New Business Models
Jennifer Crawford argues that the question of fees is really a question of business models. Architects need to work out what their ‘super power’ is, and charge accordingly.
There has been a lot of discussion in recent weeks regarding architectural fees and the idea of fee cutting, started by Shaun Carter of Carter Williamson Architects. Indeed, I imagine it is a topic that is as old as the profession itself. It is something too that the profession continually struggles with. I come at it from a slightly different angle, as my business is not a standard architectural practice. (Although, I am not sure how many standard architectural practices are left these days, as Tim Horton suggested on Twitter the other day.)
While this piece is meant to be about fees and not about me, I think a short bit of background on my business may help understand a slightly different angle on fees. My business could be described as a micro practice. Not that I do very small buildings, but that I spend very short periods of time with my clients/customers. Indeed, some of my customers I might only see for an hour to give them the assistance that they need. We discuss what options are possible and discuss whether it is worth doing at all. I also work with customers that may not be working with an architect but rather a project home builder or a draftsperson or custom builder.
These people often want their plans reviewed with a fresh set of eyes to make sure that they are getting the best result. For other clients that need further design help, I prepare concept plans for them to consolidate their ideas and start them on their way. Sometimes, I just tell people that they are on the right track and to continue full steam ahead.
Why did I choose to work this way? Well, I think there is a gap in the market for small amounts of architectural advice. Also, it became apparent to me quite a while ago now that the pool of clients willing and able to pay for full service for a residential project is incredibly small. This is compared to the vast majority of the market building with project home builders. When they say on the news that a new community is being built with x thousand houses, I would suggest that the number of those involving architects could be counted on one hand. Rather than play in the very small pool of full fee paying clients, I have decided to play in the ocean of people building new homes.
The kicker is that my clients pay me, and they have no problem paying me for a decent hourly rate. My challenge that I continue to deal with is having enough customers to make it sustainable. Watch this space.
So coming back to architectural fees, I think it’s a question of business models rather than fees per se. No doubt the industry has changed out of all recognition in the last 40+ years since the Trade Practices Act made the Institute’s fee scales unenforceable and effectively illegal. The way we deliver projects has also changed significantly, yet the structure of fees referred to by Fiona Young in her thorough analysis still has 75% of the fee wrapped up in documentation and contract administration. In years gone by, when work was still done on the boards, this probably made a lot of sense. As well, architectural practices would have hired not only architects but also draftspeople to complete that documentation. Draftspeople would have been seen as a resource for the profession rather than as a threat.
To put my two cents worth in, I think that the true value of architects and architecture is truly understanding and developing the brief and coming up with the original thought, concept and direction for a project. Unfortunately, this is often either given away free or for very little compared with the weighty fees for documentation, which can also be much more readily sent offshore or left to constantly evolving technology.
Prior to starting my business I worked not only architectural practices but also in a large construction company and land developer. I was able to witness the truely high value part of the projects (from a customer point of view) rather than the practice’s point of view. In my mind – to use a bit of a pop marketing/entrpreneurial term – we have to work out what our superpowers are and charge accordingly.
Jennifer Crawford is a registered architect and founder of Our New Home Coach, a business that helps people build the right house.