Architects, engineers, contractors, and laborers may be the ones who create the visible results of construction projects, but what’s not so observable is the legal underpinning established by construction companies’ general counsel. Attorneys representing construction firms are critical throughout the life of a construction project, from land acquisition and financing to the handling of internal personnel policies to copyrights and patents.
Some attorneys got their start in the industry, gaining field experience as architects, engineers, and even laborers. And such intimate knowledge of the role of each party and the potential pitfalls of business partnerships led many to pursue their career in law with a unique perspective on how successful projects materialize.
In difficult economic times, companies can ill-afford to take risks. General counsel serve as trusted members of management teams, and with more in-depth knowledge of the industry than typical outside counsel, the attorneys can devise action plans that maximize security and grow businesses. Here, seven such counsel talk to American Builders Quarterly about the part they play in the building industry.
Bill Quatman, Burns & McDonnell
Bill Quatman, FAIA, began his career at the drafting table, earning two degrees in architecture, gaining registration as an architect, and working in the field before he ever entered the legal profession. Capitalizing on his background, he went on to represent design and construction firms for nearly 25 years before joining Burns & McDonnell in 2008. He’s now senior vice president and general counsel for the full-service engineering, architecture, construction, and environmental consulting firm.
As an attorney, what impact are you able to have on the construction industry?
BQ: I think lawyers have a greater impact on the industry than most people realize. A large construction project may have over 1,000 contracts: purchase orders; subcontracts; design, management, planning, real estate and construction contracts. This ties the whole deal together. The parties get to make their own law, in large part by determining the scope of each person’s role, the way they interact, how they handle disputes, and, of course, how to get paid. The better lawyers follow Abraham Lincoln’s advice, which was, “Discourage litigation. Persuade your neighbors to compromise whenever you can. Point out to them how the nominal winner is often a real loser—in fees, expenses, and waste of time. As a peacemaker, the lawyer has a superior opportunity of being a good man.”
What sorts of corporate governance issues do you oversee on a day-to-day basis?
BQ: We handle licensing—which is an overlooked part for some firms—for design and construction services, ethics and government compliance, emerging personnel policies such as use of corporate technology, copyright [and] patents, corporate-board formalities, and just about everything else that walks through the door.
What role do you play in all of that?
BQ: I oversee all of our staff lawyers and paralegals plus manage outside counsel who assist with corporate and litigation matters. But beyond that, I am engaged with all divisions of the company in business discussions and risk management. I assist most often in counseling project managers on project risks; teaming with other companies; and continuing education for our 3,200 employees on legal aspects of the business, international risks, and opportunities. It is a much more diverse job than I ever imagined and much more satisfying as a result.
What skills do you depend upon to do your work well?
BQ: Organization and analytical skills. This job can be like drinking from a fire hose if you are not organized. You also cannot be too much of a reactionary. When the house seems to be on fire for your client, you have to be the fireman to assess the situation, figure out how to bring it under control despite pandemonium around you.
What’s the biggest challenge you face in your work?
BQ: Time management can be daunting with so many people wanting your time. After a day of meetings, you find there is no time left to do the work that those meetings generate. You have to block out time to get the work done. In private practice, clients call to make an appointment. But in-house, your clients expect immediate attention. Taking charge of your calendar, blocking out time to do work, and delegating to staff is essential to avoid being overloaded and unproductive.
R. Craig Williams, HKS, Inc.
R. Craig Williams, AIA, Esq., understands the work of architects, and he understands the work of attorneys. But still, he says, there’s so much more to know. The registered architect practiced design for several years before becoming a partner in a law firm with a client base of architecture and engineering companies. Then, in 1998 he became chief legal officer of HKS, Inc., a global design-services firm—and one of Williams’s former clients—with 23 offices worldwide.
Why are attorneys so relevant to large construction projects?
RCW: Construction projects are governed by contracts with highly technical legal terms addressing complex relationships that often form the basis of disputes, driven by battles over money. Attorneys unfortunately have become necessary participants in the contracting process in order to help work through liability issues related to scopes of work, insurance, indemnities, dispute resolution, lien rights, intellectual property rights, subcontracting relationships, and other issues.
What role do you play within the company?
RCW: As the chief legal officer, I guide the negotiations of contracts with clients, often conducting negotiations directly with our clients or their attorneys. I manage contracting with consultants, including drafting of contracts, and formulate policies related to delivery of services in compliance with state and federal laws and licensing rules and regulations. I advise our architects with regard to risk issues related to our services and manage insurance claims. I retain outside counsel, manage the creation and regulatory agency compliance issues of corporate entities around the world, manage all corporate documents, provide legal oversight for our human resources department, and conduct training seminars.
What do you enjoy about your role?
RCW: The primary source of enjoyment in my role at HKS comes from the opportunities I have to draw upon my training and experiences as an architect as I deal with the many and varied issues that arise. I often find myself relying totally on the architect side of my brain, which is always more interesting than the lawyer side.
What work issues keep you awake at night?
RCW: I really don’t let work issues keep me awake or bother me. The one issue that bothers me is the economy and the complete lack of understanding the current government has of the depression in the construction industry and how to deal with it. I wish someone in Washington would call me. I think I could explain it so even they would understand.
Does an in-house counsel office have the same long hours as a law firm practice?
RCW: In a word, yes. My typical workday starts in the office at about 6:30 a.m. and ends after 10 to 12 hours in the office. I always leave with more work on my desk than I had when I arrived. There is always something that needs to be done, but no matter how much there is, I enjoy doing it mainly because of the people with whom I work. The people at HKS are all clients, and I try to always remember that.
Mark Sustana, Lennar Corporation
The job requirements for general counsel don’t usually include in-depth knowledge of chemical reactions and the ability to conduct complex statistical analysis, but Mark Sustana of Lennar Corporation taps into his keen understanding of science and math to do his job better. Sustana worked for a chemical company and a toy-and-gift merchandise company before joining up with leading homebuilder Lennar as general counsel and corporate secretary in 2005. Sustana says his science-based skills help him analyze risks. “On some of my litigation, I will sit down and draw out a probability tree,” he says. “It helps me make decisions and analyze the best course of action.”
What impact are you able to have on the homebuilding industry?
MS: The industry has been attacked by many critics during the economic downturn on issues such as our use of affiliated mortgage companies to provide mortgages to our buyers, and our subcontractor labor practices. The big impact that attorneys have is defending the industry from unjust criticism.
You’ve been with Lennar since 2005, when the home-buying market was far stronger. How is your job different today?
MS: I joke that it’s been a characteristic of my career that I’ve joined every company at its peak and ridden it down from there. I’ve gotten great experience with companies during their most difficult times. It’s tough because the litigation tends to trail the event by several years, so we have had to deal with litigation from the peak of the cycle at a time when there is far less money available.
What’s your role in Lennar’s foray into the distressed-debt investment market?
MS: We’re buying bank-assembled portfolios of non-performing loans that are secured by real property. Lennar’s strength in the deal is with 30 homebuilding divisions. We use our local knowledge to analyze the property to tell what it’s worth, and in many cases we know the debtor. We try to leverage our knowledge to make an informed bid.
You led a lawsuit against a Chinese drywall maker. Tell me about that case.
MS: As building materials got in short supply during the boom years, people started importing drywall from China. We learned too late that the drywall had high sulfur content. It wasn’t hazardous, but it emitted sulfur gases that were corrosive to the copper in the homes. We started seeing rampant air-conditioning failures and eventually figured out they were corroding in the home. Ultimately, we had close to 1,000 homes in Florida that Lennar gutted to the studs and rebuilt at a cost of $80 million. We did the right thing for our customers, and the result was only 50 [cases] wound up in litigation. We went after the manufacturer, the distributor, the installers, and anyone with a hand that needed to take a share of the responsibility.
Steve Cook, PulteGroup, Inc.
Guiding venerable retailer Sears through years of transition helped prepare Steve Cook for the tumult of the housing crash. As general counsel of PulteGroup, Inc., the nation’s largest homebuilder with $4.56 billion in revenue last year, Cook has navigated a rapidly changing regulatory landscape and has helped negotiate necessary restructuring for the firm, which also offers home financing.
You joined PulteGroup in 2006, during much better times for the homebuilding industry. How has your work changed?
SC: We were beginning to see weakness in the market at that point, but clearly no one anticipated the depth of it. My 10 years of experience at Sears, which merged with Kmart in 2005—and before that, my time as a mergers and acquisitions attorney with Skadden Arps in Chicago—really prepared me for the creativity and business sense you need to perform well in-house. The firm trains its lawyers to understand business and financial statements and to understand the goal of clients and [to] fashion advice to achieve those goals.
What issues does a general counsel handle related to the slowdown in home sales?
SC: We deal with the legal issues that arise when a business contracts. That might be an employee issue as you dramatically shrink the size of the work-force. As you shrink your business, you [also] have contracts to navigate with vendors, and you might have options or land transactions that you don’t want to pursue, so you have contract rights to navigate. The business has contracted, but the work for the law department increases in this environment.
How is legal work organized within PulteGroup?
SC: We have a number of different lawyers and paralegals out in the field who are a great support [to] the business in the field, providing hands-on support with land acquisitions, dispositions, and general legal issues. Here at corporate headquarters, my team handles litigation, employment work, sales and marketing issues, and the more general corporate work. Pulte’s various policies get developed out of this office, where our view is more nationwide.
What skills do you depend on to do your work well?
SC: It has less to do with legal, technical skills and more to do with leadership skills. The most critical skill is having a sense of judgment. You move at a fast pace and rarely have the luxury of being 100 percent sure. Judgment helps you have the right answer when the right answer isn’t always clear.
What do you like to do when you aren’t working?
SC: I don’t like to brag about myself, but I am an awesome cook. We threw a dinner party last night, and I served chipotle peach-glazed chicken with charred corn polenta. I never have time to cook during the week, so it’s always on the weekend, and I make enough to carry through the week.
Alex Baehr, Colliers International
A childhood spent living for a time in Seoul, South Korea, and a two-year stint as senior counsel for a Saudi Arabian Oil Company provided Alex Baehr with the complex global know-how required for his current role as general counsel of Colliers International. A trial attorney for 13 years, Baehr jumped at the chance to work in Saudi Arabia and says the positive experience opened the opportunity with Colliers. The commercial real estate brokerage has offices in 61 countries, and Baehr now oversees corporate legal issues from Seattle.
Are attorneys able to have as significant an impact on real estate brokerage?
AB: We are a service company, and my role as an attorney is to help our staff close a deal and move people to the finish line, whether it’s a building project, leasing, or ownership. We remove the obstacles to get to the end result, get there quickly, and get there right.
Talk about your career history before joining Colliers.
AB: I was a trial lawyer and counselor with my work being split between intellectual property, contracts and joint venture disputes, and employment law. I was really lucky to be mentored by a traditional lawyer who felt the role of an attorney is to be a counselor to clients and not just a service provider and specialist. I want to know someone’s business, and then I think I can give better advice.
What’s most rewarding in your work?
AB: For me it’s closing the deals and getting things done and pulling obstacles out of the way—almost more the business wins than even the legal wins. The personality of a law department has to be one of “Yes, we can.” That “yes” may have a “but” to it, but it’s not going to stop the process. If you always say “no,” you are going to lose your internal client, and they will find ways to get it done without you, and that’s not good for anyone.
What skills and traits make an attorney suited for general counsel work?
AB: You need to be an outgoing person who likes to be with people rather than a person who likes to sit at a desk. You’ve got be okay with ambiguity and sleep at night despite it. Lawyers often look at the downside of risk and not the upside. You have to look at both sides of the equation and be okay with that. Optimism helps.
Meghan Rhea, Gensler
Growing up in the Dallas suburbs, Meghan Rhea developed a fascination for how things are built from her mother, an interior designer. After law school, Rhea joined the construction practice of a midsize California civil-litigation firm, and in 2000 she further engrossed herself in the design-build industry by joining venerable design firm Gensler as its regional counsel. Five years later, she became its general counsel.
As an attorney, what impact are you able to have on the design profession?
MR: We have 125 people who are part of firm-wide resources—attorneys, CPAs, IT professionals, HR, and marketing and communications professionals. If we take care of the contracts and the banking and developing, the marketing collateral, and supporting the computers and software, it allows the designers to focus on what they are trained to do and love to do. We are trusted advisors to the business.
Commercial and institutional development has dropped substantially in the recession. Has this created a new set of legal challenges for the firm?
MR: Our appetite for financial risk has changed, and we make a more concerted effort to get retainers from clients we’ve not worked with before. Our project profile has changed somewhat because of the lending climate. We started taking on work we didn’t do before, such as some limited residential work. When you change your work profile, the legal department must think about whether we need new contracts and need to understand the new risk profile.
How does Gensler’s expanding international footprint—adding 15 new foreign entities since 2008—affect your work?
MR: We continue to grow in Asia and South and Central America. Those are certainly different legal systems with different licensing requirements. It creates new challenges regarding what kinds of contacts to use and industry standards. It’s been exciting as well as, on occasion, frustrating. There’s a lot of complexity to setting up foreign offices.
What skills do you rely on to help you do your job well?
MR: It helps to have some native curiosity about what we do and to be genuinely interested in our core business. I love looking at the carpet swatches and renderings and models. You also need a high-level interpersonal flexibility. You need be able to communicate with the design staff, the support staff, and people of different cultures. I also understand my role as an advisor. My say doesn’t always carry the day. It doesn’t hurt my feelings when people don’t follow my advice. I am here to advise, but I don’t get to decide. They are balancing risk with rewards.
What do you find satisfying about being an inside counsel?
MR: I can never predict what’s going to land on my plate in a given day—an intellectual property issue, an HR issue, or some garden-variety corporate-governance issue. My job has a help-desk aspect to it. As in-house counsel, people pop in my office and frequently pull me off my to-do list. I am one with the client, and I go where my client takes me that day. That makes my job really interesting.
Margaret McLean, CH2M HILL
Margaret McLean combines the gift of gab with strong technical know-how, and the combination led to a quick ascent in the technology world, which then left her looking for a new challenge. After attending law school, McLean, a native of Ukraine, practiced law in the area of mergers and acquisitions and became CH2M HILL’s outside counsel. In 1998 she joined the global engineering firm, and today she steers the company through risk management while sharing with her fellow engineers a common interest in science and math.
As an attorney, what impact are you able to have on the AEC industry?
MM: My role is to look after the legal affairs of a $7 billion-a-year company with 25,000 employees worldwide. I oversee 53 men and women in my organization, with about two-thirds of them in the United States and the others in places such as the UK, Singapore, and Brazil. I play a significant role in managing the risk in the kind of work we accept and how we manage our risk as a large enterprise.
You had a previous career in computer science. What led you to change directions?
MM: I graduated with an undergraduate degree in computer science and went to work for Hewlett Packard on development of their databases. I had the gift of gab, which many technical folks don’t, so I moved into systems design and working with clients to understand what they needed in their database. At the ripe age of 26, I became director of IT for Science Applications International [Corporation] in California. I progressed very quickly because of my ability to communicate with clients, but all of my peers were 20 years older than me. I looked around and wondered, “What’s next?” My good mentors told me my background was too technical. I already had an MBA in finance, so I decided to go to law school so I would be more versatile. I fully intended to come back to a corporate role, but I went to the University of Michigan law school, and I fell in love with the practice of law.
What skills learned in your previous role do you think allow you to do your job well?
MM: I think my technical background, especially in system design, allows me to think clearly. Things are easily compartmentalized in my mind, and I can break down a project the way engineers do and expediently look for a solution. CH2M HILL is a diverse business. I seldom have the luxury of knowing what I will do in a given day. You have a plan, but you do what the business needs you do to.
As a woman, do you think it’s been more challenging for you to attain a prominent leadership position in your industry?
MM: CH2M HILL believes in broad-based diversity and takes its talent from all walks of life. Has being a woman impacted my career opportunities at CH2M HILL? I’d say no. Perhaps not being an engineer has, a little.
Can you tell me about changes you’ve made within the firm regarding ethics?
MM: CH2M HILL takes ethics seriously. My contribution is that the ethics program has grown as the business has grown. Since ’98 we have grown from a $1 billion firm to $6.5 billion if not $7 billion this year as we acquire Halcrow in the UK. Today we talk about ethics often, and we use it as a marketplace differentiator. It’s as important as quality and safety. ABQ