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Thursday31 July 2014

Architects demand return of fee scales

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BD survey says practices want scales back as ‘zero fees’ client re-considers

Two-thirds of architects polled in a BD survey say the RIBA should bring back fee scales.

The findings come as the housing association at the centre of the ‘zero fees’ storm, Sanctuary, has admitted that it might be prepared to rethink its stance.

The furore has renewed calls for fee scales to be re-introduced but RIBA executive director of professional services Richard Brindley said: “They’re not the right answer. Clients see indicative fee scales as a cost to be negotiated down.”

According to the survey, only 21% of architects achieve fee levels of above 5% while 55% are paid fee levels of 4% or less. And 63% said fee scales should be brought back but 22% said they would make no difference.

RIBA president Angela Brady

Source: Ed Tyler

RIBA president Angela Brady

BD’s survey, completed by more than 500 practices, also found that nearly 20% of firms had or would consider making a zero fee bid – despite calls from RIBA president Angela Brady to boycott clients asking practices to waive fees.

Architects willing to work for nothing were immediately branded as “idiots” by the head of RIBA think tank Building Futures, Dickon Robinson.

Brady this week told Ian McDermott, the chief operating officer of Sanctuary, her call for a boycott of the firm would remain until it drops its zero fees demands.

“Better conditions must be drawn up and we are willing to help them,” she said. “I think they thought it would go unquestioned.” Brady added that Sanctuary has promised to look at alternative criteria for getting on its framework which currently includes firms agreeing to waive fees for schemes failing to win planning.

In a separate statement, Sanctuary’s development director Stephen Oxley, who wrote the original ‘zero fees’ letter, told BD it “will consider suggestions for amendments to ensure the new framework is as equitable as possible for all our partners. We have every intention of taking on board concerns raised.”

Already architects who had expressed interest in the work – before being told about the zero fees – have told Sanctuary to look elsewhere.

In a letter sent to Sanctuary chairman, Nick Baldwin, the director of Plymouth firm Mitchell Architects, Adrian Mitchell, wrote: “I am astounded at your proposal. By procuring your supply chain in this manner you will inevitably cause some practices to collapse.”

And Hari Phillips, the director Bell Phillips, which is already working with Sanctuary on other schemes, said: “The terms of appointment are completely unacceptable to us and as result we’ve withdrawn our interest. I’d like to think the profession would stand as one and refuse to work on this basis.”

Sanctuary confirmed its deadline for firms wanting a place on the framework had been extended to the end of this week.

The results in full

BD fees survey results

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Readers' comments (10)

  • The debate about fee scales misses the point: how much money does it cost you to provide a service, and how much profit do you want to make. If that can be expressed by a random percentage on a graph, without any reference to the nature of the client and the complexity of the site and planning issues, or the level of design and detailing required, then I wish my architectural colleagues good luck.

    Most business sectors seem to survive without fee scales and set their fees to suit their own business model. What needs to change is the profession's culture of being afraid to argue their value to hard nosed clients and developers who often don't appreciate that a relatively small investment in great design early in a project reaps dividends for years to come, be it in a better house, a more profitable shop or more productive office.

    We need to be more open and challenging to clients about what services they really want or need, and charging appropriately. By all means some of you will be offering a budget/limited services practice to suit your market, but others will be a premium service with quality design and attention to detail that needs paying for (and the level of staffing this demands). Clients need this variety spelt out to them so they are not just comparing the price, but level of service too. A fee scale graph is too simplistic to deal with this level of diversity within the profession. And for most of us, being an architect is not a hobby (even if we do enjoy it - sometimes), it is our livelihood.

    I certainly don't suggest it is easy, but if you are offering the service a client wants, they will eventually see the value in the overall context of a project. Be bold, and raise your fees for 2013 - I have in 2011 and 2012, and intend to in 2013. And ignore any stupid 0% scams! It means I sometimes lose out on the smaller scale domestic work which is often very price sensitive, but if I can't make a profit out of it, why waste my time doing it? It just isn't worth the stress and I might as well spend that time supporting my profession in other ways (such as being as a member of RIBA Council), or playing a role in civic affairs (leading a front-runner Neighbourhood Plan project as an elected town councillor).

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  • Clents should remember "if you pay peanuts - you get monkeys". Architects tempted to work for minimal or no fees should remember "loss leaders inevitably lead to losses" and if you start off on a low fee it is very difficult if not impossible to increase fees on the next job for that clients. Owen Luder CBE PPRIBA author of the 4th. edition of an architects guide to " Keelping out of Trouble.

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  • Clients are currently paying peanuts and are getting a highly skilled professional service, it is us monkeys that are lowering the price of our services through desperation and survival. I believe the only way to solve this is to set a minimum fee scale. Why would any architect argue against this? A minimum fee scale would protect the profession and the built environment. Quality should be central to this, we lower our fees, we lower our time, we lower our service. A minimum standard needs to be set.

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  • The RIBA fee scales were a good thing (not random as suggested above) but constructed over years from practice feedback to RIBA, based on resources required, time required and profit levels. In the past, even after the scale was made optional, then withdrawn I would carry out two analyses to establish a realistic fee - the first being a check with the fee scale to establish the 'standard fee', then a calculation based on actual resources/time/profit. After that it's about realistic judgement of the two and clear appointment documents. It's a lot for any client to expect something of commercial value to them to be designed for a nil fee, or with front loaded risk (i.e no planning consent, no A-C fee). I'd certainly be in favour of a 'base' fee guide, below which no practice should work. This might actually have the added benefit of extending the quality of work gaining consent and being built - as the selection procedure won't necessarily be based largely on a fee, or lack thereof. Taking the emphasis away from the fee early on in the design process also frees the design team so that they can focus on giving their best as architects. In this particular case, it seems like an RSL is potentially acting like a wholly commercial developer. Most architects (I know) are committed to the principle of affordable housing but that isn't a reason to expect a free service and socially committed clients should be able to recognise the contradiction in expecting such. In fact, all clients should.

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  • Naturally every practice needs to survive however when control of a development is taken away from The Architect ! The control of the purse strings are driven by a third party be it Developer or whoever this is.
    The procurement of a larger scheme initially is driven by the client fee wise then when excavation etc. commences the fees paid by The Contractor this method has served well albeit not ideals some quarters.

    Yes !! A fee structure compatible with the building costs at any given time if vat is increased then this again will stunt a growth of construction
    Surely vat should be reduced ASAP to stimulate growth .

    Anthony Doody MCIAT
    Chartered Architectural Technologist

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  • Yes fees scale makes sense, it protects the client and the architects. Quite a good idea if you want to do art not throat cutting.
    It does not have to be minimum just average to give the client a guide line.

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  • OK they want commercial - let's go commercial. In the dark ages when I first entered an architect office all PC sums added
    " Include 5% for the Architect"

    Ian Sanders

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  • - Fee scales
    - Protection of function

    Two things which are never going to happen. Let's move on!

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  • To call fee scales "random percentages on a graph" is just ridiculous. Fee scales represent realistic, empirical, precisely evaluated estimates of the cost of delivering a professional level of service covering all costs with a standard margin. They exist in other professions and for architects around the world. This is particularly true for any "protected" profession as there is the requirement to assure standards, particularly in relation to the liabilities assumed.
    I work in Germany with the mandatory fee scales of the HOAI and those of the MOP in France, which are as complex and sophisticated as the scope of works itself. If they are well designed they don't necessarily need to be mandatory to have an effect, as they represent an empirically forceful estimate of the outlay necessary to do your work properly. I even know of architects being instructed by insurers that they would not underwrite a job if fee drops below a certain level, which again becomes a strong negotiating point, and makes perfect sense if you think about it.
    Believe me, client negotiations are no less complex because of this, as one spends a great deal of time arguing the case for which complexity class class the building is in, whether it is in the upper, lower or mean range etc. The BIG difference is that the discussion is about the actual scope of works involved in the project, and NOT the value of your work as an architect.
    I genuinely believe that the lack of fee scales is one of the main reasons why the morale and sense of self-worth of architects in the UK is so miserable, compared to their European counterparts working in comparable market climates.

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  • I don't have a problem with the level of fees the firm I work for charges for services provided, what I do have a problem however is that the scope of services is not defined adequately so it is clear that what we agreed to do is limited. This allows the all too familiar scope creep to set in.

    How many times have we all heard statements like 'my Architect always does that on all my other projects', when your client decides you are now also going to be their interior designer/landscape architect/planning consultant?

    How many times when working for a D&B contractor, have we all had massive changes forced upon us by virtue of the phrase 'design development', as if we can afford to be endlessly changing otherwise completed construction documents?

    I think it is the lack of acumen when it comes to business, of knowing what you are worth and what you are prepared to do for the money paid as fees, along with the lack of willingness to say to a client a polite but firm 'no', that really lets Architects down.

    By contrast, can you imagine a firm of (pick one) Quantity Surveyors, Services Engineers, Structural Engineers, Lawyers etc, going to work for a client on a vaguely worded and open ended contract, for half the fee required to do the job properly, and then accepting endless 'minor' additions with no extra fee?

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