We need to talk about money

Fees. I’ll be blunt; I’ve been nervous about approaching this topic. The most significant shift in this area – the abolition of mandatory fee scales – happened eight years before I was born. Fees are also an emotive topic, shrouded in the touchiness that always accompanies discussions of money in our culture.

A couple of brief caveats. I have a limited word count so this is not an exhaustive examination. I also can’t touch on architects’ wages. Though they’re inextricably tied to fees I just don’t have space to consider this properly. Caveats firmly in place, let me get on with it!

Fees are now a bit of an enigma. Rumours swirl and some publications and agencies have attempted to publish fee surveys. However, information is patchy, and surveys are usually from a small, self-selecting sample and therefore of limited value statistically speaking. One friend told me of an unethical but practical part III tutor who, as he saw it, had found a way to overcome this problem. He admitted to his students that he had little interest in teaching them – he had mainly taken the job to harvest their PEDRs and case studies for fee information.

This lack of guidance is a fairly recent development. In the early days of the RIBA a focus on the client being able to select on ability, rather than cost, was seen as key in professionalising the architect. Therefore, the RIBA set mandatory fee scales, based on a percentage of construction cost. Clients could select on talent, and architects didn’t have to concern themselves with what to charge for their services. This may have been an oversimplification in terms of fee calculation, but projects at the time rarely approached the level of either complexity or duplication that they do now.

The Restrictive Trade Practices Act of 1956 made collective restrictive practices in the supply of goods illegal. This was shortly followed by the Monopolies and Mergers Act of 1963 which extended this principle to the supply of services. A Monopolies Commission Report from 1970 began to erode the legality of mandatory professional fee scales, suggesting the introduction of price competition “is likely to be the most effective single stimulant to greater efficiency and to innovation and variety of service and price”. Under pressure from government “mandatory” RIBA fee scales became “recommended” in 1982.

RIBA fee scales exist in a mythical world – one where the architect was “god” on site

Considering these policies to be successful, the government of the early 1990s built further on this principle by introducing compulsory competitive fee tendering for public-sector projects. Many private-sector projects followed suit, and in 1992 “recommended” RIBA fee scales became “indicative”.

These indicative charts were finally abolished in 2009 with the RIBA stating at the time: “The RIBA practice committee felt that the application of percentages based upon fee survey data was an increasingly outdated method of calculating fees, and potentially harmful in the current economic climate.” The RIBA now points to its publications A Client’s Guide to Engaging an Architect (2013) and Good Practice Guide: Fee Management (2009) for guidance on fee calculation.

The government intended that the abolition of fee scales would lead to a more innovative, competitive marketplace. Thirty-seven years on, few would argue that the marketplace for architectural services is competitive, though some have suggested that there has been a race to the bottom on fees, leading to lower standards. While this argument may carry some truth, I think it oversimplifies the issue.

I spoke with Helen Logan, a partner at Allies & Morrison, who described the difficulties she sees in drawing too neatly a comparison between “then” and “now”. She acknowledged that fees as a percentage of construction cost are often half what they might have been in the last recommended scales (1992). But she also said the construction landscape has changed. Fees are not always a percentage now – they may be on a “per unit” or time charge basis. Some practices are even beginning to tie their fee to the commercial success of the project.

Additionally, efficiencies in the way we practice have shifted the time and resources required for architectural work. Drawing by hand was the norm in 1992; CAD, and now BIM, has increased the ability for straightforward duplication of, for example, flat layouts, and increased the efficiency of coordination within large teams or between disciplines. Large and complex projects can now be carried out with more accuracy and speed than when everything was drawn with a Rotring pen on trace.

Nevertheless, Logan cautioned that many of the productivity improvements that have come about in her working life are difficult to easily quantify or communicate to clients when demonstrating value or negotiating fees. Since 1992 the regulatory environment has dramatically shifted: Part M has doubled in size; Part L is notably more challenging; there has been a new Planning Act; CDM legislation has come into force; as have new parts of the Building Regulations, for security and high-speed broadband; not to mention the de-facto legislation emerging through the Ojeu process… to name but a few.

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Architects must now grapple with considerably more information and coordinate ever more complex technical detail. Very little of this is readily apparent from a surface glance. It has, however, resulted in better, safer, healthier buildings that, broadly, cause less damage to the environment and the workforce that created them, not to mention dramatically increasing the social value of modern construction projects.

For me, RIBA fee scales exist in a mythical world – one where the architect was “god” on site, projects were smaller, and where architects didn’t advertise but sat behind their brass plaques waiting for work to knock on the door.

This picture bears almost no resemblance to the profession I joined two years ago. Fee scales’ abolition undoubtedly made life harder for some architects, especially those who are not so keen on the business side of practice life.

But it is short sighted, I think, to suggest that the progress – both social and technological – made in the last 30-odd years is entirely unrelated to a more competitive market place for fees.