Vol. 4 No. 2		February 1985

It may be a restatement of the obvious, but it can be difficult at times to keep even the most obvious in mind: Your client did not select you to design a multi-million dollar, international headquarters complex by throwing darts at a dartboard. Nor were you chosen on the basis of your listing in the Yellow Pages. The problem is, this clear reality has a way of paling in the light of uncertainty when it comes to negotiating the terms and conditions of your agreement.

There are dozens of issues of risk and responsibility in a typical professional services contract. In a draft prepared by an attorney for your client, they are not likely to run in your favor. Only a few are directly related to your fee, but virtually all can have a significant impact on both the financial health of your firm and the ultimate success of the project you are about to undertake. They deserve careful attention.

Focusing on these issues often requires that you overcome an apparent unwillingness on the part of your client to deal with them at all. If so, your first challenge is to convince your client to take your efforts to negotiate seriously. You have to make clear that your intention to discuss issues of great importance to both of you cannot casually be brushed aside.

What are some of the indicators that your client is simply not listening? Here are some familiar responses: 1) This is our standard contract. It is not negotiable. 2) Our attorneys have worked for years to perfect the language of this agreement. They would never allow us to change it now. 3) No other architect or engineer has ever questioned our terms and conditions. Why should you? 4) If we have to go back to the General Counsel's office for review, it will delay us beyond any possibility of going forward. You could kill the project. 5) There are other professionals waiting anxiously in the wings. If you make this process difficult enough, we just may have to bring them on in your place.

In most cases, these arguments are sheer nonsense, more of a smokescreen than anything else. What can you do to clear away the smoke and get on with meaningful negotiations? You might start by keeping the following principles firmly in mind:

1. Everything is negotiable.

   The most carefully crafted standard contract in the known universe is no substitute for a clear, mutual understanding. Successful business people recognize that an agreement is expected to be the product of give and take between the parties. They know it is not in their interest to force you to proceed under terms and conditions no professional in possession of his or her senses would accept, and they will not be surprised when you insist on carefully negotiating those terms and conditions. Every one of them is an open issue at the outset.

2. There are black hats on both sides.

   Two can play this game as easily as one. Your client may truly believe that the General Counsel will never approve changes to your agreement. You can be equally adamant in your polite insistence that your attorney will never approve the agreement unless changes are made. You can even increase the ante: Your insurance advisor will not approve it, either. In the end, what this leaves you with is a standoff that can only be resolved through meaningful negotiations. Since this is your objective in the first place, you might suggest that you simply get on with it.

3. You are not responsible for the business practices of others.

   What some architects or engineers might agree to accept has absolutely nothing to do with you. You have an obligation to your client, to your firm, and to your staff to manage your affairs in a prudent, businesslike fashion. There may be professionals around and about who, for whatever reason, choose to do otherwise. Even if this is so, it is irrelevant. You might ask your client if he or she would seriously consider entrusting decisions about the expenditure of millions of dollars to those with no more business sense than to sign anything placed in front of them. It is not likely.

4. Your message needs to be carried to the decision-maker.

   If your concerns have to be referred to the General Counsel's office for review, so be it. Ask for a meeting. You need to convey your point of view to those who both understand the implications of the issues you wish to raise and have the authority to deal with them in the context of the project and the institutional environment in which it is being planned. The threat of delay may or may not be real. In any event, it is your client's decision, not yours. What you might do to help ease the burden is suggest that you be authorized to proceed with the pre-design phase while the details of your agreement are being finalized.

5. Replacing you is not the ready option it might seem.

   By the time you arrive at the negotiating table, your client has already invested a good deal of valuable time and energy in the project and in you. The selection process did not take place overnight. Having resolved the problem of finding the best design team available for the task at hand, your client is as anxious as you are to get on with the job. He or she may also have invested a healthy amount of personal credibility in the decision to bring you in. Having come this far, no one, least of all your client, wants to throw in the towel and start over again.

6. Your fee may be contingent upon issues as yet unresolved.

   You made certain assumptions about the degree of risk and the level of responsibility you expected to assume when you estimated your fee in the first place. It makes no sense to make concessions about either without at least calling into question the validity of your fee proposal. Your client is likely to respond that these concessions represent business decisions you simply have to be prepared to make. Perhaps so, but how many can you grant before the potential cost exceeds any possible return you might realize by taking on the work? In theory, there is a point at which you would be better off writing a check for the difference and walking away from the job. This is a concept your client understands only too well. You might want to make clear that it is an understanding you share.

All this may sound like a game of hardball in a situation that calls for nothing quite so much as mutual respect and trust. It is hardball, but it need not be played to a win-lose conclusion. You can see it through without compromising either the integrity of the project or the goodwill of your client.

You have more bargaining strength than you might realize, and there is generally more room for negotiation than you might think. You can maintain your professionalism and balance throughout if you communicate to your client, going in, that the issues you wish to discuss are of great importance to you both, and if you deal with those issues firmly, but fairly, as you go along.

For inquiries or problems please contact us via e-mail at Earleen Thomas or call us directly at 800-705-7742.
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