The whole question of fees has become increasingly tricky, since the abolition of mandatory fee scales more than ten years ago. A major concern for architects is to earn a level of fees that enables them to run their businesses effectively and to stay in the black. While architects do not want to earn less than their peers, they also want to avoid demanding fees which are unfeasibly large in relation to the competition.
The only way to achieve comfort is through knowledge of the general situation, and this is now on offer in a report 'Architects Fees 98' by Mirza & Nacey Research. The duo collected data from architects on 2500 jobs in the course of a year, covering 35 different building sectors, and analysed them by contract and building type.
It is not surprising that the fees overall are below the indicative levels that riba guidance recommends. Although the average across all projects for a traditional contract is £6.7 million, for jobs at a total value of £2 million it only averages about 5 per cent. This is in line with the riba's recommendation for Class 1, the simplest category of work: storage sheds, barns, speculative shops and surface car parks. The riba level rises through four categories to the most complex, including opera houses, teaching hospitals and one-off houses, for which it recommends a fee of seven per cent.
Whereas the recommended fee scale tails off on the biggest jobs to between 5 per cent (class 1) and 7 per cent (class 5), Mirza & Nacey's research identifies a tail-off value of a little over 3 per cent.
The graph does not of course mean that this is what everybody is earning. It is in fact a best-fit curve between a scatter of points. Some of the more detailed analysis indicates the reasons for the scatter. In private- sector work, housing attracts the highest fees, possibly related to the fact that the projects are the lowest in value, while industrial has the least generous payers. Contrasts in the public sector are less marked.
There is also a strong regional factor, with the highest fees for new- build work under a traditional contract going to practices in the South East, and the lowest to those in Wales, at only just over 60 per cent of the highest level. Also interesting is the level of fees available on design-and-build projects, roughly half those for traditional contracts.
The detailed sector breakdowns could be very helpful in an argument with a recalcitrant client. How satisfactory to be able to show, for example , that on a refurbishment of a community centre or village hall with a value of £400,000, the average fee paid under a traditional form of contract is 7 per cent. Canny architects would consult the document before setting their fees, and then decide whether it was worth their while or not to flourish it at a client in the course of a negotiation. Wise clients may also wish to invest.
The document also carries information on charge-out rates of architects at different levels within practices, again with a regional distribution. This could lead to some lively discussions within offices.
The report costs £100 from Mirza & Nacey Research tel 01243 553102