Licensing laws. Most states require corporations offering design services performed by its own employees to obtain a Certificate of Authority to practice architecture. Without it, the contractor is practicing illegally.
There are some exceptions for residential, agricultural, and small commercial remodeling in most states, depending on the type and scale of projects. Some states limit a corporate certificate only to “professional corporations” — companies that are 100% owned by licensed professionals. In other states, anywhere from 51% to 66% of the shareholders must be licensed.
Liability insurance. A contractor can get its own errors and omissions policy, which covers design errors by the contractor's employees or subcontractors. Most architects working for a contractor will want confirmation that the company carries insurance that protects the employee if he or she gets sued personally.
Corporate “fall guy.” To obtain a Certificate of Authority to practice architecture, most states require the company to name an individual who is designated personally liable for the company's design work. That person is exposed to disciplinary action if the contractor violates licensing statutes or is negligent. Most employees are reluctant to be the designated “fall guy” unless they are compensated for that risk.
Sealing of plans. Unlike the contractor, who doesn't have personal liability for construction defects (if the company is incorporated), the architect who seals a set of plans may have personal liability to the licensing board or to third parties in a lawsuit over design defects. This is true whether the architect works in design-build or in an architectural practice. As a minor employee at a construction company, the risk of personal exposure may not be offset by a comparable paycheck.
New graduates. Newly graduated architects must check with the state licensing board and with the National Council of Architectural Registration Boards to see if time spent working for a contractor qualifies toward the required work experience to sit for the licensing exam. —Bill Quatman, FAIA, is a lawyer at Shughart Thomson & Kilroy, PC (www.stklaw.com), in Kansas City, Mo., as well as an architect and chair-elect of AIA national's design-build committee.