Trent Cotney - Industry Updates with Trent Cotney - PODCAST TRANSCRIPTION

Editor's note: The following is the transcript of a live interview with Trent Cotney of Adams and Reese. You can read the interview below or listen to the podcast. 

Speaker 1:
Welcome to Roofing Road Trips with Heidi. Explore the roofing industry through the eyes of a long term professional within the trade. Listen for insights, interviews, and exciting news in the roofing industry today.

Heidi Ellsworth:
Hello and welcome to another Roofing Road Trips from Roofers Coffee Shop. This is Heidi Ellsworth and I am road tripping cross country today to meet with my very good and long term friend, Trent Coney. Trent, welcome to Roofing Road Trips.

Trent Cotney:
Hey Heidi, I'm happy to be here. This is great.

Heidi Ellsworth:
I know I am so happy. It's been a while since we've done the podcast and had you on the show, so much has happened. I'm really excited for you to share all the news, all the great things that are happening. And then of course, as always, we want to kind of get some of your perspectives, because you see so much in the industry, but before we get into all of that, why don't, for those few people out there who don't know you? Why don't you introduce yourself and tell us a little bit about you and Adams & Reese?

Trent Cotney:
Sure, sure. So I'm Trent Cotney. Obviously I focus a lot of my practice on representing roofing professionals, roofing contractors, and people in the industry. I serve as general counsel for NRCA west states, FRSA, TARP and many other roofing associations, both regional and local throughout the US. I am a partner and a construction team leader over at Adams & Reese, which is a national law firm. Back in March I took the entire Cotney team and we merged with Adams & Reese and it's been a great experience, got a lot of depth. We are, if not the largest, we're pretty close to the largest construction law firm in the United States right now. So very happy to be here. And that's just a little bit about me.

Heidi Ellsworth:
Wow. That's exciting. How is it that, I mean to move the whole team and to join such a large law firm, how has that been going?

Trent Cotney:
It's great. I mean, they've given me all the resources that I need to succeed and it's allowed me to, instead of focusing on the administrative side of things, I get to focus on what I'm good at, which is to practice the law and talking and educating. That's what I like doing.

Heidi Ellsworth:
Yeah. I'm just looking at the calendar coming up this year, I see all the different places that you're speaking, all the different things and it's so important to the industry, because you just bring such, in fact, we were just talking about this the other day, Trent, I was talking to some folks and they were just like, what you bring to the industry as an advocate to the roofing contractor is amazing. What are some of the things that you're seeing, speaking of which, what are some of the things that you're seeing out there right now that are kind of big challenges for the contractors?

Trent Cotney:
Sure. Well obviously we continue to speak about problems with lack of skilled labor that's always an issue. The material supply chain issues continue to be a problem, but I think it's sort of adapted and evolved a little bit now. Most people are aware of the issue, even consumers at this point. So it's become somewhat business as usual. What's interesting though, is the impact of inflation on top of the material supply chain issues. So a lot of what we're dealing with now is unexpected increases in pricing, which is making it difficult on contractors, but from a legal side of things, that's not really a force majeure or an act of God. It's just an increase in price.

Trent Cotney:
So we're having to get very creative and figure out other ways to try to seek additional compensation for just what is normal in inflationary pressures. So what I think is going to be really interesting, Heidi, is what the rest of 2022 and early 2023 looks like. We've got some signs that the economy has got some potential issues. So I'm curious to see how that impacts supply chain and what that means for prices and the demand for construction kind moving forward. But yeah, there's always something to do, Heidi.

Heidi Ellsworth:
I know. Always something to do. Well, and you've been talking since, I mean, 2020 when we started down this road, starting with COVID, you've been talking about the importance for contractors and companies to look at their contracts and to put in these price changes, the opportunity for them to change orders to really talk through this. Has that happened or is there still this, I mean, I'm sure there's this need every day, but how has that kind of changed the industry?

Trent Cotney:
Yeah, I think contractors have listened for the most part and they recognize that they need price acceleration provisions and things to deal with delays. And they shouldn't sign fixed price contracts unless they have something like that in there. But I think what's happened now is we've kind of evolved. And I think I'm seeing more and more general contractors put anti-provisions in there. So one of the things I would just encourage anybody that's listening to this is recognize that your contract is a living breathing document. You need to make sure that you're constantly going in there taking a look at it, make sure you've got the right provisions in there. If you're reviewing other contracts, take the time, look at those delayed provisions, look at those price provisions, change orders, all the things that prevent you from getting paid.

Heidi Ellsworth:
Yeah. I mean there's contractors who have just had terrible things happen through this because of they couldn't get out of contracts and they couldn't put it all together. So I think as we're moving forward too, some of this continues, I mean, what's happening on a government level and especially on the federal level continues to really cause and effect, that we're seeing across the industry. And I know you're a lobbyist. I know Adams & Reese has some really committed to that kind of advocacy also. What are some of the things you're seeing from the federal government right now with regulations or even just some of the legislations really changing the face of business.

Trent Cotney:
So I'm glad you mentioned that, Heidi. One of the things that I advocated for fiercely with Craig Brightup and his team was the Ocean Shipping Reform Act and it just passed. So it is now going to come long just for our listeners that if you don't know what the Ocean Shipping Reform Act was, is it basically streamlines, gets rid of some of the red tape and bureaucracy and our ports and makes it little bit easier to get stuff offloaded. We have this huge, huge logistics related issue, everything from trucking to shipping, to ports, to you name it. And it's impossible to tackle all at once the best way to go about doing it is piece by piece. And for me, this was a victory because anything that helps get those goods off the ships and onto the trains and the trucks quicker is what we need. I think some of the demand will diminish as a result of the economy, but there's still such a huge backlog. Just being able to have some of these systems in place I think would be really important.

Heidi Ellsworth:
Yeah. And I'm not sure everyone even realizes how deep it goes when you just talk about raw materials. [inaudible 00:07:40] I talk to manufacturers all the time, the reason they can't meet demand is because they maybe have just one raw material that they're missing that they can't get from the ships or because of the weather or who knows what. And so that's really, it has, it's really changed things for the contractors and having them have to look at sometimes substitutions.

Trent Cotney:
Right, right. And be careful with substitutions. We've had a lot of issues pop up with people using materials that they've sourced overseas, but haven't properly vetted and these are coming both direct from manufacturer and distributors, things like certain Chinese fasteners. We've also had issues with Brazilian plywood and some issues related to that. So yeah, it continues to be an issue and it's something that contractors need to watch out for. Make sure you're following the design specified requirements and don't get yourself in trouble there.

Heidi Ellsworth:
Okay. So as we're kind of looking at what's going on, I mean, we have midterm elections coming up, we have the inflation and we're seeing some of these changes more on the regulatory, but what are you seeing Trent, as things for 2023 that contractors should really be preparing for now in their business?

Trent Cotney:
Yeah. So times have been fairly good, even though it doesn't seem like that. We had COVID for a couple of years and we've had all these different social and economic related issues, but overall the economy has been good, roofing industry has been strong. The one thing that I would really want to just underscore is roofing contractors out there. They need to tighten the belt. They need to understand that times are going to get tighter. And what I want you to do is really look at your accounts receivable, drill that down. Don't get sloppy. When the money's flowing, you don't see the cracks. When that money stops you start seeing the cracks immediately. What I want contractors to do is get that mortar out and start covering those cracks right now.

Trent Cotney:
The other thing to watch out for is we've had a ton of private equity investment, which is great for the roofing industry. What's bad is that some of the PE companies that have invested don't really understand roofing. So my concern is that some of that financing that is available through PE may dry up or disappear, and there may be some, some contractors left holding the back. So be very careful. That would be my advice, is now is the time to really start fine tuning your operating procedures as it relates to accounts receivable, and as it relates to getting deposits, the vetting process for onboarding customers, making sure that you're contracting with the right people to begin with, because it will sneak up on you sooner rather than later.

Heidi Ellsworth:
Yeah. I agree. And I mean, as a small business with Roofer's Coffee Shop, I'm constantly looking at that also. I mean, that's good advice across the board, but we are seeing, I'd love to go in just a little bit more. We are seeing a lot, like you said, of that private equity and companies that are merging or being purchased or rolled up and it's interesting Trent. I think you have the same thing. I look back 20 years ago, we see this cycle of rollups and private equity and everything coming through. What are some of the things that contractors, like you just said, being careful, but kind of on that bigger thing, if they're thinking about selling their business right now, or thinking about doing that, what are some of the top of mind that they should be thinking about?

Trent Cotney:
Yeah. And this applies across the board. Anybody, doesn't matter whether it's a contracting business or supplier or manufacturer anything. The first thing that you need to think about is always work backwards from what the goal is. So what is it that you want? Do you want to walk away from your business or do you want to continue to operate at some fashion? If it's the former, if you want to walk away, then clearly you're going to structure the deal in a way where you wipe your hands of it, that's it, you get a buyout and you're gone. If it you're going to have some kind of ongoing role and that may be required, they may require you to stay a couple years or so in order to transition the business, then you want to make sure you know, who you're working with. You've got to have somebody that doesn't just have a checkbook, but also understands your business. And it's not going to prevent you from doing what you do best. Okay. That's something that's key.

Trent Cotney:
Regardless of whether you're buying or selling. One of the things that you want to do is make sure your books are good and I'm not talking about using your bookkeeper. I'm talking about getting a CPA that understands how to buy and sell businesses. So they are looking at what is important for the purposes of acquisition. A lot of times, even if you are the one selling your business and having to give financial data, you may also want to do some due diligence to figure out who you're working with. So you may ask for the same thing from the buyer. I just really recommend that you take the time now to do some of that corporate maintenance, make sure you've got your meeting minutes, make sure your bylaws are up to date. Make sure your books look good. All those types of key things are going to be stuff that's going to be asked for immediately.

Trent Cotney:
And then the last thing I would say, Heidi, is be patient. Be very patient. Okay. I just went through something similar. I had an opportunity. I looked at six, seven different, very large national firms. And I wanted to pick somewhere where I knew that I could bring my team, it was very important to me and someplace that would allow me to do what I do best, but also give me more growth opportunity. Give me the assets and the capability I need in order to continue to expand. But I took my time in making that selection. I wanted to make sure that it was well vetted, well thought. So that would be my advice to anybody. Don't just take the first flashy penny that comes across your desk, focus and see, is this really going to be a good long term solution for whatever your goals are.

Heidi Ellsworth:
That's great. That's great. And like you said, we've been seeing it everywhere. So it's so important. These are the kind of things. And to know really that there are people you can call, like you. So for everyone listening out there, if you do get into these situations or this great opportunity, whatever it may be, it's good to really look to someone like Trent and the team and the folks at Adams & Reese because they're your advocate and they help. Yeah.

Heidi Ellsworth:
And I see this all the time now, Trent, with the associations. And so I want to talk real quick about the associations they're back. I mean, the shows are happening. The meetings are happening. They're all in person. There's so much out there. You are incredibly involved with so many of the associations as a general council, you get to see really from the top, all the way through the association, what it does for roofing companies, businesses, what's some of your advice to contractors about getting involved with their local regional or national associations?

Trent Cotney:
Sure. Well, associations are great. And I have been involved with associations for 25 plus years now. And the reason why I get involved with associations is they are the mouthpiece of the industry. So I think about all the great relationships I've developed with the local Tampa organization, the West Coast Roofing Contractors with the Roofing Contractors Association of Washington, the great things I'm doing out there with the man of the team Tennessee association or Texas, all these, the smaller and regional ones. And I think about a lot of the big things we've got coming up and I'm sure Heidi, you'll probably be at all of them. We've got NRCA's committee and board meetings coming up in just a few weeks in July. They lead the industry with advocacy and all the great things that they're doing. That's followed by FRSA's 100 year expo. It's hard to believe an association's 100 years old.

Heidi Ellsworth:
I know!

Trent Cotney:
Three days in Daytona back where it all started and we've got all kinds of things going on from lectures to meetings and you name it. It's going to be great. And then in September, obviously we got Western States. That expo is going to be really good and we're doing something special at that one. Obviously I'm speaking, I'll have a booth, all that typical stuff, but we're doing some roofing game shows. And I encourage everybody to stick around for that. I'm frantically working on them as we speak, but there's going to be a family feud style one, and then a trivia style one. And it's going to be a lot of fun. It's going to be end of the first day. And I think everyone's going to like it.

Heidi Ellsworth:
I'm excited for that. That's very cool. And yes, I will be at all of those events that you just mentioned, as I know you will be. And it's so important that contractors realize that networking, that they can be together. And the benefits. I mean, I don't know if a lot of contractors realize that by being part of an association, you get benefits like talking to you and Adams & Reese and the general counsels, you get free legal services to a point. You get help, you get all the technical advice. So there's just so much on so many different levels that a lot of people don't realize can really help their business, especially like what you're talking about preparing for who knows what, being a part of an association will help you do that.

Trent Cotney:
Absolutely. Yeah. I've made such great friendships and relationships and that's part of it is the networking aspect too, because it gives you a sounding board and I've learned more going to association meetings than I do sitting at this desk any day because you hear what's going on in the industry. It makes me a better lawyer because I understand what the real issues are. I'm not in an ivory tower somewhere, even though on the 40th floor sometimes it seems like it. But when I go to these meetings, I hear people come up to me and say, "Hey, I'm having this problem." And I don't necessarily look to the news or statistics or anything else. I rely on what the contractors are saying and can't find a better place to do that.

Heidi Ellsworth:
Yeah, it was good. I was just-

Trent Cotney:
Other than Roofer's Coffee Shop.

Heidi Ellsworth:
Oh, which also just so everyone knows, Trent is part of, has some great benefits in consulting as part of our club too. But that's what the industry needs. It needs to know that we're all together and you bring so much of that, Trent. I was just talking, in fact, Rob Winkle was on a podcast just before this. And Rob is so excited about your game show and about Western Roofing Expo and just the overall membership and how important it is for the benefits that come from that. So anybody who's listening out there, please, as you know, I've said this so many times, but look at your local, your regional, your national, and I really recommend all three associations because they will help you in different ways.

Heidi Ellsworth:
And Trent, really, maybe just touch on a little bit, the advocacy part. I think a lot of times people kind of lose track of that. We were both at Roofing Day. It's just such an awesome time. But now I'm seeing all these Roofing Days on the state level too, where they're going to visit. I don't think a lot of roofing contractors even realize how much is done behind the scenes.

Trent Cotney:
Yeah, absolutely. I think about not just NRCA but great associations like Chicago they really do a significant amount of advocacy Bill and Linda McKew, Jessica Rope, they're lobbyists that they've got everybody, they're constantly in front of the boards, codes, the legislation to make sure that the contractors are protected. I know FRSA is putting together an equivalent Roofing Day. I know Washington is constantly putting out stuff. I see all these associations, every single one of them top to bottom. And obviously I can't name them all, but I get the emails, I see what they're doing. They're putting the news out. They're making sure contractors are aware of things that affect them. And if you're not a part of that association, then you might as well have your head in the sand because you're going to miss all this stuff that affects you. You're not going to have a voice. And that's the key thing.

Heidi Ellsworth:
Yeah, I agree. I'm on the board of Washington, RCAW and you're the general council. I am astounded at how much they do in Olympia and how the work that they do to really help and protect the trades. It's not just roofing, it's primarily roofing, but it helps across the board for all construction.

Heidi Ellsworth:
Okay. I know we're going to be seeing each other first of all, at the NRCA meetings, but then like you mentioned just a few minutes ago, we're going to be at the FRSA hundredth anniversary. You are going to be live on our coffee conversations straight from the sound stage at Roofer's Coffee Shop sound stage at Florida. But I first met you in Florida and that's where we worked together on that board. We work together with magazine and it's just such a special association. I would just love some of your thoughts on that, your experience with FRSA and the hundredth anniversary coming up.

Trent Cotney:
Yeah. So FRSA has been like family. I mean, I literally have been going there for 20 plus years and I've gotten to know so many of them so well. I consider Lisa Pate the executive director, very good friend. I know everybody that's on the executive committee every single year. And I see these people and I know a lot about them in some cases more than I do some of my relatives.

Trent Cotney:
And the kind of thing, Heidi, is you develop, they go beyond friendships. I know that if I'm in trouble and I pick up the phone, even if it's across state and I say, "Hey, I need something." They're going to drop what they're doing and come help me and vice versa. And it's hard to obtain those types of friendships and bonds elsewhere. And I think to me, that's the most important thing about it. Obviously I've made great business connections. I've acted as general counsel. And I do all that stuff, but it is a family type environment. I bring my family every year and it's going to be great. There's so many special things that are going to happen this year at the hundredth anniversary. It's going to be amazing.

Trent Cotney:
I know it's an extra day. So it's three days the live auction and I mean, the silent auction's going to be absolutely amazing. There is a variety of special meetings and I don't want to reveal it all because I don't know if it's public yet, but it's going to be quite an event. I know Lisa and the whole team over there have been working around the clock to get it done. So really excited. Rarely do you have any association that's 100 years old. So to be a part of it and to be involved even for a quarter of that time has been a blessing and an honor.

Heidi Ellsworth:
Yeah. I feel the same way. My very first regional trade show was Florida. And I met Lisa Pate who is also, I consider a very dear friend and an absolutely amazing executive director for Florida. And I still remember the Swoop family inviting me to sit down and get to know them. And now their grandkids are running around, maybe some great grandkids. I don't know. There's just, it is such a family thing. So we're really excited. We're really excited to be broadcasting live from there. And of course we're super excited to spend some time with you, Trent.

Trent Cotney:
Same here. I can't wait.

Heidi Ellsworth:
Well, thank you. Thank you for the updates. Great information as always. We so appreciate you. And just for everyone out there, you can get all this information, you can find it on the directory Adams & Reese directory on Roofer's Coffee Shop plus there's excellent articles. Trent has in fact just sent another one last week. He's always keeping us up to date and letting us know what's going on. So check all of those out on Roofer's Coffee Shop Trent. Thank you so much for being on this roofing road trip with me.

Trent Cotney:
Thank you. It's been a pleasure.

Heidi Ellsworth:
Thank you. And we will see you in Florida.

Trent Cotney:
Yep. See you there.

Heidi Ellsworth:
See you there and thank all of you for listening today. Be sure to catch all the Roofing Road Trip podcast on Roofer's Coffee Shop under the RLW navigation. You can find them there, or of course, on your favorite podcast channel. Be sure to subscribe and set those notifications so you don't miss a single one and we will be seeing you on the next Roofing Road Trips.

Speaker 1:
Make sure to subscribe to our channel and leave a review. Thanks for listening. This has been Roofing Road Trips with Heidi from the rooferscoffeeshop.com.