Small Project Design

This message has been cross posted to the following Discussion Forums: Small Project Practitioners and Practice Management Member Conversations .
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We are a small firm of 8 people and I am the only owner and registered Architect. The firm has grown and developed over the last 10 years and now is situated in a strong position for future growth.

We have two members of the firm who, I would expect, to pass their registration exam this year. They have been with the firm for 4 and 6 years. As they have grown in the firm, so have their responsibilities and client contact. They are project managers in the firm and as such the client contact is great and personal. As we all know, the Architect's  relationship with our clients is paramount and returns future work if positively maintianed.

So my question for the group is this....How do other firms handle the firm's client relationships as firm members become registered?  So the frim members stay with the firm and do not run with any of the firms clients? Naturally partnership is an option, but what about Non-Compete Agreements and how and when to implement them? 

Any thoughts would be appreciated.   

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Chris Zimmerman AIA
President
CPZ Architects, Inc.
Plantation FL
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When I told my managing principal, in 1979, that I got my license, he said, "That and 50 cents will get you a cup of coffee."  Everyone served the same narrow range of diner coffee then.

Not too long after that, - probably from experiences doing projects for law offices - I began thinking firms should designate all of their licensed professionals, associates and bring them into a firm development process.  I think it provides good recognition, a sense of belonging, encouragement to look more seriously at what it takes to manage a firm and forces the principals to do better business planning.  Looking back, I wish I had been offered growth opportunities like that.

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Roger Retzlaff AIA
Green Bay WI
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First of all, glad to hear things are going well for you at the other corner of the country, Chris.

A former co-worker said his first architect-employer told him "my job is to help you become the best  future competitor I can".  So often, having scrabbled to get a firm established, we architects develop a severe case of paranoia about people leaving and taking our work with them.  Talented staff sense that they are not trusted, and may even start planning their escape.

I would agree with Roger, and mix in a bit of my friend Tom's story.  Start thinking now about how you are going to go out of business.  Are you going to just close the doors in 20 or 25 years, or are you going to sell to others who are working for you, or to an outside firm?  These two employees who are about to become registered may or may not be the ones to sell to.  However, before you find that out, you'll need to eventually give them some responsibilities related to management.

It doesn't have to happen at once.  Maybe a year after they get licensed, you make them "associates".  They aren't owners, yet, but will probably perceive the title as a step up.  [Architects seem to be easily distracted by titles ...]  And, if you're not doing it now, maybe go with them occasionally to their meetings with owners.  This will help remind the owners about who the firm ownership really is.

Talk with your accountant and attorney about how to structure your firm for future growth.  A partnership in the true sense of the word may not be the best.  If Florida allows professional LLCs, you can retain a lot of control, and a lot of the earnings.  Just remember that eventually the younger members of the firm will need to make enough to be able to afford to buy you out. 

I don't see non-compete agreements as very appropriate for "staff".  For junior owners, perhaps.  And, they will be hard to enforce, and yield a "I am not trusted" sensation.  Better to hold out opportunities and point out that you've done the hard work of starting the firm.

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Joel Niemi AIA
Snohomish WA

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Original Message:
Sent: 07-26-2012 10:29
From: Roger Retzlaff

I began thinking firms should designate all of their licensed professionals, associates and bring them into a firm development process. 

Chris,

I'm not a big fan of non-compete agreements.  You'll need to consult with an attorney who's well versed in Florida employment law, but in Colorado they are virtually unenforceable in the situation you describe.  Usually some sort of quid pro quo is required.  For example, if you purchased someone else's firm, the terms of purchase would include a non-compete agreement.  If it's made a condition of continued employment, it may not be enforceable, and it's a kind of negative message to your employees.  They might quit and take your clients rather than sign it.  Better to keep them happy so they won't want to leave.

And it may not be as big a problem as you suspect.  I worked for few firms before I started my own, and very few people left to start their own firms.  As you know, it's a big risk and not everyone has the temperament or financial ability to take that risk.  If your employees feel that their contributions are valued, they'll be much less likely to want to leave. 

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Bret Johnson AIA
Principal
Bret Johnson Architecture
Denver CO
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