With an influx of correctional projects in the western United States on the horizon, Robert Legg, president and founder of detention equipment contractor Legg Inc., is hoping his San Francisco Bay Area location will give him an advantage for upcoming projects in California and Nevada.
Legg, who worked as a project engineer at EHRT, Power Engineering and Nibbi Brothers before going to work for EMSS/Norment in 1994, started his company in 1995 in Livermore, Calif.
From 1997 to 2003 the company grew and obtained contracts in Hawaii, Washington, Arizona, Nevada, Montana, Utah, New Mexico and Idaho. During the last four years Legg Inc. has grown by 350 percent. Legg spoke with Correctional News from his office in Livermore.
Q: You had a construction background before you went into the corrections business. What were some of the indicators that made you want to switch over?
A: Basically, when I left EMSS/Norment, I went out and got involved with school construction primarily in the Bay Area. I did that for two years, but then I saw that the detention market, although it had less opportunity to bid, was a niche market with fewer competitors.
Q: If you were in the same situation today, would you make the switch?
A: Absolutely. It has definitely been a good switch. It is a better playing field. Instead of bidding with a bunch of local school people, we have a bigger presence and more opportunity, and fewer margins for error. Looking forward, it definitely was the right decision.
Q: Do you think it is better to be in the corrections market now, compared to when you first started in 1995?
A: Yes, we have grown in the last four years by about 350 percent in a down market that has been pretty flat — there have been projects but funding has been an issue. The new $7.1 billion prison bill in California that was approved to include 53,000 more beds has made us very excited about the California market.
The next five to seven years will be very prosperous for everyone involved. There are a lot of projects coming out and there are a lot in the pipeline, particularly at the county level. They have been waiting to get funded and we are excited to see that happen.
Coinciding with that, the state of Nevada has in 2007 slated 33 projects for $332 million. Since I have been in the industry, this is by far the largest amount of work that is going to be coming through our pipeline.
Q: A 350 percent growth is pretty huge. What are some of the factors that led to that?
A: I started out on my own, with just me and another guy in the office. I was kind of handling everything — project management, estimating and engineering. I decided to add some people and hired a couple of qualified people from one of my competitors — David Talkington, as a project manager, and a project engineer named Mark Harmon. That gave me the ability to not worry about project management and engineering and allowed me to get out and market the company and concentrate specifically on estimating, meeting with architects and vendors, and traveling to tradeshows. Obviously, we got a tremendous amount of work within a short period of time and I had a qualified team to do it.
Along with that growth, about four years ago I took on a business partner. The company was at a point where it had project management, engineering and sales handled, but the financial side — which is not my background — needed to be taken care of. Since then, we have hired a lot of field people that do a good job for us.
Basically, the growth has occurred because of more opportunity and I have had more time to attack.
Q: Were there any growing pains during that growth spurt?
A: I can’t think of anything, except for making sure that we got the right field people. It is a very selective product and you need guys that are factory trained. You just can’t grab people from a union and throw them at it. The more you do in the field you need to make sure that you have qualified people. Probably the biggest challenge was field labor.
Q: What did you learn from your first project at the U.S. courthouse in Tucson, Ariz.?
A: I had a relationship with the lock manufacturers and they decided they would get on board with us. We bid the job and it turned out to be very successful. I took four years, but that is what kind of got us on the map.
After that, there were a bunch of juvenile hall projects in California . Because of our location in Livermore, Calif., we were able to jump on those projects, which really helped accelerate our growth. They weren’t huge jobs, but they were jobs that we could infiltrate on. We do work from Colorado to Hawaii, but our concentration moving forward is going to be California and Nevada .
Q: Do you think your location gives you an advantage over other DECs?
A: I think it provides several advantages. Just being close to the job saves per diem expenses. If you are based on the East Coast and want to bid a job on the West Coast you have to fly a guy out here and then you have maintenance and warranties.
I can fly to anywhere in California in about an hour, or I could drive. It gives me a chance to get out and get to know our customers. We have a big advantage because we are an hour and a half from Sacramento, where all the projects come from. We can get face to face if we need to. I would think that they would like to keep a lot of the work within the California economy, too.
Q: You have done more than 100 jobs throughout your career. Is there a project that stands out as a highlight?
A: When we first started out, we would have to approach the architects and request that they would put us in their specification and prequalify us for the job. When an architect puts us in their specification, Legg Inc. really takes that as an honor and it’s our goal to do what they want in their specification and do a good job.
The jobs that are highlights for me are when we get in with a new architect and then another job comes out a year later and the architect includes us in their specification again. That means that they trusted us, we did a good job and they trust us to do the next job. All the jobs where that happens really stick out for me. We really honor the fact that they trust us and prequalify us.
Q: What has the biggest challenge been for you?
A: The biggest challenge for us right now is some of the companies that are improperly licensed and not prequalifed that try to bid on jobs. It confuses general contractors sometimes. It is competition that really shouldn’t be doing this work. They might see an opportunity and try to get in the market, but they are really not qualified. But those guys tend to weed themselves out over time.