Practice Management

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What are six traits of high-performing teams?

-Common purpose -Clear roles -Leadership that is accepted by the team -Clear process -Solid relationships -Clear communication

What are four ways for a practice to be effective in holding staff accountable?

1. Define clear expectations. 2. Identify rewards as well as consequences. 3. Do not postpone necessary difficult discussions (i.e., reprimanding bad behavior). 4. Hold the same level of accountability for senior staff as you would for entry-level staff (i.e., do not delay rewarding and disciplining behavior)

Two categories of copyright for architectural work

1. Drawings, sketches, etc. (traditional copyright law). 2. The building itself (Architectural Works Copyright Protection Act, applies to buildings erected after December 1, 1990).

Level 5 leadership

A Level 5 leader is one who achieves greatness by combining humility with a high level of ambition, will, maturity, and diligence that endures over time. It is the highest level of leadership.

Mechanic's lien

A claim by one party against the property of another for a debt. This is a common method used for an architect, contractor, or material supplier to collect past due payments.

Conflict of interest

A conflict of interest is when a person or entity has more than one incentive influencing behavior. It usually pertains to financial incentives, but not always.

Claim

A demand from one of the parties that rightfully seeks payment or another form of relief with respect to the contract. Must be initiated within 21 ys of the contract .

Expense report

A document an employee uses to record all the expenses for reimbursement incurred for the company's purposes, such as travel or buying lunch for a client.

Standard deduction

A dollar amount that taxpayers can deduct from their income before calculating taxes if they don't itemize.

Arbitration

A formal, legally binding process of resolving disputes without litigation.

Kickback

A kickback is when a designer accepts proceeds for specifying a material. It is against NCARB's rules of conduct for professional architects to accept kickbacks.

Civil action

A lawsuit in court seeking enforcement or protection of private rights.

Duty

A legal term describing an obligation of a party to another. A duty may be explicit or implicit.

Mediation

A neutral third party who assists in negotiating a settlement using preset rules.

Comptroller

A person in a management position who controls all the financial and accounting activity of the firm.

NCARB's Rules of Conduct

A recommended set of guidelines drafted by NCARB for member boards (states) to adopt. The rules serve as a basis for policing and disciplining members of the profession. NCARB's Rules of Conduct are not the same thing as professional ethics standards.

Business mileage reimbursement

A standard mileage rate set by the federal government for the purposes of calculating deductions. This is also sometimes used by employers to reimburse employees who use their own cars for business purposes.

Statute of limitations

A statute of limitations is a limitation put on the time period after damage or an injury occurs that a person has to bring legal action against the party responsible for the injury. It is to encourage timely lawsuits. Example: A piece of roofing falls off a building and hits a passerby. If the statute of limitations is 4 years, that is how long the passerby has to sue whomever is responsible. If the piece of roofing hit the passerby in the 9th year of a 10-year statute of repose, they would still have 4 years from the date of the incident to bring legal action.

Statute of repose

A statute of repose is a statute that cuts off certain legal rights if not acted upon by a specified deadline. In the context of construction, it is the time limit within which you can discover a defect in the work. The statute of repose typically begins at substantial completion. The time limit is set by the state and can vary, but in many states, it is 10 years. For example, 9 years after substantial completion, a roof leak is discovered. The builder or designer, whoever is responsible, is liable because the discovery was made within the 10-year statute of repose. If the leak is discovered 1 day after the 10-year mark, the statute of repose has run out, and the designer or builder is not liable.

Deposition

A sworn written testimony taken during the pre-trial period to gain information and evidence.

Behavioral theory

A theory developed by psychologists that says that all behavior is acquired through conditioning. It is a foundational concept in leadership training.

Tortfeasor

A tortfeasor is someone who commits an act of tort.

What missing trait could erode leadership and credibility?

Accountability

Certificate of merit

An affidavit required by some states precedent to filing suit against a design professional prepared by a third-party design professional attesting to the factual basis of the negligent act; intended to protect against baseless claims.

Reciprocity

An agreement by member boards to recognize licenses granted by other boards. Note: Some jurisdictions refer to reciprocity as endorsement or comity.

Per diem

An allowance a company gives an employee per day for traveling for work purposes.

Audit

An inspection of a company's books. Audits are done internally, by the IRS, and by insurance companies.

Responsible control

Architects may only stamp their own work or the work for which they had "responsible control." NCARB defines responsible control as that amount of control over and detailed professional knowledge of the content of technical submissions during preparation as is ordinarily exercised by architects applying the required professional standard of care. Reviewing or reviewing and correcting after preparation does not meet NCARB's definition of responsible control.

Fiduciary duty

As a licensed professional, an architect has an ethical obligation to act in the best interests of their client and the public. This is called fiduciary duty.

Leadership concepts for architects

Behavioral theory -Contingency/situational leadership -Transactional/transformational leadership -Level 5

Derivative works

Buildings designed after the original that are substantially similar to the original. Not allowed under the Architectural Works Copyright Protection Act passed in 1990.

Contingency/situational leadership

Characterized by using a variety of leadership behaviors along with the ability to adapt and apply those behaviors in response to situations.

Employee performance should be evaluated periodically, regularly, and objectively around the key concepts of practice, personal management, and employment. What are some criteria for evaluating this?

Communication -Cooperation -Dependability -Initiative -Job Knowledge -Judgment -Planning and Organization -Problem Solving -Quality -Quantity -Use of Technology

Compensatory damages

Damages awarded to compensate a plaintiff for his or her injuries; includes direct out-of-pocket losses as well as compensation for pain and suffering.

Damages

Damages refers to the monetary compensation ordered to be paid to a party based on loss or injury through the wrongful conduct of another party.

Legal exposure

During the practice of architecture, architects are exposed to risks by the fact that the nature of the work they do can have an impact on others. Legal exposure consists of "liability" and "damages ."

Duty-based ethics as applied to architects

Duty extends to the needs and wishes of clients but also to present and future users of the building as well as to past generations (through preservation), to other species (through sustainability), and to underserved populations (through public interest design).

Itemized deduction

Eligible expenses claimed by taxpayers on their tax returns to reduce their taxable income. If you itemize, you cannot take the standard deduction.

Statute of limitations

Established specific time frames in which claims must be asserted or they are permanently barred. Claims against negligence must be asserted within 3-10 years after the completion of the project.

Compensation

Exchange of money or something of value for a service. Employees exchange time, knowledge, and talent for financial and nonfinancial rewards.

Exempt

Exempt is a word used by state boards to describe structures that do not require a licensed architect.

T/F: State boards often enforce disciplinary measures such as revocation of a professional's license upon the first violation of the rules of conduct adopted by the board.

False. An architect would usually need to show an ongoing record of incompetence for a state board to enforce disciplinary procedures such as revocation of a license.

T/F: Having a separate agenda to your practice, such as fame or publicity, is a good idea.

False. Architects should serve their clients and society.

Claims-made policies

For professional liability insurance, this means that the date the claim is finally made is the triggering event for coverage.

Statutes

Formal written enactments put together by legislative bodies at the federal, state, county, or city levels of government.

Consequential damages

Impacts not directly and immediately caused by the act of the party but caused by the consequences of an act.

Define leadership, culture, and process, the three components of practice management. Which one is the most important?

Leadership: in practice management, this is the most important component of a successful practice. It will align talent, define workplace standards, set the tone for quality, attract clients, and inspire performance. Culture: in practice management, it will define the workplace attitude, values, collegiality, and communications, and create peer pressure to perform at a certain level. Process: in practice management, it defines how the firm methodologically produces it services and products.

Consequential loss

Loss not directly caused by damage to property but may arise as a result of such damage (damage to other portions of a building or its contents caused by leaks).

General obligations: AIA Code of Ethics

Members should maintain and advance their knowledge of the art and science of architecture, respect the body of architectural accomplishment and contribute to its growth, consider social and environmental impacts of professional activities, and exercise learned and uncompromised professional judgment.

Withholding

Money withheld from an employee's paycheck that goes directly to the government to pay for income taxes.

Do you need to register created material for it to be protected by copyright laws?

No, copyright law in the United States is such that creative works are automatically covered by copyright laws, and no registration is needed.

Which of the following are acceptable behaviors for an architect? - Charging finder's fees - Sharing profits with a contractor on a project - Accepting money from building materials suppliers or manufacturers - None of the above

None of the above. There may be state laws that prohibit some of these activities, and all are against the NCARB's Rules of Conduct.

Ownership vs. copyright

Not the same thing; copyright laws give the creator of an original work the exclusive right to reproduce or display that copyrighted work.

Practice acts

One of the two parts of professional licensing laws, practice acts regulate what you can do.

Title acts

One of the two parts of professional licensing laws, title acts regulate what you can call yourself.

Conflict management

Our ability to influence other people in a positive fashion and successfully complete the task at hand in a given period of time. All work is a conflict. This takes different management than financial management.

Exculpatory clauses

Phrases that try to shift responsibility to the contractor or someone else in a broad, general way.

Title 1 of Americans with Disabilities Act

Prohibits private, state, and local governments; employment agencies; and labor unions from discriminating against qualified individuals with disabilities in job application procedures, compensation, advancement, job training, and other privileges of employment.

Surety bond

Protects the owner against default by the contractor.

Five components of NCARB's Rules of Conduct

Rule 1: Competence Rule 2: Conflict of Interest Rule 3: Full Disclosure Rule 4: Compliance with Laws Rule 5: Professional Conduct

Project work plan

Serves as a means to achieve project and firm profitability, schedule project milestones and resources, and monitor project progress.

Net multiplier

Shows how much revenue comes in for each dollar paid out to staff. This is a common way to evaluate staff productivity and is calculated by net revenue or direct salary expense

Expert witness

Somebody who testifies in a case and can offer the judge, jury, mediator, or arbitrator an interpretation on matters that he or she is an expert in.

Professional liability insurance

Sometimes called errors and omissions insurance, the policy agrees to defend and pay on behalf of the architect for claims alleging an error or negligence in the performance of professional duties in exchange for the premiums paid to the insurance company.

SMART goals

Specific, measurable, attainable, relevant, time-bound performance goals and objectives that are developed jointly between supervisor and employee.

FICA

Stands for Federal Insurance Contributions Act. It is a payroll tax to fund Medicare and Social Security. Employees and employers share the cost of the tax, which is 15.3%. Employee and employer each pay 6.2% in Social Security and 1.45% and Medicare taxes, making the total Social Security tax 12.4% of wages and the total Medicare tax 2.9% for a total of 15.3%. Self-employed people are responsible for the entire FICA percentage of 15.3% (12.4% + 2.9%) because they are in a sense both the employer and the employed.

True or false: Workers' compensation is a type of insurance that protects employees with work-related injuries from loss of income and medical expenses.

TRUE

Waiver of consequential damages

The AIA A201 document contains a mutual waiver of consequential damages that limits liabilities to direct damages.

Instruments of service

The AIA A201-2007 General Conditions document defines the various forms of work products prepared by the architect as "instruments of service," which are defined as "representations, in any medium of expression now known or later developed, of the tangible and intangible creative work performed by the Architect and the Architect's consultants under their respective professional services agreements." This broad definition likely covers any work product prepared by the architect. In the B101 document, the owner is granted a nonexclusive license to use the instruments of service for constructing the project. AIA 201-2007 outlines the contractor's right to use the instrument of service for the owner's current project and may not use the architect's work for other projects.

NAAB

The National Architectural Accrediting Board (NAAB) is the sole agency authorized to accredit professional degree programs in architecture in the United States.

NCARB

The National Council of Architectural Registration Boards is a nonprofit organization made up of the architectural licensing boards of 54 states and territories. NCARB develops and administers nationwide programs for the development of architectural licensure candidates and sets the standard for licensing and credentialing of architects.

Common law

The United States operates under what is called common law. It means that the foundation of our law system is based on case studies and decisions made in courts of law.

Agent vs. vendor

The architect is the agent of the owner. Agency is a legal concept meaning the architect is authorized to make decisions on behalf of the owner. The contractor is a vendor. The contractor's job is to carry out the contract and, in doing so, putting his or her own interests first.

Architect of record

The architect or architecture firm that is named on the building permit for a project.

Who owns the copyright to the drawings?

The architect. See also "Instruments of service."

Direct damages

The cost of completing unfinished or repairing defective work. Claims can only be made for direct damages.

Multiple of direct personnel expense

The direct salary per person is multiplied by a factor that accounts for taxes, sick leave, health care, overhead, and profit.

Utilization rate

The effective use of labor (direct labor/total labor hours= % utilization).

Project delivery

The entire sequence of events necessary to provide the owner with a completed building.

SECA

The name of the FICA tax for self-employed people.

American Institute of Architects (AIA)

The primary professional organization of architects and allied professionals within the United States. The AIA provides architects with a support network to further their careers and the profession as a whole.

What two critical core components are key for a successful practice?

The right clients and the right talent. Absent either of those elements, success drops dramatically; if both are absent, the practice will cease to exist.

Who or what grants a license to practice architecture?

The state. (Not the AIA or NCARB.)

Character-based ethics

This approach to ethics encourages people to focus on the development of good character or virtue. Examples: exhibiting fairness when dealing with others and courage to do the right thing in the face of opposition, using good judgment when encountering new information, and displaying self-control.

Indemnification

This is a hold-harmless provision, an agreement by one party to pay certain specified losses or damages incurred by another party.

Owner has non-exclusive license to use the plans.

This means the architect can resell the design to someone else.

Owner has exclusive license to use the plans.

This means the architect cannot resell the design to someone else.

Copyright transfer

Through a contract, copyright licenses used to design documents can be granted, or the copyright can be transferred to another party. This does not completely absolve the architect from all liability of the professional services provided, even if such liabilities are expressly transferred in the contract.

Professional malpractice

To fall short of the standard of care through negligence, breach of contract, or both.

Liability

To have liability means to be responsible for circumstances that lead to another person's grievance.

Reason for professional licensing laws

To protect the health, safety, and welfare of the public.

Transactional/transformational leadership

Transactions are trades or deals. Leadership within this trading environment leads to transformations in both themselves and others.

T/F: If a contract is unconstitutional, it is void.

True (for both the U.S. constitution and state constitutions)

COBRA

Under COBRA, a terminated employee may retain his or her health insurance plan for a period of time if he or she pays the premium.

Profit sharing

When a firm sets aside a percentage of salary for employees based on the firm's overall profitability or the profitability of a particular division or office.

Breach of contract

When a party to a contract does not follow through with responsibilities outlined in the contract.

Consent of surety

Written consent of the surety on a performance bond, payment bond, or both to changes in the contract, reductions in the contractor's retainage, transfer of final payment to the contractor, or waiver of notification of contract changes.

Tort

Wrongful injury to a person's person or a person's property. It differs from a crime or breach of contract, both of which are wrongs . Tort is a civil action. An example of tort is negligence.

An owner gives you plans and renderings for a project that another architect developed and has asked you to complete the project.

You must make sure there is no copyright infringement.

The six canons of the AIA Code of Ethics and Professional Conduct

i. General Obligations ii. Obligations to the Public iii. Obligations to the Client iv. Obligations to the Profession v. Obligations to Colleagues vi. Obligations to the Environment


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