Stamping work as a subconsultant for another firm 4

[SEOH]

I am a consulting engineer that typically does work for contractors and owners. Recently though, I have been approached to provide subconsulting engineering for another engineering firm. I would be establishing a subcontractor agreement with them through my LLC, and my LLC also carries E&O insurance.

My question though is in this case, since I will be stamping my own work under this other firm's letterhead/logo, will my E&O still cover me if my LLC's name doesn't show up anywhere on the sealed documents? Or should I be adamant about my LLC's info showing up somewhere in small print on their documents?

The other firm is a proper engineering entity with their own COA's, E&O, etc. It's just they are wanting me to work autonomously to handle their overflow work and for me to seal it as their company's. This company won't be directing my hours, or how I do the work.

Shout out to RON if he's around! seems to run a firm that operates in this manner. or anyone else too of course!

 

[phamENG]

I do the same thing - I recently went out on my own and have a mentor who frequently subs his work to me so he can actually have some "retirement" time while still maintaining the confidence of some very picky clients. Where things differ is in the exposure - he has no problem with me putting my firm's name on the document somewhere.

I think the most important thing is the agreement between you and the other firm, the legal relationship it forms, and the stated terms and workflow. Make sure it spells everything out and make sure they are indemnifying you. If it's going out under their name, and I'm guessing some restriction on saying "by the way, call me direct next time," that's an added soft cost to you as you're missing the business development gains that usually come from projects with decent clients. They should compensate you either directly (more money) or indirectly but taking on the risk and protecting you from it. They're already taking on a good chunk of the risk since their name will be on it and they should be QCing anything that goes out under their name.

Best bet will be to contact your insurer and see if there is anything special you need to do to make sure your policy will cover anything that happens.

None of this changes personal liability, of course.

 

[Enable]

phamENG has it right. Ethically not a problem. From a liability stand point consult your insurance carrier and ask what they require for you to be covered by them. Don't rely on a third party to whom you don't pay premiums even if they say they will cover you; if something went wrong (ideally when you want your insurer to be there) I bet they'd find a reason why that didn't actually apply.

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[SEOH]

This is very helpful everyone.

phameng- so do you put your firms name under his firm's name on documents you seal?

 

[phamENG]

Usually. There have been a few cases where I didn't, but I'll usually put my logo in the corner of the drawing or list my company under my signature. This is more about business development than a concern for insurance, though. Someday he will actually retire, and I want to make sure those clients know who to call when he doesn't answer anymore.

 

[JStephen]

In Texas, they currently have a requirement that the corporation name and corporate license number must be included on each sheet that is sealed (ie, it must match the engineer's seal). It doesn't necessarily have to match the corporate name shown on the title block, and can be hand-written with the seal, but must be there somewhere. Make sure the state(s) involved don't have any similar requirement.
Where I see this more often, civil engineers will have a set of plans that also includes electrical details done by a separate person/company, and the electrical consultant will just use their own titleblock.

 

[Ron]

Ethically it's fine. What you need in your agreement with the firm is an indemnity clause whereby they indemnify you for any work done on their behalf. Make it a broad form indemnity that even includes your negligence (they might balk at that but at least try it).

 

[dik]

Thanks Ron... that was similar to my agreement with Lavalin, where I worked as a senior engineer for a decade.

Rather than think climate change and the corona virus as science, think of it as the wrath of God. Feel any better?

-Dik

 

[SEOH]

If you are open to sharing- What kind of split on fee's were you all doing with the firm you worked under? i.e. 50/50 split, 80/20, 75/25, etc?

 

[dik]

In my case, it was a hourly rate.

Rather than think climate change and the corona virus as science, think of it as the wrath of God. Feel any better?

-Dik

 

[phamENG]

I treat it like any other professional client's work. I either agree to an hourly rate or I provide a fixed fee to do the project. The other party is free to markup as they see fit.

 

[Ron]

@SEOH....All of my colleagues (myself included) work under a revenue distribution whereby they get from 67% to 85% of the revenue generated. Yes, I make very little off this, but it covers overhead and insurance and the distribution is shared with hand-picked engineers and technicians that I have known for many, many years. They are excellent and deserve a lot more than a salaried position would give them. I do not hire from the "outside" and only bring on engineers with whom I have a good working knowledge of their capabilities and work ethic.

We are small and have no desire to get large. I have worked in high technical positions for major engineering firms with international prominence but do not desire the corporate approach. My colleagues feel the same. We don't do any marketing...all projects are by repeat business and referrals. We're very fortunate in that respect. We have been busy as a group since our inception (2005). We have 4 licensed engineers and two consistent technicians with an occasional technician add from known individuals. Everyone works as an independent contractor under our corporation name/umbrella. Our reputation is fiercely protected by each individual and will continue to be so. I am incredibly fortunate that three stellar engineers have my same philosophy of competent, professional service and are willing to ride the tide with me for so many years. Even though we started in 2005, I have worked with each of the other engineers for at least 20 years, as their senior professional in the corporate world. Thankfully they agreed to follow me when I struck out on my own.

I'm a lucky guy!

 

[SEOH]

Ron- you are a lucky guy! that is great. Finding 4 licensed engineers like that is quite a feat. Do your colleagues also carry their own insurance policies, or they just work under yours?

 

[Ron]

Two of them carry separate, smaller PLI policies. Everyone works first under the umbrella policy.