If you are thinking about value look at what counts most in your service to clients
Front-end work is where most architects earn fees: 87% of practices earned fees last year for taking projects to planning only
It is fair to say that most practices, regardless of size or location, still offer the full architects’ service. In fact, the 2012/13 Business Benchmarking survey of RIBA Chartered Practices tells us that 96% of practices earned fees from a full service. We don’t know the proportion of fees that came from this work but the survey goes on to corroborate anecdotal evidence that practices can no longer assume their commissions will run the full course. Most practices also earned fees from ‘part services’, offered as stand alone services, with no guarantee of further work on the given project: services where they could be replaced by, or replace, another practice with impunity.
Although the tendency for clients to pick and choose the tasks they want their architects to undertake has been exacerbated by the tough economic climate of the past five years, it was steadily catching on even in the good times. Perhaps the increasing complexity of designing, detailing and implementing projects has led to more specialism within the profession; perhaps the inexorable rise of the contractors’ role has given clients the confidence to take the lead themselves; perhaps the increase in international working, where the big, design-led practices find themselves having to defer to local architects at the latter stages of projects, has given the profession confidence that buildings can turn out well without a single hand on the tiller. Certainly it is true that price will have something to do with it. But, whatever the reasons, part-services are probably here to stay.
Leading at the front
So which services do clients naturally gravitate towards? It seems front-end work is where most architects earn fees: 87% of practices earned fees last year for taking projects to planning only. This rose to 96% for practices with more than 50 headcount, but was still high – 83% – for practices with fewer than five people. Equally 73% earned fees from feasibility work – again this figure rose with practice size, to 94% for large practices. It is also worth noting that around half of the practices in last year’s survey earned fees giving ‘planning advice’ to clients.
This focus on front-end work is unsurprising. The role of the architect is constantly being eroded but the one thing that most clients still recognise is that architects can, and do, initiate design concepts. Even at the cheaper end of the market architecturally trained staff tend to be involved at the early stage of projects, albeit often working in-house for constructors or professional clients.
Interestingly, and perhaps slightly less intuitively, many practices in the UK earn fees delivering production information as a stand alone service, detailing and implementing someone else’s designs and competing with the cut price 24-hour services being offered in the Far East and India. What we don’t know is how much of this work is undertaken by professionals as sub-consultants to the design architects and how much is down to clients taking the lead and demanding ‘specialist services’ at each stage of their projects. Either way, outsourcing and market demands for people to specialise in the latter stages of projects is affecting the profession. Last year 42% of practices earned fees this way, again, this rises by practice size from a modest 35% for those smaller than five people to 62% for those with more than 50. Equally, some practices have taken piece-meal specialisation a step further: 18% earned fees by offering ‘contract administration’ as a stand alone service. The percentage rose to over 25% of those with 50 or more staff.
If the trend towards part-services continues it will have a profound effect on how architects engage with their clients and the construction industry
If the trend towards part-services continues, and there is no reason to expect that it won’t, it will have a profound effect on how architects engage with their clients and the construction industry. The staff skills and working environment of a ‘front-end’ practice is very different to one that specialises in production work. The next generation of architects will find themselves faced with specialist options from the day they enter the profession and the number of people with an overview of design, detail and implementation will fall dramatically. Does this matter? Probably, yes. However, unless the profession is able to convince clients, contractors and itself of this, then the world will move on regardless, to the undoubted and continuing fragmentation of the architectural profession, as we know it.
Caroline Cole is director of Colander
The problem with balance sheets is that they only measure cost. Architecture could learn from this about quantifying social value. Methods calculating the social return on investment in society are attempting to put some complex social benefits back on the balance sheet. For example, that could be calculating the social cost of imprisoning woman offenders (bundling various effects such as increased drug use and mental health problems). Based on this mixture of quantitative, qualitative and more traditional financial information the UK government has gone a stage further and used social impact bonds in which private investors put money upfront for a new sort of service and the dividend based on results which are not formulated on direct costs alone. The CIC’s Design Quality Indicator is the closest architecture has got to this. While there is, as yet, no formula for architects to calculate the social value of a particular project, or elements of it, in monetary terms it is worth exploring with publicly-owned clients who might report on corporate social responsibility, or which have a social agenda themselves – it can be an argument for increased investment or a way of clarifying the aims of a project and how they are to be realised. And even if you can’t put a figure on the value, it has to be worth enumerating the social impacts of a project. EY
WHAT IS THE VALUE?
For all the RICS Red Book’s biblical authority on valuation, the experience of many architects is that surveyors base residential valuations on the closest similar size homes. This ignores build and design quality, or their intended market. In Harlow, Alison Brooks’ Newhall Be was valued against far older neighbours. But at the start of the project the value of the design paid dividends on process. Impressing the landowners, the Moen brothers, and masterplanner Robert Rummey with the design sent Linden Homes’ scheme sailing through a supportive planning system. This meant the baseline of design was very high, says Brooks. But proving the design had value that would translate directly into sales figures was hard. Brooks felt selling houses as ‘architect-designed’ and with added features should uplift the whole development. There was a lot of fighting for the things that made this project a Stirling contender: 2.6m high floor to ceiling heights, truss-free roofs to allow loft conversion, ground floor studies overlooking the street. But valuations don’t measure volume, area, adaptability, sustainability or the quality of construction materials, says Brooks. On phase two the arguments were easier to make because the houses had kept selling, even through recession. She reckons Linden Homes made a 20-25% return. ‘Linden did alright, even though they were pushed outside their comfort zone,’ she says. ‘Housing is so conservative because of the methods of valuation.’ EY