Document Management for Your Construction Company

For this week’s Guest Post Friday, Musings welcomes back Doug Reiser (@douglasreiser).  Doug is a construction attorney, LEED AP and the principal at Reiser Legal LLC in Seattle, WA. His office provides effective construction counsel for businesses in the construction industry. He also runs the Builders Counsel Blog, a blog focused on progressive issues in Washington construction law.  Doug is a former partner/member at Wolfe Law Group LLC and former owner and director of Express Lien Inc.

Discovery is the process of exchanging information that is relevant to a legal dispute. Discovery is everywhere: litigation, arbitration, mediation and even in your simple spat with a working partner (“Show me where I agreed to that!”).  What you have in your records can be the difference between a win or a loss in a dispute.

Attorneys are lost without a complete file. We are unable to assess risks, properly advise clients and develop strategies.  Your first discussion about a dispute should begin with “what’s in your file?” Furthermore, attorneys become expensive when your file is messy, out of order and incomplete. Tracking down records, reviewing duplicates and sorting through voluminous files are time intensive.

The process begins with your documentation policy. This includes both what you document and retain, as well as how you document and retain. If you are a contractor, you can always make it better and more efficient.

There are a bunch of technologically advanced methods for managing your construction documents. You can go to AccuBuild, Capterra, or My Construction Documents, if you want high-tech construction document management software.  You can turn to Clearwell or CaseCentral, if you are litigation-heavy and constantly concerned about ending up in high-stakes lawsuits.

But, what about the little guy?  These tips are for you.

5 Simple Things You Should Document

(1)  Document Your Agreement –  Get a written contract and document any and all change orders.  This is so vitally important.. You don’t have to have a 15 page agreement to have a contract, even a simple work order with the terms of your arrangement will be better than nothing. Change orders are the subject of a lot of disputes. Get permission to do the work – in writing – then proceed.

(2)  Document & Save Your Conversations – Contractors tend to agree to things on a whim, over a beer, or during a phone call. You aren’t being crafty by confirming your conversation in an e-mail – you are being smart. This ensures consistency and clarity. Everyone is on the same page and your lawyer will know that, as soon as they read the e-mail.

(3)  Keep Job Records – So many contractors think that someone else (supervisor, etc.) is keeping their time. Every contractor should find a notebook, or a time sheet template online, and track all labor. Also, keep a daily notebook of what happened on the job. It won’t take much time and will ensure that your pay requests are backed up with suitable data.

(4)  Keep Receipts, Invoices & Lading Records – So many contractors toss out receipts, invoices and other records of payment and delivery, because they believe they are unnecessary in a “lump sum” job. They often forget that the issue of delivery, payment, or procurement of materials might arise. Keep them all and sort them by the contract or change order that they coincide with.

(5)  Keep Copies of Insurance, Bonds & Taxes on Hand – Lawyers like to see insurance policies, guaranty contacts, and bonds right off the bat. Furthermore, they often seek copies of payroll taxes, workers compensation submissions and other governmental records to confirm payment of labor. Keep copies on record at all times. Sort them by date, so that they are easily accessible for each project.

5 Simple Ways to Maintain Your Documents

(1)  Create Individual Project Files –  Open a new folder on your computer for each project. Within that folder, use sub-folders to manage different types of documents.  Inside each folder, name and date each document so that they are readily recognizable. Simple as that. Have everything in one place that is easily shared with your counsel.

(2)  Scan All Records – We live in a great age where paper can be tossed and data can live on forever. Contractors should greatly consider keeping an entirely electronic file. Its easy to share, rids your office of clutter, and can be accessed from anywhere. If you have separation anxiety from the paper, keep it around. But, scan it in each time you receive something new and keep it in your folders.

(3)   Maintain an Electronic File – This goes along with the above. But, I would advise to keep everything electronic. Communicate by e-mail and save copies in your project file. Request electronic copies of documents from your customers and other parties. This ensures that you have the original, un-tampered files. Having a purely electronic file allows you to easily share files with consultants, engineers, and attorneys.

(4)  Document What You Do – Keep a record of what you do on a project and what you do with documents. Using a software program like BaseCampHQ or Google Sites, you can keep consistent and easily shareable records of what you and your team does on the job, in the office and when managing records. You can even use Freshbooks or other billing software, to track tasks that your team performs on each project.

(5)  Create a Policy & Communicate It – Another common problem is that companies typically have 5 different people, doing 5 different things. Call a meeting, establish a procedure and enforce it. Perform monthly checks on whether or not your file is complete. Your procedure could be as simple as creating a folder and a Google Sites page for each project, scanning all records, naming them and placing them in the files. Even this procedure will put you above many of the contractors out there.

Summary: Document as much as possible; keep it in one place; Save yourself the headache and cost of a messy discovery process.

Thanks to Chris Hill for having me back for a 3^rd visit. We all love our Musings!

As always Doug and I welcome your comments below. Please subscribe to keep up with this and other Guest Post Fridays at Construction Law Musings.