Michelle Cirson (00:01.634)
Welcome to the Subbies Toolbox podcast. I'm actually really glad you're here. If you're a commercial subcontractor working for commercial builders in Australia, then this is precisely the place that you should be. Some of you might know me from previous podcasts or from other public events that I've done in the industry. But I'm going to assume that none of you know me because it's our first episode. So by way of background, my name's Michelle Cirson
I am a construction lawyer in Queensland. I have my own law firm called Subcontractor Legal and we just act for subcontractors. Now I used to be a builders contracts administrator and I'm also a construction adjudicator in Queensland, which means I'm one of those people where if you don't get paid, you might end up with me deciding whether or not your payment claim is entitled to be paid under the Queensland Biff Act raging.
So I suppose the point I'm trying to make is that I've played cards from every side of the table in construction. I've worked client side, project management, I've worked builder side and for the last handful of years I've exclusively looked after subcontractors with their legal matters. So in terms of the ways that disputes can play out under construction contracts, there's not a lot that I haven't seen go down and
One thing that has always really frustrated me about the legal system and effectively the thing that you have to do if you have a problem as a subcontractor is that it's not built on common sense. In fact, common sense and the law couldn't be further from each other in terms of a solution for you. So in early days, when I first finished my law degree and I went to work for law firms, I used to get really upset about this.
And I would see subcontractors come to the law firm and they would be asked to put tens of thousands of dollars into the lawyer's trust account before they could even get the advice they needed to know what path they would take. And the lawyers in that instance used to say to me, look, this is effectively what happens when you're in commercial transactions. It is a statistical likelihood based on the number of transactions you do that things won't work out.
Michelle Cirson (02:25.058)
But there are variables that can have a bearing on how often things go bad for you. And I used to say to those lawyers, if that subbie had just done that one thing, if they just Googled that builder, if they had just done that due diligence check, or imagine if they sent an email saying this. And the lawyers would say to me, yeah, that would really help their case. In fact, they probably could avoid going to court if they had done those things. But that's not what we do. We're lawyers.
we're here to help the client at the back end of the problem where they're effectively bleeding from the neck. And what you're talking about was an admin solution and subcontractors won't pay lawyers to do admin grade work. And you know, that really got me thinking because if you think about it from an egotistical standpoint, lawyers can be shiny and fancy and you can have strategic whiz bang results, but
actually think the biggest superhero is somebody who can keep you out of those problems so that you never have to visit the lawyer's office. So it really got me thinking. was 2015, I was I was newly graduated graduated law school, I was still working on a building site in Brisbane and there was a whole raft of subcontractors that I've been hanging out with for about a decade that I really wanted to keep working with and
So when I started my business originally, I used to do contract administration for subcontractors and those admin systems helped them stay out of trouble. So many of our clients never, ever, ever go to court. I wear that like a badge of honor. Some lawyers might be like, well, I'm a fancy court lawyer and I can do these whiz bang Supreme Court matters and I'm really good at suing people. That's okay for them. But you and I both know that
you're actually way better off if you never have to deal with those problems in the first place. Now, one of the keen interests that I have, particularly, I think, because I became an adjudicator back in 2018. So I've been dealing with the security of payment regime for a long time is the way in which our system can be set up. Our admin systems can be set up as subcontractors to default in your favor.
Michelle Cirson (04:47.594)
if there is an issue. So if your builder doesn't pay you and you don't have an accounts receivable escalation procedure in place, you're left floundering around working out what to do next. But if you have a systematic approach to all these things, just like builders do when they ask you to give a stat deck and they put your payment claim on hold because you haven't got your insurances up to date or whatever the case may be. If you adopt a systematic approach, just like your builders do based on the 80-20 rule, you will get left alone.
In fact, I think it's better than 80 % of the time. Actually know it to be closer to 95 % of the time you will be left alone. And that is because the builder will know that you've either got somebody helping you or you're running a professional business and you weren't born yesterday. So neither of those things are a bad thing for your builder to think about you. So in terms of commercial construction and subcontractors, you might not be aware there's actually special laws.
in place to help you get paid. And those special laws require you to have your admin done in a particular way in order to rely on those protections. So if you don't have a systematic approach to this, then you're on the back foot. You have to wait to be short paid before you can find out what you should do next. But if you had those systems in place from the outset, the moment that you're short paid, you would already be on the right path.
to being able to debt recover in a timely fashion. So you might be wondering what the Subbies Toolbox is all about and what the Subbies Toolbox podcast is going to be all about. And the Subbies Toolbox is effectively an admin system, an admin compliance system that I put together almost 10 years ago now. And it was to help subcontractors manage their builders contracts and get them paid on time. And over time those
resources and templates have evolved and we've got a lot of experience trying different things with builders from a commercial perspective and we know what works, we know what doesn't work and we know what tricks builders will use to try to delay you in your process of working out how to get an outcome. So the Subbease Toolbox is designed to be a resource that subcontractors can use to keep themselves out of trouble with builders. But what's more exciting about it is
Michelle Cirson (07:12.334)
Over the years where I've previously done podcasts, I've put out a lot of educational information for subcontractors to help you guys do these things. You can actually get a great deal of your outcomes just by listening to the free advice that I give on our podcasts and implementing those things. Even if you only implement the things you hear about on the podcast, you will get outcomes using our systems. So when I decide
what I'm going to talk about on these podcasts in a big way. It is informed by what's going to help you get outcomes because I know that if you get a little bit of a taste of the things that you can achieve just by implementing these systems, you're to keep coming back and you'll be saying, Michelle, I need the next thing. need the next thing. So I'm not going to beat around the bush. This is absolutely, this podcast is part of our marketing strategy, but this podcast is also about helping subcontractors or providing resources for subcontractors.
to have a good red hard crack at trying to get yourself put forward in a position where you, if you do these things as a systematic approach, by and large, you won't get yourself into the trouble that a lot of subcontractors get into when they don't have any backup plan whatsoever. So when I decide what topics to talk about on the subbies toolbox, I have these four content pillars and guys, this is something marketing.
strategists recommend we do. And many of you, if you've seen my online content previously, you might know that I get pretty controversial with some of the things that I talk about. Where does that come from? Well, I think when you've been forced to work in a role in your career where you don't necessarily align from a values perspective with some of the things that you have to do, for example,
telling people they're not going to be paid. You know those people have family businesses. You know the people whose wages won't be paid because you are not paying those people. You're the instrument that is preventing that person from being paid. It can really shape, shape your purpose in terms of what makes you passionate and what your purpose might be in the industry or with your career. In the early days as a builder's CA,
Michelle Cirson (09:38.699)
I was one of those rat bags who used to send really nasty emails and those emails have surfaced in recent years and been shown to me by subcontractors who have said to me, Hey, do you remember sending this? So I'm very aware that what we put in writing is permanent. It will circulate. will not, even though people think, well my email account probably won't sink after 10 years. You would be amazed.
what surfaces if you put it in writing and when it might crop up. So in that vein, I suppose my purpose in the industry is to try and put things right. I feel like in the early days in the industry, I was probably too young and dumb to align from a personal perspective with the values of what I want to achieve in my career. I'm in a unique situation where
with my skills and experience as a construction lawyer, I can impart knowledge to the industry that can help everyone get better outcomes without using court. The legal systems have shortcomings that I can't personally fix, but there are commercial strategies that you can use in connection with the legal regime or a systematic approach that means that you otherwise comply. So you hedge your bets. You've got these commercial
dealings that you can do to get yourself an outcome on one hand, and then on the other hand, as a backup plan, at least you're compliant with the legal regime that's there to help you get paid if things don't work out from your commercial negotiations. So in terms of our content pillars, I've got these four content pillars that I've thought up over the years that really align with what I want to achieve in terms of purpose for the industry. And the first one,
This one might shock you a little bit, but the first one is coercive control in construction contracts. Now, if you tune into this podcast, you're going to hear me talk about this a lot because the way that contracts are drafted in construction are different to other industries and the way that commercial dealings are done in other industries. You guys would know this if you have ever tried to explain to somebody who is not in the construction industry what retention is.
Michelle Cirson (12:01.326)
I don't know if you've ever done that around the Christmas kitchen table where you've said, yeah, so, you know, there's these things called the defects liability period and they hold retention, cash retention for a year or more on the subcontractors who have already done the job. And if you're not in the construction industry, these people that you try and explain this to think that you're crazy. Why would anyone ever agree to that? And I completely agree with that as well.
Retentions are just one element of a whole list of indicators that if you were in a family law dispute would put you in the category of coercive control. Now that's a domestic violence category where people constrain and restrict the financial resources of somebody to keep them under control. That's the way construction contracts work.
Now, this is quite a controversial topic and there are lawyers out there at the moment who are very unhappy with me for talking about this in a commercial context because they think it's disrespectful to the very important work that's taken place in family law to put coercive control into a category of domestic violence. I think two things can be true. I don't think talking about coercive control indicators in a commercial context detracts from
severity of coercive control in a domestic violence situation there can be two crimes at once. It doesn't mean one victim was less of a victim than the other because the other one was also a victim. So I don't know if that addresses anyone's concerns about that. It's not my intention to be disrespectful to domestic violence victims. That is an incredibly important situation but
My duty, my duty, my passion and my intention is to try to make headway in the construction space where family businesses are having their cashflow restricted so that builders can keep them under control. And look, retention is just one element of that. There will be its own podcast, I promise you, on the elements of coercive controlling construction contracts. But watch this space because it is one of my goals this year to try and get
Michelle Cirson (14:22.506)
into a TED talk to talk on that topic. So that is one of our content pillars. I'm to be talking about how builders will try to restrict or constrain the cash flow or put financial pressure on subcontractors to get them to do things that they wouldn't normally commercially be required to do or even contractually required to do.
The other content pillar, I've got four content pillars. The other one is security of payment. think that needs to always be a discussion because of the way that the contracting hierarchy works with downstream parties and holding money back to keep them under control. Security of payments, systems and compliance and the commercial strategies that you can get used to get paid as a subcontractor are actually very good. And
you might be laughing at me, hearing me say that, but if you were a florist and you were told that you had no right to decline a variation and that you had to supply an infinite amount of flowers or provide some other service, the way that the commercial transaction works in other industries is not the same as in construction. Now, yes, they have the ability to just say, bugger off.
go down the street, I'm not serving you. In construction, we don't have that privilege. One of the other indicators of coercive controlling construction contracts is the fact that when you sign a contract with your builder, you are giving them an unlimited credit limit. I'm going to say that again. When you sign your contract with your builder, you're giving them an unlimited credit limit.
So there are very few ways that you can get out of a contract with a builder. And if the builder decides to direct you to do more and more work under those same terms, there is little to no ability for you to say no. So bear that in mind, but security of payment regimes exist all over the world for this very reason, because in construction all over the world, and I'm talking about Canada has security of payment laws, South Africa, France,
Michelle Cirson (16:40.748)
you name it, all over the world, there are special laws to get people paid in construction. Isn't that crazy? Isn't that absurd? That construction is so bad that worldwide we have to have special laws to get paid. But if you're a florist and you don't get paid, you got to take the person to court to get the outcome. So it's not all terrible.
There are remedies available to us in construction, but you need to know which one to use when. And oftentimes, if you just go and get garden variety advice from a law firm that might not specialize in construction law or might not understand all of the elements or all of the debt recovery options available to them, it's very easy for them to take you down the wrong path. So I want to talk to you guys about security of payment.
But a lot of it's not going to be about the law. A lot of it is going to be about what you can say to your builder to get paid because it's commercial street smarts. It's going to be commercial leverage. will be understanding the context of the environment that you're in and what cards you've got available to play so that you can get outcomes without having to use these legal regimes. Which brings me to my next content pillar, which is commercial street smarts.
Commercial street smarts is different to having been to business school. It's different to having been to law school. It doesn't need you to intimately understand what laws exist or what forms exist or who you adopt, who in for what. It is about understanding the commercial context in which you are dealing and rationalizing that for you.
And unfortunately, the reason you need it to be rationalized is because blue collar discrimination in our industry probably has clouded your perception of what is reasonable and what is reality. And I say that because we readily accept retentions. readily, subcontractors often will sign directors guarantees when they're being paid in arrears.
Michelle Cirson (18:57.538)
Builders are making PPS registrations over subcontractors when subbies are the ones that are owed the money. You've got to understand it doesn't make sense. The power imbalance and the obligations and the risk allocation under construction contracts is so distorted. And you've got to wonder if you're talking about it around the Christmas table and your family saying, why would you ever sign a contract that says that?
because they're from the real world and we're stuck in construction with our blinkers on in our little bubble. think well actually what they're saying is right. Why should I be the one to give the security when I'm the one giving the credit account or providing the line of credit to the builder? What risk does the builder have if I have to pay my supplier and the goods get delivered to site before I get paid for them?
So all of those elements, I want you to sort of open your eyes a little bit to that because the way the hierarchy and construction contracts is set up, it's set up for compliance. It's not set up for a level of alignment that results in good buildings getting built. Because if builders really cared about their subcontractors, they would want aligned subcontractors who also make money on every job.
So bear that in mind, why are we accepting the swallowing terms that other industries just think are completely absurd? I'll give you an example. If I was going to get a website built today, I'd have to pay that consultant in advance to get that website. Where do you as the subcontractor go where you don't have to sign a credit application form with a director's guarantee or pay a deposit or pay in advance for something?
you all would be experiencing the same pushback from the rest of the real world. It's only in our construction bubble because we label ourselves as subcontractors that we accept these terms. So commercial street smarts, this is about me opening your eyes to the leverage that you really actually have in a construction contract with your builder, helping you understand big shiny builder syndrome.
Michelle Cirson (21:11.234)
helping you see big shiny projects syndrome when you find one in the wild and then rationalizing and contextualizing what would be reasonable versus what's typical in construction. Just because we've always done something the same way doesn't mean it's right. So, that's one of our content pillars, commercial street smarts. We'll show you the ways in which that you can get things done. and
open your eyes to what you could possibly get if you just ask for it. Now, my last content pillar, because it's one thing to go and negotiate good contract terms, but they're going to be meaningless if you just leave the contract in the drawer and then you don't actually do the admin that follows, is clever contract management. So to give you an example, there are a whole raft of free searches you can do for due diligence on your builder that will give you a full picture.
of what the builders got going on in their backyard. And most subcontractors don't even try. They just go and give lines of credit to builders by signing contracts with unlimited credit limits and hope they'll get paid. So in terms of your contract management with your builder, the best way for you to get through life unscathed and get paid for the work that you do is actually just being systematic and smart.
about how you administer your contract with your builder. That doesn't sound like much fun, but from a podcast perspective, if you hear some of the war stories that we have, some of our sub EastalWalks members come forward with the most absurd scenarios and requests from their builders and we help them troubleshoot how they can best position themselves to move forward. And those are really interesting war stories or really interesting scenarios. And I think you guys could all benefit from it.
In fact, I know you could because I know with our Subbies Toolbox community that the peace of mind and the comfort our toolbox community get from talking to each other and going, I thought it was just us. Like, I'm so glad in a way, I know that's terrible to say, but I'm really glad that this is not just happening to us. And one thing I know to be true is that some contractors don't talk to each other all the time.
Michelle Cirson (23:36.877)
You guys are funny old folk. Hey, you will keep secrets. Try and keep a little silo so that you're not talking to your competition, but the power is in the number of you. have a volume in terms of a market share. And there is also the ability for you guys to set the status quo or the way that your trade does business in the industry.
Now, lot of industry associations have tried and failed at this. In fact, a lot of them are just a lip service in terms of providing you with token services that other consultants provide to their memberships. So if you go and you sign up for a membership with an industry organization, I would question whether it's actually the organization that's providing you the value or whether they've got people like me who are doing things for free consultations for you as a member, just so they have something to provide you in terms of a value proposition.
I'm not trying to pick on those guys. They seem to be listened to by politicians and legislators more so than people with real white collar services or skills that could make a real difference. And part of the reason I want to get on my soapbox about that is because I have industry goals that I'm hoping this podcast will help me achieve.
So one of those goals is about unfair contract terms and coercive control and construction contracts and the ability for builders to just withhold money across multiple contracts to choke your revenue. So you can't defend yourself when the builder tries to steal your gear or look, guys, I don't want to get too deep with it, but there's retention money stuck in trust accounts in Queensland that the government has done nothing about. And it should be a relatively simple fix.
In Queensland, we've had a new state government come in and be very proactive about walking back CFMEU legislation. So we know they know how to do it, but they're completely disinterested or at least just lazy about helping these subcontractors who've got hundreds of thousands of dollars stuck in trust accounts that were created by the Queensland government or mandated by the Queensland government. And there's no resolution to that right now. So
Michelle Cirson (25:51.533)
there are industry goals in terms of me providing you with this podcast. And I'm telling you that so that you will subscribe because a lot of people listen to these podcasts in the car or, you know, when you're out walking the dog. But if you don't subscribe to the podcast, it really limits the amount of reach that I can achieve in terms of getting our message out. So,
humbly ask that if you are tuning in today, please just hit the subscribe button and come along for the journey. I'll definitely make it worth your while. Our first real episode topic is going to be the commercial subcontractors, use resolutions list. So I'm to give you a list of things that I really wish every commercial subby did. If you could just do these things, then most of the time you wouldn't need me. You could just get through life and things would be fine. So
to give you a bit of a, a list of things to prioritize in your business about getting sorted out so that you can keep yourself out of trouble would be really good. but in saying that I would also really love to have a podcast where people reach out and ask questions. I think it's so powerful having feedback from the community and understanding what you're struggling with. You guys might be surprised to know that
quite a few builders contracts administrators will whistle blow to me. So I'm talking like I'll get a couple of messages a month from different people in the industry. Of course, I would never name names. And if you want to ask an anonymous question, please let me know. Happy to take anonymous questions. But if I'm getting feedback from builders staffers and they're
spilling secrets on hey did you know this is happening you could you could help the subbies with this. Guys don't be too scared to get in touch and ask me your questions so you can do that anonymously but I would love to be able to do question time with every episode as well so hopefully that gives you an indication of what the subbies toolbox is.
Michelle Cirson (28:08.078)
podcast will be about. Thank you for tuning in. I am genuinely looking forward to bringing you a weekly podcast. That is a big ask. These podcasts are not, takes guts to get on film and talk about these things. So hopefully it will pay off for you and hopefully it can get the message out there for subcontractors. We would really like to be able to help you achieve.
a better compliance strategy in your own business. And guys, when I talk about compliance, it's not all paperwork. It is really just about bringing you up to speed with commercial street smarts and helping you understand in a big way myth busting the things that we've been fed by builders for decades to keep us under control. There's there's a whole raft. I could make a coffee table book of the things that you're not required to do that builders make you do every month.
And if you could give away or have a response to a builder to mean that you don't have to do those things, imagine how much time you'd save. And if you could redirect that time to doing something positive or taking a positive step in terms of putting in a system or making sure that you've checked on something, that you do do something a certain way in your business, then, you know, even if just every week you took
one thing from my podcast, then I'm going to be very happy by the end of the year. And I think you will be too. So I'm going to sign off for the first SubEast toolbox podcast. Thank you for tuning in. And I look forward to hopefully receiving your questions and seeing you subscribe to our show.
See you next week.
