Digital Builder
Digital Builder

Episode 22 · 2 months ago

Construction Contracts & Payments: Tips for Both Subcontractors & GCs

ABOUT THIS EPISODE

In a perfect world, a contract should include a clear set of instructions that conveys well-defined expectations to all parties concerned. In reality, it’s often a monster document packed full of legalese that no one really understands.

It doesn’t have to be this way.

Today’s guest, Karalynn Cromeens, Owner & Managing Partner at The Cromeens Law Firm, joins the show to share the steps everyone can take to make contracts more straightforward and less contentious.

We discuss:

  • The current state of construction contracts
  • The difference between secured and unsecured debts
  • How to protect yourself when it comes to contracting and payment terms
  • Best practices for handling change orders
  • Construction technology and the future of contracting and payments  

Check out these resources we mentioned during the podcast:

Digital Builder is hosted by Eric Thomas of Autodesk.

Hear more episodes like this one by subscribing to Digital Builder on Apple Podcasts, Spotify, Google Play, or wherever you listen to podcasts.

Can’t see the links? Just search for Digital Builder in your favorite podcast player.

Hello everyone you're listening todigital builder. A podcast brought to you by autodesk. Made for constructionprofessionals who want to hear from those on the forefront of constructiontechnology. If you're looking for conversation centered around where theindustry is going. This podcast is for you. Each episode will feature aconversation with a construction industry leader Together, we'll dig inon themes related to connected construction and discuss where thefuture of the construction industry is headed. Now, let's get started. Hello everyone and welcome to episode22 of Autodesk's digital builder podcast. I'm your host Eric Thomas.This week we'll be discussing the nuances of construction contracts andfinding ways to ensure you get paid in full and on time. We'll also dig intosome common contract mistakes and how to avoid them to help tell the story.I'm joined by Carolyn Crow means Caroline is a published author, awardwinning lawyer and owner and managing partner of the Crow means law firm. Sheis the co founder of moral masonry supply and owner of the subcontractorInstitute, an online educational platform for contractors. She's alsothe host of her own construction podcast called quit getting screwed.Thanks for joining me on the show Today Caroline, I'm excited to hear aboutyour approach to getting subcontractors paid on time and how those out therelistening can improve their approach to contracts and you know, take a cue fromyour own podcast title and quit getting screwed themselves. Well, thank you somuch for having me and yeah, that's what I'm all about here, trying toreally break this down in a plain english way so ever we can understandwhat's going on. It's always such a great way to step back and just reallyevaluate what most people consider to be just a common situation like ohcontracts are contentious, blah blah blah without really digging in on whatwe can do to improve it and obviously everybody needs to protect themselvesto some degree. But I think there's some steps that we can hopefully taketwo to make the process a little bit less uncomfortable to say the to put itlightly so to get started, I wanted to spend some time looking at the currentlandscape and construction when it comes to contracts and payments andadmittedly like I just said this is uncomfortable sometimes but I thinkit's important to really talk about in an open way so we can just improve thatoverall experience. So can you give me an overview of the state of the worldwhen it comes to contracts and payments on a typical construction project?Let's start with I think let's start with the contract portion because Ithink that's so essential and it's like the £10,000 elephant in the room thatno one is talking about. The system is broken, right? The contract is supposedto be a clear set of instructions just like plans inspects but it becomes thismonster document that nobody understands and it's not conveyingexpectations clearly. So it's really hugely affecting productivity, Makingsure everybody knows what they're supposed to do and it doesn't have tobe that way. Right? So you have the The part of you know. Yes, I can'tunderstand what it says. But the second part of what the contract has become isto shift 100% of the liability downhill. And I can understand why you want to dothat. But let's look at it from the perspective, what is the end result?What is happening? People don't want to stay in construction because what'shappening, they're getting screwed and why are they getting screwed? Becausethey don't understand what's in their contracts and they take 100% of theliability and it never used to be this way right. I'm not saying that the subsdon't take any liability or the general contract doesn't take any liabilityfrom the owner. But I'm saying let's negotiate, let's let's meet in themiddle which which is what it's supposed to be right and let's have acontract that everybody knows what it says. You know, I was talking to anattorney out of Ohio yesterday and he said I just ran it went through 129page subcontract from my client going through it and I said could have beenboiled down to 10 pages. He said absolutely. It's all repetitive. It'sall legalese and there's no there's no reason. It should really be a tool tohelp everyone in the construction...

...industry about these are the symbols wewant. These were when they need to be turned in. These are the daily reportswe want. These are how they turned in. It doesn't have to be this monsterdocument that you just have to like hold your nose and sign and hope forthe best. So that's my current opinion on it. And I think everybody wouldbenefit from more straightforward language in those documents. And I hadto chuckle because this brings me back to my days of federal contracting whenI was still doing proposal management. And most of those are FPs were 23, 400pages in length. And it was so obvious when the language was copied from oneRFP and paste it into another one because the dots weren't connected andit was confusing and you can ask all the questions you want to thecontracting officer, but you may or may not get an answer. And at the end ofthe day you're doing the owner of disservice because you're not settingthe level very clearly on expectations. And so there's room for mistakes andyou know, misalignments at the end of the day that are just unnecessary ifwe're being a little bit more straightforward with our contracting.So I'd like to take a closer look at the contract types. Our listeners aresigning every day. So I know there are prime contracts and subcontracts. Canyou get us a little closer to the nuance of the difference and which onesare most relevant for our specialty contractors out there. Absolutely. Sothe prime contract is the contract between the owner and what I like tocall the place one contractor because they're in place one on the food chainor the general contractor normally. And so that puts out the terms andconditions between the owner and the general and the general can negotiatethe contract with the owner and then the general contractor, the place onehire subcontractors. And that is a subcontract agreement. And so that, youknow, relegates the terms of that agreement. What has happened and whathas been happening. As long as I've been reading contracts, subcontracts isone of the on the first page of the sub contract. There is a line thatincorporates the terms of the prime contract. And so here's the thing isthat the subcontractors, specialty contractors, trade contractors aregoing to be held responsible and liable to the terms of the prime contract. Theproblem is, is that they've never seen that document. They have no idea whatit says. They don't get to negotiate the terms of that, of that contract.And and sometimes when even when they request a copy, they're not given one.So, I mean, yes, I it's supposed to work the chain. But and in my opinion,it's kind of, you know, a catch all if I missed something, it'll be in there.But I don't think first off, I don't think it's unreasonable that if you'regoing to be held liable to the terms of your contract that everything is inthat contract. And so that portion could be removed or that at the veryleast you get a copy of that contract. So you know what it says. So if there'sthings like I had a client that didn't have delay damages in their contractbut was held to have delay damages because they finished you know, 100days late because the delay damages was in the prime contract. And althoughthey never read it, they were held liable to its terms. So those are howthose 200 play another big thing that's come up with material price increasesand everything is what's called a GMP contract. A guaranteed maximum pricecontract. And so what this tries to do is shove is shift the risk of materialprice increases either to the general and then from the general to the subs.And so it's got it's got the name general, you know, guaranteed maximumprice contract. And so you know what is on the front end. But here's the thingis if your contract that you sign doesn't allow for you to increase formaterial increased cost it is a GMP whether it's called that or not. Andmost contracts most either owner to G. C. Or prime contracts or subcontractsdon't have that language in there. So it is a GMP contract just by its termsbecause you cannot increase what you're charging for for the increased cost ofmaterial or labor if it's not written in there. And that's such a challengingthing to navigate with the amount of uncertainty that we're dealing withright now. We had a lot of firm fixed...

...price contracts when I was still backin federal land to put my proposal manager had on and there was a handfulof companies that bid those out like they were still cost reimbursableprojects and a lot of them went out of business because they tried to buy thejob assuming they could get, you know some cash with the aria or something atthe end of the day and it doesn't work like that. Especially when you'redancing with the federal government. So I think just understanding those termsclear is probably a great starting point for anybody out there listening.And then make sure if you've got that prime contract clause in your subcontract, get ahold of that. Because if you're surprised by liquidated damagesor delay damages or something. I mean, you sign on the dotted line, even ifthe transparency wasn't quite there. So you understood what you were gettinginto. So yeah. And that's another thing at the end of the day, there's what yousign will be used against you, especially in commercial contracting.There's no set of rules that protect you. There's no set of. Oh this can'tbe in your contract. It's very much what you sign is what you're going tobe used against you. I'm completely okay with not being the person that hasto sign on the dotted line for most of the things that roll across my desk.The challenges there are pretty obvious. But I've heard a lot of frustrationswith a pay when paid clause that appears on a lot of contracts. And youmentioned a little bit about that when we last spoke. So I was hoping youcould share your thoughts about that and what specialty contractors and subsout there should look for when those clauses show up in the contracts. Imean the first thing is that even if you don't want to negotiate so let'sstart with what to pay one paid clauses. So if you're a subcontractor and you dothe best outstanding job in the whole world and the G. C. Tells you what agreat job you did and you know a great job That alone by itself is not enoughto get paid. If you have a pay one pay clause you are relying on somesomething to happen that you have no control over. So the owners got to paythe general before the general's got the obligation to pay you this up andthat could be I don't know 120 days there's there's no telling about therelationship between the owner and the G. C. If that's gonna work. You knowyou know if the G. C. Gets mad you're the painter and they're mad about thetile so they don't pay the G. C. And now you're not getting paid. So youknow really if you sign if you sign a subcontract with the penguin pay clausethat you don't negotiate you should really have enough cash on hand tofloat that whole contract amount just in case because you can't stop workingright? You don't have that right because the obligation to pay youhasn't been triggered yet. It's the payment from the owner to the general.So it is really and here's my thing is okay you know G. C. I understand youdon't want to take the risk. I don't want either sub can't afford to takethe risk because I'm putting out labor material because I'm you know doingthis and waiting to get paid. Let's split the wrist let's have some youknow okay you know I have provisions that I recommend that if I don't if youare G. C. Are not paid by the owner within 30 days and it's not my fault.You pay me 50% of the pay up at least I can pay for my guys and you know I'mnot you know and I can I can make it a little longer without getting paid. Sothese are just some things that we don't have to you know we can we canshare the risk. Not 100% of it goes, you know because in that situation thesubcontract, taking 100% of the risk of non payment from the owner, the general.I mean the subcontractor didn't vet the owner to make sure they have thefinancial capacity to, you know, so and that's such a tough spot to be in toobecause especially as the subcontractor is holding the cost for all of thosematerials themselves and those weren't wrapped up into other parts of the bidor whatever the amount of overhead and risk you have to carry is tremendous.Especially if you're bidding on 10 15, $2200 million dollar projects. Even ifyou're especially contractor or a subcontractor, your scope might be $20million. Like that's not an unreasonable amount for a larger youknow subcontractor. So I I do like your your approach to finding a way to meetin the middle and kind of share that risk because it does feel a little bitfairer. I'm curious is the landscape...

...right now in construction with theamount of work going on in the in the shortages and labor? Is there moreopportunity for these negotiations to be meaningful than there were, saymaybe four or five years ago? I definitely think so. And especially if,you know, you're working with a G. C. That truly appreciate your work. Youhave great customer service and you do a good job that is that is worth somuch to them. They have less to manage. You'll do a good job. And so they'll bewilling to negotiate as opposed to when they you know they get to say andthere's still a lot of GCS out there so you can either sign it or or not andthen you've got to decide that risk but knowing what the risk is going in andlike I said like I say all the time I never see a good project. So you knowI'm kind of jaded from the perspective of I know what damages can cause and itprobably doesn't most of the time but still having that in there is a hardthing. It's a good perspective to have coming in and just making sure yourbases are covered. And I like your point about the relationships toobecause this industry is entirely built on relationships and I know from pastexperience that sometimes the G. C. Will pick especially contractor or subthat is more expensive than one of their competitors simply because theyknow that they're a good person to work with. Like they've got a greatexperience, they're already built into their systems and such and so you knowyour overhead costs go down when you don't have to bring a brand newcontractor up to speed. And so finding that middle point to support everybodyacross the project and continue empowering our teams to be successful Ithink is a great baseline to set with uh with how you interact with yoursubcontractors. But this this kind of leads into my next question especiallyfor those that might not have all of the cash on hand to float an entire $20million dollar project. But you had mentioned the last time we spoke that alot of this industry is run on credit and I was wondering what that rolereally is and how leans play into that as well. Absolutely. So it's like thepenguin pay cause that we just went through. So yes the owner takes outalone normally sometimes if he's not paying cash to do the constructionright? And so he gets credit to do that. But what ends up happening especiallywith the pay when paid clause as subcontractors and material supplierssupply the labor supply the material and the wait to get paid and that iscredit right? You are owed a debt and right now it just just across the boardas the way it sits if you just work and wait to get paid, you know the extendedcredit and so there's two types of credit in the world there is securedand unsecured debt. So a great example that I like to use is that if you havelike a home depot credit card or credit card and you charge up a bunch ofthings and you don't pay it, that's an unsecured debt in order for them tocollect on that debt, they have to take you to court. So you get a judgment andthen find assets to collect that amount. Whether that's bank account propertywhatever to collect the amount that they're owed. That is unsecured debtwhen you're working just on your contract. And you extend credit bysupplying labor materials. That by itself is an unsecured debt. You havethe same right as the credit card company does right? You can see theperson who hired you the G. C. To pay you for those things and then you'vegot to find assets to collect from and all that. The other type of credit is asecured type of credit secured debt and the most common type of that that youcan think of as a mortgage. So you go to buy a house. If you don't have thecash to pay for the house up front you get a mortgage company that extends youmoney in exchange they take back a lien on the property. And what that means isthat basically if you don't pay your mortgage, they can foreclose that leanand sell the property to pay what they're owed. Mechanics Lane works thesame way. If you do it right in your state and you followed on the project,you are now a secured creditor. The amount that you're owed for labor andmaterials is secured by the property that you supplied them to. You stillhave your unsecured debt claim against the D. C. Or whoever hired you. But nowyou have a security interest in the...

...property to the extent that you're owedmoney for labor, materials supplied. So it really kind of can even out that andyou're extending credit and only having an unsecured claim because absolutely,if you have the choice between being an unsecured creditor and being a securedcreditor, that's where you want to be and the construction industry hasreally has allowed this to promote people to go to work right and and feelsafe that they will get paid in the United States. Was the United Stateswas actually started by thomas jefferson because he wanted people tocome build the capital and nobody would because it was a broke country who theydidn't think that they were going to get paid. So like we're not coming.He's like okay well we'll do this this way, You feel securing income, you'llcome work. And so the same thing Still applies. But the tricky thing about itis that such a strong remedy. There's a lot of notices and timeliness that hasto be followed, which is different in all 50 states. It makes sense though.And it feels like a much safer way to approach building if it's somethingthat's on the table for you to explore. And certainly a lot more risk adversethan maxing out your home depot credit card for the building supplies on a $10million dollar project. So that's I I appreciate that context too. And youknow, every person in the world touches the built world in some way. And sofinding ways to incentivize this industry that's so terribly importantto, you know, work collaboratively together and empowering people to takeon new projects and minimize that risk is I think just an empire paramountconsideration for construction at large, so getting people a bit more educatedin in these different terms and you know, how to be successful is a reallygreat starting point on getting everybody paid. Which rolls me into thesecond part of our conversation that is focused on, you know, what the heck canwe do? And I think we've set the stage for, you know what's going on in ourindustry tied to contracting. And I'd like to take a moment now to helpempower our listeners to take steps that will make improvements in theircontract approach and make sure that everybody gets paid. So even thoughthose laws differ from state to state or country to country, can you sharesome of those top common steps that you recommend that people can take toprotect themselves when it comes to contracting and payment turns so forthe contract side, I think that even if you don't want to negotiate, havingsomeone an attorney, whoever break it down this is what this means. And so,you know, you know what you're agreeing to, you know what's expected. And so,and then once you know, you can evaluate the risk and if something isnot worth the risk then you can take steps to negotiate. But the first thingis don't just sign it. Please don't just sign it right. And here's thething is that from my experience the subcontract that comes over is thefirst offer right? It is like paying sticker price for a car. No one doesthat. And I think part of why subcontracts are in the state that theyare in. Now attorneys draft things that are the best for their client thinkingthat there's going to be a negotiation and we're gonna meet in the middlesomewhere. But subs were so afraid of not getting the work that they justsigned it. And now there's a standard out there. That's that's way one sided.And so even if you just take the time to you know have somebody tell you whatit means and then you can decide to negotiate. So that's the main thing.And obviously you don't have to do it through your attorney because I knowthat might seem intimidating. The attorney can give you some languagesome ideas on how things to negotiate and meet in the middle. It's not justcross it off and say I can't take it. You know, I'm not gonna do this at all.If you don't change this, we can always work on meeting in the middle. Sothat's that's my but at the very least just understand what you're agreeing toand then you can go from there now on the collection side. I think one of themost important things that we can do is have a consistent collection strategybefore we decide to extend credit. And so what I mean extend credit before wedecide to give those materials, you know, send out that labor withoutgetting paid and so that is consistent the same time and that can be built onand built within your lien. The lien requirements for your state. And soevery state is different. But what I...

...can tell you is that every staterequires notice before you file a lien. It's different on when it's required.But the main thing is that the whole purpose of the notices to give people.Like if you're a subcontractor to give the owner a chance to know that you'renot paid before that lien is actually filed. And so that the whole system canwork together to make sure that you are paid and the lean isn't filed. Sonotice is always required. So what I say, even if you're state doesn'trequire notice till 75 days after work, you can always send it early if youknow that there's an issue. I mean communication again is the key toresolving these things. So if you if you know that there's an issue, sendthat notice. So all states have noticed, all states will require that you haveto record it in wherever the real property records are. So you can haveget with your attorney, get with an attorney and have it built up so that,you know, if you're not paid by the 60th day, here's what's going to happen,right? Here's all the things that are going to happen. And then then, youknow, then you're ready, then it's not like, oh my gosh, I haven't been paidand there's, you know, I'm owed over half a million dollars in my open openinvoice reports. What do I do now? And in some states you might have waivedyour bling, right? So be proactive about it. I know that it can be not themost, not the highest priority on your list, but it really should be one ofthe higher priorities. And I think after you start doing this morefrequently and set this as your baseline, it's going to get easierevery time you move forward. And I really like your point about just readthe day in contract and really get into the weeds and I that can be painful. II I I know I feel that pain myself after reading four or 500 pages of anRFP looking for, you know, one surprise line that's going to change our entireapproach to our bid or you know, tell us we needed to use 11 point fontinstead of 12 point font and throw our proposal in the trash. So, you know,getting into the weeds does have an R. O. I. But you set that, that baselinefor yourself and you, you're building, you know, a new approach that hopefullywill, you know, improve all those projects and it always comes back tocommunication and construction. It's having those conversations making sureyou have those relationships because even before you start sending thoseformal notices, if nobody knows you're expecting something or somethingslipped through the cracks, you might be able to have a conversation about itand resolve it before he starts sending formal documentation out, which couldmake somebody a little more grumpy as far as moving forward. So you havethose conversations as early as possible and build those relationships?Absolutely. The other thing I can say is that if you're consistently thesqueaky wheel, you will get paid first. Just like that makes sense. It'sunfortunate that sometimes that behavior gets rewarded in a contextthat we're not super fond of. But in this instance, I think it makes senseto, you know, make sure your your challenges are are heard. So everybodyknows what's going on. Another element tied to contracts and getting paid thateverybody on here is certainly familiar with is the dreaded change order. And Iwas wondering, are there any best practices that our listeners canimplement or common mistakes or pitfalls that you see to avoid that canensure that the costs from change owners specifically are paid for. Okay,so there's a couple things there first off read the change order provisionsbefore you sign the contract because yes, the change order provision isgoing to generally be the same, right? And that is going to be signed by bothparties before the work is done. But I've seen more and more pushback tookay, you're going to do the work and then we'll decide the price way lateron. And so or it's only your change orders can only be approved by bob onTuesdays at 10 a.m. So does knowing what that is, even if you don't want tonegotiate them, know what it is in your contract to have a valid change order,right? And so and if you can negotiate it, what I like to do in my contract isOkay. If we can't agree on a price it's cost plus some percentage, 15%,whatever it is. So we don't have this long drawn out negotiation about whatit is. We can't decide. We just build in. Okay, I'm gonna give you a price ifyou don't like it, here's the here's the alternative and that way it's builtin. And so and then the other thing is you know that I have the actual changeorder form drafted everything that...

...needs to be in there with the price ofits agreed on and signed by both parties before you do the work wheremost people get into trouble is that they don't get it signed or they don'tsubmit it at all or they do it after they do the work and then and thenyou're just you know, somebody's good graces to sign it for you becauseyou're really not going to get paid for that extra work if it's not on awritten change order. And another thing to make sure that we take account of isthat if whatever we're doing the change order is going to extend our completiondate, we need to put that extra time in there as well because if we don'tyou're not going to be entitled to it and you're gonna say well they shouldjust know it's going to take longer. Well they probably do but if we don'tput it in writing, it's not going to help you at the end of the day whenyou're tied down to this deadline and now delay. The damages are starting totick because you didn't finish on time and you didn't put it in the changeorder requests. So you know, just making sure it's signed in writingbefore you start to work or at least know what the process is in thecontract. Try to negotiate. That if it's not something that's practical andthen follow that process is the main goal because if not you're basically tobe doing that extra work for free. Yeah. The documentation trail in thoseconversations is so important and anything you do where you haven'tdocumented and greet it. You're putting yourself at risk and if you've got thatrelationship and you're comfortable with that risk, I mean entertain itmaybe but you're still putting yourself at risk until you get those signatureson the dotted line. So I appreciate that perspective. And then of coursejust reading everything to make sure you're capturing all that documentationin the way that the G. C. Expects it to be. So there's no surprises when youknow you get a little bit further along in the schedule and would like to getpaid for the surprise work that you weren't expecting to do. Absolutely. Soextending this out to just bid packages in general, is there any commonavoidable mistakes that you see when people are submitting bids at the startof a project or that would relate to what we just discussed as far as changeorders go. So there's a couple things especially in this new environment thatthat's going on. Is that right now your bid from what's going on with theescalation of materials and labor and all that You need to put on there thatif the material prices escalate more than two or 3% that you're going to beable to change your bid for that. And I also have guys that are putting shortertimelines on their bid like 30, 60 days. If it's not accepted then it'swithdrawn just because the market is so volatile right now and if you don'tthat could be a huge thing right? That you if for example I had a client thatbit a job the end of 19 it didn't get going to the middle of 20. They senthim a subcontract. He didn't sign it because the prices were were no good.But apparently when he submitted his bid he signed their paperwork. Thatsaid the G. C. can rely on this. It's good forever. The prices are goodforever. And so he gets a demand letter at the end of 20 that they hiredsomebody else to do his scope of work. And it cost them $115,000 more. And nowthey're seeking the difference from him and the paperwork doesn't look good forhim. That's what I can tell you. And so that is one big thing too. When you doa bid always do an itemized bid because you don't want to just did the wholescope and miss something and then you're on the hook to do it becauseonce you put a bit out there into the world it is an offer that can beaccepted and once it's accepted your held liable to those terms. And sothose are kind of the some of the things and then another big thing thatI that I always see misunderstood is that subcontractors think that they'rehired to do their bid. You're not hired to do your bid you're hired to do thescope and they could be different, right? And so when you come in and saywell I need to put that in my bid. It doesn't matter because your bid nolonger describes the work you were hired to do, the scope attached thecontract does. And if those things two things are different, You're still heldto the scope. And so one of the things I tell my contractors is read the scopeas if it were new a project and make sure you get the same price becausethere's there's been you know I've seen things as small as $3,000 and I've seenthings big as a couple $100,000 that were missed in that situation. Yeah.That's always a scary moment when you shop at your bids and you know why arewe $200,000 less than this other...

...contractor? And you know the othercontractor might have put a ton of contingency in there or something. Soit's you know, not an apples to apples comparison but it's tough and I cantalk for 10 hours about my feelings on the bid and proposal process that it'scoming from the perspective of the G. C. It was always tough because things comein very last minute and I understand why we're on a crunched amount of timeto be able to put these bids together and everybody is worried about priceshopping. So we can get that lower price out And I'm I'm hopeful at somepoint that those relationships can be a little bit more streamlined becauseIt's so painful as the person owning the submission of the proposal to catchthese bids 20 minutes before the submission is to and try to compilethis 200 page document to submit into a portal that may or may not work likeyou stress in our lives, right? You can see former proposal manager here, I nolonger do that work anymore because after, you know, four or five years mybrain was filled that I just didn't have the capacity to deal with thatongoing stress. And I think a lot of digital tools now are improving thatprocess in a way that makes the transparency easier in the bid packageseasier to submit, which is what I'm thankful for. But that does lead intomy next question, which ties into the fact that I'm a tech nerd. So I'mexcited to hear what your answer on this one is. But what are ways thatsubcontractors can leverage technology themselves to ensure that they'regetting paid? Oh my gosh, There are so many great platforms out there thatallow you to do everything electronically and let me tell you, Idon't have a preference for which one I can just tell you that, you know, a lotof the times sometimes you don't get paid on time because not everything isin there or it's not submitted correctly. So that pushes you backanother month right. You know if the bid does not if the payout doesn't getsubmitted properly to the owner they have a deadline that they've got to geteverybody else paid. And if you're not in there you're wait until next month.So I think it helps eliminate all that. It has everything all in one place andI appreciate it so much as a lawyer they don't have to go through bankerboxes looking for all the paper that go with this job right? It is no longerthing. And so and I can if I want I'm looking for something I can search bykeyword oh my gosh saves you so much an Attorney streets too because I don'thave to spend time searching through that. So I think there's some reallygreat platforms out there that you can use that are will streamline and I knowthe kind of the pain that stuff feels because it seems like every G. C. Usesa different platform and sometimes the one they have is not compatible withthe one that GC uses. And so it it's all very even if you have your own andsomehow make it work with it it's so worth it to have everything digitally.It's just as good evidence in court right if it's digital because mostcourtrooms are now going to I can use my computer to show everythingdigitally zoom trials are a huge thing that's all you know, there's no realpaperwork there. So I mean I'm just saying don't be wrong, I'm from thegeneration, I love paper, I love to hold it, I love to write on it becausethat's where I wasn't born digitally but it does save so much time and canmake the streamline the payment process because you have everything that theyrequire and it'll all be done better. So yes, I'm all for it. Everythingyou're sharing here is music to my ears and for listeners out there who haven'tnecessarily adopted a platform themselves. Go back a couple episodes.I think it's episode 20 where jim lynch and sid hacks are joined me and wetalked about the platform converse at length and really evaluating which oneis the right one for your organization. But you made a really great point thereabout sometimes the tech that the G C selects may not be the same thing thatthe specialty contractor subcontractor selects. And I think that's it'simportant to remember that that's okay sometimes because you need to make sureis a subcontractor that you're owning your own data instead of simply beingbeholden to whatever the G C does as far as documentation and what'scaptured because you could get surprised where the G. C. Turns offyour access to the thing if a platform...

...you've chosen doesn't empower you tokeep your data at the end of the day and suddenly you don't have all thatdocumentation that you thought you did to go in and have those meaningfulconversations. So you know be smart about the tech choices you choose,please avoid email because it's just not a great way to document everything,especially if there is a platform option. But the technology thing isjust getting more and more powerful to ensure that you know, everybody has allthat documentation and then your owners are going to be happy at the end of theend of the day to because your hand over packages aren't a stack of bankerboxes full of stuff that they don't know what it is. Like the digital twinconversation is becoming ever more important. So I, I like to hear that.Alright, so I think it's time to snag our crystal ball again and take a lookat what the future might have in store for us. Do you have any predictions onhow the world of contracting and payments may or may not change in thefuture either in the near term or a little bit further out. I think thetech portion is definitely going to help streamline everything and makethings communications easier. I still think that there needs to be arevolution with the contract documents. I'm not saying there needs to be astandard one but I think there needs to be some where you don't have to hire alawyer to read your contract to go to work. I think, I don't know exactly howthat's going to change, but I think that needs to change and I'm out therepushing forward and I hope everybody else's, it doesn't need to be a we'relosing productivity when we don't know what we're supposed to do. And in thelong run it is costing you entirely too much money, your sub's gonna build thatinto their price, everything gets inflated. I mean, this is not this iswhere we're now, this is where we're at now, but it's not the best solution.And so I really hope that I'm going to be pushing in all the ways that I canthink of to try to try to get that done, but I do think technology is going tohelp so much. And I think, I think we're gonna hopefully see some of theolder contractors realize this and jump on the platforms become, you know, waymore productive as well, you know, in the last year and a half in particularhas just rapidly accelerated the technology adoption and constructionspecifically. And, you know, any listener of our show has heard me talkabout this at length, but it's it's a really important point, like we are weare newly digitized in a way that we weren't 18 months ago and there's a lotof power in that as far as getting work done and collaborating, communicatingwithout being contentious in the process. The other thing that comes tomind when I'm thinking about the future of contracting is simply our deliverymethods and finding ways to explore integrated project delivery in a moremeaningful way. Because if you're incentivizing everybody to be moretransparent about their data, the documentation they have, where they'reat in the project. And ultimately those incentives reward people if you beatthe schedule or all sorts of things that can happen that have positiveimpact for everybody on the project team, it seems like a no brainer toadopt. But I also understand that that's a complex relationship to set upto and you can't really walk into a room and go, we're doing I. P. D. Today.Hello. A bunch of new specialty contractors, you guys are on board,right? Like you give people a heart attack. Yeah, there's a transition. ButI think especially if you're a contractor and you've got greatrelationships with everybody that you work with and you, you know, an ownerthat works over and over and over again with the same GCS who bring on the samesubs that's really an opportunity to start thinking about ways to optimizethose relationships and try new things in a a way that's probably a bit lessrisky than showing up with a whole new team and saying we're going to do thisand you know, not to say don't ever do that. I mean if you if you want to rollwith it by all means I support it. But if you're trying to take baby steps,it's a, you know, one thing at a time. So to close out this episode, I've gotone more question that I ask every guest and the answers are always reallyinteresting and span, you know, physical tools to all sorts ofinspirational things. So what is one tool that you will always carry in yourtoolbox no matter what kind of project you're working on? An attorney, That'sa phone call away. That's my because I...

...think so much, especially in theconstruction industry, I don't I don't think people realize how much legalcrosses over into that world or things that you really need to consider beforeyou just sign. Uh and here's the thing is that you need somebody that's gonnaanswer the phone now, right? You can't wait two days, you can't wait a week toget an answer. Should I sign this lien waiver because I need to get paid so Ican make payroll. And so I think setting up that relationship early onand having it where like you know that you there's a phone call, we candiscuss it, let you know, it's kind of like almost like coaching. But from theside of you know, I'm not gonna write a demand letter, let's let's talk aboutour options here. You know, you can handle this, here's the email, I wouldsend all of those things like a sounding board right from the legalperspective and what I would what I can recommend of. I've seen the badsituations and I don't want you to go there. So I think I think that is andon the collection side on the contract side all of it just to just to evenknow what you're agreeing to and to have a plan. So I think an attorney oncall that is familiar with construction that's what they do is a priceless toolin your toolbox and I think it's important to remember too especially ifyou have those relationships or you've got an organization big enough for youhave lawyers on staff the legal teams your friend like they may tell you notto do certain things sometimes and you might get frustrated because you reallywanted to do the thing but they are there to protect you. And I've alwaysbeen super appreciative of my legal team since I built those relationshipsbecause they keep me out of trouble and it's just a really important asset.Actually one of my best friends was the former corporate counsel for one of theG. C. S. I worked for and I appreciate him you know being a phone call awaywhen something looks a little messy I'm like what do you think about this?Because that sanity check definitely goes a long way when you're you knowmoving forward in the construction industry specifically. I know you'reworking on some really cool projects right now including your own podcastand you've authored two books on today's topic. So I'd love it if youcould tell us a little bit more about the books that you've written and shareanything else that you think our listeners would be interested inhearing about. Absolutely, I think, I think you have to before I get into allthat stuff, I think you have to start with my why and why I do all this stuffbecause it is hugely important and because I grew up in the trades, youknow, I had my, my grandfather's business went out of business becausehe didn't get paid on a project. And so I feel the pain, I know what it's likeand I've learned so many things on the legal side that can save a business andmake you run a better business. And so I'm just trying to get that out there.And so, you know, I have subcontractor just to which got a lot of, you know,the rules for filing leans in all 50 states, the podcast, which we arediving into him talking to a construction attorney from all 50states about the Lean right? So you can hear it, you can hear it on the podcast.I'm also kicking off, you know, going in deep dive into the risky thingsabout subcontracts that I'll be teaching to have, that you havesubcontractor institute. The books Quick, Getting screwed is literally the20 things to watch out for when you sign us up contract. So if you don'twant to hire a lawyer, it's all in there quick getting stiffed is acollection of mechanics lien guide for texas specifically because texas is socomplicated and required a whole book. Most states are not that complicated.Um, and you know, the crow means law firm, we're always here to help you andI'm really trying to overcome that, the stigma that's around lawyers that wejust want money and we're not here to help. And I think I should be more of acoach and more of a counselor than I should be on the litigation side. Mywhole job is to keep you out of litigation to keep you running yourbusiness. And so that's really where I'm coming from and that's, that's whatI'm trying to do with the books and then there's tons of like 83 forms thatsubcontractor institute. So all really great information out there and youtouch on something that is one of my favorite parts about the constructionindustry at large and everybody is incredibly supportive and collaborativewhen it comes to bettering the industry at large. And of course people aregoing to be protective about competitive information at times, butthe lessons learned in the education...

...that we can get from speaking to ourpeers and you know, listening to podcasts like yours, you know,hopefully digital bill there as well. It just brings so much value to thisongoing conversation about improvements. So I I appreciate you sharing thoseresources and you know, doing your part as far as empowering people to makebetter decisions when it comes to contracting and litigation and allthose other fun things that people don't necessarily want to think aboutbut are incredibly important to being a successful business. So if listenershave any questions for you, is there a good way for them to reach out to you?Probably the best way through my website at the Crow means law firm dotcom. There's a phone number. If you ever want to talk to me, my customerservice guy will set it up, emails, my emails, Caroline at the Crow means lawfirm dot com. I'm available. I'm here to help and truly that's I want to helpyou guys run better businesses. That's what I'm here to do. Awesome. Well ifyou're out there listening and you've got any questions, you know where to go.So everybody out there still thanks for taking the time to join us on thisepisode of digital builder. If you have any questions for me or have a guest inmind for a future episode, you can reach out to me on linkedin or twittervia builder underscore digital and if you're enjoying the show, please rateus on Apple podcasts or your favorite podcast player. All you gotta do isopen the app, Find digital builder and select the number of stars that youthink we deserve. It's super easy and does make a real difference for ourshow. And of course you can always like subscribe to or share this episode ifyou enjoyed it. And on that final note, goodbye, you've been listening todigital builder to ensure that you never miss an episode. Subscribe to theshow in your favorite podcast player. If you're listening with Apple podcast,we'd love for you to give a quick rating of the show, simply tap thenumber of stars you think the podcast deserves and then you're done. Thankyou so much for listening until next time.

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