2015Since 12:01 a.m. on Thursday morning, some of us have resolved to run a 5K by Easter, or to hike a few of Colorado’s famous “Fourteeners,” or to try every brewpub in Portland before 2015 is out. Some have decided to spend more quality time with our families, or learn how to use a food processor, or solve the NYT Sunday crossword at least once without help. These are all excellent personal goals for the new year. In case you’re looking for similar inspiration for New Year’s Resolutions for your business, we thought we’d point you to Mark LePage’s The Entrepreneur Architect Podcast.

The following is an excerpt from the blog post accompanying a recent episode titled Top 10 Ways Architects Can Earn More Money:

“As a requirement for licensure, registered architects are responsible for the health, safety and welfare of every occupant in every project we design. Like any small business, architects must pay the typical operating expenses required to remain buoyant, such as utilities, professional service fees, consultants’ fees, insurances and several other overhead expenditures. But wait… for architects, there’s more. To protect us from the liabilities inherent in our responsibilities as licensed professionals, most architects also purchase an additional Professional Liability insurance policy costing several thousand dollars each year.

“Then, there’s that little thing called profit.  Every business, including architecture firms (yes, its true!), must earn a profit. It’s one of the rules to “the game”. In order to continue pursuing our success as architects, we must not only cover our expenses and take home a salary, we must make enough to reinvest into the business.

“Most sole proprietors and small firms I know, struggle to meet the minimum requirements of operation. Forget about profit.

“Simply stated… Architects just don’t make enough money.

“On this episode of The Entrepreneur Architect Podcast, I am sharing my top 10 ways architects can earn more money.”

New year; new bottom line. We hope this resource helps you in your endeavors this year. All the best to our readers in 2015!

About the Podcaster:

Mark R. LePage, AIA, a licensed architect in the State of New York, is the Partner in Charge of Operations at Fivecat Studio Architecture, a leading residential architecture firm located in Westchester County, New York (about 40 minutes north of New York City). Mark and his wife, architect Annmarie McCarthy, launched Fivecat Studio in 1999 at the age of 29 with no money and no clients. Together they have grown the regional firm to a staff of six, managing projects worth more than $10 million. Mark is the founder of Entrepreneur Architect, this online education resource inspiring architects to build better businesses. He launched the blog in 2007 as a personal project to document ideas for business success. In 2012, Mark relaunched Entrepreneur Architect at EntreArchitect.com and introduced the The Entrepreneur Architect Podcast. Working to become an influential force in the profession, Mark’s mission is to teach sole proprietors, small firm architects and students the importance of business success in the profession of architecture.

One of the many value added resources a/e ProNet brokers offer is access to our ProNet Practice Notes, in-depth white papers prepared by members of a wide variety of professions related to the design industry. They offer insight and advice on topics like risk management, practice management, and litigation issues for Architects, Engineers, and other Design Professionals.


Our most recent edition is titled  The Collections-Claim Connection: Getting Paid Without Getting Sued, authored by attorney David A. Ericksen of Severson & Werson in San Francisco, CA. The full PDF version of this excellent paper, including several helpful attachments, is available for download at our website. The following is an excerpt for your review. We hope you find it helpful!


While money isn’t everything, it is the measure and fuel of any business, including a design firm. Without payment for services firms suffer, starve, and even die. Payment issues are also often the single greatest warning sign of a project in trouble.

Perhaps there is no greater indicator of the correlation between unpaid fees and troubled projects and relationships than the remarkable frequency with which efforts of design professionals to collect unpaid fees through litigation result in even larger responsive counter-claims from clients alleging professional negligence. 2011 gave the entire industry the most dramatic and alarming example of this pattern. Having already received over $8.2M in fees, the engineering firm Carter & Burgess sued its client the City of Victorville in Southern California for the final $106,196 on a power plant project that the City had been forced to partially abandon mid-project due to cost overruns. The City responded with a counter-claim for professional negligence. When the verdict came in 2011, it was devastating financially and professionally as news, industry, and internet sources widely reported and publicized the award of $52.1M in damages against the engineering firm.

The results of such a counter-claim need not be as dramatic in terms of publicity or financial losses to be devastating to the firm. In addition to the unpaid fees, there are many other impacts of even a “defensive” counter-claim. They frequently include:

  • Deductible payments for legal fees and costs, which may even include the involvement of a second “defense” attorney.
  • Insurance impacts for rating, pricing, and loss history.
  • Lost internal time and resources for purposes of participation in defense.
  • Publicity and required disclosures in future responses to RFPs for claims history.
  • Potential uninsured exposure for prevailing party attorneys’ fees if negligence claims exceed fee claims.
  • Ultimate discounted or waived fees for expediency of resolving and closing claim.

Obviously, avoiding such collection challenges and the potential for responsive claims is critical to good business and project success.

In reality, a proper approach to collections closely resembles a proper regimen for personal health. Firms which get paid become and remain healthy and strong. Firms which do not get paid regularly and on time become malnourished and increasingly susceptible to disease. Just as health is a life-long process, financial success is a project-long process. The following discussion tracks the relevant phases and provides analyses and strategies for those various phases. Those phases are: Continue reading “{ProNet Practice Note} The Collections-Claim Connection: Getting Paid Without Getting Sued”