Midwest Roots And Employee Ownership Yield Global Success

Saturday, May 19, 2012 - 10:57

The Editor interviews G. William Quatman, Vice President and General Counsel, Burns & McDonnell.

Editor: Please tell us about your professional background and your responsibilities.

Quatman: I began my career as an architect and obtained my license after practicing for a few years in that field. I took a business law course as an elective and found it fascinating. I was also picked for jury duty that same semester and then read an article titled “Architect-Lawyers: An Important New Breed” in Progressive Architecture magazine. The article caught my attention, and I corresponded with the author, Arthur Kornblut, now deceased, about his career as an architect-turned-lawyer. With his encouragement, I took the LSAT and enrolled in law school.

Upon graduation from law school, I cut my teeth on construction law at a small boutique litigation firm that represented mostly contractors and sureties. After five years there, and recognizing the limitations of a small firm, I joined the Shughart Thomson & Kilroy law firm’s construction law department. The bigger firm enabled me to handle larger clients and cases. I practiced there for nearly 20 years and was a partner until October 2008, when I got the opportunity of a lifetime. 

Burns & McDonnell was a client I greatly admired, and they contacted me when their general counsel retired. The fit was perfect, as the company is among the top design firms in the U.S. and one of the largest general contractors. I was able to use my experience representing both types of firms as well as design-builders. As general counsel, I run a legal department consisting of seven lawyers and two paralegals, handling day-to-day contracts, claims, risk management and legal training for a company with 3,500 employee-owners. It’s the perfect job for my background.

Editor: Please talk about Burns & McDonnell’s (BMCD’s) history and core business areas.

Quatman: The company was founded in 1898 in Kansas City by two Stanford graduates, Clinton S. Burns and Robert E. McDonnell, as a partnership, Burns & McDonnell, Consulting Engineers. We later incorporated in 1970, and in 1986, the company became an employee-owned ESOP (employee stock ownership plan), which is a core to our success. In 1989, the company opened its first “regional office” in St. Louis, Missouri, and within 10 years, we had expanded to ten regional offices nationwide. Although the core business has been engineering services, the company has expanded into general contracting and design-build/EPC (engineer-procure-construct) in many markets, where we act as prime contractor or joint venture with another firm to provide both design and construction services.

The company’s industry diversity is one of its strengths, offering everything from architecture, archaeology, biology, industrial, commercial, government, aviation, energy, environmental, healthcare, refinery, food processing, transmission lines, water, wastewater and transportation. If one market is down, another is up, which helped us weather the storm of the past few years. We grew while other firms had massive layoffs.

Editor: BMCD is one of very few large employee-owned businesses. How does that affect employee morale and willingness to play by the rules?

Quatman: All employees are owners of the company and share an interest in seeing us succeed on every project. This is good for the employees and for our clients. This year, the ESOP Association named Burns & McDonnell as the 2012 ESOP Company of the Year. We offer lots of employee benefits and social events, from picnics to pancake day, to chili cook-offs and barbeques, on-site workout and healthcare facilities and a full cafeteria. These benefits plus our ESOP have resulted in our being included on Fortune magazine’s Best Companies to Work For list twice in the past three years.

Our employees enjoy what they do, and we all share in the rewards when the company has a good year. We try to instill a culture of ethical conduct through online and in-person training plus a company code, but mostly through conduct that is modeled from the top down in the way we treat each other, our subcontractors, consultants and clients. Engineers and architects are licensed to protect public health and welfare, so they tend to be pretty ethical people at their core. That makes my job easier.

Editor: We understand BMCD’s headquarters are in Kansas City, Missouri. Please talk about the company’s roots in the Midwest and the process by which it has expanded nationally – and now globally.

Quatman: Our international work has been very selective and mostly for U.S.-based clients who have projects abroad. We have offices in Doha, Qatar and Dubai, U.A.E., and we do considerable work in Canada through a Canadian subsidiary, however, 90 percent of our work is still in the lower 48. We are very invested in Kansas City – and are active civically here – where some 2,000 of our employee-owners work.

The company’s regional offices continue to grow and spread the culture of best places to work. We are very calculated in where we open offices and in selecting who runs them, as these activities require a considerable investment. The regional presence outside of Kansas City has helped to serve our clients where they are located and to attract talent in those markets as well

Editor: BMCD is a member of DBIA. What does that signify?    

Quatman: We expanded into “design-build” over a decade ago, which was quite a culture shock to a company full of architects and engineers. But as the company’s success with this method of project delivery resulted in fewer claims, more project control and satisfied clients, the culture changed. Now, we look for more opportunities in design-build, which are growing rapidly. 

The Design-Build Institute of America (DBIA) is a national organization that promotes best practices for public- and private-sector use of design-build. Burns & McDonnell is active in the local Mid-America chapter, and I serve on the national DBIA board of directors as well as the contracts task force. 

Editor: Describe the legal department. What role does your experience as both an outside attorney and an architect play in managing BMCD’s legal department? Of what aspects of the legal department are you most proud?

Quatman: We have currently six full-time lawyers, plus one who works part-time, two paralegals and one administrative assistant. The bulk of our time is spent in reviewing and negotiating contracts for our various practice areas and regional offices. We also deal with the occasional claim and daily situations as they occur, as well as with corporate and licensing issues common to a design and construction firm of our size.

I was primarily a litigator before coming in-house, so I recognize the cost of lawsuits and the benefit of resolving conflicts at their earliest stages. We hire top lawyers, both in-house and as outside counsel when needed. Nearly all of our staff lawyers have engineering or architectural degrees, and most worked in the industry, so they bring a real-world approach to giving legal advice. I am proud of the talent that we have recruited and are able to retain in our department and of the great service they provide to our employees. My philosophy is that we treat our co-workers like “clients” just as in the private practice, since they pay our salaries and we are in the “service business.”

Editor: What legal functions do you handle in-house? On what basis do you select outside firms?
Quatman: We handle all contracts in-house and manage most claims until they reach formal legal action. At this point, we’ll engage outside counsel, but we keep a strong hand on their services so as to manage costs and avoid run-away legal bills. I know from 25 years in private practice that each firm has lawyers that are strong in certain areas, but not every lawyer’s skills are equal, so we seek out the best in each area where we need service and hire the lawyer, not the firm. 

For legal matters outside of Kansas City, we’ll most often go to local counsel who know opposing counsel, the local law and procedures. We do our homework and do not accept the “panel counsel” approach to insured claims. Our insurers know that we treat their money like ours and that we want the best representation, within reasonable costs.

Editor: Please tell us about BMCD’s corporate values. Do you encourage your staff attorneys to get involved in pro bono work?

Quatman: The company is very active in charitable efforts and has made generous donations to such causes as cancer research and science education.  Our staff lawyers are encouraged to be involved in industry organizations of their choosing, but they also are really busy here serving our company needs. I try not to overburden them with expectations of doing charitable work, unless they choose to do that.

One of our lawyers went to Haiti after the earthquake for a week, and the company helped to build housing for orphans as a result. When we are called for a court-appointed matter, we hire an outside law firm that specializes in criminal, juvenile or family law. The clients get better representation from someone who knows that area, and we remain available to help the company and our co-workers with their urgent legal needs.

Editor: How can the right project-delivery strategy maximize results and help reduce risk for the project owner?

Quatman: I mentioned design-build, of which I am a big fan and on which I have written a book. Nearly every study that has been conducted in the past 15 years shows consistently that design-build can result in shorter project delivery time, fewer change orders and cost overruns, plus fewer claims. Most studies show that the quality of the design is either the same or even better with design-build. 

You tell a client that you can deliver a project faster-cheaper-better and they’ll listen. It’s not like the old story of “pick two, but I cannot give you all three cards,” because in design-build, clients can get all three. Most construction claims involve design errors or omissions that pit the owner against the contractor and the design firm. Design-build replaces “finger-point” responsibility with “single-point” responsibility. 

As the designer and the contractor, we at Burns & McDonnell realize that the buck stops here, but with total control, we are able to team the designers with the builders early on; catch the problems before they arise in the field; and work out conflicts internally. We are motivated to finish on time and within budget, which is the client’s desire as well. If we are late or have cost overruns, we lose money, so the entire team shares the client’s desire to make progress and produce a quality project, with no warranty claims that keep us returning later.