Barry LePatner of LePatner & Associates: 5 Questions

Barry LePatner, founder of the New York City-based law firm LePatner & Associates, has kept his finger on the pulse of the construction industry’s woes for over four decades.

LePatner’s legal practice began more than 45 years ago representing architects, engineers and other designers in their work as a business and legal adviser. The firm grew quickly, developing an expertise in how projects are built, designed and negotiated. In the early `90s, the practice expanded to cater to real estate owners, developers and construction lenders.

LePatner has been on a crusade to identify and eliminate inefficiencies in the construction process. In 2007, he authored Broken Buildings, Busted Budgets: How to Fix America’s Trillion-Dollar Construction Industry, advocating for the end of “fast-track” projects that incur cost overruns. That was followed in 2010 by his book on the state of aging U.S. infrastructure, Too Big to Fall: America’s Failing Infrastructure and the Way Forward. A 2008 New York Magazine article even dubbed him “a Cassandra of infrastructure.” 

Today, LePatner is echoing the ardent request of so many other professional industries: Use more technology. LePatner sees modern technological tools like artificial intelligence as a golden ticket to bypassing the construction industry’s chronic problems, like timeline delays, cost overruns and paperwork headaches. He says, however, that architects and designers don’t seem ready to adapt.

Commercial Observer sat down with LePatner in June to discuss his views on the sources of the construction industry’s current headaches, and the tools that might help alleviate them. 

The following conversation has been edited for length and clarity.

Commercial Observer: After 45 years working with architects, designers and developers, what concerns you most about the industry today?

Barry LePatner: You’ll recall we started this century with a technological recession. Tech really went bottom up, construction projects stopped, and there were whole problems with inflation.  Seven years later, in 2008, the financial community collapsed. It took until 2011 through 2013 for the real estate, design and construction world to come back to some kind of normalcy.

Then we had COVID-19 and what that did to the supply chain and how we sourced materials from all over the world. Globalization no longer helped the design or the construction of projects, because there was no sense of reliability.

We have seen, since that time, a continued sense of fear, uncertainty and doubt in the principals of all the players, because nobody can assure an owner today that the elements of a project that are being designed are available. Nobody can assure an owner that you’re going to have a guaranteed fixed price because of the uncertainties of the supply chain. Nobody can assure that we have enough laborers to do the work, because the construction industry is about 450,000 workers short as of a few years ago, and they are certainly several 100,000 workers shorter today because of the immigration policies of our administration. 

All of these problems pervade the real estate, design and construction industries on every project that goes forward.

There’s one other problem, and that is the slow, minimal adoption of technology by the architecture and design professions. You have a whole industry being held back, because architects really have chosen to look askance at how technology would help them, even though every other industry is implementing massive amounts of technology and artificial intelligence as we speak.

All of these things can pile on to what we generally would like to believe is the flawless mechanism by which buildings get designed and built in this country.

Do you have an example of how this has manifested in your own work? 

In the last 12 months, I was representing a major construction lender who routinely lends hundreds of millions and billions of dollars for projects. This recent project was a huge, 2 million-square-foot warehouse facility. When the construction lenders’ team came to me, they had already vetted a contractor, they had the design and engineering plans, and they had a budget ready to go, except the loan was being held up for the risk analysis that I do on these projects. 

When I looked everything over, one thing caught my eye. On a conference call with about 25 people involved, I said, “There’s one thing that we can’t routinely handle.” The outer facade of this 2 million-square-foot facility was made from precast concrete blocks that would be set in and pushed into place. I went on the internet and identified only four factories in the United States that make these concrete, slip-in exterior panels. All four of them said they were going 24 hours a day, and anybody who placed an order would have to wait 14 months minimum.

So I said to the team, “You’re going to have a problem. You’re going to finish this project in 14 months, and if you place the order tomorrow, you’d have an empty shell open to all the elements, and only then would you be in the beginning of the delivery window for these concrete panels.” This provoked silence on the phone for a long time. 

So you can’t count on assuring supply chains. You can’t count on contractors, suppliers and manufacturers who may have been in business and prolific years ago. Today, you have to double check and do the due diligence on every element of a project’s design and construction.

How does the industry need to change to avoid unforeseen hurdles, or at least to anticipate them? 

I’ve been an advocate of this for 15 to 20 years now, speaking to different elements of the industry. We have to recognize that the industry is built on a broken foundation.

Today, we look to build based upon construction documents set at the end of the design, which are supposed to tell a contractor how to build, how every element and every piece of equipment is supposed to come together, but the technology that’s available is largely technology that has been ignored. 

The architectural profession, and in some cases the engineering profession, has had a consistent pattern of nominally accepting these new tools like CAD [computer-aided design] or BIM [building information modeling], but they extract none of the transformative potential, the technology that really could make a difference in being more efficient in both the design and the construction processes. The industry itself, the profession itself, is balking at stepping up to meet this challenge.

Architects should be able to bring their genius of design and their instincts for how to make projects look great, but they need the capabilities to produce complete documents that will enable everybody on the team, including the owners, to benefit. It’s not being done.

Is there another corner of the industry that wins out if these architectural firms don’t embrace new tech to its fullest?

Large construction management firms have to manage these projects, and they need the information to go to their subcontractors, suppliers and vendors with all the details upfront, so that each piece of equipment, material and installation can be purchased and delivered on time to be installed appropriately when the schedule calls for. When they lack this information because the architects and the engineers can’t put it down into the design documents, they’re at risk, and they pass that risk on to the owners who pay more at the end. 

We are starting to see some of these construction companies bringing on their own teams of architects and engineers and saying to an owner, “We can short-circuit the design process. We know you want this factory, or you want this basic research building that we’ve done for you in the past, and what we can do for you is instead of taking the better part of a year to design it, we can produce a set of documents in-house.” Owners increasingly are going to find this very attractive. 

How does AI fit into this picture? Are architects using these new tools?   

They should, but they’re not, across the spectrum.

Most architectural firms are not stopping what they’re doing and realizing the incredible benefit they could get from addressing their inefficiencies in the production of routine documents. Not the design, not the creative side, but the production of the documents, the coordination of their design to eliminate interferences or clashes. They could bring AI on readily if they would take the time and had the incentive to do it, but right now they don’t see that incentive, and they don’t see the willpower being generated for them en masse to start bringing AI into their firms, and delays are going to be costly indeed.

The architecture and engineering drawings have to be coordinated. It’s a whole process. AI technology could have a big role to play in ensuring more complete and coordinated documents, ensuring a fixed price and probably a fixed schedule that everybody would be willing to abide by. We just don’t have it as an industry standard.

Emily Davis can be reached at edavis@commercialobserver.com.