Over the past decade, consultants have taken on increasing levels of risk through Design & Construct contracts, stricter legislation in Australia, and increasingly one-sided contracts.
Many firms sense the imbalance, but struggle to push back without feeling like they’re jeopardising work or client relationships.
In a recent episode of The Blueprint Collective, Farrah Motley, Director and Founder of Australian law firm Prosper Law, reveals how risk actually works in practice, where consultants are most exposed, and how small contractual decisions can have ongoing, lasting consequences.
Here, we explore what most A&E firms are getting wrong about risk, insurance and liability, as well as how some of these issues can be mitigated moving forward.
Why Architects and Engineers Keep Accepting Unfair Risk
Despite knowing the risk model is broken, many continue signing one-sided agreements. But this is rarely driven by ignorance. Commercial pressure, prestige projects, pipeline anxiety, and the desire to build client relationships keep firms accepting unfair contracts.
Revenue and reputation can often outweigh risk assessment when signing contracts, with a reluctance to appear difficult during procurement processes. Farrah points out that firms trying to secure new clients can sometimes be willing to take on additional risk, in the hopes that one project will lead to more, or to foster an ongoing relationship.
Over the last five years in particular, Farrah has seen developers and builders be under tight contracts themselves, resulting in contracts given out to A&E consultants on a “take it or leave it” basis.
“Leaders within those consulting firms are being driven by money, the glory of the job and building those client relationships with new clients. And that means they’re setting aside those unfair contracts in favour of those other drivers.” – Farrah Motley
How Design & Construct (D&C) Contracts Push Liability Downstream
Design & Construct (D&C) contracts fundamentally changed the risk landscape for architects and engineers. When builders take on a D&C contract, they also take on design responsibility, but many don’t carry in-house design capability or, in some cases, the appropriate insurance coverage to support that responsibility. Instead, that exposure is pushed downstream to design consultants.
The result is a risk model where consultants are held accountable not only for their own work, but often for the work of other consultants they don’t control. Rather than being liable for any issues within their own scope, architects and engineers are often being asked to underwrite systemic project risk. That shift has been gradual, but its consequences are significant.
“If one deliverable is wrong, it has this domino effect where every other design consultant’s work that follows on from there is also wrong. It’s almost like every consultant is being held to account for every other consultant, even though they have no direct relationship with them.” – Farrah Motley
What Architects and Engineers Are Really Liable For (And What They’re Not)
One of the biggest misconceptions in the industry is that insurance defines liability. But professional indemnity insurance is simply an agreement between a firm and its insurer, rather than a cap on the exposure to a client.
Consultants are liable for what they agree to in their contracts and what legislation imposes on them, and sometimes, that liability cannot be limited. In Australia, the Design and Building Practitioners Act, for example, means that registered practitioners and directors can now be held personally liable for any negligence or mistakes, significantly raising the stakes.
“Most firms think they need to get registration and tick the box to say, I could technically comply with the registration requirements, but it goes much further than that. And I don’t necessarily think that there’s a good understanding of how the DBP Act applies, or how it might apply in different scenarios.” – Farrah Motley
How to Negotiate Contracts Without Damaging Client Relationships
Negotiation can often be seen as friction in A&E: something that might jeopardise winning a project. In reality, thoughtful negotiation and honest conversations often strengthen relationships, as well as improve alignment. Raising issues early clarifies expectations, prevents mid-project disputes, and sets a foundation both parties can rely on.
Farrah’s approach isn’t about flooding clients with redlines. It’s about picking the battles that matter and addressing core risk concepts clearly and commercially. Often, clients struggle to justify overly harsh clauses when they’re calmly and logically questioned.
Having hard conversations upfront is far less damaging than disputes at the end of a project. Done well, this protects both clients and firms.
“Lots of consultants don’t want to be seen to be difficult. But I’ve never had it where a client’s pulled the engagement just because there’s amendments needed. I think it’s actually much better for the relationship: have those hard conversations upfront, and then you’re both going to have clarity and know exactly where you stand.” – Farrah Motley
Building a Risk-Literate Practice
For A&E professionals, risk isn’t just a legal issue. It’s a leadership issue.
Too often, contracts sit with directors while project teams operate without visibility into the commercial and legal framework shaping their decisions. Variations are missed. Scope creep becomes normalised. And when something does go wrong, firms realise too late that the risk was embedded from day one.
Farrah’s advice is simple but powerful: risk literacy needs to extend beyond the boardroom. Contracts should be shared across multiple levels. Teams should understand what sits inside the scope and what doesn’t. The firms that manage risk best aren’t the most aggressive, they’re the most aligned internally.
“Read the contract before you go and submit variations. Make sure everyone’s across the scope so you can identify when there is a variation. I see it time and time again on projects where it gets to the end and the fees have blown out. Whereas if everyone in the team had a really good understanding about the contract and the scope, they would have had a lot more success on the commercial side on the project.” – Farrah Motley
Ultimately, better contracts don’t damage relationships. Clearer boundaries don’t make you difficult. And informed teams don’t slow projects down, they protect them.
About The Blueprint Collective
Hosted by Scott Bampton, Product Marketing Manager at Total Synergy and former Operations Lead within national architecture firms, The Blueprint Collective is a curated podcast featuring candid Q&A-style conversations with architects, engineers, and creative leaders redefining how we design, deliver, and lead.
Filmed online, the series cuts through industry polish to focus on what matters: the ideas and people driving progress. Want to join us on the podcast? Register your interest here.
About Total Synergy (Australia)
Total Synergy is an Australian software company based in North Sydney, NSW, helping architecture and engineering practices across Australia improve project visibility, resourcing, and profitability with project management and practice management software.
