Architects know they add value, but seem to expect the world to disagree. It’s time to change that
We architects are a uniquely optimistic and interesting bunch. Consummate professionals, we look after our clients’ interests and try to maximise their returns. We worry about and try to mitigate the effects of climate change, consider the context and impact of our project work, and take pride in our creativity and lateral thinking.
And yet we can seem almost blissfully unaware that in running a practice of whatever size we are also running a business. In undercharging for the value and impact of the transformative ideas and delivery of our projects, we undervalue not only ourselves but also our profession’s standing. In offering initial tranches of work or professional advice to potential clients free of charge we dismiss our intellectual property as valueless.
This happens at all levels: from the sole practitioner competing with a local unqualified plan drawer, to the large practice bidding unprofitably for glamorous potential projects and spending up to 25% of its income on ever more comprehensive competition bids.
Last year’s RIBA benchmarking survey revealed some awful stats: 62% of practices don’t have a business plan, and of those that do only 13% have one for more than a year; 40% don’t set annual financial targets, and many micro practices don’t even monitor cash flow. The average salary for mid ranking architects is £33,000, and half of partners in micro practices (under five people) take home less than £25,000. As the survey shows, there is no correlation between success at winning work and profitability, but more than 60% of practices undertake speculative design work for clients.
There is no correlation between success at winning work and profitability, but more than 60% of practices undertake speculative design work for clients
We need to do better than this. The Institute must show leadership, facilitating an inter-practice discourse to remove surgical undercutting and end the downward spiral of confidence and recompense. But as practitioners we must all play our part – it’s up to us.
There are of course excellent practices run by business savvy and commercial architects. They understand the impact of undercharging on the internal ability of practices to invest in their futures.
We each need to learn from this and create a programme of action to pay and develop ourselves and our staff. As we all know, losing staff costs a small fortune, the expense of recruitment and loss of accumulated office culture and methodology, team skills, networks and working relationships.
The long hours, low pay culture also makes it harder for us to persuade young people to consider architecture as a rewarding career, favouring those from wealthier backgrounds. I worry that consequently our profession is becoming increasingly elite.
We all have a responsibility for this, and need the tools to tackle a future crisis before it hits. The RIBA Education Review plans to add business skills to the curriculum from year two on, and we are working on regional (and hopefully core modules of) CPD to offer training events in business and marketing, fee negotiation and client management.
As your president I want to see the Institute play its part in educating our clients and the wider public about what architects do and offer, so they can respect and reimburse us appropriately. Architects need a thorough re-branding, so that we, our staff, industry colleagues and future clients value our broad range of skills and understand that paying appropriate resource-based fees enhances outcomes, and can actually reduce project costs.
I was once outside court with a barrister, about to give evidence on a case and he quietly asked me how my profession expected to be taken seriously by the business world when we charge ‘such ridiculously low fees’. He was right.
House of the year
Look out for the new Channel 4 TV series, Grand Designs: RIBA House of the Year. Broadcast weekly for four weeks from Wednesday 4 November 2015, the series features the longlist for the RIBA’s prestigious award for the best new house, sponsored by specialist insurer, Hiscox. The shortlist for the RIBA House of the Year award will be announced during the course of the series, with the winner announced on-screen on Wednesday 25 November.
On 17 June 2015 the RIBA Hearings Panel found that Mr Justin Paterson was in breach of Principle 2.1 of the RIBA Code of Conduct in that he failed to take reasonable steps to obtain advice when his contract interpretation was legitimately questioned. Furthermore, the Panel found that he was in breach of RIBA Byelaw 4 in that he used unprofessional language in his correspondence with the complainant. The Panel decided that the sanction for this be a public reprimand.