Understanding Architects’ Fees

A Guide by Pablo Lambrechts, Principal Architect at L+ Architects, 13th August 2024

As architects, we often face questions about our fees: What are they for? How do we calculate them? How do we present them? And crucially, how do we win jobs when our fees are higher than the competition? At the heart of these questions lies the concept of value for money and expertise.

As the late Dalibor Vesely said, “When you go out into the world and when people discuss value for money, count the number of times people go on to discuss value.”

Methods of Fee Calculation
There are three primary methods for calculating fees:

1. Percentage Fees: This method aligns the fee with the project’s cost, adjusting as the project scope changes. At L+ Architects, our Residential Architecture fees typically range between 10-15%, depending on the size and complexity of the project.
2. Time Charge Fees: Clients pay for the actual time spent on services, suitable for projects with uncertain scopes.
3. Lump Sum Fees: This provides clarity for clients, with fixed fees for well-defined scopes of work. However, additional fees may apply if the project scope changes. Often a client does not have a clearly scoped brief to start with. Time charges in addition to the lump sum can often lead to a not only a higher fee than a percentage model but can also cause the client stress and it may stop the ‘flow’ of a project constantly having to renegotiate fees.

Why Pay an Architect?
Before diving into the details of fees, let’s consider why anyone should pay an architect at all. What value do we bring to society? The construction industry will always exist to meet the fundamental human need for infrastructure. Our role as architects is to add value to this process and reduce the inherent risks in construction.

Charles and Ray Eames beautifully illustrated this in their Venn diagram (below), highlighting the overlap between the interests of the architect, the client, and society but also highlighting the time-quality-outcome. This “sweet spot” is where our fee-earning work resides, driven by expertise, conviction and enthusiasm.

Setting appropriate fees allows us to allocate sufficient resources and time to deliver quality work without rushing. Stressed and hurried work often leads to mistakes. By ensuring we have enough time, we can work more efficiently and creatively.

Scope of Service
Architects offer a wide range of services, from initial concept design to post-occupancy evaluation. The traditional full-service approach, where an architect oversees the project from start to finish, has evolved. Now, services can be more fragmented, tailored to the specific needs of each project and client.

L+ Architects equally strive to oversee all our projects through to the construction stage to ensure the design intent is followed with adequate quality materials and that the contractor adheres to our plans, we find that this is the best outcome for our clients and ensures the quality of our designs is fully interpreted into the build phase. We also check the quality and speed of the build and certify stage payments from the client to the contractor to control that the work done is at an adequate stage.

People hire architects because they need more time or skills to manage a project. Our fees cover our expertise and the time we dedicate to a project. At L+ Architects, we understand that salaries are the most significant expenditure for any practice, but they are also our greatest asset. To determine our fees, we first need to understand our costs, including salaries and overheads.

Traditionally, fees are divided as one-third for salary, one-third for overheads, and one-third for profit. However, in reality, salaries often take a larger portion, leaving less for profit. This is especially true with a high-inflation economy driving salaries up and profits down. We don’t take project selection lightly. Choosing the suitable projects is crucial. At L+ Architects, we consider whether a project is enjoyable, beneficial to our portfolio, and profitable. We also prioritize working with clients, contractors, and consultants we respect. Mutual respect and a good working relationship are vital for a successful project.

How Clients Choose Architects
Clients typically select architects based on reputation, skill, and personal rapport. While cost is a factor, it is rarely the deciding one. We advise clients to choose their architect based on compatibility and trust, ensuring that fees can be equitably negotiated.

Understanding and setting architects’ fees is a complex but vital part of our profession. At L+ Architects, we strive to deliver value, manage risks, and ensure our fees reflect the quality and dedication we bring to each project. By doing so, we aim to create spaces that are not only functional but also enriching and inspiring. We believe that an excellent architect is worth their weight in gold and can act as an insurance against many unpredictability in the construction business, often saving the client their fees several times over.

For more insights or to discuss your next project, feel free to reach out to us at L+ Architects. Let’s create something remarkable together.