Whether for personal or professional reasons, situations arise that require firm owners to move. And sometimes that move goes beyond a bigger space down the street, but rather a move to another state or even a different country. But setting up shop in a new state or country can require more than hanging a sign on a new door. Below, practitioners and lawyers offer strategies for relocating a design studio.
Hire Professional Advisers
When business partners and spouses Vivian Lee and James Macgillivray moved from Ann Arbor, Mich., to Toronto to be closer to family, they decided to also uproot LAMAS, the firm they founded in 2008, rather than simply start a Canadian branch office. Though jumping through the bureaucratic hoops of licensure reciprocity and visas proved challenging, the logistics of moving the duo’s business was relatively painless. “We are small and nimble,” Lee says of their their four- to six-person firm. “It was a fairly easy transition.”
To get the ball rolling, Lee and Macgillivray alerted their U.S. tax accountant of their intent to relocate. He guided them in notifying the Michigan Secretary of State’s office to close their business. Upon arriving in Toronto, they hired a local accountant and adviser “almost immediately,” Lee says, as well as a lawyer to help them re-establish LAMAS on Canadian soil.
But Lee and Macgillivray understand their circumstances are somewhat unique. “It takes a long time to establish a client base, a reputation, to know the trade,” Lee says. “If you’re getting to be a larger sized firm, it [might not] seem worth it or wise.”
Consult Local Laws
Moving a business across national borders can be complicated, but transitioning from one state to another can also require a series of steps, depending on local laws. “It requires understanding of not just whether you’re licensed in your new state, but what kinds of entities or companies can practice architecture,” says Robert Herrmann, Allied AIA, partner at the New York law firm Menaker & Herrmann, and author of the book Law for Architects: What You Need to Know (W. W. Norton & Co., 2012).
Construction services attorney Stanton Beck, Allied AIA, of the Seattle-based law firm Lane Powell agrees: “Certain states have only certain forms of entities—limited liability companies, corporations, or otherwise—that can be practicing architecture,” which could require a business’s legal structure to be changed. In these cases, architects must also take additional steps to close a practice in the state left behind. “Depending on how [a firm is] set up in that state, they would perhaps have to file for dissolution of their legal entity with the secretary of state, and close out their tax filings,” Herrmann says.
Because laws regarding employment, ownership, and taxation differ by state, design and construction attorney Bennet Heart, a partner of Cambridge, Mass., firm Noble, Wickersham & Heart recommends first contacting the secretary of state’s office in the new state to learn its requirements, and to do the same with that state’s architectural registration board. “If you’re a Massachusetts firm doing a project in Ohio, you don’t have to comply with Ohio employment laws,” Heart says. “But if you’re establishing a practice in Columbus, you will be subject to all the laws of Ohio.”
Consider a Satellite Practice
To streamline their move, many architects and firms opt to open a satellite office in the new state while keeping their headquarters in the original location—a choice made possible with the help of technology and telecommuting.
For example, when Monica Ponce de Leon, AIA, became the dean of Princeton University’s School of Architecture in 2016, she did not close her eponymous architectural practice in Ann Arbor—nor had she closed her Cambridge office eight years prior when she left her faculty position at Harvard University to become the dean of the University of Michigan A. Alfred Taubman College of Architecture and Urban Planning. Instead, Ponce de Leon manages her 10 employees across four separate offices.
She says the decision to keep her studios open was initially based on not wanting to lay off or displace employees—but now, the multistate presence has enhanced collaboration. “We have the ability to access each other’s servers remotely and to [even] draw on each other’s screens,” Ponce de Leon says. “We are constantly collaborating in a seamless way.”