RIBA removes Percentage Fee Graph

In what seems to be an unprecedented move in the UK , the Royal Institute of British Architects (RIBA) has, as of the 23rd October, informed its architects that is has removed the percentage fee graph from the Client’s Guide.

The RIBA wrote to its members to offer up an explanation why it has removed the percentage fee graph from the 2010 version of the Client’s Guide to Engaging an Architect which will take effect on November 2nd 2009 with the issue of the new guide. The guide will supposedly still contain “concise written advice” about how practices calculate fees and structure payment options, including resource-based methods.

The RIBA issued compulsory fee scales until 1982 when they were re-branded “recommended scales” in response to changes in competition law. These in turn were scrapped in 1992 and replaced by the graphs.

But the institute now believes even these are outdated and unworkable and could damage practices.

Jane Duncan, RIBA vice president of practice, acknowledged it would be a controversial decision but said the graph in the 2009 version of the Client’s Guide showed fee percentages lower than 1971.

In a letter to members she wrote:

Dear member

You may have heard that Practice Committee has been successful in its recommendation to have the fee survey graph removed from the RIBA Client’s Guide to Engaging an Architect. I realise that this issue has been controversial in the past and wanted to take some time to air the issues in advance of the publication of the new guide on 2nd November.

Since the mandatory fee scale was removed, architects and their clients – often but not exclusively at the lower end of the survey scale – felt it appropriate to rely upon or negotiate on the basis of published generic fee scales to determine what fees should apply to projects, without working out the real costs and proper fee for a particular job. The 1996 ‘indicative fee scales’ that I recently unearthed in my filing drawer was used by many offices as an easy guide to fee charging without recourse to the type of client, the level of complexity of the project, the stages of work or the output required. This was certainly a quick and easy route to setting out a fee proposal.

Today the process is far more complex and varied, and yet graphs and charts have continued to be included, culminating in the 2009 version of the Client’s Guide with its simplistic graph showing fee percentages lower than 1971!

One has only to look at the Schedule of Architect’s Services in any RIBA form of Appointment to see that a line on a graph just can no longer be used for fee calculations – it will be fair to neither architect nor client. Indeed the recent graph showed fees which if applied to a full services project would have left most architects seriously out of pocket. I fail to see how any practice could resource a £250k mid range project for less than 7% or £17,500.00 unless their hourly charge out rate is about £30.00.

How many clients actually like to employ an architect on a percentage basis anyway? I have heard too many times to mention, how it must encourage architects to design more expensive buildings as the fess will then rise proportionately.

These days I find that percentages have gone out of the window in favour of reviewing the specific content of a project, and agreement is easily reached for either hourly paid work or lump sums, re-visited at each stage of the project.

This year of course it’s been a very competitive market. Instead of just offering to slash fees to meet apparent competition, we have instead listed the specific services which we will carry out for the offered reduced fee, and then provided a list of those ‘extra’ services which the client may wish to procure later.

This has been quite a successful strategy, and is after all what builders have been doing forever to win tenders. Canny clients know this and prefer to pay sensible fees based upon a clear understanding of what they actually need from their architect at any stage in the programme. Can we educate our clients to see this?

Of course it means a completely different approach to the appointment contract with a lot of thought put into a fee bid and its presentation. We now need to rely upon our knowledge of our costs, and also sound out the competition. For the former we have had to grow up as a business, and keep very good job records, time sheets, and resource plans for every project.

For the latter we need as much information as we can get about what our competitors are doing. We have found that the RIBA business benchmarking process has been a great help both in making us review our own charging and strategy, and also being able to see what others are doing.

I have never been tempted to pay for a benchmarking service, but now there’s one offered free by the Chartered Practice scheme – and it’s really good. I recommend that you do it.  For further information, just send an email to benchmarking@inst.riba.org

If you have any pressing issues that I can assist with please let me know.
With kind regards

Jane Duncan RIBA – VP Practice

Comments from observers have included interesting viewpoint already tainted with some controversy:

Author: Nats 26 October, 2009

The RIBA needs to be doing more to get a standard fee level agreed between architectural practices in this country, this process shouldn’t involve clients at all. Until the government makes architectural involvement on all planning applications compulsory (as is the case in Spain) we will continue to lose work to cowboys and will never be paid what we deserve in comparison to other similar professionals. If it was possible to make a comparison between the importance and authority of different professionals considering their respective fees earned, architects would surely come out bottom of the pile. Mostly we are thought of as purely ‘day dreamers’ by the majority of people we work for and with, and until that changes we will always be paid badly.

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