Fixing Fees

February 7, 2011

Architects, being artists, spend their time thinking about aesthetics, not business. During hard times, we use our bohemian pluck and survival skills to pull through until patrons regain their willingness to spend money on art again. History shows that this cycle is inevitable. Starving artists starve because their art transcends corporeal complaints.

These clichées persist because architects cannot bring themselves to alter them. Richard Norman Shaw and Richard Morris Hunt, two giants of 19th century architecture, made concerted attempts to balance the artistic and professional aspects of their careers, and used their prominence to better the circumstances of their peers. Frank Lloyd Wright and H.H. Richardson cultivated the eccentric artist persona–their genius and subsequent fame set the profession back 100 years. We live with the myth of Howard Roark because we cannot face the reality that architecture is a service profession.

During the past 25 years the American Institute of Architects has maintained a statistical database on economic matters affecting the profession. Kermit Baker, Ph.D., the AIA economist, has been its primary analyst. Like most members of his profession, he affects a cool, impartial air in his writings. Among other things, the data show that compensation among architects is significantly lower than that of doctors, attorneys, accountants, and other professionals. That is no surprise. Nevertheless, during the past 15 years of economic growth, architects have begun to narrow the gap, both because of their relative gains in fees and the drop in compensation among physicians and other professionals.

This relative gain in remuneration, and status, has proved to be ephemeral. The Great Recession has taken a brutal bite out of the building economy, and architects are suffering badly. What many do not realize is that, while “artist” architects continue to ride the myth of creative vitality, most in the profession are finding it difficult to earn a living wage. Moreover, the building industry is losing some of its most skilled practitioners during a critical period in history when building a sustainable infrastructure is essential.

Worse yet, as we face these challenges, members of our dog eat dog community are undermining the profession by lowering their fees to win business, thereby dropping the earning power of their peers to unsustainable levels. A recent discussion group on Linked-In has chronicled the disturbing trend toward fee gouging and low-ball bidding. Many architects are reporting competitive bidding that can be as low as 25% of the average fee proposal in a given project. Larger firms are competing in smaller markets, forcing out the specialists who serve them. In residential or small institutional arenas the mid-sized offices are losing business to one-person firms with little or no overhead. The cycle is driving fees to lower and lower levels, and owners will likely expect these levels to persist once the economy regains equilibrium.

When the AIA lost its critical lawsuit with the Federal Trade Commission over “price-fixing,” the architectural profession opened the door to this kind of competitive chaos. It is time that this organization, or some other professional consortium, takes up the issue of fair compensation again, before another glut of architectural talent leaves. With ranks depleted and morale at an all time low, architects will once again join the consumptives of La Boheme, coughing and starving toward oblivion.

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