The Top Mistakes Design Firms Make from a Risk Management Standpoint
A conversation with Craig Thompson, Sullivan Ward, Patton, Gleason & Felty
In our third episode of the Pro Concepts podcast, I sat down with Craig Thompson, a construction attorney at Sullivan Ward, Patton, Gleason & Felty, who has spent nearly three decades representing design professionals. Architects, engineers, surveyors, civil engineers, geotechs. If it involves a design professional and a dispute, Craig has seen it.
This conversation is built specifically for the design community. We covered the most common risk management mistakes Craig sees firms make, and what to do differently before problems ever reach the litigation stage.
1. Getting the Contract Right
If there is one place where design firms consistently create problems for themselves before a project even begins, it is the contract. Craig described contracts as setting the table before you can eat. You have to have things in order before the project starts, because by the time there is a dispute, it is too late to renegotiate the terms.
The challenge is that most contracts coming to design firms originate from owners, and they are heavily modified in the owner's favor. A 50-page contract based on an EJCDC, AIA, or DBIA document sounds familiar enough on the surface, but the modifications can shift significant risk onto the design professional in ways that are not immediately obvious.
Craig's approach is not to throw out the owner's contract and start from scratch. He describes it as surgical modification. You identify what is unfair, what is a deal breaker, and equally important, what is missing entirely. He calls those missing provisions "dealmakers," and they are often overlooked because firms are focused on striking bad language rather than adding what should be there.
A few examples of common gaps: contracts often say nothing about who is responsible for site safety. The answer in the industry is clear, that responsibility falls on the contractor, but if the contract is silent on it, the design firm is exposed. Similarly, limitations on consequential damages, things like lost profits, are industry standard protections that sometimes get stripped out entirely. If they are gone, they need to be added back in.
When clients tell Craig that an owner will never agree to changes, he pushes back. His experience is that when you are asking for fair and reasonable modifications, not trying to flip the contract entirely in your favor, there is more room to negotiate than people assume. We don't give up the fight. A good contract is not a perfect contract. It is a fair one.
2. Use the Resources Available to You
Design firms have more support available to them than they often take advantage of. Craig framed it simply: you have a tool belt. Use the tools in it.
That means your insurance agent. Professional liability insurance for architects and engineers is not a commodity product. The people who specialize in it understand contract language, know how carriers will respond to different types of claims, and can be an important sounding board when something comes up on a project. At PCIA, one of our favorite calls to receive is a client saying, "I just want to bend your ear on this for a minute." Those proactive conversations are where we feel like we're genuinely adding value, and they often head off problems before they become claims.
It also means your carrier. Good professional liability carriers in the design space provide real support resources beyond just a policy. They can weigh in on contract questions and help you think through how a situation might be handled. If you're paying for a robust policy, you should be using what comes with it.
And it means a construction attorney who actually knows the space. Craig made a point worth repeating: a general business attorney is a valuable resource for many things, but when you're dealing with a dispute involving your fee, your intellectual property, errors and omissions on a project, or a complex construction claim, you want someone whose entire practice lives in that world. Craig called it a very specialized area, and he is right. There are not many attorneys who eat and breathe design professional liability the way he does.
One note on carriers specifically: I have been doing this for 25 years, and I have watched new carriers come into the architect and engineering space offering lower premiums, attract firms away from established markets, and then quietly exit when they realized the long tail of exposure in this space. Firms have been left managing claims with carriers that no longer write the coverage. At PCIA, we made a decision that if a carrier has not been working with design firms for at least five years, we are not representing them. The low-cost option is rarely the right option when you actually need someone to have your back.
3. Managing Owner Expectations
One of the most consistent sources of disputes Craig sees is a gap between what owners expect and what design professionals are actually responsible for delivering. No set of drawings is perfect. There is no such thing, and the industry standard does not hold architects and engineers to that bar. But clients often expect perfection anyway, and when something comes up during construction, the blame lands on the design team.
Errors and omissions exist in every set of construction documents. Sophisticated institutional clients, universities, healthcare systems, large developers, generally understand this and carry contingencies for it. Smaller or less experienced owners often do not, and that is where the friction happens.
The fix is a conversation that needs to happen at the start of the relationship, not the end. Setting realistic expectations upfront about contingencies, about how change orders work, about the nature of design deliverables, is one of the most important things a design firm can do to protect itself. Craig put it clearly: architects and engineers get paid a fee for delivering a service. They are not stakeholders who benefit from the profits of a project. Their margins are tight, and they are not in a position to absorb the cost of every issue that comes up during construction.
Clear communication at the outset, calibrated to the sophistication level of the client, goes a long way.
4. Documentation
Craig and I are completely aligned on this one. Document everything.
In a design professional's world, undocumented decisions are liabilities waiting to happen. Meeting minutes, RFI responses, change order direction, approvals that happened in conversation. All of it needs to be captured in writing, and it needs to happen in real time, not after the fact.
I have always said that email is a great documentation tool but a poor communication tool. The right sequence is to have the real conversation by phone, by Zoom, or in person where you can actually communicate effectively, and then follow up in writing to create the record. Craig's guidance is the same: nothing goes undocumented.
When something significant comes up on a project, whether it is a contractor question about the design, a direction from the owner that changes scope, or anything that has cost or schedule implications, elevate it. Do not let it sit at the project architect or project engineer level. Get the project manager or project executive involved, and if there is any real concern, pick up the phone and call your attorney or your insurance agent. Craig welcomes those calls. We do too.
5. Internal Communication and Coordination
Design firms rarely work in isolation. Structural, mechanical, electrical, plumbing, civil engineering, there are often multiple subconsultants involved in a single project, and coordination between all of them is critical. Craig's observation is that firms do this well in general, but it is also an area where there is always room to do it better.
Internally, the same principle applies. You cannot rely on software alone. AutoCAD, Revit, and other design tools can flag coordination issues, but they do not replace human review, mentorship, and quality control. The pressure for productivity is real. Timelines are tight. But cutting corners on internal coordination is often where small issues become large ones.
Face-to-face communication, or at minimum video calls, makes a meaningful difference in how well teams stay aligned. When you can see someone across a table or even across a screen, you pick up on hesitation, confusion, and disagreement in ways that an email thread simply cannot convey.
The Biggest Takeaway: Proactive Beats Reactive Every Time
The thread running through everything Craig shared is that most of the problems design firms face are preventable. A fair contract negotiated on the front end. An attorney or insurance agent consulted before a dispute escalates. Owner expectations set clearly at the start of a project. Documentation habits built into the workflow from day one.
The firms that call Craig and call us before something becomes a crisis are in a very different position than the ones who call after. The goal is to never need the back-end conversation, and getting the front end right is how you get there.
To reach Craig Thompson at Sullivan Ward, Patton, Gleason & Felty, email cthompson@sullivanwardlaw.com or call 248-746-2776.
To reach PCIA, visit pciaonline.com or call 800-969-4041. We answer our phones.