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Architect's Essentials of Contract Negotiation / Edition 1

Architect's Essentials of Contract Negotiation / Edition 1

by Ava J. AbramowitzAva J. Abramowitz


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For architects, negotiation is explicit in every aspect of practice, just as it is implicit in every aspect of design. And now you can develop or refine the negotiation skills you need with the help of this concise, easy-to-follow guide. Written by an acknowledged expert in the field, this volume in the Professional Practice Series offers accessible, practical coverage of contract negotiation essentials related to growth, expansion, new management, internal transitions, mergers, acquisitions, liquidations, retirement, and more. Also, like all the books in this series, the information you'll find here is expressly tailored to the needs of the design professional.

Product Details

ISBN-13: 9780471443650
Publisher: Wiley
Publication date: 04/28/2002
Series: Architect's Essentials of Professional Practice Series , #3
Edition description: Older Edition
Pages: 304
Product dimensions: 7.48(w) x 7.96(h) x 0.63(d)

About the Author

AVA J. ABRAMOWITZ, Esq., Hon. AIA, has a mediation and partnering practice and teaches negotiation to architects and lawyers across the country. She has been serving as a mediator for the United States District Court for the District of Columbia for over ten years. She is a former deputy general counsel of The American Institute of Architects, and has lectured on legal aspects of architecture at Harvard University's Graduate School of Design.

Read an Excerpt

Architect's Essentials of Contract Negotiation

By Ava J. Abramowitz

John Wiley & Sons

ISBN: 0-471-44365-4

Chapter One

Why You Want to Read This Book

Do you toss and turn the night before an important negotiation? Do you enter into a negotiation afraid you will lose? Does facing one more negotiation make you want to volunteer to do anything but that? If so, this book is for you. It is intended in plain words to give you and architects everywhere the keys you need to negotiate and to profit from your negotiations. Or maybe you're an architect who loves to negotiate and are just looking for some new ways to win. This book is for you also. You'll find lots of tips in it and, I venture to say, a new idea or two.

Or maybe you're like the architect friend I was accompanying on a construction site when we bumped into his client. The client was upset about something-nothing big-and I watched the two work out the client's dilemma. The architect acceded to some items, including one that surprised me. He agreed to do some additional services at no cost to the client. And he stood pat on one item (he didn't want to change a design feature). The client left the negotiation seemingly happy. "It's hard to negotiate on the fly, isn't it?" I asked, guessing my friend felt forced to agree to provide the free services. "Huh?" he responded. "What negotiation? I wasn't negotiating. We were just talking." If you're like my friend, this book is for you, too. It will help you recognize when you arenegotiating and help you find the breathing space you need to think on your feet. If you're not used to negotiating, though, a few of the concepts may seem difficult to grasp at first, but rest assured, all of them are accessible. So, get yourself a cup of coffee, settle back, and enjoy.

First, some basic insights. You already know how to negotiate. You wouldn't be where you are today if you didn't. How else could you get through a day? You negotiate with your spouse ("What do you want for dinner?"). You negotiate with your colleagues ("Any chance you can help me with this report?"). You negotiate with strangers ("Excuse me, but I was first in line."). You negotiate with children ("Finish your homework and you can watch TV."). So, the issue isn't learning how to negotiate. You already do that, thank you. The issue is learning how to negotiate better. Second, someone may have told you that you have to be a lawyer to negotiate effectively. If that were true, you would be lost already. As a lawyer myself, I say, "Bananas!" Not being a lawyer may even help you be a better negotiator, especially if you put your design skills to good use. Architects are problem solvers, and solving problems is what negotiation is all about. Furthermore, if you are reading this, you probably never wanted to be a lawyer. If you had, you would have gone to law school. In fact, you might not even like lawyers. That is okay, too. Negotiating, especially negotiating owner-architect agreements, has as much to do with design and construction logic as with legal reasoning-or it should for you in the future after you have read this book.

Third, negotiating can be fun for both you and the "other," a term I use to reference the other person with whom you are negotiating. This is true only if you use negotiation, not to align words on paper, but to align energies for project success. Project negotiation-whether the negotiation involves you with an owner, a contractor, a zoning official, or whomever-provides you the opportunity to focus with the other on what is necessary for project success. This is true even with respect to negotiating owner-drafted agreements. Contract negotiations provide you and the owner the last best chance to finalize expectations and to make sure that both of you will be working equally hard on the same project to the same end.

Now, you may be thinking, "That's easy for her to say. She's not an architect." That is quite true. I am a lawyer; furthermore, I was brought up learning how to negotiate. Most architects are not taught how to negotiate, in no small part because the National Architectural Accrediting Board and the National Council of Architecture Registration Boards historically have not required negotiation to be taught. But the need is there.

This first came home to me when I was deputy general counsel at the American Institute of Architects (AIA). At that time, I would often walk to work with a colleague, Jim Franklin (now FAIA), who lived around the corner. One morning I told him the story of my niece, Beatrice, who was seven at the time. She had called the night before, crying uncontrollably and beyond consolation. Her mother had refused her request to hold an overnight at her house. Now this was a real loss to her. Since Beatrice at that time was afraid to leave her mother, she never went on overnights, and not being allowed to have an overnight in her own home meant that she could not be part of her peer group. She just could not stop crying. Finally I said to her, "Beatrice, stop crying immediately. One, I don't have the power to reverse your mother, so all your tears are in vain. And, two, you are crying prematurely. You have no idea why your mother said no. Maybe she didn't want it that Saturday night; maybe she wanted it in three weeks. Maybe she didn't want 10 girls; maybe she wanted only 5 girls. You have no basis for crying, none whatsoever. Now, go wash your face, brush your hair, go back to your mother, and-not accusingly in any way whatsoever-simply ask, 'Mama, about that overnight: Why didn't you want it?' Find out what your mother's concerns are, give me a call, and we'll figure out a negotiating strategy." Five minutes later the phone rang again. "It's in two weeks, on a Saturday night, six girls plus me."

Jim was somewhat horrified and very jealous. He said to me, "This is unfair. No one ever taught me how to negotiate!" And I looked at him and said, "How do you get through life not knowing how to negotiate? Architects have to negotiate everything-not only their salary each year, but also projects with owners, school boards, contractors, everybody, all the time. How can you function without knowing how to negotiate?" Right then and there I silently promised myself that someday I would write this book.

And here it is. This book is my "thank you" to a profession that has made the world a better place because of it. It is meant to level the playing field. To give architects, to give you, the skills you need to negotiate wisely and well with owners, contractors, friends, and even enemies. It is designed to give you the tips, tools, and opportunities to view and do negotiations comfortably and in a different light.

How to Use This Book

Now, how should you use this book for maximum impact? You will read new ideas that may make you question your existing way of doing things, what you know from others and from life, even how you do business. And, of course, you may question the ideas themselves. Question, by all means, question all that you read here. The best negotiators aren't afraid to question everything, so you shouldn't be either. And accept only those ideas that make sense to you personally. You are you. Only you know what you are facing both personally and professionally, and only you can judge the usefulness of the ideas presented here.

This book has wide margins and space for you to jot down your thoughts. Feel free to mark it up and make it yours. You will also find exercises throughout this book designed to give you a chance to apply your new knowledge and skills. Do them, not in a haphazard way, but thoughtfully, so you can try new skills on for size in the privacy of your own home. Then, when you take what you have learned onto the construction site, don't try to implement every new idea at once. Pick the one skill you most want to work on and focus on acquiring that one skill until you absorb it comfortably into your essence. Then choose another. Under no circumstances should you try to change everything about how you negotiate all at once. You are not that much of a negotiating mess, but you will be if you take the "adopt everything" approach. You won't be listening to the other. You'll be thinking, "What should I do next?" or worse, "Why did I do that?" So promise yourself, try just one new skill at a time. Master it and move on to another.

To make maximum use of this book, must you read it cover to cover? No. Each chapter can be read independently, and each chapter is indexed so you can easily access the book that way. You can even use it as a reference tool, looking up key words and starting from there. At the same time, however, you should know that the book was written cumulatively, so that Chapter 2 builds on Chapter 1, and so on. This was done purposely to maximize the ease of learning new skills.

Let me show you what I mean. In the next chapter, you will be learning about what claims data have to teach you, the owner, and the project team that will help you front-end align your projects and become a better negotiator. Chapter 3 translates tough legal concepts into design and construction so you can negotiate as an architect and not as an ersatz lawyer. You are introduced to negotiation concepts for the first time in Chapter 4. What is negotiation? How does the negotiation process work when it works well and when it does not? Does it make a difference if the "other" is an owner? A contractor? Someone you like? Someone who makes you exceedingly uncomfortable? In Chapter 5 you will read how expert negotiators prepare for negotiations, including what they do to get the fees they want. Chapter 6 lets you in on research into how skilled negotiators communicate. What do they do-and do differently from negotiators who are merely good-to make them and their results so special? How can you pick up those skills and make them yours? Chapter 7 applies what you learned in the first six chapters to some of the most egregious owner-drafted contract language and some of the most common problems. Chapter 8 discusses dispute resolution just in case the first seven chapters don't quite work for you. The final chapter pulls it all together, as final chapters should, giving you the tips you need to incorporate your new knowledge into practice. I have even included an appendix of other sources of information on negotiation so you don't have to rely on this one book for all the answers.

Let me also tell you what this book isn't. It isn't an exhaustive compilation of all the most onerous owner-drafted language edited for reasonable acceptability. No one can ever presage what creative lawyers will do, nor can anyone anticipate all future owner needs in an ever-changing construction world. Besides, every architect's and engineer's insurer has a book just like that available for the asking. (You can find a list of insurer-drafted analyses and aids in the Appendix.) More important, it wouldn't be helpful to write such a book: It would be too prescriptive and neither you nor your practice is a cut-and-paste effort. Worse, over time, it could become a standard of care, a set of rules for you to adhere to, even if they were not in yours or your clients' interests. So don't think of this book as a prescription for you to follow or this year's formula for success. In the negotiation process, as in professional life, success comes from creative critical thinking, not from adhering religiously to someone else's set of rules. You will have to think about what and how you want to negotiate to become a successful negotiator. The purpose of this book is to help you with your thinking.

Please don't think the above paragraph is just the usual lawyer's disclaimer. I learned the dangers of unwittingly setting a national standard of care when I served as legal counsel to AIA's Handbook Review Committee for both the eleventh and twelfth editions of The Architect's Handbook of Professional Practice. An architect called me up during a recess of an arduous trial. Opposing counsel had just tried to impeach him using the tenth edition of the AIA Handbook. "Nobody does it that way anymore," the architect wailed. "But I'm the one who looked like a fool." As a consequence, we took great pains in both the later editions never to set a standard of care. Issues were raised. Issues were discussed. The impact of the various resolutions on the designer, owner, and contractor were explored, but all decisions were left to the parties. That way the Handbook could be made equally useful to an architect in a large-firm setting as to the sole practitioner.

I've taken similar pains here. As a result you will never read in this book "the architect must...." You have the power within you to design your own practice. This Honorary AIA is not going to steal that power from you.

Nor are there any rules dictating good client behavior. And even if there were, if your clients are like some others I've met, they probably don't think that any rules apply to them. Clients come in all different shapes and sizes. Some are nice people; some are not. Some are smart; some are not. Some know about the realities of design and construction; some do not, and so on and so on. This book starts you out wherever you find your client. And I've written it with the gamut of client types in mind. So, you are going to want to develop your client selection skills (a skill you will read more about in Chapter 2 on front-end alignment) as much as you are going to want to develop your client negotiation skills. In the interim, if your words fail you, feel free to give a copy of this book to your client. I say the same things to owners (and engineers, contractors, and lawyers) as I say to you.

Now, a bit more about me so you can put everything I say into perspective. You already know that I am a lawyer and that I love your profession. Three more confessions-one you'll enjoy, two you may not. Here's the one you will like: I am smitten by most of the architects I have had the pleasure of working with these past many years. Architects, by and large, are good people committed to doing good. I learned this first as deputy general counsel for The American Institute of Architects and later as vice president of Victor O. Schinnerer & Company, Inc., counseling architects on negotiation and risk management strategies. After nearly 20 years, I can assure you that architect-negotiating skills may be lax, but architect commitment to project success is not.

Now for the two other confessions-the ones you may like less. First, I am also an owner. In the last five years, I have had the opportunity to oversee nine projects, some large, some small. All with challenges, all with difficulties, all with varying degrees of success. Most built. One not, and even that was a success of sorts.


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All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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Table of Contents



1 Why You Want to Read This Book.

How to Use This Book.

2 Front-End Alignment.

The Study.

How to Use Front-End Alignmentin Practice.

3 The Purpose of Contracts.

The Difference between Contracts and Torts.

How Liable Are You?

The Purpose of Design and ConstructionContracts.


4 Power and Leverage:How to Get It and Keep It.

Negotiation: What Is It?

Why Architects Fear Negotiation.

Two Ways to Negotiate: Hard and Soft.

Another Way of Negotiating: Principled.

How to Negotiate on the Merits.

There You Have It: Principled Negotiation.

5 Preparation Tips.

Who Prepares More?

Negotiating Fees.

Fees as Grease: An Operational Theory.

Defining Your Value.

Making the Pie Bigger.

Ava s Preparation Cheat Sheet.

6 Power and Leverage Redux:The Skills of ExpertNegotiators.

The Three Classes of CommunicationBehaviors.

Whom Do You Trust? Who Trusts You?

What Expert Negotiators Don t Do.

7 How to Say Yes,How to Say No.

Ava s Rules of Contract Interpretation.

Applying the Rules.

Putting the Rules to Work.

8 When the Best Laid Plans...

Recognizing Disputes.

Handling Confrontations.

Managing Change.

Managing Claims.

9 Pulling It All Together.

Appendix: Buildinga Support System.

On Selecting Your Lawyer.

A Word to My Legal Colleagues.

If You Want to Learn More.


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