and National Fire Protection Association Standard #1)

And always be sure fire protection systems are installed properly. The first two minutes of a fire are the most crucial so be sure there are plenty of fire extinguishers, hydrants, sprinklers and detectors throughout the property and complete a product inspection once installed.

Last but not least, double check with your local fire inspectors for your cities current codes and standard regulation information.

Please join the conversation with a comment below.  I also encourage you to subscribe to keep up with this and other Guest Post Friday posts.

© Construction Law Musings- Richmond, VA is licensed under a Creative Commons Attribution-No Derivative Works 3.0 U.S. license.

Bobby can be reached at bobbydarnell@cmconl.com.

Have you ever been a witness to a similar situation from the ‘tired cliché department’?

“Look how gaudy that person’s outfit is…there ought to be a law!”

“Wow, it is hot today…there ought to be a law!”

“There is nothing more obnoxious that a (fill in blank with your least favorite team) fan…there ought to be a law!”

I am compelled to begin this guest posting by saying how much I truly value Chris Hill’s blog and how flattered I am to be able to share a few musings of my own with his readers.

First off, I am not an attorney but, in a nutshell, someone who has been in the construction industry from a sales, marketing and business development perspective my entire career.   While I am not an attorney, I am one of those guys who friends and family members often say, “You should have been a lawyer.”  This comes from my passion for debate, or at least that is what I tell myself.

Ever since taking my first elective philosophy course, I continue to be a student and enjoy formulating arguments, making presentations and trying to get the ‘jury’ to give me the desired verdict…a sale.  I love sales; marketing, business development and seeing companies grow.

Throughout my career, I have found, general speaking, that the A/E/C industry is quite artisan by nature, at least from the hundreds of companies we have worked with.   What I mean by that is, for the most part, our experience is that architects and engineers love to design; contractors love to build; subcontractors love to install…that however does not necessary equate to a love for the business side of running a business, especially sales and marketing.

In short, I have yet to meet an architect, engineer, contractor or subcontractor who started their own business because they wanted to be in sales.

Today, you will be my jury as I make my case for the need for any business in the A/E/C marketplace to take some time to take a pause from working in the business and spend some time working on the business.

I could present as evidence many tired but true pearls of wisdom such as:

• If you fail to plan, you are planning to fail.
• Planning is bringing the future into the present so that you can do something about it now.
• It wasn’t raining when Noah started building the ark.

However, I will offer what I believe to be a more substantive example:

In a typical million dollar commercial building, the owner will put together a unique, one-time, joint venture involving several hundred companies.

These companies will work from a set of plans and specifications to create a desire result.  The data contained in these documents will indicate how the steel should be erected, how the cement should be poured, the pathway of the electrical wires, the distance of the foundation from the legal property line all the way down to the direction of the air flow through the diffuser…and more.

Not only is the completion of the building a one-time joint venture but the creation of the construction documents are as well as architects work with consulting engineers, building product manufacturers, zoning and code officials and more.  All in all, a lot of companies not only come together to create a plan, they also come together to execute the plan.

Ergo, I cannot think of an industry that better exemplifies the use of plans and planning than entities in the A/E/C marketplace.  Likewise, I cannot think of an industry that struggles more with internal planning, especially when it comes to building new business than entities in the A/E/C marketplace.

Example:  I once was called upon by an architectural firm that needed some help with their sales, marketing and business development.  In reviewing where they were and what their ‘points of pain’ were, part of my recommendation was they needed to create a solid marketing plan.  The president of the company did fully understand that idea and asked, “Why do I need to have a marketing plan?”   I then asked him why do general contractors and the subcontractors need a set of construction documents.

He thought for a second, reached across the table and signed my contract.

Now, what does all this have to do with ‘there ought to be a law?’  For an industry so focused on plans, dare I say there ‘ought to be a law’ for companies facing challenges in this economy to be focused on business development planning?  Sorry, you won’t get that from me.  It is your company and you should be able to run it as you please.  My job here is to encourage you to consider otherwise.

Our industry is built; pardon the pun, on the ‘subcontractor’ and ‘consulting’ relationship.  Few can afford an in-house attorney, so they make sure they have one on speed-dial.  If there are areas in your business that could use some help getting you over a revenue slump, increasing quality pricing opportunities, developing processes, get some input from others who can help you with the areas that are not necessarily your strong suit.  There are plenty of resources available that do not require adding staff.

My closing argument is this…just as hope is not a strategy…wishing revenues would increase consumes as much energy as planning.  I like what Paul ‘Bear’ Bryant said, “Have a plan. Follow the plan and you’ll be surprised how successful you can be.  Most people don’t have a plan.  That is why it is easy to beat most folks.”

…and with that ladies and gentlemen, I rest my case.

Bobby and I welcome your comments below.  Also, please subscribe to keep up with this and other Guest Post Friday Musings.

© Construction Law Musings- Richmond, VA is licensed under a Creative Commons Attribution-No Derivative Works 3.0 U.S. license.

For this week’s Guest Post Friday, Musings welcomes Johanna Hoffmann.  Johanna is a marketing and management consultant to construction professionals, architects and interior designers. Her company, Oomph Group Inc. delivers workshops and webinars in the areas of marketing and sales, human resources, general business and financial management. Oomph programs are accredited for continuing education by leading professional and regulatory organizations. Her newsletter and blog are jam-packed with great business tips and resources and you can follow Johanna on Twitter.

2010 is just getting going and it looks as if the long-awaited recovery is finally beginning to take hold. This is good news for everyone, but especially so for the construction industry, which has been so affected by the collapse of the housing and mortgage markets.

Recessions are incredibly and difficult to navigate, but for companies on solid footing, business downturns provide the extra time needed to take stock and refine or restructure the company’s direction, services and management systems. “The first step is to define your value proposition,” says Gabriel Draven, co-founder of Village Technologies Inc, a Toronto-based leader in the design and installation of energy conservation and recovery systems. “Ask yourself: what problem are we solving for our clients or, what do our clients value most about our service? This is critical because, as Mr. Draven says, “If you can’t answer this question and you are not able to describe your value effectively to potential clients, then you are left having to compete on price alone.”

Indeed, if you describe what you offer as ‘drywall installation’ or ‘roof replacement’ you are selling a generic service people will buy at the lowest possible price. But, if you present your services as a powerful solution to clients’ problems, you will be more able to justify your fees because clients will perceive what you provide as a valuable benefit.

“The question of value changes over time,” explains Mr. Draven, “so you need to be aware of the larger trends in the market place and position your business and services accordingly. Right now people are starting to value energy efficiency. Soon, an aging population will need homes that will remain affordable and comfortable, so demand for energy efficiency will continue to grow as will the need for barrier free designs and retrofits”.

To tap and incorporate market trends into your value proposition you need to research the areas you are interested in and become an expert in all related technology and construction systems. As well, knowledge of government financing programs and other pertinent data will enable you to provide extra information that can help reposition you from a ‘hammer and nail guy’ to a valued counselor or consultant.

In addition to providing a way of differentiating yourself from the competition, being ‘on trend’ enables you to ‘package’ services that tap market demand and drive sales in times when people aren’t embarking on large-scale building projects. Current examples include energy audits and long-term home maintenance and renovation plans, which are precursors to actual building projects.

Another value-driven option is the packaging of services aimed at specific market segments. Women and elderly home owners often need help with seasonal home maintenance tune-ups, like the installation and removal of storm windows and the cleaning of eaves troughs. While not significant from a building point of view, these types of services are great for establishing long-term relationships and for generating ongoing bread-and-butter business to help weather economic downturns.

Teaming up with a specialist and combining forces to sell a service to existing and past clients is yet another option. “The growing need for energy management, conservation and recovery systems and the wide range of government funding and rebate programs provide an excellent opportunity for driving sales right now,” states Mr. Draven. “We are teaming up with contractors who don’t have our expertise in this area but who do have an extensive Rolodex. We encourage them to review their current and past client list, to identify prospects for energy system upgrades and we help them pitch and procure this type or work.”

Tapping clients to ‘up sell’ is only effective if you have diligently provided good service, otherwise they may not want to see you again. Using the slowdown to review and revamp your client and project management procedures is another valuable strategy for driving future sales. In an industry that has often been plagued with poor service, haphazard project management and shoddy business practices, a firm that can guarantee satisfaction, outstanding client service and impeccable project management will always find clients willing to pay for top quality service and who are happy to tell their friends about it.

Resources:

●       Visit DSIRE – Database of State Incentives for Renewables and Efficiency for information on Virginia programs including:

●       Arlington County Green Building Incentive Program

●       Energy Efficiency Rebate Program – Residential

●       Energy Efficiency Rebate Program – Commercial

●       Renewable Energy Rebate Program – Residential

●       Renewable Energy Rebate Program – Commercia

●       TVA Partner Utilities  – Energy Right Water Heater Rebate Program

Virginia Natural Gas – Residential Energy Efficiency Rebate Program

As always, we welcome your comments below.  Also, please subscribe to keep up with this and other Guest Post Fridays here at Construction Law Musings.

© Construction Law Musings- Richmond, VA is licensed under a Creative Commons Attribution-No Derivative Works 3.0 U.S. license.

For this week’s Guest Post Friday readers are in for a treat.  Lance Godard, founder of The Godard Group, has provided marketing and business development solutions to global law firms for nearly 20 years. He has particular expertise developing strategies that allow lawyers to identify client opportunities, communicate their messages, and grow their practices. Lance has been called a “provocative and engaging leader in the legal profession and social media” and was named one of the “20 Twitterers Lawyers should follow on Twitter.” He is the founder of 22 Tweets, live Twitter interviews with practicing lawyers, which provides a forum for lawyers to tell their story using social media.

The market appears to be picking up. Clients are getting back to work. New opportunities can’t be far behind. What are you doing to find them? To make sure they show up on your radar? To put yourself in a position to see those opportunities that do present themselves, and to land the work when you pitch for it? Maybe it’s time for a marketing tune-up.

Just like you regularly perform maintenance on your car, you need to perform regular maintenance on your marketing efforts, objectives and plans. You need to modify them to reflect the constant evolution of your practice, your client base, your experience and your network. And as you do that, you should keep in mind some basic notions:

• Planning is everything. Know where you want to go? How to get there? What it looks like when you’ve arrived? You need a plan. Not a complicated one that accounts for every contingency and takes two or three or six weeks of reflection and drafting and editing. It does have to set goals, realistic, achievable, measurable goals. It does have to understand the clients you want, the work they need, and your ability to perform that work. Plan your route so you don’t end up someplace you don’t want to be.
• You’re not out to change the world. Yes, you need a plan of action, but you don’t need to change the world, to solve every problem, to cure cancer on your first try. You just need a road map to start. You can build the atlas as you go along. And you can always change your mind when an idea doesn’t work or a potential client doesn’t pan out or a deal falls through. Just don’t get hung up on making it perfect, because that will get in the way of making it in the first place.
• Focus on opportunities. It’s easy to spend time picking apart ideas, looking at what won’t work, what you can’t do, what you’ll never be able to achieve. But that won’t get you anywhere. Spend your time looking at what you CAN do, not what you can’t. Isolate the opportunities—true opportunities, ones measured in terms of probability not possibility—and the steps needed to realize them. You’ll solve the real problems when you get to them.
• Be realistic. It’s only an opportunity if you could realistically get the work and do the job better than your competition. If you can convince your client that it makes sense—for them, not just for you—to give you a new assignment. If your experience allows you to tell a credible story, a story that convinces someone who doesn’t know you that they should trust you with the future of their company. If you can’t do that, then you’re probably not going to get the work, and you shouldn’t waste your time chasing it.
• Don’t neglect your existing clients. Relationships are relationships, and those with clients require the same amount of work as those with potential clients. Providing good legal advice, answering questions, dotting the i’s and crossing the t’s isn’t enough. Anticipating client needs, addressing their concerns, understanding their objectives, communicating early and often are essential to maintaining the types of relationships that will not only keep clients coming back, but lead to increased referrals.
• Don’t forget your homework. Think you know what your clients need? The services they’re looking for? The business problems they’re struggling to solve? Do your research. Read what your clients are saying. What the press is saying about them. What their competitors are doing, what’s going on in their industry, where the growth is in their markets. If you can, talk to your clients about their business, their industry, their competition, their challenges, and most of all how they define success and how well they are achieving it.
• Execution is everything. You’ve set your objectives. You’ve identified realistic opportunities. You know where you want to go and what you need to do. But a plan is only the beginning. To generate results, you need to execute with discipline, follow-through and flexibility. Sound easy? It really isn’t. If it were, everybody would be doing it already. The part that drives success is execution, and it takes time, commitment and hard work.

As the economy improves and opportunities increase, there’s no time like the present to review your marketing efforts, rethink your marketing objectives and tune-up your marketing plans. You’ll be glad you did.

Lance and I welcome your comments below.  Also, please subscribe to keep up with this and other Guest Post Friday Musings.

© Construction Law Musings- Richmond, VA is licensed under a Creative Commons Attribution-No Derivative Works 3.0 U.S. license.

For this weeks Guest Post Friday, Kirsten Grant (@kgrantcareers on Twitter) has graced us with her thoughts on a very timely topic: How to get a job as a construction attorney. Before becoming a career specialist at Kaplan University, one of the largest online universities in the nation, Kirsten Grant had faxed almost 1000 resumes, e-mailed close to 300 resumes, personally mailed 20 resumes with each one featuring “special inserts” to encourage hiring managers to read her resume (50% of those resumes received calls for an interview) and interviewed with 50 companies over the course of 5 months. Based on the feedback hiring managers provided, in addition to 10 years experience in human resources, training, recruiting and staffing she REALLY learned what hiring managers look for in a candidate and today helps over 40,000 adult learners understand how to conduct successful job searches and earn a promotions.

As the real estate industry makes torrid adjustments to right itself due to foreclosures, short sales, and falling house prices, court rooms are seeing more construction law cases. As houses and properties fall into states of disrepair and as efforts are taken to repair them a chain of events take place:

1. Property is purchased
2. Contractors are hired to make repairs to a property
3. The selected contractor files permits for the type of work performed
4. After work has been performed, contactor receives compensation

Sometimes, things don’t always go as planned. When things don’t go according to plan, the following situation results:

1. Property is purchased
2. Purchaser discovers property has municipal code violations
3. Demolition court summons due to municipal code violations

If you understand municipal code violations then you can tap into this quickly expanding section of the construction law industry. The ability to talk a stressed out client that has been summoned for demolition court is a valuable asset. Being able to navigate and help a client through the labyrinth of appearing in demolition court is an “in demand skill”. So how do you “tap into” this pool of people that need your services? Expand your professional network of the following people:

1. Real estate brokers
2. Neighborhood associations
3. Banking associations
4. Debt consolidation agencies
5. Non-profit advocacy groups
6. Churches
7. Park districts

Try holding informational workshops or meetings to educate the public and establish yourself as a “subject matter expert” in your field. Contacting institutions via phone or e-mail to alert them of your services is another great way to build your network. As people learn that you can help them (or their friends) with their situation, you will receive referrals and create your own construction law job opportunity!

© Construction Law Musings- Richmond, VA is licensed under a Creative Commons Attribution-No Derivative Works 3.0 U.S. license.

For this weeks Guest Post Friday here at Construction Law Musings, we welcome Shane Brown. Shane leads the construction services group at EKS&H CPA’s, serving private and public companies with a specialization in construction and auditing. Shane has extensive experience partnering with his contractor clients to understand their goals and provide financial expertise. Shane is a member of the AICPA, CFMA, AGC and ABC. EKS&H has been providing solutions for construction companies since 1978, with locations in Denver, Fort Collins and Boulder, Colorado.  Shane can be reached at 970-282-5405 or at

Contractors go to great lengths to manage risks inherent in their business. Contractors are arguably among the best risk managers in the business world.

Service providers such as banks, bonding agents, sureties, attorneys and CPAs manage risks in providing services to contractors as well. One of the key risk management tools that service providers use is a financial statement audit conducted by an independent CPA.

Part of the auditor’s work includes an evaluation of a contractor’s financial strength. The bank and bonding companies use the auditor’s report to assess whether the company has the ability to operate through the next year or business cycle. An auditor’s ability to identify those risks is valuable insight that every contractor can benefit from.

Auditors know from experience what causes contractors to fail. Although an auditor is required to follow a long process, here are three key controls auditors look for that every contractor should be aware of as well.

1. Accurate Cost Estimates

Service providers typically have concerns about a contractor’s ability to estimate the costs to complete a project. In many cases, a contractor’s ability to do so is only as good as the project manager on the job. All too often, the only internal control over cost estimation is to terminate project managers after a significant job loss.

In today’s economy, contractors are being forced to accept projects outside their normal job scope, making it more difficult than ever to estimate cost. New clients, new contracts, new geographies and new disciplines will all affect cost estimation.

This leaves a risk gap for the contractor and the service providers to bridge.  In turn, auditors are left to analyze margin fade, confirmation of contract terms and status to determine if any cost issues exist.

To help mitigate these issues, a contractor should have strong controls to identify estimation problems and to assist the project manager. Controls to dial in costs are essential, especially when in unfamiliar territory.

A number of controls are available to contractors, including consistent monitoring by experienced senior project managers and oversight by senior operations and finance executives where risk is increased.  Whatever controls a contractor chooses to implement, cost estimation has become even more critical in our current economic situation. Missing the target could be catastrophic for some companies.

2. Contractual Risk Management

Contractor bankruptcies are often attributed to an unfortunate series of incidents. However, it is frequently a single, identifiable incident that led to the crash – the signing of a contract.

The current economic climate, besides leading contractors into new territories, has led to a willingness to sign contracts without properly addressing, mitigating or avoiding certain inherent risks. In today’s competitive environment, it is common for contractors to accept the terms as a requirement for being awarded the project.

If a contractor can estimate the cost, they will often sign a contract without hesitation. This worked well several years ago when contractors were working with the same clients and doing the same types of projects. Since contractors are finding work in new areas and working with much leaner margins, contract review should be a top priority.

In order to audit a contractor, the auditor must address the risk management controls surrounding the review and acceptance of the contract. All too often, these controls are lacking. Ideally, the contractor should implement controls that encourage a devil’s advocate approach to contract acceptance.

When it comes to contracts, contractors can take a lesson from the poker table. Doyle Brunson, the 10-time World Series of Poker champion, instructs his students to look for a reason to fold in order to avoid unnecessary risk. He notes that winning at the game of poker is not about the hands you win but about avoiding catastrophes. Contractors can benefit by having an independent review to ensure risks are identified and openly addressed.

Strong contract review programs require a review of the contract terms, contract type and estimator’s takeoffs. Independent reviews should also include a “What if?” or “Why not?” perspective. These programs often include an independent external review by a bonding agent or surety as well.

Auditors understand that many estimates and contracts must be prepared and accepted under fire drill conditions.  Auditors simply look at a contractor’s resources to identify when acceptance of a contract is not appropriate and perhaps reckless under the conditions.

Contracts in a new industry, with a new owner, in a new location, requiring new expertise or a new delivery method are examples of situations where more stringent contract reviews are critical. When a contractor is in a situation with a great deal of experience, the same skeptical approach may not be required.

3. Budgeting and Forecasting

When it comes to budgeting and forecasting, contractors have a significant advantage over many other types of businesses. Contractors have the ability to forecast income based on contract terms. Subsequently, contractors can ensure that budgeted expenses and overhead are adjusted to achieve appropriate income.

Unfortunately, many contractors do not take full advantage of this benefit. Some contractors operate like companies that have revenues tied to historical results.  Historical results produce expenses that are included in future budgets by default. Once an expense is there, it never seems to go away.

The problem is, when known contracted revenues are less than expense structures, contractors are literally driving toward a brick wall that could be avoided. A mechanism should be in place that allows for the adjustment of variable costs with changes in volume.

The recent economic downturn has made the gap between contract revenues and historic expense structures widen. Many construction companies have experienced a 20 percent to 50 percent decrease in volume. This downturn comes after 10 to 15 years of steady growth, leaving many companies without a highly flexible expense structure. It’s no wonder many contractors feel entrenched in their budgets and struggle with cutting costs.

This year we had a client facing a 25 percent decrease in revenue. They had not produced revenues that low since 2001 and were unsure how to react. We lined up their 2010 budget next to their budget from 2001. The easiest cost cuts quickly became evident. We were able to see where costs had significantly increased in the past several years and how to scale back to 2001 levels.

Take the current year’s estimated revenue and compare it with the most recent year with similar revenue. Review the overhead expenses side-by-side. In most situations, opportunities for cost cuts will stand out.

Next, maintain a schedule of contracts that includes revenue, expense and cash forecasts on a monthly basis.  These forecasts will identify obvious shortfalls in income and cash flow in advance, allowing you to make adjustments before critical damage is done.

Take a close look at what’s coming in, what’s going out and ask yourself, “Am I okay with that?”

Other Concerns

While cost estimation, contracts and forecasting represent three major risk areas for auditors, it is by no means an exhaustive list. Auditors are required to cover a long list of items. However, these areas are high-level risk factors for auditors because of their ability to capsize companies. Contractors will find a great benefit in examining their own businesses with the perspective of an auditor in these areas.

Finally, some of the best risk managers in construction actively seek out the best industry experts to be their advisers. Advisers who ask good questions, even difficult questions are critical. Be wary of no-questions-asked or low-cost providers. Risk rarely goes away, it is simply distributed.  The key is to distribute it to those who are most able to manage it.

Shane and I welcome your comments below.  Also, please subscribe to keep up with this and other Guest Post Friday Musings.

© Construction Law Musings- Richmond, VA is licensed under a Creative Commons Attribution-No Derivative Works 3.0 U.S. license.