Session 2: Negotiations, Risk Management and Legal Issues in the Profession


Negotiations, Risk Management & Legal Issues was organized by Kelly Orji & Nicole Seekely and was hosted at the Atlanta office of HKS Architects. This session’s key learning objectives encouraged the scholars to develop optimal negotiation skills (recognizing trade-off opportunities and avoiding “leaving money on the table”), understand when contracts are needed (inherent risks and which clauses to leave in & out of contracts) and understand the benefits and risks of using BIM as a shared construction tool.

Presentation 1: Negotiating Optimally

“Success doesn’t mean getting a deal, it is understanding and weighing what will happen if you don’t…”

– Professor Edward Miles, Georgia State University

The first presentation was conducted by Professor Edward Miles of Georgia State University, in which he introduced the types of negotiations that occur and strategies to optimize each.  He described the three types of negotiation issues as: 1) Trade-Off Issues, 2) Zero-Sum Issues, and 3) Compatible Issues and the scholars were teamed in groups of two in order to roleplay a negotiation scenario.

The exercise was set at the Wilhelma Botanical Gardens and Zoo in Stuttgart, Baden-Wurttemberg, Germany where the Associate Director Dr. Zeyer negotiated with the world-famous Gator Gaucho.  Each scholar in the two-person group was given one of these two roles, a priority list with point values and was encouraged to “maximize their points” in negotiating the details of Gator Gaucho’s public appearance, film promotional material, filming schedule, number of animals to be wrestled and the fee for the entire package.  Each scholar made priorities based on a score-sheet of their point scale but had to build consensus with the other scholar’s character in these same areas. Some areas provided point scales where each party’s negotiation would maximize either their score and minimize the other scholar’s (Trade-Off).  Other issues would net the maximum score regardless of which agreement was made (Zero-Sum).  While other negotiations would actually mutually benefit both parties to agree on a solution (Compatible).

Overall, the ideal was to maximize the scores to the benefit of both parties and to reach a “Pareto Optimal Agreement”.  The scholars found that “compromise” does not always mean “meet in the middle”.  One issue in finding common ground for some areas was described by Professor Miles as “The Dilemma of Openness” in which an underlying pull to compete is in tension with the pull to divulge information that in an optimal scenario would result in more effective collaboration, but could also be used to as leverage to gain a better deal for one side rather than for both.  This dilemma can be resolved by using these strategies for “Structuring Deals Optimally”:

  1. Ask questions to understand the other side’s priorities
  2. Share information about your own interests/goals
  3. Keep multiple issues in the conversation / talk in terms of packages
  4. Capitalize on differences by structuring contingent agreements
  5. Adjust and test tentative agreements to augment Pareto Inefficiencies

In order to develop and improve negotiation skills, Professor Miles outlined the approximate phases of a negotiation and how each side can maneuver in order to maximize their role in the deal.  When beginning the “information exchange” phase of negotiation, for instance, there are some non-negotiable items that each party has in-mind; however, it is best to leave enough items penciled-in to have flexibility later in the discussion. He noted that many times, one side will attempt to make the most ambitious argument to begin that can be supported with plausible logic.  He called this the “optimistic opening” and noted that there’s always a chance that it could push away or insult the other party.

Professor Miles wrapped up his presentation with a reminder that the number one advantage in negotiation is that you can walk away from the discussion and be willing to accept what happens.  Having this in the background helps to keep one’s ego in-check.  He offered that “success doesn’t mean getting a deal…it is weighing what happens if you don’t.”  We can improve our negotiating skills by focusing on the process and having the prudence to understand what is happening and why it is happening during the negotiation.

Presentation 2: Risk Management and Legal Concerns

“There are 3 things you can control in your Architectural Services: Scope, Time, and Money”

– George Williford, HKS, Inc.

The second presentation was conducted by George Williford, a registered Professional Engineer and Principal at HKS Architects, as well as the Assistant General Counsel.  George outlined the risks that are associated with the Practice of Architecture, how to manage those risks, contractual concerns/best practices, whether a lawyer is needed to manage risk, and how design professionals can manage risk today to help get off the “tight rope”.

George asked the question: “What is Risk?” and after hearing several specific results of risk, he concluded that Risk is “the potential for failure…or success”.  Within Architectural Practice, risks are taken daily which is why being able to call oneself a Registered Architect requires a high professional standard. Risks can include loss of money, loss of reputation, loss of life, etc.  So, the question becomes how can you manage these risks?

The illustration was given of a tightrope walker who was charged with crossing from one station to the next.  When asked to determine what the tightrope walker’s risk was, it was important to understand the context in which he was performing, such as the height above ground, the wind speed, the tightness of the rope, and many other factors. The professional tightrope walker could mitigate these risks by knowing how best to approach the situation, by practicing his trade and understanding the conditions of the stunt.  George asked whether the tight rope walker would feel better if he was strolling across a pedestrian bridge – of course, everyone agreed that it was a much safer risk.  He related this to how Architects could move from the proverbial “tightrope” to the “pedestrian bridge” of practice and offered that it is through: improving processes, maintaining quality control, following best practices.

Presentation3: Panel Discussion – BIM Modeling and Risk Management

“We must have an honest conversation about expectations of the model…”

– George Williford, HKS, Inc.

Participants included:

– Scott Haugh, AIA (SH) – Vice President & Senior Construction Contract Administrator, HKS Inc.

– Spencer Phillips, P.E. (SP) – Principal Engineer, Integral Group

– Jason Vaia (JV) – Senior VDC Coordinator, Brasfield & Gorrie Contractors

– George Williford, P.E. (GW) – Principal, Assistant General Counsel, HKS Inc.

The panel discussion was moderated by Kelly Orji and Nicole Seekely and included questions submitted prior to the day’s session and those from the Scholars during the discussion.

What is the biggest mistake you’ve seen when developing BIM Models?

  • GW: You have to start with what the law says about what constitutes “Contract Documents”.The tradition of signed/sealed/dated paper or digital sheets is still the standard.  These instruments of service are required to be legally called contract documents.  Open source BIM models cannot currently meet the requirements of personal or direct care clause or “responsible care” of the design professional.  Even digitally released drawings should have the ability for the seal/signature to disappear if someone attempts to alter the drawings.
  • SP: But the standard is being pushed, as we are seeing with the new LA Rams Stadium. The Construction Documents were released entirely as a BIM model because the Architect said that you simply cannot build it from paper.  The State of California allowed it, with the caveat that the seal/signature was provided by a separate program.

How are professional services altered to allow time for the proper amount of detailing of the elements contained within?

  • JV: BIM is an amazing tool, but you have to understand these questions – What is the purpose of the model? Are you trying to create a completely digital version of what will be built in reality? What is the line of demarcation between Architectural detailing and Contractor/Supplier shop drawings?  There can’t be too little detailing so that there are unresolved elements hiding within a wall, but you also don’t need to detail every screw in a bracket assembly.  This level of detailing can take away from the contractor’s competitive advantage of “means & methods”.
  • SH: As someone who spends a significant time working with contractors on figuring out the sequence of getting projects built, this can be a major hurdle in the construction process. It seems prioritizing the detailing of the most important elements should be a focus. BIM allows you the ability to provide endless numbers of sections, but are the variations enough between the details to warrant having another version?  At some point, the contractor must use their knowledge and expertise to interpolate the minor deviations.

What do you see as the future of BIM being released as full contract documents? What hurdles have to be overcome? What are the advantages of this possibility?

  • GW: We must have an honest conversation about expectations of the model – do we expect that it will be a “golden ticket” to Architecture? At this point, I think that we do!  We expect that by modeling something, we’ll inherently be able to understand its implementation into the real-world, but there are many other factors. It is powerful, but there has to be an appropriate input to get the expected output.
  • SH: BIM, as opposed to pen/paper or 2D CAD, is made for what Architects do. It works best in an integrated construction delivery method, in which the team can leverage the model for its potential benefit.
  • JV: I can only speak from my experience working with BIM in our projects, but when beginning construction, we ask for both the model and the PDFs of the documents. The model is used to coordinate trades and provide a better understanding of possible issues, then resolve them early in the process, so adjustments can be made in virtual space versus field changes which affect time and profitability of the project.

How is are copyright permissions affected when releasing BIM models to clients?

  • GW: It is become more frequent and even commonplace that Owner want to own the rights of the Architect’s Instruments of Service at the completion of the project.Historically, the law has stated that these documents could not be re-used in another application with hiring a design professional to site adapt the project, and that any alterations to an Architect’s design would result in copyright infringement.  But how do you monitor this with a BIM model?  There need to be safeguards in-place so that the model can be used in a “read-only” version which allows the client to use the “information” but not alter it.