Change Management: Establishing Your Firm's Policies

{"version":"0.3.0","atoms":[],"cards":[],"markups":[["strong"],["a",["name","OLE_LINK12"]],["em"],["a",["href","https:\/\/www.berkleydp.com","target","_new"]],["i"],["a",["href","https:\/\/www.berkleydp.com\/risk-management\/risk-resources\/","target","_new"]],["a",["href","mailto:amendelson@berkleydp.com"]]],"sections":[[1,"p",[[0,[],0,"July 28, 2022"]]],[1,"p",[[0,[],0,"\n\nLet\u2019s face it: change happens. There\u2019s no such thing as\na perfect project plan, and the difference between success and failure is\nplanning for the inevitable. You have to expect that changes will occur during\na project and be prepared to address them. "]]],[1,"p",[[0,[],0,"\n\nUnmanaged changes can lead to scope creep: the\nexpansion of services provided without a corresponding increase in your fees.\n"]]],[1,"p",[[0,[],0,"\nOn the financial side, scope creep can compromise the\nproject plan and result in a loss of profit for your firm. It can lead to\naccounts receivable issues, particularly when you\u2019re trying to bill a client\nfor an additional service that they weren\u2019t expecting and did not provide prior\nauthorization for. This can lead to fee disputes, which are never a good thing\nfor design professionals as they frequently result in counter-claims for\nnegligence, errors, or omissions.\n"]]],[1,"p",[[0,[],0,"\nFor your clients, scope creep can lead to surprises.\nIt\u2019s not a good practice for clients to learn the fee for an additional service\nonly when they get the invoice. This can be a frustrating experience for the\nclient and can put a strain on your relationship. Clients should be\ninformed\u2014well in advance\u2014of any financial consequences for services that are\noutside your agreed-upon scope.\n"]]],[1,"p",[[0,[],0,"\nOne of the best tools to manage change and lessen the\nlikelihood of scope creep and its consequences is to establish a change\nmanagement policy. "]]],[1,"p",[[0,[],0,"\n\n"],[0,[0],1,"Elements of a Change Management Policy"],[0,[],0,"\n"]]],[1,"p",[[0,[],0,"\nThere are four elements in a proactive change\nmanagement policy:\n"]]],[1,"p",[[0,[],0,"\n1. Identify\n"]]],[1,"p",[[0,[],0,"\n2. Notify\n"]]],[1,"p",[[0,[],0,"\n3. Authorize\n\n"]]],[1,"p",[[0,[],0,"4. Document\n"]]],[1,"p",[[0,[],0,"\n"],[0,[0],1,"Identifying Change"],[0,[],0,"\n\n"]]],[1,"p",[[0,[],0,"The foundation of change readiness is awareness. Your\nproject team leaders and members need to be acutely aware of the project\u2019s\nagreed upon scope of services and pertinent contract clauses. When team members\nare aware of these details, they are in a better position to identify\ndeviations\u2014changes that need to be addressed.\n"]]],[1,"p",[[0,[],0,"\nChange can also arise from the discovery of unforeseen\nor unanticipated conditions, client modification of prior decisions, or issues\nwith contractor performance.\n"]]],[1,"p",[[0,[],0,"\nAnything that impacts the scope, schedule, work effort,\nor budget of a project is a meaningful change. Those that are not caused by\nyour negligent performance of services should be contractually justifiable\nadditional services.\n"]]],[1,"p",[[0,[],0,"\n"],[0,[0],1,"Issuing Internal and Client Notifications"],[0,[],0,"\n"]]],[1,"p",[[0,[],0,"\nOnce a potential change or problem has surfaced, the\nnext step is to notify the right people. First, your project team members need\nto know whom to notify at your firm\u2014usually the project manager or project\nprincipal\u2014when they become aware of an issue. You should establish a clear\ninternal communication process and make sure your staff understands and follows\nit.\n"]]],[1,"p",[[0,[],0,"\nNext, you\u2019ll need to notify your client of the change\nsituation. Typically, this notification includes your assessment of the change\nand an array of options on how to address it. In your professional services\nagreement, there is almost always a requirement that the client be notified\nprior to providing additional services, obligating the client to review and\napprove\u2014or deny\u2014the additional services.\n"]]],[1,"p",[[0,[],0,"\n"],[0,[0],1,"Attaining Approval (Authorization) from the Client"],[0,[],0,"\n"]]],[1,"p",[[0,[],0,"\nFor additional services, it doesn\u2019t matter whether it\u2019s\nan association agreement (such as AIA or EJCDC) or a client-generated contract,\nyou need to obtain approval to proceed\u2014that is, if you hope to get paid for\nthem.\n"]]],[1,"p",[[0,[],0,"\nLook at the situation from the client\u2019s perspective.\nThey have responsibility to manage the budget and schedule of design services,\nand they have the right to make informed decisions. "]]],[1,"p",[[0,[],0,"\n\nIt\u2019s critical to understand your client\u2019s\ndecision-making authority structure. That way, you can present the change, the\npotential solutions, the related costs, and any schedule implications so that\nthe authorized client representative can make a timely decision on how to\nproceed.\n"]]],[1,"p",[[0,[],0,"\n"],[0,[0],1,"Documenting Change"],[0,[],0,"\n"]]],[1,"p",[[0,[],0,"\nFinally, and most importantly in the case of a claim\nagainst you, you need to properly document changes in your project files.\n\nThis may take the form of email or letter (with an\naffirmative response), a contract modification form\/amendment, or a formal\nchange order. The project record should document:\n"]]],[3,"ul",[[[0,[],0,"\nThe source and impact of the change\n\n"]],[[0,[],0,"The cost and schedule impact of potential\nsolutions \n\n"]],[[0,[],0,"The client\u2019s decision on how to proceed and\nauthorization of the related cost\n"]]]],[1,"p",[[0,[],0,"\nSpecial Note on Documenting Change:\n"]]],[1,"p",[[0,[],0,"\nWe recognize that working with large or bureaucratic\nclients, such as federal or state agencies, can be challenging. With such\norganizations, a contract officer may only be available every three months to\nofficially sign off on contract modifications for additional services. Therefore,\nyou need to have effective documentation that your day-to-day authorized client\nrepresentative has authorized the change to proceed, not to mention the\nconfidence that when the paperwork goes in front of the contracting officer,\nthat they will, in fact, authorize it.\n\n"]]],[1,"p",[[0,[1,2],2,"Diane P. Mika, is Vice\nPresident, Director of Risk Management Education and Andrew D. Mendelson, FAIA,\nis Senior Vice President and Chief Risk Management Officer of "],[0,[3,4],2,"Berkley Design\nProfessional,"],[0,[2],1," a division of Berkley Alliance Managers which is a member\ncompany of W. R. Berkley Corporation that provides professional liability\ninsurance to design and construction professionals. "]]],[1,"p",[[0,[2],1,"Risk\nmanagement resources for design professionals can be found "],[0,[5,4],2,"here."],[0,[2],1," Andrew may be\ncontacted at "],[0,[6],1,"amendelson@berkleydp.com"],[0,[2],1,". "]]],[1,"p",[[0,[2],1,"Information\nprovided by Berkley Design Professional is for general interest and risk\nmanagement purposes only and should not be construed as legal advice nor\nconfirmation of insurance coverage. As laws regarding the use and\nenforceability of the information contained herein will vary depending upon\njurisdiction, the user of the information should consult with an attorney\nexperienced in the laws and regulations of the appropriate jurisdiction for the\nfull legal implications of the information.\u202f"]]],[1,"p",[[0,[4],1,"Practice\nmanagement recommendations should be carefully reviewed and adapted for the\nparticular project requirements, firm standards and protocols established by\nthe design professional."]]],[1,"p",[[0,[2],1,"Products\nand services are provided by one or more insurance company subsidiaries of W.\nR. Berkley Corporation. Not all products and services are available in every\njurisdiction, and the precise coverage afforded by any insurer is subject to\nthe actual terms and conditions of the policies as issued."]]]]}