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Ethics: Codes of Conduct for Design Professionals Part 3 – Ethics and Business Practices

By Kevin O'Beirne, PE, FCSI, CCS, CCCA, CDT posted 04-23-2024 11:48 AM

  

This is the third in a three-part series on this blog addressing ethics for design professionals, comprised of: (a) Part 1 – Introduction and Ethical Dilemmas; (b) Part 2 – Common Ethics Requirements; and (c) Part 3 – Ethics and Business Practices. 

Ethics and Business Practices
When a design firm performs services in more than one state or jurisdiction, or where a business opportunity arises in a jurisdiction where a design firm does not ordinarily do business, many design professionals may say something like, “That opportunity is in ___ State.  Can we practice there?” “Ask our lawyer.”  Design professionals must know fully and understand the laws and regulations that govern the practice of their profession and their business.
Licensure requirements apply both to individuals as well as design firms, yet it is relatively common to encounter individuals who have less-than-perfect knowledge of the laws and regulations governing their profession and business. When employees have access to their employer’s legal counsel, there is typically nothing wrong with consulting them to the extent acceptable to the employer. However, the most appropriate situation is for design professionals, especially those possessing licensure and individuals performing client development, to have the necessary knowledge and information without having to rely on an attorney to advise them of the rules governing their own profession and practice. If the employer does not typically practice in a certain geographic area, due diligence is necessary to obtain a complete understanding whether the design firm is appropriately licensed and insured to practice the necessary services in the geographic location of the project, before undertaking pursuit of a business opportunity there.
Often, one of the most difficult and painful ethical conundrums arises when a design professional observes or has reason to believe that another design professional has failed to comply with statutory obligations or ethical obligations of another entity, such as a non-profit industry organization or their employer. In such situations, a design professional may say or think something to the effect of: “I am not going to report that to the [architecture] [professional engineering] Board.”  Design professionals are typically expressly obligated, both by statutes governing the design professions and by codes of conduct of non-profit industry organizations (and, possibly, their employer) to police their own profession and licensure.  While it’s understandable that nobody wants to be a snitch, a fink, or act as a cop, licensed design professionals have a monopoly practicing their profession (compared with unlicensed individuals) and continuation of that exclusivity means accepting the responsibility of self-policing their profession. If licensed design professionals do not police their own profession, then either someone else will do it, or statutes requiring licensure of the design professions may be weakened or abolished, neither of which would be in the interest of design professionals in that jurisdiction or the public. 
Perhaps the cardinal ethics obligation for design professionals is to protect and safeguard health, safety, and welfare in all activities. Just what is meant by “health, safety, and welfare” may not always be clear to everyone. This phrase requires design professionals to hold paramount in all activities the health, safety, and well being of occupants and users of their projects, and the general public as affected by the project. In addition, the broad term, “welfare” may be interpreted as including protection of property at and adjacent to the project, the environment, and, perhaps, plant and animal life. Of course, virtually every human endeavor, especially constructing a capital project, has some effect on the environment. The boundary of a design professional’s responsibility for, “health, safety, and welfare” is somewhat unclear and is the topic of ongoing debate. Statutes governing the design professions in some jurisdictions may expressly define the meaning of health, safety, and welfare, either separately or collectively. The design professions’ interpretation of this expression has changed over time, with ever greater emphasis on the need for sustainability and resiliency in implementing capital projects as well as the intersection of ethics, diversity, equity, and inclusion in the design professions.
While ethics obligations apply to everyone engaged in the design professions to one degree or another, leadership of an organization often sets the tone and the example followed by their subordinates. When an organization has appropriate, written codes of conduct for its employees, consultants, or contractors, but where the leadership seems to imply, “do as I say, after all, this is our business at stake here,” there may be increased potential for ethical lapses. Thus, it is highly desirable for organizations to not only have and enforce written codes of conduct, but for their leadership at all levels to act ethically and actively encourage their employees and subordinates to do the same. Fostering a culture of integrity and proper conduct encourages subordinates to not only act ethically, but to speak up without fear of reprisal or other adverse consequences when they believe others act contrary to the organization’s code of conduct.
Although ethics obligations typically appear to be common sense, sometimes other matters can blur the lines of what is required and ethical. For example, design professionals are obligated to issue statements in an objective and truthful manner, however, exchanges like the following are probably not uncommon: “Our client does not want us to tell that to the contractor [or other entity]. That’s okay because our client pays us, and they are one of our best clients.” Design professionals should be objective, and truthful, and provide all pertinent facts, especially regarding matters of health, safety, and welfare. When it comes to negotiating a challenging construction change order with a contractor or obtaining competitive bids for a budget-conscious client, design professionals need to be mindful of unintentionally crossing beyond the boundaries of appropriate ethics. Although the terms of a professional liability insurance policy, typically prohibit admitting liability, a little white lie, or a partial truth, is still a lie.  Ethical obligations should always trump financial interests but the ‘grey areas’ are real and must be appropriately handled consistent with the professional and ethical obligations of design professionals.
Being ethical is not always convenient. Doing the right thing relative to protecting health, safety, welfare, property, the environment, and clients’ interests takes precedence over the design firm’s own convenience, financial interests, and business relationships. This concept is highlighted by the following: “I just heard that the laboratory we’re using on the project recently fired an employee for sidestepping quality assurance and quality control procedures and I’m concerned that its recent test reports might be faulty.  But our deliverable is due out next week, and we can’t afford to have the test redone at this late date.” Again, design professionals must be truthful and hold paramount health, safety, and welfare in all endeavors, even when it is inconvenient to do so.  In addition, failing to fulfill one’s obligations to be ethical and truthful, may also have associated potential liability under federal or state false claims acts.
When a design professional consultant is required by its client or other entity to sign a non-disclosure agreement (NDA), the scope and implications of the draft NDA should be carefully considered, in consultation with the design firm’s legal counsel, from an ethical standpoint. For example, signing a NDA that would effectively prohibit a consulting engineering firm from advising authorities having jurisdiction and the public of a potential health or safety hazard, such as potential for a structural failure or the presence at a site of constituents of concern that may pose a hazardous environmental condition, would likely be ethically questionable.
Consulting architects and consulting engineers are often pressured by clients to agree to aggressively price their compensation and are also pressured by their own client development personnel to aggressively budget their services as a means of increasing their competitiveness and business position. Such practices tend to result in project teams believing their project budgets are too low and seeking ways to cut corners, to comply with deadlines for deliverables and their employer’s metrics for profitability and performance. Personnel exposed to such pressures must always bear in mind that temptations to reduce costs by curtailing or omitting activities intended to provide quality or verify that the necessary quality was achieved must never adversely affect health, safety, and welfare, and the professional standard of care always applies regardless of budget or lack thereof.
Another tactic that may be employed by some design firms with insufficient budgets for developing construction documents is to delegate, through the construction contract documents, the final design of certain elements of the project to engineers or other design professionals to be retained by a construction contractor, subcontractor, or supplier. While delegated design is not, itself, typically unethical or outside the boundaries of statutes governing the design professions, it may be unethical or a breach of contract to delegate the final design when the design professional’s scope of services with its client requires the design professional to prepare a complete design for the entire project. The purpose of delegated design responsibility is not to increase the profit of the principal design firm when they have a low budget.
In consulting engineering and consulting architecture, pressures to obtain award of desirable contracts for large or marquee projects can be intense, and, on occasion, competitiveness may get the better of some design professionals. Some workshops on the art of developing proposals for architecture and engineering professional service contracts even present advice on how to “ghost the competition” which is a polite way of tiptoeing up to the line of ethical conduct without really crossing over it. Some consultants, perhaps less concerned with the ethical niceties concerning business development, may have sentiments such as: “To help win the contract, we’ll tell the client how that firm really goofed up in Peoria.” Statutory requirements for ethics and codes of conduct of non-profit industry organizations require design firms to resist the temptation to fling mud at the competition. Attempting to smear the competition, whether overtly or by implication, is probably crossing the line from appropriate ethics into dangerous libel or slander territory and should be avoided. Similarly, firms aggressively pursuing competitive business opportunities should be careful to accurately represent their own qualifications and experience without exaggeration or falsehood, regardless of the desirability of obtaining the award of a prized contract.
Indeed, when a design firm does not possess the necessary qualifications and experience to perform some part of a given assignment, they should either refrain from accepting the contract for the project or include on their team a sub-consultant possessing the necessary qualifications and expertise. It is typically unethical to misrepresent one’s qualifications and to perform professional services outside a firm’s or individual’s areas of competence, regardless of the desirability of the assignment or the firm’s need for the business. Health, safety, and welfare may depend on a design firm or individual complying with this important aspect of typical ethics obligations.
The National Society of Professional Engineers (NSPE) Board of Ethical Review posts on its website redacted summaries of selected cases. Regardless of whether one is an engineer, architect, or other design professional, these summaries are educational. While the NSPE summaries address many different ethics situations, a common topic that appears to be rarely addressed in many treatises on design professionals’ ethics is an employee’s obligation to their current and former employers regarding credit for work previously performed. Competition for desirable contracts can be intense and such awards are often made to the firm presenting the most-qualified individuals. How a person’s record of experience should be indicated when such experience spans multiple employers, and how a design firm’s marketing and promotional materials should depict credit for past projects, are addressed in several NSPE Board of Ethical Review case summaries, including:
Case 19-12 - Misrepresentation—Claiming Credit for Work of Former Employer
·       Case 17-2 - Employment—Transitioning from One Employer to a Competing Employer
·       Case 72-10 - Soliciting Clients of Former Employer - Hiring Employees of Former Employer
Design professionals also need to consider how advancing technology has the potential to affect ethical decision-making. The rise of increasingly affordable and able artificial intelligence (AI) is likely to result in the ever-increasing use of AI in decision-making at design firms. This has a strong potential to influence what design firms and their management view as ethical behavior and may foster the use of design tools for which the firm’s personnel may, potentially, not be fully competent. Incorporating AI into the business management decision-making process may be fraught with opportunities for actions that may be less-than-ethical. In such cases, appropriate ethics constraints should be incorporated into the AI’s decision-making process. Before AI is used in design or in performing other services of a technical nature, whether engineering, architecture, geology, or other design discipline, the technical processes used need to be fully understood by and performed under the responsible charge of competent, licensed design professionals.
Consequences
Failure to comply with statutory requirements on ethics has the potential for serious consequences. A licensed design professional found by the associated licensing board to have violated their ethical obligations may be fined, have their license temporarily suspended or permanently revoked, or both, or be subject to other penalties. Such licensees typically have news of their misconduct published in the licensing board’s newsletter, may be subject to other, adverse publicity, and, when authorized to practice in other jurisdictions, may be unable to renew their license in such locations. Being subjected to licensing board disciplinary action typically necessitates legal representation and is stressful. Loss or suspension of licensure typically adversely affects the individual's ability to practice their career. 
Non-compliance with ethics obligations or codes of conduct of non-profit industry organizations has the potential to result in the individual’s suspension or loss of membership in that organization. This, in turn, has a strong potential to affect the individual’s ability to fully pursue their career and may have a detrimental effect on future business and employment opportunities. 
Failure to comply with an employer’s policy on ethics and professional conduct may result in censure or other disciplinary action, perhaps including termination of employment. Non-compliance with ethics policies of a design firm’s client may decrease the potential for obtaining future business from that client and, possibly, damage the person’s professional reputation. Ultimately, while a person may be able to find other employment, it can be difficult to escape one’s own reputation.
Conclusions
While seemingly everyone believes they act properly, various business pressures and other common circumstances that arise in daily practice may create an ethics maze that can be difficult to successfully navigate. Despite such pressures, which may, at times, be intense, members of the design professions should always act properly and ethically in all facets of their practice.
Acknowledgments: The author gratefully acknowledges the assistance of the following, who kindly reviewed and commented on drafts of this article: Jerry Cavaluzzi, Esq, of Westchester County, NY, who is Chief Risk Officer and General Counsel for Kennedy/Jenks Consultants, Inc.; and James K. Lowe, Jr., Esq., P.E. (VA, emeritus), who has more than 45 years experience in the A/E industry. In addition, Mr. Lowe kindly furnished information on the NSPE Board of Ethical Review case summaries. The author is solely responsible for the content of this article. 
Copyright 2024 by Kevin O’Beirne
The content of this blog post is by the author alone and should not be attributed to any other individual or entity.
The author of this blog post is not an attorney and nothing in this blog post constitutes legal advice. Readers in need of legal advice should consult with a qualified, experienced attorney.
Kevin O’Beirne, PE, FCSI, CCS, CCCA is a professional engineer licensed in NY and PA with over 35 years of experience designing and constructing water and wastewater infrastructure for public and private clients.  He is the engineering specifications manager for a global engineering and architecture design firm.  He has been a member of various CSI national committees and is the certification chair of CSI’s Buffalo-Western New York Chapter.  He is an ACEC voting delegate in the Engineers Joint Contract Documents Committee (EJCDC) and lives and works in the Buffalo NY area.  Kevin O’Beirne’s LinkedIn page. 
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