Construction attorneys can assist with transactional matters (e.g., drafting and reviewing documents), help avoid disputes, and resolve disputes in the contractor’s best interest when they arise. Here are some skill sets to consider when selecting this important partner.

The Work
A construction attorney’s work primarily focuses contracts. Construction attorneys draft, review, and (when disputes arise) litigate contracts. Construction attorneys should be comfortable operating in many business-related environments, including:

• Performing real estate and loan closings;
• Drafting, reviewing, and negotiating owner-GC contracts, subcontract agreements, and insurance contracts;
• Developing subdivisions and drafting related association documents;
• Forming business entities such as corporations, LLCs, partnerships, limited partnerships, and joint ventures; and
• Drafting operating agreements for LLCs, partnership agreements for partnerships and joint ventures, and shareholders agreements for corporations.

In the event of a dispute, a construction attorney should also be comfortable handling adversarial situations (e.g., contracts, lien claims, bond claims, local governments, development rights, codes enforcement, and bid protests). The attorney should be willing to try these cases both in court and through the arbitration process. Construction attorneys should also be experienced negotiators, as approximately 85% of all cases settle before they go to trial.

Qualifications
The construction attorney should understand how businesses operate. The CFM/owner may want to look for a construction attorney who has previously worked for a contractor. At a minimum, the attorney should specialize or be board certified in construction law, understand the construction process, and have a broad knowledge of applicable statutes and cases.

The attorney must be able to try cases. An understanding of the dispute resolution process is imperative in helping to reach a favorable settlement; if a settlement is not reached, then a willingness and ability to try a case is imperative.

The construction attorney must have the ability to analyze the strengths and weaknesses of the contractor’s case based on the facts and existing legal precedence (i.e., how courts have treated similar disputes in the past). This information and analysis is used to negotiate a resolution based on the anticipated result at trial (or in arbitration if the case does not settle).

A construction attorney is a critical partner in a contractor’s success. Keep experience and qualifications in mind when searching for the best fit for your team.

Note: This is an excerpt from the upcoming article “Leverage the Benefits of Teamwork Between Your CPA & Attorney,” CFMA Building Profits May/June 2016.

Copyright © 2016 by the Construction Financial Management Association (CFMA). All rights reserved. This article first appeared in May 2016 Bottom Lines newsletter.