Event: Keep It Legal, Protected, and Profitable
Location: Center for Architecture, 01.27.11
Speakers: Cynthia Fischer — Partner, Schnader Harrison Segal & Lewis; Scott St. Marie — Partner, Schnader Harrison Segal & Lewis; Steve Whitehorn — Managing Principal, Whitehorn Financial Group
Organizers: AIANY New Practices Committee; RIBA-USA New York Chapter
In an increasingly litigious business climate, risk, liability, and exposure are integral aspects of practice. It is beneficial for architects at all levels of the profession to have an understanding of exposure, as well as the instruments in place to protect businesses from legal recourse.
Cynthia Fischer, Scott St. Marie, and Steve Whitehorn have decades of experience in architectural risk management, and each contributed a different facet to the subject of legal liability and exposure. Fischer, a business partner at the law firm of Schnader Harrison Segal & Lewis, as well as Secretary of RIBA-USA, explored the various legal structures and mechanisms available to architectural practices. She discussed the advantages and disadvantages of S-corporations, liability clauses in contract documents, and operating agreements between managing principals. She stressed the importance of proper asset valuation, whether that asset is employees, managing partners, or the company itself.
St. Marie, also a partner at Schnader Harrison Segal & Lewis, focused his talk on potential exposure during the design and construction process. He covered “changes” to the contract documents, as well as the manner in which changes resulted in “betterment” to the work and, therefore, decreased legal exposure. In addition, he outlined the function of mediation, arbitration, and litigation as methods of resolving disputes between architects and other aggrieved parties.
Whitehorn, managing principal of Whitehorn Financial Group, presented a brief overview of liability insurance. He spoke about practices excluded from insurance policies, recalibration of policies on a regular basis due to revenue changes, and the importance of working with consultants who maintain their own liability policies.
If there were a single concept uniting each of the three lectures, it would be the value of appropriate communication during the design and construction process. Clear dialogue is the most effective method of limiting liability and exposure, whether that communication is between client and architect, contractor and architect, principal and employee, or principal and principal.
Matt Shoor, LEED AP, is a Manhattan-based freelance designer, educator, and writer. He is currently teaching sustainable design to Bronx high school students while taking his architectural registration exams.