DESIGN PROFESSIONAL

For almost thirty years, Mark A. Smith, Esq. has been providing professional legal services to Engineers, Architects and other design professionals. The unique requirements of the Design Professions require legal advice and services tailored to your industry. Below is a sample of the many legal issues that can arise and with which the Law Offices of Mark A. Smith can assist you.

Business Formation:

Whether you are working in New York, Connecticut or some other state, it is critical to be sure that you and your employees are properly licensed, appropriate individuals are in responsible charge of engineering, architectural or other design services, and that your business entity is properly authorized by both the Secretary of State and the licensing board. Failure to property address these issues can not only subject you to professional discipline, it could jeopardize your ability to collect fees for your services.

Contracts:

Once your employees and your business are properly licensed and authorized to do business, the first step in making sure that you get paid should happen long before the first plan is drawn. That step is making sure that you have a good contract with your client. Whether the contract is one that you prepared with Standard Terms and Conditions or one that your client prepared that has been edited to include necessary language, the basic requirements are the same:

  • At least one of the contracting parties needs to be an entity that can pay your bills, not just a shell corporation set up for a specific project;
  • The scope of your services must be clearly defined, without ambiguities that could extend your obligations beyond what you intend;
  • Payment terms must be clear and not be contingent on factors outside of your control;
  • The Design Professional must reserve the right to suspend services if payment not received;
  • The Design Professional must reserve the right to withhold documents if payment not received;
  • Interest must be due on past due payments;
  • The client must be responsible for reasonable attorney’s fees if invoices are past due and collection efforts are necessary;
  • The Design Professionals’ Indemnification obligations need to be limited to actual negligence or other malfeasance;

The Law offices of Mark A. Smith can provide you with contracts tailored to your business that address the above concerns, or review and revise contracts provided by your client to maximize your ability to get paid for your work.

Collections:

There is no cookie cutter solution to collecting past due accounts receivable for engineering, architectural or other design professional fees for professional services and there are many factors which affect the collectability of any specific account. In our experience, the key to maximizing the collection of delinquent accounts is knowing what tools are available to you and how best to apply them to maximize your leverage. As detailed above, the first step in collecting your Accounts Receivable is making sure that you have a good contract.

  • Mechanic’s Liens: Engineers, architects and other design professionals have the ability to file mechanic’s liens when their services are for the improvement of Real Property. It is crucial to keep track of your filing and service deadline and to know when to file a lien to maximize its impact.
  • Stopping or Suspending Work: The contractual right to stop or suspend a work on contract is a powerful tool to encourage a delinquent client to bring his account current, particularly when it can be done at a time when it brings a project to a standstill.
  • Withholding Work Product: Similarly, the withholding of finished work product can be an effective tool in collecting delinquent accounts receivable, particularly when the client faces a deadline. For this reason it is important to keep track of a client’s project and to know what deadlines the client faces.
  • Bond Claims: On public projects (and sometimes on private projects), general contractors are required to file bonds to insure that providers of material and labor (including design services) are paid.
  • Litigation: While litigation is often the last resort in collecting past due accounts receivable, that is not always the case. It is not uncommon for a developer to withhold payment (effectively making you his involuntary lender) in order to minimize stress on his cash flow. In those circumstances, litigation can bring a quick end to an “involuntary loan” by making the developer have to face the prospect of having to pay legal fees.

General Business Matters:

In addition to the above matters which are, to some degree, specific to the design professional community, the Law Offices of Mark A. Smith is ready, willing and able to assist with general practice issues which relate to all businesses, such as Partnership Agreements, Stockholder Agreements, Employment Agreements, the purchase, sale and financing of real estate, leases and Joint Venture Agreements.

Contact the Law Offices of Mark A. Smith for a free, no obligation discussion on how we can assist you with the legal issues in your business.

Mark A. Smith, Esq.

New York Office:

118 N. Bedford Rd, Suite 100
Mt Kisco, NY 10549

Connecticut Office:

5 Dover Circle
Newtown, CT 06470

Mobile: 203-556-8193
Fax: 914-747-1094
Efax: 203-549-0614
Email: [email protected]