How is the practice of Architecture affected by fees? Part 1

Architects Base Fees

Architectural fees are determined by the amount of time and effort that each specific project requires. The more services, oversight, and responsibility given to the architect the higher the fees will be. Those are the main factors in regard to total fees. The Architect is the team leader, the responsible party. There are types of projects that can be slammed out. The level of coordination can be low. Responsibility can be taken by the client. The projects can be drawn as a builders set in lieu of a full bid set. There are many ways to reduce fees. In each case the Owner takes on more responsibility. Who needs to document existing conditions and find the old building permits? Who is designing the new building? Is it one design concept or are there several? What level of detail is wanted on the construction documents? What kind of specifications are needed? Are interior design issues included? Who is going to process all the government approvals? Is bidding going to be involved? To what extent will the Architect and the design team be needed during construction? Will they need to be onsite? Will commissioning be part of all this? Then there are many other issues related to energy systems and value engineering that may need to be looked at including but not limited to, sustainability, low voltage systems, and acoustics. The effort extended to properly meet all the requirements to fulfill a project’s goal needs to be determined. When issues and services are defined, then the fee negotiations; fixed, hourly, or percentages; can be determined, approved, and the work can begin.

How are Fee Structures set?

The fee structure for hourly rates is independent to each company. Some firms have higher employee expenses/ overhead costs than others. Why? The more experience, or dedication to the art of architecture, the more the person receives in compensation. The more of a leadership role one takes the more they are compensated for. The longer you have been with a company generally the more you would make. This is true in any business. So, the more complicated a project is the more important having knowledgeable staff working on the project becomes. The Architect might have a senior design manager, with a project architect or designer under him. Then there are intermediate designers, junior designers, and drafters. Each one has different abilities and responsibilities meeting their own level of performance. The higher up the ladder you are the more you earn. At JHAI we hire from the top and have experienced, caring, communicative staff directing, designing, and drawing on your projects. This way there is less of a disconnect between the Owner, Architect, design consultants, and staff.

There are all types of insurance. The key policy is professional Errors and Omissions insurance. This can be low or high depending on income and claims. The more claims on the E&O insurance policy the higher the cost of the premium. At JHAI we work to preserve our great claims history on over 2000 projects. We work to maintain all our office support systems, IT servicing, equipment, software, filing systems and misc. items. We want to be able to respond to our clients needs on the run. Our office is a studio type, not flashy, so we can put all our energies on the practice of architecture. By using the best practices in running the company we can keep our overhead down so we have a higher likelihood of staying open during the recession times which hit architects deeply. We stayed busy thru all the recessions since 1980. You do not want an architect who might disappear in the middle of a project or who will not keep your plans and documents for future needs.