Many seasoned construction leaders believe that when it comes to legal action, is not a matter of if, but when. Whether you’re an established firm or a small independent contractor, chances are you’ll likely be dealing with a few legal disputes in your career.
Across industries, we’ve seen an increase in the instances of litigation. According to a Norton Rose Fulbright litigation survey, this is caused by difficult market conditions, which have driven more people to recover lost revenue by taking legal action. In a high-risk industry like construction, a litigious business environment is bad news. Managing construction projects requires anticipating unknown variables and balancing client demands with cost and safety — this complexity makes it easy for things to go wrong. And each project stakeholder — whether it’s a contractor, vendor, client or employee — represents a point of legal risk, as their concerns or grievances may turn into a lawsuit.
Legal disputes can arise over the project specifications and scope of work, change orders, site conditions, labour disputes, injury and regulatory compliance issues — to name a few. Construction companies may find themselves on the receiving end of litigation, or they may seek legal action themselves if, for example, a client fails to pay.
In a climate of increased litigation, it makes sense for construction leaders to take every precaution when it comes to the law. This means preventing legal action whenever possible, and it also means preparing for the inevitable. The best line of defense is documentation. Because most court cases come down to which party has the best paper trail, firms need an airtight system for documenting every aspect of their projects.
The most common advice any lawyer will give you is to document everything. By the time you’re involved in a legal dispute, it may be too late to properly prepare. Documents and project details may be lost in the confusion or difficult to locate. Or, your documentation might not have enough detail to protect you.
Across industries, firms are doing what they can to keep more detailed documentation, and this is becoming a real burden. Document management is growing into a significant issue for some firms. For companies with legacy software and outdated database management protocols, “document everything” is easier said than done.
In contrast, firms with Enterprise Content Management (ECM) software are in a much better position to protect themselves in a dispute. ECM is often included as part of a larger ERP system. ERP systems contain multiple applications that serve a variety of operational functions, all within a single platform.
ECM software as part of a larger ERP system has many benefits, including:
- App Integration: Advanced platforms can automatically sync data from apps like Outlook and Excel. Easily create standard RFI’s, change orders and other construction-specific documents by dragging and dropping an email into the platform folders.
- Single Database: All your data is stored in one place so that it never conflicts with data found elsewhere.
- Dynamic Document Management: With so many collaborators on a single project, it can be tricky to maintain a final-version document in real-time, especially if you’re using email. Smart content management systems record all modifications in real-time and always display the final version.
The Search for Documents
Capturing the data is one thing, locating it is another. When construction firms don’t have a single database that stores documents relating to all areas of operations, it makes gathering together supporting documentation for a lawsuit time consuming and stressful.
Quite often, the IT department must step in and search for documents across email accounts and multiple databases. If you’ve ever tried to search through your email for a specific attachment or message, you know that this can be a tedious task.
With an enterprise content management system that’s part of a robust ERP system, you’ll only have to search in one system. A simplified search:
- Decreases the amount of time your employees must spend on gathering documentation. They can focus their efforts on daily operations and keep projects moving forward.
- Decreases legal costs by reducing the time that legal counsel must spend constructing their defense.
- Increases your chance of a successful legal outcome by allowing you to locate each and every important document. When documents are scattered across databases, you likely won’t be able to find everything you’re looking for.
Not only does CMiC’s ECM platform make it easy to search and locate necessary documents, it also simplifies sharing. Documents stored in CMiC’s single database can be moved to other hard drives and attached to emails with the drag and drop function. This eliminates time-consuming document uploads and allows you to expedite the document discovery process.
An Ounce of Prevention
While construction firms can always expect a certain number of legal disputes, there are measures that can be taken to reduce their likelihood of legal disputes arising. Advanced, streamlined content management gives you the power to recognize potential issues before they come to fruition. They do that with two unique functions:
- Customized Analytics
- Relevant stakeholders use custom dashboards to view the most relevant financial and project data in real time.
- This includes resource utilization, profit margins, project budgets as well as field operations such as change orders, RFI’s, submittals and more.
- Real-time Integration
- Systems like CMiC are built to interact seamlessly with external solutions — like DocuSign and PlanGrid, for example — and update both systems bi-directionally to drastically decrease the likelihood of conflicting data.
Enterprise Content Management software is a necessity in all industries, but it’s especially important in construction. In the event of a legal battle, see how CMiC’s ECM application makes documentation easy and reliable.