Engineering Inc. - September/October 2008 - 22

W e ask our senior people to train the staff through example on a day-to-day basis. project, field managers might not be as diligent as they should be. “Given the autonomy that other-thansenior people have to negotiate contracts and other services,” says Magliano, “everyone needs to be very familiar with terms and conditions.” “In our firm, any outside contract has to go through the risk management department,” explains Beemer. “And any large contract has to go through the contract review team.” At HNTB, a Standards of Performance for contracts spells out, in detail, who needs to be involved in which type of contract based on a host of factors, including the size of the project, the role HNTB is playing and the size of the client. “Eighty percent of the contracts need to go through risk management,” says Fogle. “About the only types of contracts that don’t go through us are those with clients with whom we sign multiple contracts a year for recurring projects.” Training ties together all these risk management practices. It provides the framework for attaining technical expertise, building good client relationships and putting together a strong and consistent contract regimen. “In most firms, there’s a big gap between the senior and junior staff regarding risk,” says Corbett. “That knowledge has to be passed on, and training programs are the best way to do that.” Syska Hennessy has an extensive training program. “We have classes through our in-house general counsel or outside counsel about once a month,” says Magliano. “Then you have to factor in our risk management meetings, which are essentially also training, and they take place once a month as well.” Additionally, Magliano says, “we ask our senior people to train the staff through example on a day-to-day basis.” HNTB integrates “risk management into virtually all of our in-house training,” says Fogle. “We have all kinds of training for project managers and client managers, and generally a piece of that training has to do with risk management.” Walking the Walk john MaGLIano syska hennessy Group working and then maintain a good, open relationship with those clients as they move through the project. “Relationships are your first line of defense,” Beemer says. “Ninety-nine times out of 100, it’s the relationship that makes a project work.” Patrick McCarthy, director of risk management for the architects and engineers department at Lexington Insurance Company, agrees. “You need to know your client. You have to know their background. You have to know their history of litigation.” As in any successful relationship, good communication is the key. “You need constant communication with the owner,” says McCarthy. “If there’s no communication, the client’s first reaction to bad news is to file a claim.” When a client relationship does go sour, consistent contract and design document procedures might mean the difference between a minor inconvenience and a major settlement. “No matter the discipline or the size of the firm, contracts are extremely important,” says McCarthy. “They ensure that the design professional is held to a professional standard of care.” The challenge for many firms is that contracts often are negotiated at the project level over a long period of time and go through much iteration. It’s easy for ambiguity to slip into the wording, for the scope and the fee to slip out of alignment, or for wording that guarantees performance to find its way in. In the fervor to get the 22 eNGINeerING INc. september / october 2008 I n most firms, there’s a big gap between the senior and junior staff regarding risk. tIM corBett sMartrIsk Successful engineering firms have a culture of risk management. It isn’t an afterthought or a piece of the puzzle; it’s an approach to business. Small firms get that approach organically from the principals, who are often on the front line. Bigger, multidiscipline firms have to build a culture of risk management more formally. Most firms have put in place risk management training programs, risk management manuals and risk management policies and procedures designed to squeeze out the mistakes and miscues that can lead to someone filing a suit. They even have staff whose sole role is to ensure that risk management stays high on everyone’s list. At HNTB, for example, the risk management department has 10 people. As important as all these formal practices are, XL’s Lewis says, it’s a firm’s drive and commitment to sustained risk management that makes the difference. “All too often, we see firms establish a set of standard risk management policies and procedures and then hope they are being implemented,” says Lewis. “Hope, however, is not a method. You have to go out and confirm that these things are being done.” n Gerry Donohue is ACEC’s senior communications writer.

Engineering Inc. - September/October 2008

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