Episode 1 - In this episode, Patricia introduces herself and the concept of balanced contracts. If you would like to learn more about Patricia or follow her social media posts, please connect with her on Linkedin: https://www.linkedin.com/in/patriciahaywoodesq/ or visit the website: https://www.haywoodcommercial.co.uk
TRANSCRIPT That is a very good question. I love this question, what qualifies me to do this? Absolutely nothing. Welcome to THE CONSTRUCTION CONTRACT, the podcast with me, Patricia Haywood. I am the founder of Haywood Commercial, the fastest-growing construction contract advisory firm in London. This podcast is for you if you want to learn more about leveraging your construction contracts, to drive profits, and achieve sustainable cash flow. So I got some questions here. I've put together some questions that I tend to get asked or that I know people are often wondering about me. And the reasoning behind the questions is, I'm on social media, and I do a lot of posts on LinkedIn, as you know, you probably listening to this podcast because you've seen my posts on LinkedIn. And I have a couple of videos on Tik Tok. And I do get a couple of DMS. And now is the time to answer some of these questions. I think this is a great platform to do that. So the first question which I love is What qualifies me to do this? And absolutely nothing. Nothing qualifies me to do this in the traditional way this question is asked. So as you know, I'm a lawyer, I studied and trained as a barrister. And then I was requalified in the UK as a solicitor. And being a lawyer does allow me to understand contracts really well, and to be able to draft and amend. And that's about it. I never studied construction law in school. I was exposed to construction, to the building of things because my family was involved in construction. Generally, we do a lot of construction work. And I was always around like tradesmen and women builders, that type of thing. But it never occurred to me that I could marry the two low on construction that never crossed my mind. In fact, my aim was to be a corporate lawyer. And so that's what I went off to do. But for some reason, construction appeared in my life. And it really happened during the last financial crisis. And I've told this story many times, you know, I did a master's actually in commercial law, and business and taxation, two separate masters, and I came out and I could not find a job. And so I started doing consulting, freelancing, that type of thing, because I, I knew people within the space, and I knew how to create companies because that's what I did before. And so I created a company and started offering services under that company, and really just formalized the offering of services not just for me, but for people who I knew within this space, so they started coming under my umbrella. And we started doing work together in the space on this business. And so that took me to work in the Project space. I started working on projects, I started doing work from the front end from the business case all the way to close out, looking at the feasibility of the projects, looking at non-tariff barriers to trade like roads and stuff like that, and infrastructure and transportation and really just getting stuck in the project aspect of things. So I moved out of just private practice, purely the practice of law like case law, what the law says that to more in to the application of all of this. So I left that environment into this environment, which is pretty chaotic for me coming from private practice where everything is structured. And now I'm in this environment where we're moving at, like, such a fast speed. Because if you work on projects, you know, everything just moves so quickly. And no, I'm actually applying these things. I'm seeing how the contracts work in these environments. And I'm learning so much. And this took me to various countries, and to work on various projects in these countries. And so from there, when I returned to the UK, I was trying to figure out, you know, what should I do next? Should I go back to private practice? Or, you know, do I continue down this route, I was uncertain. And I met a recruiter. And we were talking and he said, Oh, send me your CV, I sent him my CV, he had a look, I sent him a CV of everything that I've done, it wasn't a tailored CV to any particular role. And we had a discussion and he was just like, wow, you have a lot of experience, doing this type of thing, which is not normal for a lawyer, someone who's their first training was that of being a lawyer. So typically, in the space, you may find a QoS, or commercial manager, who, that's what they started out doing. And then they'll transition to law. I didn't do that. I was a lawyer, and I'm still a lawyer. And I transitioned into the project space. So it was pretty interesting and different. And he felt that this recruiter kind of guided me and he was just like, this is a skill set that you can totally leverage. And, you know, these are some of the ideas that I have. And gave me some direction. I started working with various companies, and offshore in rail, and transportation, energy, tidal telecoms, that type of thing, doing infrastructure work, and helping them with their commercial and contracts. But the thing that often got me those roles was the fact that I was my legal background, and then having that commercial sensibility, and also the fact that I could fit within the project space. So I understood so much about their world that I didn't just bring this theoretical view. And I could look at the contract. And, in a way, understand how it will work out in real life in the project and amend accordingly. And I could also negotiate with a lot of key players. And there was one company that I did some work for, and they would always send me to negotiate their contracts, because the MD felt he was, you seem to have a good rapport with other people when we go to negotiate, which was a bit interesting for me, because if you know me in real life, you know, I'm an introvert. I mean, I don't really like labels. But if I would choose a label to explain my personality, it would be an introvert. I love alone time. I love small groups. I'm not very talkative. I'm not a very social person. But when it comes to negotiations, I always say, it's like, it's my stage. That's when I come to perform. And I enjoy it. I enjoy and I think it's because it's such an intimate setting. And I think that's what I like about it. It's intimate, you get to know that you get to know the other person or the other person's, you know, across the table from you. And you get to build that rapport. And I think that's what I like about it. Is my kind of deal is my kind of situation? It works to my strengths. And so I started doing negotiations. I know because I worked in these international arenas in these different countries, and had to understand the cultural differences and sensitivities. And bringing that and I was working with really senior stakeholders within these countries, especially within the government, and I had to learn some amount of diplomacy. And I think that is what I learned during that time and journey. And I've brought those lessons and those skills with me. And I believe that's why I'm able to negotiate the way I do, I don't have a forceful personality, I'm happy, I enjoy life, I love life. And I bring that to my negotiations. And I think people see that honesty and transparency when I sit in the negotiation, and I believe that's what tends to win them over. Because they know I'm not here to make a bad deal. I'm not here to throw things at them figuratively, in terms of, you know, risk and stuff, I'm here, with the intention of doing a deal that is, is good for all parties. And I think that comes through. I started doing that type of work. And, from there, I just continued, and I worked on major projects, I got senior-level positions, leading these projects, commercially. And I just continued to hone those skills. And here is the thing, why I say that, you know, what qualifies me is absolutely nothing is that this is not something that I've gone to school to study. This is not a path that I've chosen. I just absolutely love construction and absolutely love construction contracts. And that is it. And when I, when I officially started working, you know, in the space in projects, and I paid the price, I took the courses, you know, like the prints courses, managing successful projects, I've actually done a Master's at Oxford in managing major programs. I've spent years doing the hard graft, you know, I've worked under some incredible people, some incredible project managers and engineers and designers, and I learned so much from them, you know, I've worked in the project environment from the bottom all the way up to the top. So it means that I have this great appreciation for what we do in construction. And this is not just an opportunity for me to work on these projects, or because construction is is a high-profile industry. That's not it. For me, construction is about building things for people, it's about adding value to people's lives, through the buildings that we build, like the hospitals and the schools, to the infrastructure that we create, like, you know, bridges and railways that build communities and really transform communities, to just the services that we provide, to allow people to live quality lives, from the green spaces, we create the sustainable buildings that we are now constructed in, in our communities, you know, to save to save on energy and emissions and all of these things. It's the love of construction. And so if you're thinking what qualifies me, because in the industry, we like to talk about, oh, I have 20 years, I have 30 years, you know, 50 or 100 years in this industry. You know, I like oftentimes when I meet people because I look very young, they tend to say oh, you know, I have 2030 years. And I'm like okay, you know, I do have more than two decades too, but I don't go around talking about it because that is not what is important. To me. What is important to me is to add value to people's lives with the things that we build. And I add my little piece to it by helping companies by helping organizations by helping the parties, the delivery partners to have balanced construction contracts. Which takes me to the next question is Why do you promote balanced contracts? and I get this question so much. Balanced contracts because I don't particularly like the view that says some contracts are bad. And I hold my hand up, I used to say "bad contracts, bad contracts." But I've changed that view, you know, the more I learn is, the more I realize that I need to learn more and is the more I realize how much I absolutely do not know. But that is life, isn't it. And so, the more I learn, the more I try things, the more I get out there and meet people. And the more and because I've sat on different sides of the table, so I've worked with public sector who tend to be the employers. I've worked with finance organizations, I've negotiated finance deals for major projects, I have worked with the main contractor, I've worked with subcontractors and specialist contractors. So I believe that I have a good view of many of the delivery partners within the space. And I know that the use of the word bad is all perspective. And therefore, I made the decision to use the word balanced contracts. And so I propose I promote balanced construction contracts. And that means that we need to start negotiating contracts that allocate risks properly. And I what I mean by that is the party who is better able to manage that risk, should carry that risks within the construction industry, within construction contract practice, we have a way of flowing down terms, to parties, and also to try and allocate as much risk as possible to the other party. So the name of the game, as I like to say, is pass the ball or musical chairs. It's like when we were kids, and we play musical chairs, and there's one less chair and when the music stop, we absolutely hope that we are not the one without a chair. That's how we do construction contracts currently within the industry. And it is not the best way. Because what happens is, you pass your flow these things down, or you pass so much risk onto the party who is not able to manage it. But they sign up to the contract because they want the work, which means that the risk is out there waiting to come, it will come knocking. And when it comes knocking, that party is not able to manage that risk, which means we have cost overruns. We have program delays, we have a lot of adjudications, a lot of disputes, adversarial relationships, you know, we have all worked on projects where you can cut the tension with a knife, you see the project managers going head to head like they're about to fight. I don't know about you, but I've been on those projects, and I am just uneasy, I feel like I could just take my bag and run. Because those environments, they don't go well with my personality. Right. And so often in those environments as the commercial lead, I am trying to manage egos. That's what I'm trying to do. I'm trying to manage the relationship to ensure that, you know, nothing kicks off today. Nothing kicks off today. And so I'm often the buffer between my project manager and the delivery partners, project manager and team, which is not a great place to be and I'm sure if you are a commercially commercial manager or Quantity Surveyor, you know this well. It is not a wonderful place to be it's a lot of stress. The environment is not good for your mental health. And that's why we have such a revolving door. It's like you know that door do like IKEA, you know, that door that does turn and as one goes in one comes out. That tends to be the labor force in construction. And I absolutely believe that a part of one of the reasons for that is just the tension and adversarial behavior that tends to occur on the projects and this stems From the contract because the contract sets the tone for the project, and if you have one party carried, all the risks come on, they are going to reach a breaking point, they are going to eventually blow when that risk comes, and they just cannot deal with it. So that is why I promote balanced construction contracts because I have seen firsthand what a contract that is not balanced can do in a project environment, what effect it has on the people, the effect it has on the delivery, the effect it has on the product or service that we are delivering. And I know, we can do better. And I know that with balance contracts, we will cut out a lot of the issues that we have of projects, which leads me to my next question, Do you really think having a balanced contract will give me better profits? How so? This is a question everybody loves to ask me. I get DMS all the time, you know, and I have a lot of posts on social media, especially on LinkedIn, if you go to my LinkedIn at @patriciahaywoodesq then you will, you can see a lot of my posts talking about this. And I absolutely believe that having a balanced contract will give you better profits. Because with a balanced contract, you are allocating the risk according to how each party can handle risk. Or rather capacity according to each party's capacity for the risk. And it also means that you're putting boundaries around a lot of the profits, the profit margin that you want to achieve. What do I mean by this? I mean that you pay attention to certain clauses like your payment clauses, your indemnities, your warranties, and you put boundaries around those clauses, in certain considerations, the applicant, when in what circumstances with those clauses apply? How do you get paid? When do you get paid, you know, in what circumstances that you will not get paid list them, Make them clear! And so it means that if each party is carrying the amount of risk that they can manage. When the risk comes knocking, the party is able to manage the risk. So you'll have fewer cost overruns, fewer delays, and fewer issues. And it means therefore that you're paying out less money for things, better-managed projects, projects that are run more efficiently and effectively. And that's how you will get better profits. Because the contract is the starting point and the endpoint for your profit. You may think that it's you know, it's the delivery phase. You know, it says the scope is the scope creep, it's all the changes, but what's the foundation for those things, it's your contract. And so if we can negotiate balanced contracts, that take into consideration each party, the role they play with him in that project, the capacity for risks, the things that they have in place to manage those risks. And we will be able to have projects that deliver what it says it's going to deliver. And the delivery, the delivery will be done in better project atmospheres, will have less adversarial relationships will have less disputes, less adjudications, you know, less issues with profit margins, less issues with cash flow will have better-functioning companies, less companies going into administration in construction, we would just have less issues. I'm not saying it's going to be perfect. I can assure you. It's not going to be perfect, especially overnight. But if we can change the way we contract that is absolutely. We will change the way we do project management. And that's the point that I want to make. Thank you so much for spending your time with me today. I really appreciate you. I hope you enjoyed this episode, and that it brings value to you and your business. Please leave me a review on Apple podcasts and Spotify. share this episode with others who may be interested in this topic. Also, feel free to let me know what topics you would like me to cover in future episodes. Get in touch with me on social media.
See you next week for a new episode. Bye!
