Also I'm sorry for everyone whose local AIA isn't offering interesting content. Our chapter made a specific initiative to get interesting, design-oriented speakers this year, so we've had Thom Mayne (joint program with BSU), Juan Miro, a great old-timer from SOM, Deborah Berke is coming in October.....we're purposefully cutting down on the product rep events and making them more interesting. I have to say, our local Executive Director is awesome, and we have great volunteers doing fun programs.
Donna I would be able to get enthusiastic about the tax credit thing you mentioned.
Why isn't the AIA focused on raising the profitability of the profession? For example by focusing on hardcore lobbying representation in DC, AIA activities focused on business topics etc? Thoughts?
Perhaps the average architect these days is just too reta....stoopid to understand or care that profitability leads to the opportunity for better 'designs'?
All this testosterone-driven chest-pounding about the Consent Decree is misguided.
AIA has about 85,000 members - compared to 400,000 in the ABA and 250,000 in the AMA. Low numbers mean low financial resources available to fight the U.S. Department of Justice in court. To have done so would have meant bankruptcy for the Institute - and we still would not have prevailed.
You also are misguided to think a published fee schedule guarantees economic success. Lawyers and doctors don't rely on collusion to maintain their income stream - they make their own decisions about what to charge - neither the ABA nor the AMA set their fees.
You're looking in the wrong direction guys.
These seem like good points. So what are some of the proper directions? More licensed professionals for one, i.e. mass/ density?
Why are architects not focused on this important topic? Again...too stoopid and scatterbrained as a group perhaps? The divided & conquered, plundered gelding hangs its head and shuffles into the setting sun.
In my home state of Washington, the AIA actively pursued legal implementation of a CE system (we didn't have one) against the wishes of most of the membership. I will never forgive them for doing that, and it's not an isolated incident. Their "public advocacy" has been consistently bad.
Quizzical:
The issue with the Consent Decree is that it is emblematic of the failure of the AIA to fight for professional architects. Perhaps they could not have won if they fought it (though actually, I think they could have made DOJ's life miserable by trying it in the court of public opinion). But that argument is fundamentally cowardly. By rolling over and giving in to DOJ's bullying, AIA made itself irrelevant as a force in our favor. They would have served us better if they'd hoisted the black flag and fought to the death with the intent to cost opponents dearly in the process. AMA and ABA do have more resources, but more importantly, they have more will. They are just fundamentally a lot scarier than than the AIA, and when you find yourself going toe-to-toe with political bullies, you want the scariest guys around on your side.
Published fee schedules won't save us now. Wouldn't save us then. But as a symbolic matter, the Consent Decree was the point at which the architectural profession surrendered unilaterally to the forces of managerialist over-reach in the political sphere. The damage caused by that cannot be understated, and the AIA has been the lap-dog of the political establishment ever since. They don't have any fight left in them at all. It's pathetic.
And, by the way, doctors DO engage in blatant collusion and price-fixing.
Ultimately is there any way to reverse the effects of the Consent Decree? Perhaps too many stoopid/ undicsiplined mouth breathers inside the gates of the profession at this point, though. All is likely lost forever.
So does this mean the ABA had/ has better 'designers'?
Lawyers are scary, but they have their own issues, mostly flowing from a combination of a horrendously exploitative business model and educational pyramid scheme. We don't need to become more "like them," (less so, actually) but we do need to learn how to fight for our interests.
"Beyond the immediate disappearance of fee schedules and a new need for architects to negotiate for projects based on price, the consent decrees have had a far more profound effect: As attorney Carl Sapers says, ''As a lawyer, I seriously doubt the AIA could have fought the Justice Department and won. But the consent decrees have weakened the standing of architects enormously. The actions of the Justice Department in the late 1960s and early 1970s had a deplorable and terrifying effect on professional life in America and today we are reaping the harvest of the poisonous seed that was planted. These professions [architecture, medicine, and law] have come to look much more like trades. I have to ask, even if fee schedules and codes of ethics meant that people were paying more for professional services, was that more important than maintaining the integrity of professions in America?''
James Scheeler, a former CEO of the AIA and a current resident fellow for international relations, takes the opposite view. ''This profession should thank the Justice Department,'' he said. ''As a result of the consent decrees, we have had to learn to deal with competitive fees and the business aspects of architecture. American architects have been highly successful and competitive in foreign markets, in part because the understanding of the business of delivering professional services is finely tuned. If we still had fee schedules, we would not have been forced to learn these things.''
wait...wha...? Lawyers make how much more than architects? The lawyer is speaking common sense to the issue and this tool (Scheeler) representing the AIA is speaking the role of lap dog to those who destroyed the profitability of the profession?
The AIA has such a history, as demonstrated here, of being so pathetic to the point of professional suicide. Morons leading the pathetic retreat. Even the lawyer here is making more sense. And the lawyers were leading the charge against the profession!
"Architects' inability or unwillingness to obtain good fees must have other causes. Michael Strogoff, a Mill Valley, Calif.-based negotiations consultant, suggests three primary reasons:
1. First, within our professional culture we share an unwillingness to walk away from a great commission, no matter what the cost. Architects knowingly accept low fees for fear of losing jobs or creating adversarial relationships.
2. Second, sometimes architects fail to obtain fair fees simply because they lack business training, negotiating skills, or an understanding of their real costs.
3. Finally, architects have had difficulty explaining the value of what they have to offer."
Why doesn't the AIA focus in on these 3 glaring deficiencies?
It must be personally humiliating to blame the AIA for one's lack of success in the profession.
I know many lawyers and doctors and none of them credit the ABA or the AMA for their success. And, I've known a few lawyers who didn't have what it takes to succeed in the law - they didn't blame the ABA.
As carrera posted above, success in this profession comes from one's own abilities, energy and effort - and, a decent understanding of market forces. At best, any organization like the ABA, AMA or AIA can provide support only at the margins.
Oh, and I know Michael Strogoff -- he's absolutely right in the narrative quoted immediately above.
Case in point; take a minute to ask for a quote for a building feasibility opinion from a lawyer as compared to a building feasibility study from an architecture firm. One will charge you 25k, the other will do it for free; guess who's who?
Remember I'm unknowledgeable in most everything, but you could try implementing sound business practices, like charge enough to cover costs plus some more to make a profit. The scope of services and level of service can vary so much from project to project, why wouldn't the fees be tied directly to the services rendered?
We can thank the AIA for silencing these very discussions. But if you are familiar with the antitrust law you don't have to be scared and you can act in compliance. This is perhaps my biggest beef with the AIA, instead of educating the members on what law was violated and how not to violate it, they decided everyone should just never talk about it again. So the AIA and our firms are places where there are secrets and forbidden topics surrounding fees. It hurts everyone.
Scheeler is a fool, and typical of the AIA apologist mindset. We should thank the Justice Department for bullying us into a position of economic weakness and fear? What? F**k off.
That article was pretty good, particularly in how it described the more important negative effects of the Consent Decrees: e.g. utter paranoia about discussing business models and pricing among architects, and the concomitant inability to share knowledge about articulating value for pricing leverage. One of the major impacts of the first Consent Decree was to push architects toward cost-based pricing and time-based accounting, both of which have been catastrophic for our profession. The second Decree merely cemented those practices in place with fear, because nobody is brave enough to talk about how stupid they are lest the Eye of Sauron become fixed on us again.
"According to Michael Tardif, director, professional practice, at the AIA, this cycle can be stopped: ''If architects were rigorous about understanding their costs when preparing fee proposals, they would be less willing to negotiate their fee away without cutting scope,'' he says. But the growing complexity of the business of architecture has made an understanding of costs ever more elusive. As Strogoff says, ''Firms are busier than ever. They are reporting more profit, as they should in an economy like this one, but the percentage increase doesn't compare to the recent growth in construction. Overhead is the reason.''"
Remember I'm unknowledgeable in most everything, but you could try implementing sound business practices, like charge enough to cover costs plus some more to make a profit. The scope of services and level of service can vary so much from project to project, why wouldn't the fees be tied directly to the services rendered?
We can thank the AIA for silencing these very discussions. But if you are familiar with the antitrust law you don't have to be scared and you can act in compliance. This is perhaps my biggest beef with the AIA, instead of educating the members on what law was violated and how not to violate it, they decided everyone should just never talk about it again. So the AIA and our firms are places where there are secrets and forbidden topics surrounding fees. It hurts everyone.
You are too right on this one tintt (except the part about you being unknowledgeable in most everything).
AIA regularly and routinely presents programs, and provides resources, aimed at enhancing the business management and negotiating skills of its members. Much of this work is being performed through the Practice Management Knowledge Community, plus every national convention and most state conventions provide programs to address a wide variety of these topics.
"Overhead demands differ radically from firm to firm -- depending on size, location, and the nature of the practice. But in general, architects have not done a good job of computing their real costs. As William F. Fanning, director of research for the Professional Services Management Journal says, ''In other industries, future projections are used to determine prices. Architecture is the opposite. We use last year's cost model to determine next year's prices.''"
The consent decree primarily prohibits the AIA from publishing fixed fee schedules and from enforcing those schedules among its members. It does not prohibit members from talking about fees or how to calculate fees -- unless such discussions are aimed at price fixing. Over the years I've been in many discussions with other architects about fees and routinely have participated in, and received the results from, 3rd party surveys related to fees being charges for various types of work.
The consent decree does not prohibit the exchange of arms-length information about fees -- it only prohibits price fixing.
Oh -- and as to all of these questions like "why doesn't the AIA focus on such and such a topic?" -- I would argue that they make a very good effort to do so. The information is readily available to members -- but, as the old saying goes "you can lead a horse to water ...."
keep selling me quizzical and Donna...seriously thinking about joining for the first time period in my life. Might try it out for a year at least...
Don't know if I can stomach all the hand wringers and tools (like that Scheeler) though...selling out the profession and turning it into a used car sales lot.
I'm familiar with most of the AIA practice stuff, and have even authored white papers for some parts of the practice management sections available nationwide as part of the small firm management pamphlets. But it tends toward the generic and the conventional, not to mention still being hopelessly mired in a labor-theory-of-value economic model that's more than a half-century past it's sell-by date.
If you really want good advice about running a firm and setting your pricing strategy, AIA is not the place to get it. There are other groups out there (most of them private consultancies like PSMJ) who will help you out for a fee. If that's what you need, your money is better spent with them than with AIA.
When it comes to antitrust laws, Professional societies as organization may not engage in activities that constitute an antitrust violation such as price-fixing, conspiracy to price fix and collusion, and other such.
The reason is AIA had been sued twice. AIA due to it being a professional association which sets rules in which members are to follow constitutes a nexus. AIA got sued because their members were required to follow a published fee table, AIA has/had influence over the entire licensing process and they still do. They had a nexus.
When things happen at the local, grassroots being individuals then it goes below the radar (nexus) of the US DOJ. When there is mass collusion, conspiracy and organized price-fixing then U.S. DOJ will be suing for antitrust violation.
At lower levels, this becomes a state thing and in some places, this can be interstate and still not be a sufficient nexus to involve the U.S. DOJ.
AIA has good reason. They actually have a court order from a Judge and violating the order can constitute contempt of court and they can be fined and on the extreme end, individuals can actually go to jail. I don't think AIA's executive director or anyone within is intent on going to jail. Two violations / two lawsuits is enough of a reason to not have anything close to antitrust violation on their formal / official websites and forum.
Even AIBD doesn't permit discussion of price fees like how much to charge. You can talk about the things that one should think and consider in connection with feed but you should not publish fees. HOWEVER, an independent statistics publishing can prepare average fees based on a statistics pool including regional adjustments. The trick is getting a large and deep statistical pool. This isn't far off of an RS Means like approach.
This needs to be independent of AIA to work effectively and updated periodically. Like every 3 years or so. Perhaps faster cycles of annual could be achieved if the statistical data could be pooled and published with a year offset.
In my opinion, based on case precedence, a professional society be it AIA, AIBD or others, are not allowed to discuss price fees at organization events, meetings, website, forums beyond a very limited extent of educating people on how to price fees without giving specific percentage of construction costs or things like that. We can discuss how fees pricing are determined such as what things are factored in, estimation of labor and average number of worker hours and things like that which can inform how to price profitably. We can discuss about basic business stuff like how much contribution margin is financially sustainable and how to make a profit as a business. That... can be discussed.
We can't say.... "you should charge ______%".... or it would be a violation of price fixing laws at state and/or federal level.
Sometimes, fees will systematically increase because we get our shit together and charge to a level where we make a profit. This depends on your independent decision and choice to charge more in this competitive market place. You have to decide how much to charge for yourself.
Good_Knight's post on the "three primary reasons" has it about right...the fee schedules were in place when I started and they weren’t mandatory, they were guidelines. The accounting method of looking at past projects to establish future fees doesn’t work because no two projects, clients or design teams are alike. The schedules did the work for us and the number s were generous enough to keep you out of trouble and helped resist the temptation of doing something stupid…and it eliminated the need for the "three primary reasons".
The problem is that the schedules weren’t replaced with anything and things went “wild west”.
Every government project we did had a designated fee from a government schedule of fees…funny how things work.
Hi stone! Haven't seen you in awhile! Nice post, too.
Two things, and lordy this conversation is meandering.
1. We can't compare our pricing to the AMA because so much medical pricing is set by Medicare/aid reimbursement. I don't think architectural has any national program remotely comparable to Medicare/aid, but if we could get some kind of national infrastructure maintenance and improvement program going (which god knows we need) maybe we would. (LOL who am I kidding; the contractor's lobby would get all the money from that and architects would be their subs hoping for a 2% fee.)
2. I mean the AIA can't win because every time they/we do something to try to address what members seem to want we get blasted for it by so many posturing, vocal and opinionated architects, members and non-members alike (and yes I too am posturing, vocal, and opinionated, all the time). In my opinion the I Look Up campaign was a great first step in pushing the idea that good design is important for everyone for a lot of cultural, emotional, and financial reasons, but the campaign was immediately criticized for all the things it DOESN'T do with no recognition for how to use it to tell the story you think we should be telling.
We're crabs in a bucket, frequently and frustratingly. I'm doing my best to fight that cliche but man is it exhausting.
What’s “exhausting” is private work/living with sharks. I swam like hell to public work to get away from the sharks, but when I got there I found the fees were “fixed”.
"Our fees" or "our pricing" is exactly what language and activity needs to be dropped. For example, comparing prices to other professions is not independently arriving at a price. You have a fee or price and the next person has their own, arrived at independently. You can't say doctors make this much so I should too, that is exactly what gets you in trouble. Really baffled at the misunderstandings. Like I would think you can have your own "fee schedule", like a menu of what you do for what fee, you just can't all have the same one.
In my opinion the I Look Up campaign was a great first step in pushing the idea that good design is important for everyone for a lot of cultural, emotional, and financial reasons, but the campaign was immediately criticized for all the things it DOESN'T do with no recognition for how to use it to tell the story you think we should be telling.
My beef with the I Look Up campaign is that the premise of appealing to everyone is a good one. Trouble is, once again, its the AIA advertising its design ego to other esoteric design egotists (AIA or otherwise). The I Look Up campaign actually does more harm than good because the average everyday viewer ends up experiencing more vertigo about the profession than before the commercial.
Now, if the commercials had stuck with the premise of appealing to everyone and demonstrating the value of the architect in the everyday...
...and had a commercial such as the operating room of a surgeon taking some beloved grandmother's cataracts out and explaining how the surgery isn't possible without the building and the building wasn't possible without the architect...
...and another commerical wherein some quadriplegic can't take a bath or use the toilet without before an architect comes in to save the day with accessible design...
...etc etc
...now we'd be talking.
Instead, once again, the AIA seems to be so esoteric in its mission it can't seem to stray to within 100 yards of painting a positive picture of the average professional practitioner or average everyday user.
...Always seem to regress towards some esoteric overly poetic stretch where the simple idea of 'architect = good for Joe Public' gets lost in some bizarre, painterly impressionistic/ deconstructivist/ abstract metaphors.
To collude means to come together. This is what is against the law. It looks suspicious to say 6%, or 15% or 3%, why isn't all of this language being dropped?
yeah, wouldn't want any sort of collectivist business acumen to say, develop? by communicating with one another...might actually...*gulp* profit. *gasp*!
Aug 4, 15 2:30 pm ·
·
quizzical,
The consent decree also requires AIA to comply with ALL antitrust laws.
Not only price-fixing is unlawful but conspiracy or collusion to price fix is also unlawful. So what exactly is conspiracy or collusion to price fix... mean? What is all that is necessary for conspiracy or collusion to price fix to have occurred?
Price fix occurs when an agreement (doesn't have to be in writing but an indication of an agreement) has occurred.
Conspiracy or collusion to price fix occurs before price fixing has occurred. You don't have to reach an agreement but an attempt by two or more persons....?
Young architecture school grads need their own !exclusive! group/ brand/ title. One that speaks to the passion, drive, and commitment graduates from accredited school have demonstrated by earning their degrees
I agree. A union for grads and all the design misfits. Funny thing is that there are far more of us...
this profession is so diverse in work types, client types, methods of delivery, organizations, many parts farmed out, done by others, etc...level of firms quality of work (big difference between rubber stampers and high-end people -HUGE)
I don't even see how agreeing on fees would even work. I think agreeing on perhaps hourlies would help and that's not really price fixing? you know like minimum wages....
Olaf, I think we are beyond all that. Was a time that work stayed in the community where you practiced and firms could have worked out some wink & handshake deals, but today if a community locked in some agreed parameters, the clients would just go to the internet.
Also, post DOJ, almost all public works have fixed prescribed fees.
The other elephant in the room is that architects just don’t cooperate on business matters…too many firms competing for too little work….then there are the renegades that screw everything up.
^^^ your final paragraph is, of course, the fundamental characteristic of a "free market" -- as the DOJ intended.
To claim that the AIA should have / could have achieved a different result is, on its surface, ludicrous and a claim that "restraint-of-trade" should be a policy adopted by our own professional organization.
I'm looking at it without collusion, winks and handshakes, after all they are your competition or public projects...and I don't agree with half of what the knuckleheads do in this profession and that's why they make less - facts...
I'm looking at it more like a disruptive technique and offensive, as being offensive is far more effective between architects than cooperative.
Just mock and shame people that do not charge enough or pay enough.
make a website that says some stupid bastard in Bum Fuck Egypt charged this and that much for a silly job and made so little they would be better off at McDonalds, and then post some question to client making them doubt their decisions...
and then show what the pro's charge.
you have to think about this in a modern day social media spin, not some old timey AIA meeting type of thing.
get the "renegades" to brag why they make sooo much more than everyone else.
"oh you do drawings?" - renegade
"yes, they are essential to every project? I draw to make fee proposals, etc..." - low earning architect
"we do diagrams, underpay staff, run adds, and have fun and make millions. how's that traditional working out for you?" - renegade
"that's not architecture, you're not an architect, you're why I don't make much, not my fault I can not find better means and methods for executing the built environment from the design and paperwork perspective!" - low earning architect
"exactly. means and methods have never been your problem." - renegade
probably not clear enough in what I'm getting at...
AirBNB a different means and method of hotel operation.
Uber a different means and method of taxi service.
If you thought like a contractor, figured better means and methods for producing the end product instead of hoping some community will support your only approach to architecture - you would inevitably find better ways to earn a living.
Olaf, actually you’re on the right line, all of the hand wringing over fees is moot today, what’s needed is a way to speed up the process, or as I’ve repeatedly suggested getting paid twice or three times for each project, through CM, branding etc.
We need to spend our time figuring out how to get it done cheaper and add services to multiply the fees. These are things you can do independently.
Embarrassing people to fly right and focusing on what other people are doing is always a waste of time, renegades just aren’t wired right, why rewire them when you can rewire yourself.
Following my last statement, and with respect to the AIA, belonging carries the risk of getting focused on what other firms are doing, projects other firms get that you didn't, it can be mentality corrosive, need to guard against that, and it's hard to do given human nature.
^Agree a lot with these sentiments. Architects aren't paid less solely because we do a poor job of managing fees or achieving collusion. While the medical profession has been very successful at putting up barriers to medical school that limit the supply of doctors, law schools are notorious for providing oversupply - only the top class of lawyers actually gets paid a lot. And the supply of top-tier law school grads is quite limited.
But compared to lawyers (the big-law ones and in-house corporate lawyers) or specialist doctors, what architects do is actually much less necessary. There is none of the urgency that goes into seeing a doctor to keep you from dying or a lawyer to keep you and your company from losing tons of money. Clients have time to shop around and be picky. And getting a 'good' architect is probably only weakly correlated (maybe even negatively) to getting an efficient, functional building that's easy to build.
Clients will pay for interesting design - but only for a very limited number of prestige projects which are the realm of starchitects. It's basically a long-term gamble as to whether a talented designer will win enough competitions that get built to establish a practice like this. Most work simply doesn't demand this level of artistry.
The professions we should consider as case studies in business are those of low-priority business consultants: engineers, accountants, business consultancies. After getting past the entry-level stage formerly known as internship, architects tend to compare reasonably well in salary.
---
The post describing the drop in salaries since the 1960's is a bit misleading. Architecture is very dependent yet totally without influence on the economy's demand for new construction. It's quite obvious looking at our cities that a lot more big buildings were built in the 1960's than the 2000's - hence more demand. At the same time, CAD and BIM have probably reduced the demand for drafting staff enough to limit salaries at the entry level.
Prior to that period of post WW2 America, architects often struggled to earn money. Wright was always in and out of money. Louis Sullivan died destitute. I think even Latrobe left DC to evade creditors, and died of yellow fever digging ditches in New Orleans.
---
This is kind of a rambling post; I haven't collected my thoughts. My sense is that expecting / demanding the AIA to fix an economic circumstance is unreasonable and inevitably futile. Better is to look into business models that can provide either substantial repeat clients to reduce marketing overhead and developing a reputation for efficacy that precludes competing solely on fees. But best is finding alternate ways to leverage our professional skills to make money in development and the management of construction and urban policy.
Carrera's comment that the AIA is like a country club is spot on to me. I don't mean that in a pejorative way - I just see it as a place to commiserate with those who have a common interest and shared experience. It's fun and gives me things to think about, but not directly useful. That's worth a lot to me as a person, and I'm willing to pay so long as I continue getting some enjoyment out of it.
Has anyone noted that the DOJ is an arm of the political power at that time? In both cases; 1985, and 1990, the Administrations ruining, err running the country, were Reagan | Bush, and in the pocket of so-called "free-market" principles. Perhaps it's time to go at it again, before Obama leaves.
I really don't understand what the big deal is with the DOJ order. Suggested fee schedules shouldn't exist in conjunction with a professional organization - I don't think that's a big deal. That's it.
Pricing data is out there - just not free.
The big big question is: Is there a market out there for a platform where architects can anonymously report pricing data much like the Archinect Salary Poll?
lawyers and doctors are the only ones capable of providing what they provide. They deal with life threatening situations that require urgency as midlander pointed out. Their work also has a direct effect. Architects offer a service that is indirect. It is mostly a luxury service. A competent building can be achieved without an architect. Exceptional buildings or programmatically complicated ones do require an architect. In that respect architects are most like chefs. Chefs make exceptional food as architefts make exceptional buildings. Both food and buildings can and do get produced by others more often than not. Both are fundamental needs (food/shelter,) but the architect and chef elevate that need to an art/luxury. Of course competence is required, but that alone is not what is unique to the profession. AIA and Ncarb is counterproductive because its selling point is hsw, competence, etc...none of which are exclusive traits of the profession. Rather than Ncarb and the aia...imagine a hypothetical organization called the UCA "united chefs of america" Now imagine their entire mantra was based on the idea that they ensure that chefs understand the internal temp of cooked meat, hygene, food safety, the exclusive right of chefs to cook food, etc...This is minimizing imo... That is why these organizations do little to elevate the profession in the eyes of the public.
AIA
Are there any AIA members who don't drink? Do they have kool-aid or pop for them?
Another article about the consent decree / anti-trust law violation. It isn't just fees, it is the whole business model.
quizzical, perhaps they should have been allowed to go bankrupt.
Also I'm sorry for everyone whose local AIA isn't offering interesting content. Our chapter made a specific initiative to get interesting, design-oriented speakers this year, so we've had Thom Mayne (joint program with BSU), Juan Miro, a great old-timer from SOM, Deborah Berke is coming in October.....we're purposefully cutting down on the product rep events and making them more interesting. I have to say, our local Executive Director is awesome, and we have great volunteers doing fun programs.
Donna I would be able to get enthusiastic about the tax credit thing you mentioned.
Why isn't the AIA focused on raising the profitability of the profession? For example by focusing on hardcore lobbying representation in DC, AIA activities focused on business topics etc? Thoughts?
Perhaps the average architect these days is just too reta....stoopid to understand or care that profitability leads to the opportunity for better 'designs'?
All this testosterone-driven chest-pounding about the Consent Decree is misguided.
AIA has about 85,000 members - compared to 400,000 in the ABA and 250,000 in the AMA. Low numbers mean low financial resources available to fight the U.S. Department of Justice in court. To have done so would have meant bankruptcy for the Institute - and we still would not have prevailed.
You also are misguided to think a published fee schedule guarantees economic success. Lawyers and doctors don't rely on collusion to maintain their income stream - they make their own decisions about what to charge - neither the ABA nor the AMA set their fees.
You're looking in the wrong direction guys.
These seem like good points. So what are some of the proper directions? More licensed professionals for one, i.e. mass/ density?
Why are architects not focused on this important topic? Again...too stoopid and scatterbrained as a group perhaps? The divided & conquered, plundered gelding hangs its head and shuffles into the setting sun.
"Lawyers and doctors don't rely on collusion to maintain their income stream - they make their own decisions about what to charge"
Who's being misguided?
Donna,
In my home state of Washington, the AIA actively pursued legal implementation of a CE system (we didn't have one) against the wishes of most of the membership. I will never forgive them for doing that, and it's not an isolated incident. Their "public advocacy" has been consistently bad.
Quizzical:
The issue with the Consent Decree is that it is emblematic of the failure of the AIA to fight for professional architects. Perhaps they could not have won if they fought it (though actually, I think they could have made DOJ's life miserable by trying it in the court of public opinion). But that argument is fundamentally cowardly. By rolling over and giving in to DOJ's bullying, AIA made itself irrelevant as a force in our favor. They would have served us better if they'd hoisted the black flag and fought to the death with the intent to cost opponents dearly in the process. AMA and ABA do have more resources, but more importantly, they have more will. They are just fundamentally a lot scarier than than the AIA, and when you find yourself going toe-to-toe with political bullies, you want the scariest guys around on your side.
Published fee schedules won't save us now. Wouldn't save us then. But as a symbolic matter, the Consent Decree was the point at which the architectural profession surrendered unilaterally to the forces of managerialist over-reach in the political sphere. The damage caused by that cannot be understated, and the AIA has been the lap-dog of the political establishment ever since. They don't have any fight left in them at all. It's pathetic.
And, by the way, doctors DO engage in blatant collusion and price-fixing.
Ultimately is there any way to reverse the effects of the Consent Decree? Perhaps too many stoopid/ undicsiplined mouth breathers inside the gates of the profession at this point, though. All is likely lost forever.
So does this mean the ABA had/ has better 'designers'?
Lawyers are scary, but they have their own issues, mostly flowing from a combination of a horrendously exploitative business model and educational pyramid scheme. We don't need to become more "like them," (less so, actually) but we do need to learn how to fight for our interests.
from the link posted earlier:
"Beyond the immediate disappearance of fee schedules and a new need for architects to negotiate for projects based on price, the consent decrees have had a far more profound effect: As attorney Carl Sapers says, ''As a lawyer, I seriously doubt the AIA could have fought the Justice Department and won. But the consent decrees have weakened the standing of architects enormously. The actions of the Justice Department in the late 1960s and early 1970s had a deplorable and terrifying effect on professional life in America and today we are reaping the harvest of the poisonous seed that was planted. These professions [architecture, medicine, and law] have come to look much more like trades. I have to ask, even if fee schedules and codes of ethics meant that people were paying more for professional services, was that more important than maintaining the integrity of professions in America?''
James Scheeler, a former CEO of the AIA and a current resident fellow for international relations, takes the opposite view. ''This profession should thank the Justice Department,'' he said. ''As a result of the consent decrees, we have had to learn to deal with competitive fees and the business aspects of architecture. American architects have been highly successful and competitive in foreign markets, in part because the understanding of the business of delivering professional services is finely tuned. If we still had fee schedules, we would not have been forced to learn these things.''
wait...wha...? Lawyers make how much more than architects? The lawyer is speaking common sense to the issue and this tool (Scheeler) representing the AIA is speaking the role of lap dog to those who destroyed the profitability of the profession?
The AIA has such a history, as demonstrated here, of being so pathetic to the point of professional suicide. Morons leading the pathetic retreat. Even the lawyer here is making more sense. And the lawyers were leading the charge against the profession!
from the link posted earlier:
"Architects' inability or unwillingness to obtain good fees must have other causes. Michael Strogoff, a Mill Valley, Calif.-based negotiations consultant, suggests three primary reasons:
1. First, within our professional culture we share an unwillingness to walk away from a great commission, no matter what the cost. Architects knowingly accept low fees for fear of losing jobs or creating adversarial relationships.
2. Second, sometimes architects fail to obtain fair fees simply because they lack business training, negotiating skills, or an understanding of their real costs.
3. Finally, architects have had difficulty explaining the value of what they have to offer."
Why doesn't the AIA focus in on these 3 glaring deficiencies?
It must be personally humiliating to blame the AIA for one's lack of success in the profession.
I know many lawyers and doctors and none of them credit the ABA or the AMA for their success. And, I've known a few lawyers who didn't have what it takes to succeed in the law - they didn't blame the ABA.
As carrera posted above, success in this profession comes from one's own abilities, energy and effort - and, a decent understanding of market forces. At best, any organization like the ABA, AMA or AIA can provide support only at the margins.
Oh, and I know Michael Strogoff -- he's absolutely right in the narrative quoted immediately above.
Architects try to avoid being the "fall guy".
Lawyers just price their falls accordingly.
Case in point; take a minute to ask for a quote for a building feasibility opinion from a lawyer as compared to a building feasibility study from an architecture firm. One will charge you 25k, the other will do it for free; guess who's who?
Remember I'm unknowledgeable in most everything, but you could try implementing sound business practices, like charge enough to cover costs plus some more to make a profit. The scope of services and level of service can vary so much from project to project, why wouldn't the fees be tied directly to the services rendered?
We can thank the AIA for silencing these very discussions. But if you are familiar with the antitrust law you don't have to be scared and you can act in compliance. This is perhaps my biggest beef with the AIA, instead of educating the members on what law was violated and how not to violate it, they decided everyone should just never talk about it again. So the AIA and our firms are places where there are secrets and forbidden topics surrounding fees. It hurts everyone.
Scheeler is a fool, and typical of the AIA apologist mindset. We should thank the Justice Department for bullying us into a position of economic weakness and fear? What? F**k off.
That article was pretty good, particularly in how it described the more important negative effects of the Consent Decrees: e.g. utter paranoia about discussing business models and pricing among architects, and the concomitant inability to share knowledge about articulating value for pricing leverage. One of the major impacts of the first Consent Decree was to push architects toward cost-based pricing and time-based accounting, both of which have been catastrophic for our profession. The second Decree merely cemented those practices in place with fear, because nobody is brave enough to talk about how stupid they are lest the Eye of Sauron become fixed on us again.
From the link posted earlier:
"According to Michael Tardif, director, professional practice, at the AIA, this cycle can be stopped: ''If architects were rigorous about understanding their costs when preparing fee proposals, they would be less willing to negotiate their fee away without cutting scope,'' he says. But the growing complexity of the business of architecture has made an understanding of costs ever more elusive. As Strogoff says, ''Firms are busier than ever. They are reporting more profit, as they should in an economy like this one, but the percentage increase doesn't compare to the recent growth in construction. Overhead is the reason.''"
Why isn't the AIA focusing in on this as well?
Remember I'm unknowledgeable in most everything, but you could try implementing sound business practices, like charge enough to cover costs plus some more to make a profit. The scope of services and level of service can vary so much from project to project, why wouldn't the fees be tied directly to the services rendered?
We can thank the AIA for silencing these very discussions. But if you are familiar with the antitrust law you don't have to be scared and you can act in compliance. This is perhaps my biggest beef with the AIA, instead of educating the members on what law was violated and how not to violate it, they decided everyone should just never talk about it again. So the AIA and our firms are places where there are secrets and forbidden topics surrounding fees. It hurts everyone.
You are too right on this one tintt (except the part about you being unknowledgeable in most everything).
amen gwharton. Eye of Sauron LOLZ
AIA regularly and routinely presents programs, and provides resources, aimed at enhancing the business management and negotiating skills of its members. Much of this work is being performed through the Practice Management Knowledge Community, plus every national convention and most state conventions provide programs to address a wide variety of these topics.
quizzical can you provide some links? thankx
from the link posted earlier:
"Overhead demands differ radically from firm to firm -- depending on size, location, and the nature of the practice. But in general, architects have not done a good job of computing their real costs. As William F. Fanning, director of research for the Professional Services Management Journal says, ''In other industries, future projections are used to determine prices. Architecture is the opposite. We use last year's cost model to determine next year's prices.''"
Why isn't the AIA focused on this?
"Next month, we will introduce several methods -- from visionary ideas to conventional wisdom -- that architects are using to boost their fees."
"Editor's note: The following story originally was part of a series and appeared in the October, 1999 issue of Architectural Record magazine."
Next up: try to locate the November 1999 issue of Record. Anyone have any links?
The consent decree primarily prohibits the AIA from publishing fixed fee schedules and from enforcing those schedules among its members. It does not prohibit members from talking about fees or how to calculate fees -- unless such discussions are aimed at price fixing. Over the years I've been in many discussions with other architects about fees and routinely have participated in, and received the results from, 3rd party surveys related to fees being charges for various types of work.
The consent decree does not prohibit the exchange of arms-length information about fees -- it only prohibits price fixing.
Good Knight - go to http://network.aia.org/practicemanagement/home/ - if you're not a member, you may not be able to access all of the content available.
Oh -- and as to all of these questions like "why doesn't the AIA focus on such and such a topic?" -- I would argue that they make a very good effort to do so. The information is readily available to members -- but, as the old saying goes "you can lead a horse to water ...."
keep selling me quizzical and Donna...seriously thinking about joining for the first time period in my life. Might try it out for a year at least...
Don't know if I can stomach all the hand wringers and tools (like that Scheeler) though...selling out the profession and turning it into a used car sales lot.
I'm familiar with most of the AIA practice stuff, and have even authored white papers for some parts of the practice management sections available nationwide as part of the small firm management pamphlets. But it tends toward the generic and the conventional, not to mention still being hopelessly mired in a labor-theory-of-value economic model that's more than a half-century past it's sell-by date.
If you really want good advice about running a firm and setting your pricing strategy, AIA is not the place to get it. There are other groups out there (most of them private consultancies like PSMJ) who will help you out for a fee. If that's what you need, your money is better spent with them than with AIA.
http://www.psmj.com/
First off,
When it comes to antitrust laws, Professional societies as organization may not engage in activities that constitute an antitrust violation such as price-fixing, conspiracy to price fix and collusion, and other such.
The reason is AIA had been sued twice. AIA due to it being a professional association which sets rules in which members are to follow constitutes a nexus. AIA got sued because their members were required to follow a published fee table, AIA has/had influence over the entire licensing process and they still do. They had a nexus.
When things happen at the local, grassroots being individuals then it goes below the radar (nexus) of the US DOJ. When there is mass collusion, conspiracy and organized price-fixing then U.S. DOJ will be suing for antitrust violation.
At lower levels, this becomes a state thing and in some places, this can be interstate and still not be a sufficient nexus to involve the U.S. DOJ.
AIA has good reason. They actually have a court order from a Judge and violating the order can constitute contempt of court and they can be fined and on the extreme end, individuals can actually go to jail. I don't think AIA's executive director or anyone within is intent on going to jail. Two violations / two lawsuits is enough of a reason to not have anything close to antitrust violation on their formal / official websites and forum.
Even AIBD doesn't permit discussion of price fees like how much to charge. You can talk about the things that one should think and consider in connection with feed but you should not publish fees. HOWEVER, an independent statistics publishing can prepare average fees based on a statistics pool including regional adjustments. The trick is getting a large and deep statistical pool. This isn't far off of an RS Means like approach.
This needs to be independent of AIA to work effectively and updated periodically. Like every 3 years or so. Perhaps faster cycles of annual could be achieved if the statistical data could be pooled and published with a year offset.
In my opinion, based on case precedence, a professional society be it AIA, AIBD or others, are not allowed to discuss price fees at organization events, meetings, website, forums beyond a very limited extent of educating people on how to price fees without giving specific percentage of construction costs or things like that. We can discuss how fees pricing are determined such as what things are factored in, estimation of labor and average number of worker hours and things like that which can inform how to price profitably. We can discuss about basic business stuff like how much contribution margin is financially sustainable and how to make a profit as a business. That... can be discussed.
We can't say.... "you should charge ______%".... or it would be a violation of price fixing laws at state and/or federal level.
Sometimes, fees will systematically increase because we get our shit together and charge to a level where we make a profit. This depends on your independent decision and choice to charge more in this competitive market place. You have to decide how much to charge for yourself.
Good_Knight's post on the "three primary reasons" has it about right...the fee schedules were in place when I started and they weren’t mandatory, they were guidelines. The accounting method of looking at past projects to establish future fees doesn’t work because no two projects, clients or design teams are alike. The schedules did the work for us and the number s were generous enough to keep you out of trouble and helped resist the temptation of doing something stupid…and it eliminated the need for the "three primary reasons".
The problem is that the schedules weren’t replaced with anything and things went “wild west”.
Every government project we did had a designated fee from a government schedule of fees…funny how things work.
The government is always very careful to exempt itself from all of its own rules.
Hi stone! Haven't seen you in awhile! Nice post, too.
Two things, and lordy this conversation is meandering.
1. We can't compare our pricing to the AMA because so much medical pricing is set by Medicare/aid reimbursement. I don't think architectural has any national program remotely comparable to Medicare/aid, but if we could get some kind of national infrastructure maintenance and improvement program going (which god knows we need) maybe we would. (LOL who am I kidding; the contractor's lobby would get all the money from that and architects would be their subs hoping for a 2% fee.)
2. I mean the AIA can't win because every time they/we do something to try to address what members seem to want we get blasted for it by so many posturing, vocal and opinionated architects, members and non-members alike (and yes I too am posturing, vocal, and opinionated, all the time). In my opinion the I Look Up campaign was a great first step in pushing the idea that good design is important for everyone for a lot of cultural, emotional, and financial reasons, but the campaign was immediately criticized for all the things it DOESN'T do with no recognition for how to use it to tell the story you think we should be telling.
We're crabs in a bucket, frequently and frustratingly. I'm doing my best to fight that cliche but man is it exhausting.
What’s “exhausting” is private work/living with sharks. I swam like hell to public work to get away from the sharks, but when I got there I found the fees were “fixed”.
"Our fees" or "our pricing" is exactly what language and activity needs to be dropped. For example, comparing prices to other professions is not independently arriving at a price. You have a fee or price and the next person has their own, arrived at independently. You can't say doctors make this much so I should too, that is exactly what gets you in trouble. Really baffled at the misunderstandings. Like I would think you can have your own "fee schedule", like a menu of what you do for what fee, you just can't all have the same one.
In my opinion the I Look Up campaign was a great first step in pushing the idea that good design is important for everyone for a lot of cultural, emotional, and financial reasons, but the campaign was immediately criticized for all the things it DOESN'T do with no recognition for how to use it to tell the story you think we should be telling.
My beef with the I Look Up campaign is that the premise of appealing to everyone is a good one. Trouble is, once again, its the AIA advertising its design ego to other esoteric design egotists (AIA or otherwise). The I Look Up campaign actually does more harm than good because the average everyday viewer ends up experiencing more vertigo about the profession than before the commercial.
Now, if the commercials had stuck with the premise of appealing to everyone and demonstrating the value of the architect in the everyday...
...and had a commercial such as the operating room of a surgeon taking some beloved grandmother's cataracts out and explaining how the surgery isn't possible without the building and the building wasn't possible without the architect...
...and another commerical wherein some quadriplegic can't take a bath or use the toilet without before an architect comes in to save the day with accessible design...
...etc etc
...now we'd be talking.
Instead, once again, the AIA seems to be so esoteric in its mission it can't seem to stray to within 100 yards of painting a positive picture of the average professional practitioner or average everyday user.
...Always seem to regress towards some esoteric overly poetic stretch where the simple idea of 'architect = good for Joe Public' gets lost in some bizarre, painterly impressionistic/ deconstructivist/ abstract metaphors.
To collude means to come together. This is what is against the law. It looks suspicious to say 6%, or 15% or 3%, why isn't all of this language being dropped?
yeah, wouldn't want any sort of collectivist business acumen to say, develop? by communicating with one another...might actually...*gulp* profit. *gasp*!
quizzical,
The consent decree also requires AIA to comply with ALL antitrust laws.
Not only price-fixing is unlawful but conspiracy or collusion to price fix is also unlawful. So what exactly is conspiracy or collusion to price fix... mean? What is all that is necessary for conspiracy or collusion to price fix to have occurred?
Price fix occurs when an agreement (doesn't have to be in writing but an indication of an agreement) has occurred.
Conspiracy or collusion to price fix occurs before price fixing has occurred. You don't have to reach an agreement but an attempt by two or more persons....?
Young architecture school grads need their own !exclusive! group/ brand/ title. One that speaks to the passion, drive, and commitment graduates from accredited school have demonstrated by earning their degrees
I agree. A union for grads and all the design misfits. Funny thing is that there are far more of us...
this profession is so diverse in work types, client types, methods of delivery, organizations, many parts farmed out, done by others, etc...level of firms quality of work (big difference between rubber stampers and high-end people -HUGE)
I don't even see how agreeing on fees would even work. I think agreeing on perhaps hourlies would help and that's not really price fixing? you know like minimum wages....
Olaf, I think we are beyond all that. Was a time that work stayed in the community where you practiced and firms could have worked out some wink & handshake deals, but today if a community locked in some agreed parameters, the clients would just go to the internet.
Also, post DOJ, almost all public works have fixed prescribed fees.
The other elephant in the room is that architects just don’t cooperate on business matters…too many firms competing for too little work….then there are the renegades that screw everything up.
^^^ your final paragraph is, of course, the fundamental characteristic of a "free market" -- as the DOJ intended.
To claim that the AIA should have / could have achieved a different result is, on its surface, ludicrous and a claim that "restraint-of-trade" should be a policy adopted by our own professional organization.
I'm looking at it without collusion, winks and handshakes, after all they are your competition or public projects...and I don't agree with half of what the knuckleheads do in this profession and that's why they make less - facts...
I'm looking at it more like a disruptive technique and offensive, as being offensive is far more effective between architects than cooperative.
Just mock and shame people that do not charge enough or pay enough.
Like A Darwin Award
make a website that says some stupid bastard in Bum Fuck Egypt charged this and that much for a silly job and made so little they would be better off at McDonalds, and then post some question to client making them doubt their decisions...
and then show what the pro's charge.
you have to think about this in a modern day social media spin, not some old timey AIA meeting type of thing.
get the "renegades" to brag why they make sooo much more than everyone else.
"oh you do drawings?" - renegade
"yes, they are essential to every project? I draw to make fee proposals, etc..." - low earning architect
"we do diagrams, underpay staff, run adds, and have fun and make millions. how's that traditional working out for you?" - renegade
"that's not architecture, you're not an architect, you're why I don't make much, not my fault I can not find better means and methods for executing the built environment from the design and paperwork perspective!" - low earning architect
"exactly. means and methods have never been your problem." - renegade
means and methods.
probably not clear enough in what I'm getting at...
AirBNB a different means and method of hotel operation.
Uber a different means and method of taxi service.
If you thought like a contractor, figured better means and methods for producing the end product instead of hoping some community will support your only approach to architecture - you would inevitably find better ways to earn a living.
Olaf, actually you’re on the right line, all of the hand wringing over fees is moot today, what’s needed is a way to speed up the process, or as I’ve repeatedly suggested getting paid twice or three times for each project, through CM, branding etc.
We need to spend our time figuring out how to get it done cheaper and add services to multiply the fees. These are things you can do independently.
Embarrassing people to fly right and focusing on what other people are doing is always a waste of time, renegades just aren’t wired right, why rewire them when you can rewire yourself.
Following my last statement, and with respect to the AIA, belonging carries the risk of getting focused on what other firms are doing, projects other firms get that you didn't, it can be mentality corrosive, need to guard against that, and it's hard to do given human nature.
^Agree a lot with these sentiments. Architects aren't paid less solely because we do a poor job of managing fees or achieving collusion. While the medical profession has been very successful at putting up barriers to medical school that limit the supply of doctors, law schools are notorious for providing oversupply - only the top class of lawyers actually gets paid a lot. And the supply of top-tier law school grads is quite limited.
But compared to lawyers (the big-law ones and in-house corporate lawyers) or specialist doctors, what architects do is actually much less necessary. There is none of the urgency that goes into seeing a doctor to keep you from dying or a lawyer to keep you and your company from losing tons of money. Clients have time to shop around and be picky. And getting a 'good' architect is probably only weakly correlated (maybe even negatively) to getting an efficient, functional building that's easy to build.
Clients will pay for interesting design - but only for a very limited number of prestige projects which are the realm of starchitects. It's basically a long-term gamble as to whether a talented designer will win enough competitions that get built to establish a practice like this. Most work simply doesn't demand this level of artistry.
The professions we should consider as case studies in business are those of low-priority business consultants: engineers, accountants, business consultancies. After getting past the entry-level stage formerly known as internship, architects tend to compare reasonably well in salary.
---
The post describing the drop in salaries since the 1960's is a bit misleading. Architecture is very dependent yet totally without influence on the economy's demand for new construction. It's quite obvious looking at our cities that a lot more big buildings were built in the 1960's than the 2000's - hence more demand. At the same time, CAD and BIM have probably reduced the demand for drafting staff enough to limit salaries at the entry level.
Prior to that period of post WW2 America, architects often struggled to earn money. Wright was always in and out of money. Louis Sullivan died destitute. I think even Latrobe left DC to evade creditors, and died of yellow fever digging ditches in New Orleans.
---
This is kind of a rambling post; I haven't collected my thoughts. My sense is that expecting / demanding the AIA to fix an economic circumstance is unreasonable and inevitably futile. Better is to look into business models that can provide either substantial repeat clients to reduce marketing overhead and developing a reputation for efficacy that precludes competing solely on fees. But best is finding alternate ways to leverage our professional skills to make money in development and the management of construction and urban policy.
Carrera's comment that the AIA is like a country club is spot on to me. I don't mean that in a pejorative way - I just see it as a place to commiserate with those who have a common interest and shared experience. It's fun and gives me things to think about, but not directly useful. That's worth a lot to me as a person, and I'm willing to pay so long as I continue getting some enjoyment out of it.
Has anyone noted that the DOJ is an arm of the political power at that time? In both cases; 1985, and 1990, the Administrations ruining, err running the country, were Reagan | Bush, and in the pocket of so-called "free-market" principles. Perhaps it's time to go at it again, before Obama leaves.
I really don't understand what the big deal is with the DOJ order. Suggested fee schedules shouldn't exist in conjunction with a professional organization - I don't think that's a big deal. That's it.
Pricing data is out there - just not free.
The big big question is: Is there a market out there for a platform where architects can anonymously report pricing data much like the Archinect Salary Poll?
Fact check: The first case was brought in December 1971 and the first consent decree was issued in 1975.
The second case was brought in 1985, decree issued in 1990.
1971 - Tricky Dick
1975 - Trippy Gerald Ford
Fact: both Republicans
lawyers and doctors are the only ones capable of providing what they provide. They deal with life threatening situations that require urgency as midlander pointed out. Their work also has a direct effect. Architects offer a service that is indirect. It is mostly a luxury service. A competent building can be achieved without an architect. Exceptional buildings or programmatically complicated ones do require an architect. In that respect architects are most like chefs. Chefs make exceptional food as architefts make exceptional buildings. Both food and buildings can and do get produced by others more often than not. Both are fundamental needs (food/shelter,) but the architect and chef elevate that need to an art/luxury. Of course competence is required, but that alone is not what is unique to the profession. AIA and Ncarb is counterproductive because its selling point is hsw, competence, etc...none of which are exclusive traits of the profession. Rather than Ncarb and the aia...imagine a hypothetical organization called the UCA "united chefs of america" Now imagine their entire mantra was based on the idea that they ensure that chefs understand the internal temp of cooked meat, hygene, food safety, the exclusive right of chefs to cook food, etc...This is minimizing imo... That is why these organizations do little to elevate the profession in the eyes of the public.
b3tadine[sutures], how did the republicans force the AIA to break the law?
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