The mission of the Risk Management Program of the Council of American Structural Engineers (CASE) is to improve the practice of structural engineering by reducing the frequency and severity of claims.

This is accomplished through educational convocations (held twice a year in conjunction with the SEI Structures Congress in the spring and the ASCE Fall Conference) and software-based tools that are made available to CASE members through e-mail and on the CASE website.

Previous articles in this magazine introduced the first six tools in this series:

• Tool 1-1: Create a Culture for Managing Risk and Preventing Claims
• Tool 2-1: Risk Evaluation Checklist
• Tool 3-1: Risk Management Program Template
• Tool 4-1: Project Status Report Template
• Tool 5-1: A Guide to the Practice of Structural Engineering
• Tool 6-1: Scope Checklist

The framework for the series is called the 10 Foundations for Risk Management. These 10 aspects of business and project management will help reduce claims.

This installment presents two more tools you can use to help manage risk. The seventh and eighth of these Foundations are "Compensation—Prepare and Negotiate Fees that Allow for Quality and Profit" and "Contracts—Negotiate Clear and Fair Agreements."

Tool 7-1: Client evaluation spreadsheet
Do you know who your best clients are? If you say they are "the ones who give me the most work," you may be surprised. When evaluating a client, many of us focus heavily on how much money that client brings in without much thought on how much true profit that client generates.

Tool 7-1 is a simple spreadsheet that helps you answer this question. In addition, the tool can be used to help make decisions on how to focus your marketing and client efforts or how to identify areas where you could be more productive.

To create this helpful spreadsheet, you will need the following information: 1) The name and abbreviation for each client, 2) The revenue attributed to each client, and 3) the total amount of expenses incurred for each client. Many finance departments already keep this kind of information, making it easily obtainable.

Once you have gathered the information, insert the data into the spreadsheet and the tool will automatically generate a graph with revenue on the x-axis, profit on the y-axis, and a dot and label for each of the clients. The more revenue the client brings your firm, the farther to the right that client will be. Notice, too, that the more profitable clients appear higher up the graph.
Using the graph, you can easily divide your clients into the following four groups:

• The Best: Clients who are responsible for both large revenue and large profit will appear in the upper right-hand corner of the graph. You should be doing everything in your power to keep them happy.
• The Good: Clients who may not be giving you a lot of revenue, but who do generate profits are those appearing in the upper left-hand corner of the graph. You should be doing what you can to get more of their work.
• The Bad: Clients in the lower left of the graph are characterized by both low revenue and low profit. You might want to ask yourself why you are working for them.
• The Ugly: Working for the clients in the lower right-hand corner of the graph could get ugly—you are losing money with these clients who bring in a lot of revenue. This is a definite "red flag" area and you should be trying to investigate the cause. Are your fees high enough? Are you productive enough with this type of client or work?

Tool 8-1: Onerous words contract review
Do you read every word of every contract that is sent to you? Do you sometimes realize that you have turned the page, but can’t recall what you just read?
Tool 8-1 presents a guide to finding and highlighting words or phrases in a document that could be a part of onerous contract language.

The procedure includes scanning a proposed contract into a PDF format, opening the document using Adobe Acrobat, and using that program to scan for a list of words or phrases that could be of concern. Tool 8-1 describes the step-by-step procedure to accomplish this and provides a list of recommended words for your search.

Conclusion
To obtain these tools, your firm must be a member of CASE. However, non-members can try a test-run on one tool free of charge. Visit www.acec.org/RMP to review a description of all of the tools and choose one to try. E-mail me at cmatsuoka@ssfm.com and request the tool. The CASE RMP Toolkit Committee is also interested in ideas for other tools, so please e-mail your suggestions, too.

If you would like to join CASE and have access to all of the tools, visit www.acec.org/coalitions/CASE/index.cfm and click on "Membership—Join Now!"

The Risk Management Program (RMP) is organized as a program of the American Council of Engineering Companies’ (ACEC) Coalition of American Structural Engineers (CASE). The group’s mission is to enhance risk management, loss prevention, and claims management techniques of the structural engineering profession. To learn more, visit www.acec.org/RMP.

Corey Matsuoka, P.E., PMP, LEED AP, is chairman of the CASE RMP Toolkit Committee and a structural engineer and vice president at SSFM International, Inc., in Honolulu. He can be reached at cmatsuoka@ssfm.com.