Property Management Consulting The Client’s Perspective FRED D. SETH, JR., CPPM, CF oday’s property should first evaluate the situation. Some typical situations management envi- Consultants have that warrant your consideration of hiring a consultant are Tronment is a com- as follows: plex maze of regulations, to walk a fine line ● contractual issues and, You need qualified, property management exper- more than ever, empha- between bringing tise that you do not have in-house sis on cost savings initia- ● You need an unbiased, frank opinion if you have tives. Corporations, their expertise differences of opinion among managers concerning agencies, universities management of your property and other property hold- to the project and ers are all looking for ● You need temporary technical assistance while you ways to reduce costs, working with the search for a property manager while maintaining fully ● compliant property present staff. You need assistance in regulation compliance and management systems. interpretation of directives Many cost reduction ● You need a comprehensive training program for measures have involved cutting staff and often, expertise. management, property personnel and staff To fill this void, managers have turned more and more to property management consultants. This article addresses ● You do not want to hire a full-time property man- the consulting process from the client’s perspective, ager, but want help available on-call including what consulting services are available, how to ● find the right consultant for your company, effective man- You want to outsource the property management agement of the consultant’s efforts to maximize the bene- function fit, and finally, evaluating the success of the effort. If your property management situation fits one of these conditions, you are ready for the next step. Why do I need a consultant? What kind of property management consultant do I In past years, government contractors had large staffs need? of property professionals and administrators to manage their government property and corporate assets. The size There are several types of property management of the typical property organization has been reduced sig- consultants that you may want to consider. They can be nificantly in recent years due to “downsizing” and “right- categorized as follows: sizing.” Property management consultants can fill the void left by this reduction in in-house expertise. The ser- Advisory vs. Operational vices offered are dependent on the knowledge, skills and Most property management consultants today would experience of the consultant. Obviously, your first ques- be considered operational, but there are some that are tion must be, “Do I need a property management consul- more advisory in nature. The advisory consultant con- tant?” To answer this question, you must first consider ducts an analysis, arrives at conclusions, makes recom- what goals you want to achieve in your property manage- mendations and then turns a report over to the client for ment program. If you have failed an audit or have serious implementation. These consultants do not get involved in inventory problems, the answer may be relatively easy. the day-to-day operation of the client’s business. Opera- Your problems may be subtle, however. There may be a tional consultants are also involved in the implementa- general lack of interest in managing property effectively tion. This benefits both the consultant and the client. that has led to losses, the inability to locate property These consultants get more billable hours, but can also when it is needed, or buying the same items again and ensure their ideas are implemented in the client’s organi- again. Morale may be low in your property staff. Training zation. You benefit because the consultant is present dur- may be ineffective or nonexistent. Your experienced prop- ing implementation when most resistance occurs and dif- erty manager may have just retired or left for another ficulties arise in achieving the stated goals. position. Each case is different. To prepare yourself, you Volume 11 Issue 4 – 1999 © 1999 National Property Management Association NPMA 7 Part-time vs. Full-time satisfied with their work. Contact the In recent years, property managers Regular meetings NPMA for referrals. who have a full-time job or are semi- Conduct a personal interview. The retired have hung out consultant’s shin- between staff interview gives you a chance to evaluate gles. As part-timers, they have the freedom the consultant’s style, knowledge and to pick and choose clients and also work and the experience. Most important, you can for less money than the full-time consul- assess how well the consultant will work tant. However, there are drawbacks. Part- consultant are with your staff. No matter how talented a time consultants may not be available consultant may be, if he comes across as when you need them. They may not be critical to the an arrogant know-it-all, your chances for able to devote the necessary time to the success are slim. Your property staff may project. They may also overstate their success of the be intimidated by outside professional expertise and be difficult to pin down if help. Consultants have to walk a fine line the project does not go as well as expected. project. between bringing their expertise to the project and working with the present staff. Large Firm vs. Small Firm Discuss desired outcomes and objectives and how There are several large accounting firms who perform they will be evaluated. The consultant should ask what property management consulting as one of their activities. you hope to accomplish and how you envision your There are other smaller firms who provide similar ser- property management system at the conclusion of the vices. In addition, some property management consul- project. You and the consultant need to agree on these tants work as independents. Both have advantages and outcomes and also how they will be measured. You need disadvantages. The larger firms and those who have dedi- to know your investment was worthwhile. cated property management resources are usually a little more expensive, but they also have more resources and Discuss business arrangements and get references. can support a wider range of services with highly quali- You should get all of the business arrangements clarified fied staff. The smaller firms or solo consultants may have up front. The following issues are important: less work and more time to devote to your problems, but Term of the project they may not offer the wide range of services that large Cost (hourly, daily, project completion, etc.) firms do. You need to tailor your consultant choice to Type of contractual arrangement (fixed fee, cost plus, your needs. time and material, etc.) Management of the consultant’s efforts (who conducts Specific Area of Expertise it and the parameters) Evaluation of the consultant’s work or Property Generalist Termination (conditions, terms of payment if termi- Consultants bring different skill sets to their clients. nated) Some may have a specific government agency or private Non-disclosure/confidentiality (protection of client’s sector background. Others may have extensive military interest) experience that helps when dealing with defense contrac- Impartiality and potential conflict of interest (these tors. Others have gotten into property through account- issues must be resolved at the beginning) ing, retail business or inventory and specialize in one spe- Evaluate references cific area. Some bill themselves as a “jack of all trades” in No consultant can provide everything you need, work the property field. As the informed client, compare your to get the best fit requirements with the skill set of the consultant. Ensure Negotiate terms and the agreement. Consultants that there is a good match. may seem rather expensive to you but remember that OK, I have decided I need a property management unlike your employees, they have administrative expens- consultant. Now what? es, overhead, travel and per diem, professional develop- You have evaluated your situation and decide you ment, benefits, marketing expenses, etc. Of course, you need a consultant. Finding the right one may be the most are not paying them benefits, and you do not have to important step in the process. Your first action is to put worry about days off for illness or vacation. Contracts your goals and objectives down in writing. These can be between clients and consultants are much like those you flexible, but you should have a specific, defined need. have worked with in government contracting. Fixed fee Finding a consultant is easy, finding the right one can be plus expenses, fixed fee with incentives, time and material difficult. Consultants contact potential clients on a regu- and cost reimbursement contracts are all vehicles used to lar basis. Evaluate them and also ask around. Find out if contract with consultants. Each places a certain degree of any of your colleagues has used a consultant and been risk on the client or consultant. As a client, you want to 8 NPMA © 1999 National Property Management Association V olume 11 Issue 4 – 1999 try to ensure the best possible outcome of the consultant’s are deemed successful or not. The most important ele- efforts through an effectively written and managed con- ment in this phase is the final report. The report brings tract. the data, analysis and findings into an organized form. The consultation phase. Before the consultant starts The quality of the final report is often how the consul- work, prepare your staff. They may overreact, assuming tant’s efforts are judged, and forms the basis for the action there are problems that reflect on their performance. To plan undertaken by the client. The final report should be successful, the consultant must have the organization’s contain at least the following elements: support. You must ensure full cooperation and open com- A statement of the goals and objectives of the project munication from your staff.