What are the lessons learned from a lawsuit? Why is this so important? How can Randy Brown Architects prevent a lawsuit from occurring again?
The question was discussed in a relaxed meeting format in the studio. Randy, Jon, and I were all involved in the conversation.
On Wednesday April 14, 2010 Randy sat in court for numerous hours because of a lawsuit. RBA was suing his former client because they refused to pay the architecture fees. Randy was suing them for only $17,000 of their $40,000 contract. They claimed the original (conceptual) design that was done as a feasibility study for $1,500 fee was perfect!!!! but the construction documents were not the same as the concept drawings from the feasibility study. Also, they stated that Randy had told them the costs in the beginning of the project and by the end, the costs was much more expensive. The client’s also argued they never received any drawings.
The number one lesson learned from this unpleasant incident was to communicate to the clients better. The former client’s tried to argue that the feasibility concept drawings RBA showed to them were not the same as the construction documents. RBA needs to make sure the client understands the difference between a feasibility study and construction documents. We should have clarified feasibility and concept drawings as simply an idea or concept in the contract and Randy did a good job on the contract to clarify that construction documents the reality of the concept.
RBA also needs to communicate to the client a cost estimate is not the same as the hard bid construction cost based on construction drawings. The former client tried to say RBA said “the cost estimate of the feasibility concept design is the final cost of the project.” RBA can only estimate a cost from historic information at the beginning of a project. Most information comes from the cost of similar structures. Randy wants to stress the difference of a cost estimate and the hard bids construction cost to future clients, as a way to prevent this from happening.
The second lesson we have learned was to save all documentation. The Friday before court Randy, Jon, and I spent hours searching the network and dead files for the former clients files. The day became very stressful because without those documents to defend Randy’s argument, the case may have been thrown out. Fortunately, Randy was able to find the files on the external hard drive before the court date. One example that RBA communicated to the Hrdlicka’s was through e-mail. He was able to save these documents to the hard drive. When he found the e-mails on the hard drive he was able to use them as a way to justify his case.
The third lesson is to make sure to send and save transmittals to the clients about drawings and meeting notes. RBA is a small firm and we do not have much time dedicated to re-typing meeting notes. Instead of re-typing the notes we can send an e-mail to the client that sums up the meeting. After we send the e-mail we should print in and place it into the job file, as well as, save an electronic copy of it in the network job file. RBA should also use the same technique for the reply from the client. Fortunately Randy is the keeper of the office files so all of the hand written meeting notes, emails and office schedule were admitted into evidence.
Placing dates on every document is the forth lesson. RBA always dates every document, whether it is a sketch or a note from a phone call, is very important. Randy says having dates on the document is direct evidence of when the work takes place.
The next lesson is to make sure to keep a paper trail. We want to make sure there is evidence of drawings being approved to move forward. The former client’s stated to the jury that they did not want to move forward with the project. But from paper trails, it clearly explains the former client was an active participant in the design and construction drawings and bidding process. E-mails that are saved on the external hard drive proved this point.
From this discussion I have learned documenting work and saving information in a well organized manner will help prevent legal problems. Also, making sure your client understands the process of design is essential to avoid confusion.
Listening to Randy, I could tell he wasn’t just explaining to us the lessons he learned by this; he was explaining to himself how he was going to improve his firm’s organizational skills even more. I have learned a great amount about office organization while working at RBA. The lawsuit was a prime example of why it was so important to be organized, physically and electronically. Randy would have been less stressed if he knew exactly where all the electronic and physical files were located. But he would have been more stressed if he did not have the documents from this project.