Customize This FEE SCHEDULE And Make It Your Own

11/17/2014

Architectural Fee Schedules

Up until 1972 architectural fee schedules were very common, in fact members of the American Institute of Architects were required to follow a fee schedule. The Department of Justice put an end to that "price fixing". It was probably something Howard Roark bragged about at a cocktail party that screwed everything up. I think it is time to bring back the percent of construction cost fee schedule. Nothing mandatory, just a really helpful too.

THE BEAUTY OF THE FEE AS A PERCENTAGE OF CONSTRUCTION COST
One of the great features of a percentage of construction cost fee schedule is that it stays current with inflation. If you are still providing the same service as you were in 1972, then you can charge the same percent of construction cost for your fee. As the value of the cost of the construction changes, so does the amount you earn for your work. There's more...

HOW TODAY'S COMPLEX PROJECTS AFFECT THE FEE SCHEDULE
What if you aren't providing the same service as you were in 1972 because codes are more complex, energy savings has become a thing, and clients have noticed that not all buildings must have gray carpet, 2x4 ceilings, ivory walls and black metal doors and frames. More complexity means more work. You can do one of two things, adjust your fee schedule by an amount equivalent to the extra work required; or you can treat those new issues as additional services and charge separately for them. There is a third way to compensate that depends on your use of the schedule itself.

HOW AN ARCHITECTURAL FEE SCHEDULE WORKS
A fee schedule is made up of several tables, five in this case. Each table addresses a group of project types and is incrementally adjusted for the complexity of the projects in that group. The groups range from completely unique to completely utilitarian:

group I - monumental buildings, custom homes;
group II - exceptional complexity, or expensive mechanical/electrical systems;
group III - moderate complexity, but custom;
group IV - conventional character, not custom;
group V - utilitarian character.

Within each group table there is also adjustment for the value of the construction cost. The percentage fee goes DOWN as the value of the project goes UP. Using an architectural fee schedule is a two-step process. First you select the table group that is appropriate for the complexity of the work, second you find the estimated construction cost of the project, which shows you the appropriate percentage fee. So the third way that you can compensate for additional complexity is to select the table that represents the next higher level of complexity.

AN EXAMPLE OF SELECTING AN ARCHITECTURAL FEE
Let's say you have landed a corporate office building. You might use the group III table, moderate complexity if this is a manufacturer's headquarters. If this is the new home for a large law firm, I think it is safe to say you will need to use the group II table or even the group I table. From there you find the estimated construction cost, say $2,500,000, and you will see that the fee from the group II table is 7.7%. Note that the percentage fees are for construction costs OVER the dollar amounts listed.

DOWNLOADABLE FEE SCHEDULE
Now is a good time to remind you of the Architekwiki Terms of Use because I am going to share my fee schedule with you.
Try not to hurt yourself.

THE GLOBAL ADJUSTMENT MAKES THIS YOUR FEE SCHEDULE
One last thing about this fee schedule that you need to know is that there is a global adjustment number that modifies every percentage based on the number you enter. This feature allows you to truly make the schedule your own. The way that it makes these adjustments is by modifying the "baseline percentages" that you will find on the far right. These baseline percentages are built into each group table. So if you increase or decrease the global adjustment, everything changes. The adjustment number is added to the percentages in the table, and I think it should remain 1.0 or more.

MORE ABOUT FEES
If you want to catch up on other Architekwiki blog posts that touched on fees, here are some links. The last one contains an offer you might like.