Best Practices for Managing Individual Licenses

Because of the technical knowledge required and the component of public safety involved, firms that provide architecture, engineering, construction, and adjacent services are among the most highly regulated in the country. The primary objective of licensing boards is to ensure that such firms operating in their state are qualified to practice. Professional service firms face complex licensing requirements at the individual level that differ from state to state.

The successful management of qualifier licenses is mission critical, as the licensure of these individuals directly impacts the overall standing and reputation of a firm.

The consequences of overlooking a renewal or failing to report a change in qualifier within a state’s required timeframe can range from the inability to pursue or get paid for work in new states up to the denial of a firm’s right to practice. Because license statuses are publicly available to prospective clients, employees, competitors, and other stakeholders, lapses can also substantially impact a business’s reputation.

With the right approach, however, firms can transform burdensome licensing regulations into both an edge over less proactive competitors and a tool that enhances the perception of the breadth and depth of their expertise—for example by listing the states in which they’re licensed to operate on their website.

Most firms generally manage individual licenses in one of three ways:

Approach 1

The firm trusts or relies upon its practitioners to manage their individual license renewals and continuing education (CE) obligations.

Benefits

• This approach minimizes the amount of organizational overhead dedicated to the license management process, freeing up its administrative staff to focus more time and resources on strategically important tasks
• In theory, it promotes a straightforward process where trusted practitioners maintain the health of the organization as a byproduct of protecting the ability to earn a living in their area of specialty.

What To Watch Out For

• Despite the perceived competency levels that practitioners may have, firms lose a key level of oversight and face an increased risk of critical lapses by keeping individual license management at arm’s length.
• A lack of visibility into who is licensed can make it difficult for firms to develop a contingency plan in response to the departure of a professional-in-responsible-charge. In the resulting ‘fire drill,’ a firm may be forced to send someone to sit for the exam if no one holds the proper state license
• If a professional license holder is not sharing knowledge of where they are obtaining their CE credits, they may end up with a list of courses that don’t apply to state-level requirements.

Approach 2

The firm delegates the entire individual license management process to administrative staff.

Benefits

• This provides the firm with improved visibility and insight into the status of its practitioners in the states where they hold licenses.
• To an extent, the additional oversight offered by a more consolidated system of managing these requirements increases the probability of qualifier licenses being renewed ahead of filing deadlines.
• Because practitioners are not required by the firm to track upcoming due dates and receive administrative assistance with logging their CE hours and finding relevant courses, they can focus more time and energy on their core competencies.

What To Watch Out For

• The firm may overestimate its administrative capacity to handle individual license renewals directly, and the managing admin is often pulled away from other vital responsibilities. 
• An overwhelming burden can be placed on the shoulders of staff members who may not have the requisite training to ensure that each state’s specific requirements are met 100% of the time.
• These systems are often tracked in homegrown systems that require a substantial time commitment and the sharing of credentials to keep accurate and up-to-date. 
• If the staff member managing this process leaves the firm, significant resources must be allocated to hiring and training a new individual to take over. Key executives are often tasked with untangling and managing individual license renewal in the interim.

Approach 3

The firm implements a hybrid approach. In most cases, these firms rely on an admin to track and renew the licenses of only professional-in-responsible-charges.

Benefits

• This option gives the firm oversight over their most critical individual licenses and frees up more time for admin staff to focus on other tasks. 
• The risk of qualifier license lapses is mitigated but not fully eliminated—for example, if a state changes its requirements unbeknownst to the firm.

What To Watch Out For

• Potential continuity challenges are not fully solved. The firm may find itself scrambling to fill the void caused by the unexpected departure of either a key admin or professional-in-responsible-charge.
• Data integrity is also a potential challenge. Most firms will use legacy systems—such as spreadsheets or email calendars—which are dependent on the manual input of accurate and up-to-date data by those involved in the license management process. These tracking systems are only as accurate as the data put in them, and the firm faces risks of working off of incorrect and outdated information.

Supercharge License Management With Harbor Compliance

Individual License Access is our solution to the challenges listed above, expanding our industry-leading License Manager software to now provide firms with a streamlined, collaborative and reliable system to track, manage and renew individual licenses.

This new functionality supercharges the hybrid approach. Firms can now maintain instant visibility into the status of the licenses that their practitioners hold while providing practitioners with a less time-consuming and more user-friendly method of completing their annual renewals. 

Not only does the firm benefit from enhanced oversight and reporting capabilities, but it can also restrict the data available to each user. Individual licensees do not have access to information they are not authorized to view—for example, the licenses of other professionals or the firm’s tax and entity data.

If you are exploring options to ensure the compliance of your firm’s professional licenses, we are here to help. Contact us today to learn more about our software and services or schedule a demo.