We all know how this goes, we are asked to work on a project and even when we are busy, we are flattered by the request and we want to make sure we have work in the pipeline, so we accept, without a moment of due diligence. Here’s the problem with that approach. If you have not worked with this firm before, you really don’t know what you are getting into. They may be lovely competent people, or they may turn out to be pit vipers. People can sound very reasonable when they are trying to “sell” you. Nothing is worse than working hard on a job and not getting paid or when an issue arises on a project (and issues arise because people are not perfect) and your fellow “team” members runs the other way, or worse, throws you under the bus. You deserve better.
The answer is simple. Go into a new project with your eyes open. Conduct due diligence. It is not hard, but it takes some time and a willingness to turn down a potential project. If you are working with an owner that you have never worked before, make sure you ask about their expectations before you sign a contract or start doing the work. An unrealistic or inexperienced owner can be a nightmare. Make sure that the owner has the funding to pay you. If the owner is a LLC, it may be a single purpose entity and have inadequate funding. You need to understand how you are going to be paid. Ask questions about how the project is going to be financed. If a potential owner gets cagey about answering, you know that you have a problem.
If you are asked to be a subconsultant or a subcontractor, conduct due diligence. Just because someone is a licensed professional, does not mean that they are a good guy. Are they a small operation? Are they going to be able to pay you? What happens if the owner does not make payment to them or short pays them? Are they going to assure that they will meet the contractual obligation to make payment to you? Are they competent? What if something goes wrong on the project? Do they have a history of pointing fingers at their consultants to make themselves look good to the owner or are they really team players? Ask your fellow consultants if they have experience with this entity. Ask your friends. Ask your attorney. Ask your insurance broker.
Google. You would be amazed what you can learn on Google. You can check public court filings. If your potential team members files lawsuits regularly, find out why. Some lawsuits may be totally unrelated and others may be something to be concerned about.
Sometimes, it is better to turn down that opportunity. A little investigation in advance can save you stress and time later.
If you need legal advice concerning a design or construction issue, please contact the attorneys of Gibbes Burton, LLC at (864) 327-5000. We want to help make your projects a success.