Managing risk in AEC projects: insights from industry experts

From commercial pressures and contracts to design changes and payment delays, risk is everywhere in architecture, engineering and construction. Although risk can never be eliminated entirely, the firms who succeed are the ones who learn how to anticipate it, manage it, and build resilient practices around it.

In our latest expert webinar, hosted in partnership with the Architects’ Journal “Business in Practice: Managing Risk”, we brought together four leading voices from across the AEC sector to explore the different types of risk that practices face, and how you can take steps to reduce your exposure.

Whether you're a partner, director, practice manager, or project lead, the insights shared in this session are grounded in real experience and practical strategies that can help you better safeguard your people, profits and reputation.

Watch our webinar

In our article below, we break down some of the key topics and takeaways from the discussion.

Getting to grips with legal risk and liability

Assad Maqbool, Partner at Trowers & Hamlins, opened the session by exploring how commercial risk plays out in contracts and professional liability.

A key takeaway was the importance of clarity around the scope of services and the standard of care you’re being held to. In most cases, this means working to reasonable skill and care, a legal standard that underpins both statute and common law.

However, Assad warned that ambiguity in contract language can lead to unintended liabilities – ensuring that your contacts align with your professional indemnity insurance can limit these risks.

He also highlighted the increasing significance of the Building Safety Act and the push toward collaborative contracting models, both of which are reshaping the way responsibility and risk are shared across project teams.

Managing subconsultants - beyond the architect's role

Tahera Rouf, Director at RCKa Architects, focused on the growing commercial and legal risks that architects face when managing subconsultants.

Tahera began by reflecting on a shift she’s seen in projects, where clients increasingly expect architects to act as lead consultants - managing not just design coordination, but also appointing and administering engineers, sustainability consultants, and other specialists.

This demand often stems from a desire for simplicity and efficiency: one contract & one point of contact... but this consolidation of responsibility also transfers significant risk and liability from client to architect.

To better manage this risk, use clear scopes, realistic fees, and a solid design programme as a baseline. These should be backed by early warnings for changes, monthly reports to track work and support fee claims, and a simple change control process to formalize variations and protect cash flow.

"As architects, because we are coordinating, there’s a greater efficiency if we also manage the consultant team and manage the invoices that are related to them. But, also, this is a risk and liability shift from the client to the architect."

Protecting profit - from fees to forecasts

Laura Cooke, Director at Laura Cooke Consultancy, brought a brought a pragmatic view of how practices can better manage commercial risk.

Firstly, set your fees right at the start and avoid the temptation to undercut. Low fees not only threaten profitability, but furthermore could devalue your work.

Laura emphasized the need to factor in buffer and contingencies from the outset, particularly on portfolio or breakeven projects, which almost always overrun or involve extra iterations.

Laura also addressed scope creep and design changes as common but preventable profit drains. Setting boundaries in contracts, limiting design iterations, and being transparent with clients about changes - in real-time, not at project end - can help recover costs and preserve margins.

Laura further emphasized the importance of better data, from forward-looking forecasts to active resourcing plans, to help practices stay in control of their pipeline and margins.

Navigating risk from bid to bill

Joe Emanuele, Head of AEC at CMap, brought his real-world experience to the topic of project risk – covering the essentials from bid to bill and beyond.

Joe expressed the critical importance of the bidding phase and encouraged practices to evaluate clients, funding certainty, and project profiles early - asking not just “Is the fee too low?” but “Is the scope too broad?”  

He also warned against hidden losses caused by underestimating bid-stage costs or failing to match fees to resource requirements.

In the design and construction phases, Joe emphasized strong change control, financial oversight, and diligent information management, especially given new obligations under the Building Safety Act.

He highlighted that effective information management helps avoid legal “grey areas” by maintaining clear, accessible audit trail of all project communication, drawings and documentation.

"Profit is not about yachts in the Bahamas… it’s about investment, mitigating loss, and helping you sleep at night."

So what can you do?

While risk can never be removed entirely, there are clear, proactive steps you can take to mitigate:

• Set your foundations with realistic fees and scope
• Make better use of your project data to drive smarter decisions
• Be transparent with clients across the whole project lifecycle
• Have defined processes for managing subconsultants
• Maintain an accessible audit trail for project information

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