Tuesday, April 18, 2023

TOP TAKE-AWAY SERIES: The 2023 Annual Meeting in Vancouver

"Slow," the stainless steel pandas
in front the JW Marriott

Program coordinators Katie Kohm and Peter Marino put together an amazing annual meeting last week in Vancouver. While its impossible to retread all of the ground we covered in discussing the "future of construction law," here are my top 10 take-aways:

10. Public-private partnerships may finally be taking off in the United States. P3s were slow to be pursued within the United States. According to panelists Peter Hahn, John Heuer, Sean Morley, and Lee Weintraub, this was chiefly because of the reticence of public bodies to deviate from the standard vendor model. Looking at the recent trends, it seems as though the United States--the "sleeping giant of public-private partnerships"--may finally be waking up. In 2022, a total of 29 public-private partnership projects were signed or reached financial close within the United States, representing an increase of 16% from the prior year. Thirty-eight states also now have some form of P3 enabling legislation. While we still lag behind our Canadian cousins, the future of P3s in this country is looking a little brighter.

9. The value proposition for the architecture profession is broken. Architects Lakisha Ann Woods (the CEO of AIA) and Phillip Bernstein (Associate Dean & Professor Adjunct Yale University) shared their thoughts with moderator Kelly Bundy on the challenges facing the architecture profession. The biggest issue they noted was the need to recruit qualified (and diverse) candidates into the profession. Unfortunately, this is difficult to do given the long career track (on average, it becomes 13.1 years to become a licensed architect) and the low salaries paid compared to other professions. Phillip shared that the high average starting salary for architecture grads from Yale (one of the leading programs in the country) is just $76,000. If we want to recruit the best and most innovative candidates into the field, the value proposition needs to change.

8. By striving to be "super advocates" lawyers may be doing their clients a disservice. In trying to push all of the costs and risk on other parties during contract negotiations, attorneys are often succeeding only in setting their clients' projects for failure. According to Lakisha Ann Woods and Phillip Bernstein, more emphasis needs to be placed on encouraging attorneys to work collaboratively with each other in the drafting process to optimize project outcomes. Dealing reasonably with the other side during the drafting phase may be the best way to get the best project for the client.

Deborah Ballati, Ty Laurie, and Steve Nelson

7. How to make the most of the joint session at your next mediation session. When asked to address emerging trends for ADR, Ty Laurie, Deborah Ballati, and Steve Nelson seemed to lament the fact that attorneys don't seem to prepare as well for mediations like they did 20 years ago. Too many attorney expect the mediators to do all of the work. But if they want to improve the chances of getting a deal done, attorneys need to arm the mediator with proper ammunition in the form of their best arguments. While joint sessions have become less common, that is oftentimes an attorney's only opportunity to make sure their arguments are being conveyed correctly to the principal on the other side. Good advocates will use the joint session, not as a dry-run of their closing argument, but to frankly address the hurdles to settlement and why their version of the facts on those issues are likely to carry the day.

6. More forethought is needed in drafting termination provisions. In a joint lunch presentation, several luminaries of Divisions 1 and 8 discussed "termination for default" provisions as being chief among those contract provisions likely to lead to dispute. Difficult to prove and fraught with fact questions, termination disputes are rarely in anyone's best interest. That said, the big take-away from this lunch program was that attorneys could avoid a lot of the doubt and uncertainty inherent with invoking this right if they more clearly outlined in the contract what specific events or missed milestones will be considered substantial enough defaults so as to warranty termination. On a related note, it was also observed that attorneys should take care in how they draft termination for convenience clauses to ensure they are balanced. If the cost of invoking a termination for convenience is too steep, it may have the undesired effect of precipitating more terminations for default.

5. Attorneys need not be at the mercy of their client's unethical conduct. Although it's not every day that we find our client representatives implicated in unethical--or even criminal--activity, if and when attorneys do find themselves in this situation, it is critical to understand the rules that govern an attorney's duties to both maintain client confidences and not perpetuate third-party unethical or criminal conduct. Liz Kraengel and Kate Hamann delivered an engaging program on how to navigate these difficult waters and get out with your dignity (and bar license) intact.

Sharon Prince at the Diversity Breakfast

4. The construction industry's drive to lower costs perpetuates modern slavery. Much of the materials used on construction projects are procured from developing countries with the use of modern day slavery and child labor to keep costs low. Few companies engage in the work of trying to trace their building materials to ensure they were ethically sourced. The building materials most at risk of embedded slavery include brick, copper, glass, timber, and steel. The production of bricks, for example, is highly fragmented and notorious for employing some of the worst forms of child labor. In Nepal alone, between 30,000 and 60,000 children--some as young as five--work in the country's brick kilns. Sharon Prince, CEO and Founder of the Grace Farms Foundation and the meeting's keynote speaker, asks that participants in the construction sector commit to ethical sourcing policies for their projects. Enacting change is a moral imperative but must start with an appreciation that the lowest price for a commodity is not always synonymous with the fair market price. Anyone looking to be a part of positive change can download Grace Farm's Design for Freedom Toolkit here.

3. Building construction contributes more to carbon emission than any other industry. Building construction and operation presently constitutes nearly half of the COemissions worldwide. A major focus on the future of construction will be exploring ways we can bring that percentage down. After attending the workshop led by Theodore Senet and Jason Santeford, change seems not only possible but remarkably within reach. Some of the easier ways to reduce the carbon embodied in construction materials include sourcing commodities locally, manufacturing steel by electric arc furnaces (in lieu of coal-fired furnaces) and replacing a fraction of the cement content used to mix concrete with fly ash. Jason and Theodore also extolled the virtues of mass timber, which (despite being a renewable resource) can be pre-fabricated offsite, reducing construction times by 30% in some cases. Because of the aesthetic appeal of mass timber projects, the use of other materials (such as ceiling tiles and drywall) is unnecessary, further reducing the carbon footprint. While height restrictions for mass timber are greater than for concrete/steel construction, the code restrictions are liberalizing as the technology improves. California now enables mass timber structures of up to 18 stories. And, in 2022, a 25-story mass-timber/concrete-hybrid building was completed in Milwaukee, officially becoming the world's tallest timber structure.

2Making meaningful strides in sustainable design will necessitate a big commitment from developers and builders. Jason Santeford spoke of how his company--Gensler, the largest design firm in the world--is doing what it can to accelerate sustainable building. Gensler has pledged that, in 2030, its entire portfolio will be carbon neutral. It was motivating to hear how at least one company is striving to not only be the best design firm in the world but the best design firm for the world. This type of commitment towards progress at the potential sake of profit is commendable and worthy of imitation.

The D1/D8 Dinner at the Blue Water Café

1. Vancouver is one of the most progressive cities in the worldVancouver is a stunning, multi-cultural icon that has dedicated itself to becoming one of the greenest cities in the world. There could not have been a more apt location for a meeting focused on the future of our built environment. The best part of exploring this beautiful city was sampling the diverse restaurant scene with construction lawyers and consultants from around the country. The 6-course kaiseki dinner at Miku on the Vancouver waterfront was a highlight. Another stand-out was the D1/D8 dinner at the Blue Water Café... Many thanks to Janie Winning and Amy Phillips for planning and to our generous sponsors at ESi (Bill Broz); HKA (Tracy Doyle); Peritia Partners (Tamara Savinas); and Socotec (Sylvia Zurita). If you were not lucky enough to be amongst the 80 people to score a seat, don't worry, as there is always DC... see you in the fall!

Author Marissa L. Downs is a construction attorney in Chicago, Illinois where she has been practicing law since 2009. Marissa is a partner at Laurie & Brennan, LLP and represents owners, general contractors, and subcontractors in all phases of project procurement, claim administration, litigation, and arbitration/trial. Marissa can be contacted at mdowns@lauriebrennan.com.

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