Launch Build & Thrive: Starting Your Own Firm

“Launch Build & Thrive: Starting Your Own Firm” attracted some 150 attendees.  Presenters Frank Musica, Professional Liability Risk Advisor for Victor Insurance Managers, LLC, and Jacqueline Pons-Bunney, Esq., Owner and Managing Partner at W&D Law, LLP, spoke with a group of interested entrepreneurs about legal, financial and risk strategies to consider when starting an architectural firm.  Some highlights from the talk and the questions and answers that followed:

Legal: First and foremost, it is essential to choose the correct business structure (LLC, PLLC, LLP, C-corps, S-corps, etc.) for your firm that fits with the requirements of your jurisdiction. There are specific requirements for setting up a business in every city and state. Separately, each architecture board has its own requirements and limitations.  Conditions of both must be met.

Financial: Hand-in-hand with business structure decisions are tax implications. Once you determine which entity type is right for you, consult a tax professional. Additionally, engaging an insurance broker that specializes in architectural firms is key. Not all brokers are created equal. A broker that understands and is proactive in our industry will be an invaluable asset to your business at every stage.

Risk Strategies: Working with a qualified broker to ensure your firm is adequately protected brings tremendous piece of mind as you navigate what can seem like shark-infested waters of potential projects and clients. Having a standard, favorable contract that is insurable likewise provides that important layer of defense (and potentially offense) to safeguard your practice. For example, a fair and equitable indemnity provision balances risks on a project. Limitation of liability and a waiver of consequential damages serve to limit your exposure when the inevitable claim surfaces.  Protecting your instruments of service will protect your unique designs while providing leverage for payment. There are countless ways these provisions can be negotiated, and informed business decisions will pave the way to expanding your practice in a manageable way. Consult a qualified attorney with experience in the A/E arena when the decision-making becomes murky.

AIA Trust provides many resources for emerging firms. Its knowledgeable staff is dedicated to helping your new firm grow. LegaLine, a subscription-based legal information program through AIA Trust, provides another resource for AIA members with questions about running their practice. Understanding the nuts and bolts of forming and managing an architectural firm from the outset will put you in the best position to thrive.