DS26

Fees vs. Free

Posted in opinion, other architects, responsibility by DS26 on 07.23.2010

We, in the profession of architecture, have this tendency to ‘budge’ in terms of money.

I don’t know if you have heard this before but…

what horrible business people!!    :@

A couple of days ago the AIA (American Institute of Architects) was looking for the topic for the next #aiachat session.

( in case you have not been there… it is a moderated online event hosted by @AIANational, through Twitter.com, where professionals like @NextMoon, @Urbanverse, @ladyAIA, @mike_kohn and some maybe emerging like ourselves @DESIGNSTUDIO26 basically chime in on a topic… it happens every 1st Wednesday, at 2Pm ET )

This coming #aiachat I proposed be about Fees.

I guess, understandably, Fees are of legal concern in terms of being a topic for #aiachat… with that said, it is not of legal concern to us (until we begin to get paid for services)… so here it goes:

People, free work (unless it is to help a non-profit or effort) is NOT good for you or the profession.

There. Pheww. I said it.

This market we know is compelling to run, side by side, with the next guy, in a race to the “lowest bid” just to get the work. But, as you should know… specially if already in the profession… lowest bid?!… mmmhhh. Sketchy.

Just think of it the way you would if you were the Architect going through the bidding process with the Owner… and you run into the lowest bid. What is your first reaction? What is it, especially, if the lowest bid is so inconceivably far off from the second lowest? What if it is almost “impossible” (because the materials alone cost that..)?…

See it now?

As we approach ‘o’ in terms of our fees, we approach ‘o’ in terms of respect/consideration and of course ‘value’ (see definition below).

Monetary value and worth go hand in hand. They cannot be separated. That is the mindset we’ve created ourselves with the introduction of money into society (back in the day).

It is inevitable !

You cannot, CANNOT, work for free haphazardly and save any value.

It may seem the opposite for a minute… FREE? Great value!… Everyone loves FREE.

Surely, if it’s an ice cream or dessert on your birthday.

But, Let me paint the picture a different way :

If you were in legal trouble (besides remembering not to admit to anything without a lawyer present) … would you not pay the best lawyer you could find? the best you could afford?

Why would you then think for a second that, somehow what we do is different? Isn’t what we do about life safety? about the places that people inhabit and use everyday? about the work, health, livability, joy, play, use, learning (i could go on and on) of everyone?

Where in your mind does it fit that ‘the Owner’ would have any consideration or give you any value if you’re handing off your services for free?

Or, where in your mind does it fit that, furthermore, they would consider or value others in the profession?

Its tough, right now, I know… believe me.

But, rather than handing off your services, you must (find a way to) educate your clients that this is a ‘win-win’…

It is not that you work, and they gain. There is supposed to be gain-gain.

Same deal when I run into emerging professionals looking to work free.

People, the employer gains as well as you. Why would you do that to yourself?

After all that…

we are not going to tell you what the fees should be. That’s for you to decide… but we will tell you this:

‘o’ is a cheap way to cheat yourselves from what you deserve.

(and by the way… ‘cheap way’ for the owner… very costly for you my friend!)

If you’re work is that poor, invaluable… that is worth ‘o’ to you

(we assume because that is what you will charge…)

it definitely is worth ‘o’ to everyone else out there…

and ultimately adds ‘o’ to architecture as a whole.

~~~~~

the definition  of value :

Main Entry: 1val·ue
Pronunciation: \ˈval-(ˌ)yü\
Function: noun
Etymology: Middle English, worth, high quality, from Anglo-French, from Vulgar Latin *valuta, from feminine of *valutus, past participle of Latin valēre to be of worth, be strong — more at wield
Date: 14th century

1 : a fair return or equivalent in goods, services, or money for something exchanged

2 : the monetary worth of something

3 : relative worth, utility, or importance <a good value at the price>

4 : a numerical quantity that is assigned or is determined by calculation or measurement . . .

7 : something (as a principle or quality) intrinsically valuable or desirable

{ from Merryam-Webster online }

~~~~~

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5 Responses

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  1. Cindy Frewen Wuellner said, on 07.23.2010 at 08:28

    Tabitha: good post, important topic, especially during recessions.

    theres a lot of ways to get stuck w/ free work, some legitimate, others unintentionally, and still others that are a terrible idea.

    Legitimate – pro bono as you mention, competitions and design/build selections. The last two are horrendously expensive to an architecture firm. and yet they are part of the overall system. Also, firms create ideas just to build knowledge, and that is also legitimate. We have to be growing, advancing the field, and we do not have a mechanism for paid research like science does. so we fund it ourselves.

    Unintentional – scope creep, schedule creep, poorly estimated fees, and the worst of all – errors. nothing more expensive than covering your a**.

    Wrong – undercutting fees, giving away services. Sadly this happens every day.

    Glad to see you plug #aiachat on twitter – coming up Aug 4th at 2 eastern.

    Cindy @urbanverse

    • 26at41 said, on 07.23.2010 at 09:45

      Cindy, thanks.

      Very well put from your end also, in legitimate versus not.

      We find that, instead of working for ‘free’ per say… working for yourself for free is different. For the purpose of self-development, or even marketing (us & twitter).

      A great example of that is LTL Architects in NY. They, instead of offering free services, develop ‘speculative’ work in order to carry out research and better themselves in a certain typology. This also beefs up their portfolio, and creates precedent for bidding a job.

      We need more LTL(s)… :)
      ( http://www.ltlarchitects.com/ )

  2. marjannepearson said, on 07.27.2010 at 22:08

    Hi Tabitha,

    Like Cindy, I agree with you, too. There has been so much conversation about this over the years that I have been in the architectural profession, and it seems to re-emerge during recessions.

    Architects always seem to be the lowest “vendor” on the totem pole. Part of this is because although we have good contracts, we don’t enforce them. Cindy’s point about scope creep, schedule creep, etc., is valid. Everyday I hear stories about clients — real, legitimate clients — that hire architects and sign legal contracts, but then try to back out of paying fees for services rendered. And the architects, not wanting to damage their reputations, submit to mediation or eat the fees.

    General advice:

    1. Architects can do something that no one else can. You can help the owner visualize what the project will be, three-dimensionally. This has great value. Without the architect, there’s nothing to take to the lender, and there’s nothing to sell to donors.

    2. The starchitects know that when a high-profile client makes a selection and announces it, the client can’t back down without losing face. It creates enormous leverage for the architect to negotiate the right fee. How can you position yourself so you have more leverage?

    3. Get a retainer, and if you don’t get it, stop work. Do not proceed with any work if you don’t get paid.

    4. Do not proceed with any work if you do not get paid promptly. (And yes, I repeated myself.) Include a clause in your terms of engagement that you have the right to stop work if you do not receive payment within 30 days from date of invoice, and then stop. Nothing gets the client’s boss’s attention faster than stopping work.

    5. Before you sign your contract, talk to the client about how to set up a payment schedule that will work for you and them. Set up the benchmarks or metrics so there won’t be any question about whether you have completed your work, and include it in th contract. If necessary, talk to someone in the client’s accounting office to make sure that you are submitting what is needed to process the invoices.

    6. Offer discounts if payment is issued within 10 days from date of invoice. (Sometimes government agencies mandate that discounts must be accepted.)

    7. If you know that you’re going to lose money, a donation to the organization might be a better option than doing the work. Let someone else take on the project and the liability.

    8. And if you’re really interested in the project as a speculative venture, then approach it as an investor, not an architect. Make your deal based on your investment, with an appropriate ROI.

    • 26at41 said, on 07.28.2010 at 07:07

      Marjanne,

      is interesting that you correlate architects not enforcing contracts with them trying to avoid damage to their reputations.
      We happen to think they go hand in hand. That is if you do not enforce, you damage… in a much deeper sense of the word.

      And, not only you damage your reputation (and the entire A/E Team’s reputation) but you may even damage the project, its schedule, and ultimately the Owner. Of course he/she (the Owner) will not know that, until the damage is done. And then they are plain angry, and they don’t see where it went wrong.

      We urge people in the profession (and it’s hard for them to hear since we are younger, and barely beginning a practice) to do exactly as you mentioned:
      Enforce contracts, and a step further even, know well and customize their contracts (not just use an AIA provided default because… it is there. Plus I find some Architects do not even really know their contracts/contractual obligations or scope. Crazy!).
      Make sure to get paid, and in addition, make sure to get credit for the work (i know that the ‘starchitects’ did not make it to where they are by leaving themselves out of the publicity of the project)
      And yes, finally… someone is aware of ROI… but knew that you would be from the point where I realized we both read ‘the Blue Ocean Startegy’ :)
      ROI should be consider in almost everything we do, and most definitely in an architecture venture.
      Stopping work is thought of as a no-no, but it is regularly practice to protect our liabilities (i.e. when the contractor fails at the roofing)… how about we enforce it to protect our ‘economic liabilities’ ?!

      I wish that, one day, an architecture education would include a bit of business as a requirement… I learned a great deal from a minor in Business Admin, and still learn a great deal everyday by simply a trip to B&N and a cup of coffee… but where I have learned the most is in watching the people around me, principals, practitioners, architects/engineers, contractors, all trip and fall…
      to all of you out there : a bit of biz will go a long way in this profession.

  3. […] 9 Jun In my previous blogging life, as 26[at]41 (under which I still function once in a while), I wrote a piece “Fees vs. Free“. […]


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