Typical Design Fee

[Anonymous]

Just curious, what are your flat rates for designing residential work? I know it is a broad question but give a ex.

[Anonymous]

One of our clients has been very receptive to the following...

Quote a fixed fee based on hours estimated to completed a set of construction documents for the residence for a fixed amount of hours. If hours exceed the proposal, bill hourly at a low rate...50-75% of your regular hourly rate.

Stipulate client driven changes are billed at a regular or add service hourly rate

[Anonymous]

I worked for a Historical Preservation Architect a few years back and I'll never forget his advice to me.. "People don't listen to you if your advice cost next to nothing. But they WILL if they are paying $75/HR."

I try to establish as high a fee as I can and break out all other incidental expenses. I tie this fee to a payment schedule and that into a project schedule, require at least $1500 down at signing. I have also combined the complex 5 phase services into 2... Design and Construction Documents. In my experience, normal, well-educated clients still want a simple process and know what thier maximum expense for you will be. Once they get over the "sticker shock" and see that you are worth it, then you become an ally for them in this process.

+pablo

[Dwight]

Adding:

This whole typical design fee discussion has problems because so many individuals from so many areas and aptitiudes are assembled in designing buildings. Asking the question here is too generalized - every local community has its compensation levels.

Pablo is close when he asserts that the work HAS value. The problem is that one doesn't want to undercut the market and look like an idiot, nor be high. The isue is nobody will hire you by the hour - they want a fixed fee for a fixed service and that is a fixed value in any given community

If the design service can be at all quantified, I would call other guys who might be my competitors and ask them to quote the job. Ask them, even, to educate you about the design climate. When I started out as an illustrator, I called around and asked the straight-forward questions : "I'm starting out. I don't want to look like an idiot and undercut everybody. What is this service WORTH?"

[Richard Morrison]

Dwight wrote:
Adding:

The problem is that one doesn't want to undercut the market and look like an idiot, nor be high.

Agree about being too low, but I don't see the problem in being high. If you provide a high level of expertise and service, you SHOULD be high. A middling fee pretty much says to a client, "yep, we're about like everybody else." Not a particularly compelling message, in my view.

[Dwight]

(Written while on hold at Apple because while checking laptop battery due to recall, latch broke closed. Can't open to check battery. Out of warranty two months. $400 to replace entire bottom of laptop)

This is the marketing concept "franchise versus commodity."

If you are established with a service type or distinct style that attracts custom, then you have "franchise." No competition for a unique product. Price no object. Curved titanium panels on your stuff.

However, I expect that anyone asking "typical design fee?" stuff is a "commodity" provider. I get these calls at the firm all the time from people who are simply calling architects and I am near the top of the list. "How much?" They don't know anything about me, even to the extent of not looking at my areas of practice. And aside from quoting the standard fee structure to a stranger, it pays to know what the value of a commodity is on any market.

In the case of commodity, you might be pretty much like everybody else. That is because you are. They WANT commodity. At the best price. But in busy times, availability is how you get your business going. I just had a nightmare getting waterjet service in Vancouver. Then somebody said. "Go see George, he just started." Nice young guy, 20% cheaper and my invoice is his #8. We hammered the leaves at the studio.

[TomWaltz]

Rick wrote:
One of our clients has been very receptive to the following...

Quote a fixed fee based on hours estimated to completed a set of construction documents for the residence for a fixed amount of hours. If hours exceed the proposal, bill hourly at a low rate...50-75% of your regular hourly rate.

Stipulate client driven changes are billed at a regular or add service hourly rate

I really like that method! I might try that some time...

[Richard Morrison]

Dwight wrote:
This is the marketing concept "franchise versus commodity."

If you are established with a service type or distinct style that attracts custom, then you have "franchise." No competition for a unique product. Price no object. Curved titanium panels on your stuff.

While all of this may be true at the extremes, in actual practice, just having a little more cachet can take even a commodity product to much higher levels of revenue. Mercedes Benz has plenty of competition (e.g Lexus, et al.), cranks out an enormous quantity of non-custom cars, yet the pricing is still quite high compared to "average" cars. Similarly, I see plenty of architects who get higher fees, not because they are better, but merely by asking for it. "Worth" is almost competely in the mind of the beholder.

[Dwight]

I think that we are on the same track, but asserting franchise when there isn't one is a bad practice. As long as the client never catches on through the smoke blown up the dark place, so much the better.

I get your point, though, that one can't think poorly of one's service and should not be feeling that it isn't worthy of proper compensation.

I was trying to sell Archicad to a guy years ago who said:"We aren't creative. We're good imitators. And we make a fine living at it." For the demo, I modeled a project of his - a public washroom at a park at the time. And so it goes.

Your Mercedes comparison is skewed simply because they have a true franchise - all car makers spend oodles establishing their own subtle franchises (psychological associations - more blown smoke) - the double-glazing, top quality materials and engineering help buyers PROJECT their own exclusive franchise, enabling even moderately successful accountants to look cool.

[Anonymous]

David wrote:
This year marks a change in fee structures inspired by the industrial design industry. All design is charged hourly no maximum.

That's the direction interior design is going, too - just straight hourly fees. Some designers will cap the fees, and some will still also charge cost plus for purchases, either in addition to the hourly fee, or more often charging an hourly fee for design and then the cost plus for purchases instead, but flat fees are definitely a thing of the past.

Hourly fees start around $75 for a junior designer; principals will get $125-150 and up. One high profile guy I know gets $300, the last I heard, and I'm sure he's not alone. Cost plus rates are typically around 30% of the net cost of the goods.

Vitruvius wrote:
Architects should really latch on to the copyright bandwagon. Our work is exactly the type of effort it's intended to promote and protect.

Guess what? US copyright law already protects all intellectual property and any sort of creative work as belonging solely to the creator. And you don't even have to register copyrights; they already exist, just by virtue of you having created the work, regardless of who has commissioned or paid for the work to be done.

And that means that unless you specifically sign away the rights and allow reuse of the design, you are automatically covered if someone does try this without your explicit agreement. Of course, I would imagine trying to enforce this would be a real headache.

I'm including terminology in my contracts that limits the use of any aspect of any of my designs to both the specific location and the specific client contracted for, and even then, only if I'm on the project throughout. If they fire me at any point in the design process, they don't get to use the plans or anything else I've selected for the project unless they've already paid for it in full. I explicitly retain the copyright, as well as full rights to photograph the finished project and publication rights, requiring them to get *my* permission first if *they* want to publish it anywhere themselves.

Of course, someone is bound to balk at these terms at some point, I'm sure - and then I'll be happy to consider selling them the copyright, or giving it to them in exchange for higher design fees, a percentage of revenue received as a result of their reuse, or some such <g>.

Rick wrote:
Quote a fixed fee based on hours estimated to completed a set of construction documents for the residence for a fixed amount of hours. If hours exceed the proposal, bill hourly at a low rate...50-75% of your regular hourly rate.

Stipulate client driven changes are billed at a regular or add service hourly rate

I like the sounds of that, especially since I'm just starting out and really don't yet know how long it will actually take me to do most projects. I don't think clients should really have to pay for my learning curve, but I also don't want to be working entirely for free, either, if I really grossly underestimate things. This sort of scheme sounds like it could offer a very reasonable happy medium.

Wendy

[Anonymous]

Rakela wrote:
put in writing that you are reproducing an already designd residence, and that new changes or modifications to the design will be charged in an hourly basis !!!

It strikes me that disclaimers would also be in order to the effect that you are working with a design provided by someone else, and that you will not be responsible for any errors in those drawings, or in your work that result from relying on those drawings.

Wendy