Houston Arch, the major problem with what you're saying is that everyone who has been responsible for this disaster has been getting heavily rewarded at our expense. If you're content with this as just "the way the system works" you're the one with issues.
.med, I am just as mad as you are. But I'm not mad at architects for finally getting a shot at prosperity in the last few years. For a while we were in demand and making some half decent money - FOR ONCE! The entire architectural profession is a tiny insignificant speck in the context of the national economy. Architects didn't create this crisis - we're not anywhere near big enough or important enough - but we sure as hell are caught in the undertow now that it is all crashing down.
I'm mad at banks for packaging subprime mortgages into securities and selling them throughout the global marketplace while disregarding any suggestion that there might be risk involved. I'm mad at mortgage companies for selling predatory mortgages to people without any care whether they could afford them, because the mortgage companies no longer carried any risk for the loans. I'm mad at homebuyers who didn't care how much they could afford, but who bought a house 8 times their annual income and now are wondering why they can't pay their note and want the rest of us to save their asses.
I'm furious at executives at bailed out financial firms who ran their companies into the ground, yet even now are scheming to find a way to loophole to get their precious multimillion dollar bonuses after the government said it would limit their pay.
I'm mad that I have to worry every day about what will happen if I or my husband lose our jobs. I'm mad that some of my good friends who are highly qualified people have had to take major pay cuts. And I'm mad that once again, talented and dedicated young people are going to be drummed out of the field by the economy, and it will be years before the salaries of those who are left get back to where they were.
diabase - where are you getting your numbers, please? and, are you presenting "gross revenue" or "net revenue" for the design firms?
based on credible industry surveys I've seen, net revenues per FTE employee in design firms average considerably higher than the numbers you show. I'll look up the exact figures tomorrow when I return to my office.
while I'm confident lawyers still will exceed our numbers, I don't think the disparity is as large as you suggest.
I make no claims to exhaustive research - only 2 highly specialised and corporate firms - but check out this link for architecture firms ranked by revenue. The stats for the law firms were found via their Wikipedia entries.
I believe the underlying ENR list, from which diabase obtained his numbers, reports "gross revenues" not "net revenues". Net billings generally represent about 70% of gross billings -- with the difference typically being passed through to engineers and other consultants. For that reason, the numbers diabase uses above probably are not a totally useful comparison with the "revenues per employee" research for law firms, which generally would not involve much, if any, pass throughs.
However, to extend and build upon diabase's point, the AIA's 2008 Firm Survey reports that architecture firms employing more than 100 people produce average "net revenue per employee" of about $143,000. Average industry figures are lower, mainly because smaller firms tend to bill considerably less per employee than do large firms. While still way below the figures shown for law firms, this is a considerable increase over the numbers diabase produced.
PSMJ research parallels the AIA figures -- PSMJ reports the average industrywide "net billings per total staff" for 2008 to be about $113,000. Assuming PSMJ's distribution among firm sizes to be similar to AIA's research, then "net revenues per employee" at the sort of large firms that diabase was examining is likely to be in the same range as the AIA's $143,000 number.
Our firm is a mid-sized (high 40s), average, everyday sort of design firm. Last year wasn't a particularly great year for us, but we were profitable. For comparison purposes, in 2008 we generated $179,000 in gross revenues per employee and $142,000 in net revenue per employee. Numbers at this level allow us to provide highly competitive pay and benefits, plus the delivery of strong bonuses at yearend.
While I'm doubtful that architecture will ever be as lucrative as the law, my main point in this post is to suggest that a properly managed design firm need not pay starvation wages nor must the owners of the firm take a vow of poverty to pursue their craft. We can make a decent living practicing architecture. But we can't do that just by coming to work every day with the idea that we're going to be artists -- we have to manage our affairs in a manner that suggests our firms are both a business and a profession.
Lots of good info. Since benefits add about 50% to salary costs, at $143,000, you're talking an average salary about 95K -that's good.
Besides the fact that attorneys touch many more aspects of business than architects do, their fee structures are different. They often have open ended fees, billed hourly, as well as a considerable upfront retainer. Architects' fees are almost always capped, being a percentage of construction cost, a lump sum, or (the worst choice) hourly to a maximum. Increases in project scope, except in the case of percentage of construction cost, must be negotiated with the client as a change to the contract.
Think of all the extra money we would make if we could bill the client for all the hours we actually expended.
I thnik discussions like this are very useful, since many firms don't share any sort of financial information with staff.
Oh yeah, another reason why we make 1/3 of what attorneys make is that our billing rates are 1/3 of theirs: $100 to 150 an hour vs. $300 to $1000 for attorneys.
benefits and overhead are 150% on average of salaries, not 50%. So if the average is $143000 in billings per staff member, the average salary after overhead $57,200.
blue goose - thanks for sharing those numbers. a lot depends on the company, as you say, but i've seen similar numbers when just comparing companies here in atlanta, via a couple of local business publications (which track the 25 largest firms). the average for the firms over 100ppl was close to 140 per fte - again, maybe unscientific since there's only 12 firms. but, still, your premise is right: manage the practice well and there should be enough to go around...
Has anyone benefited from the stimulus yet? I am just now reaping the benefits of the extended unemployment benefits so that I can afford to focus on the LEED AP exam Revit and searching for architecture jobs. I found out that you have to re apply for unemployment. Even if your benefits ran out a while ago you should reapply. I am still looking for non design jobs but having another round of unemployment benefits will help me stay current on student loans and other obligations.
come on guys ... let's get the arithmetic and definitions correct ... it makes a lot of difference in how you draw conclusions from the numbers.
Payroll burden -- i.e. payroll taxes, vacation, sick leave, group insurance, retirement contributions, etc. -- generally amount to about 35% of total payroll or, alternatively, about 55% of direct labor (time charged to projects).
Office overhead (before bonus payments) -- i.e. rent, computer costs, administrative staff salaries, telephone, etc. and including the payroll burden discussed immediately above -- generally runs 140%-150% of direct labor. Overhead -- because it includes a lot of salary costs -- is rarely, if ever, calculated as a % of total salaries.
Unfortunately, neither of these measures really make much contribution to estimating a firm's average salary -- they just add confusion.
So, in order to reasonably estimate the average salary rate for a firm, let's assume the firm averages net billings per employee = $140,000. Direct labor generally runs about 35% of net revenues, so in this example DL = ($140,000 x .35) = $49,000 of direct labor per employee.
Companywide, the typical firm experiences an average staff utilization rate = about 65% ... dividing DL by this % should give you a pretty accurate estimate of the amount of overall salary expense per person the firm is incurring ... i.e. ($49,000 / .65) = $73,384.
As mentioned above, our firm experiences about $140,000 NR per employee and the calculation immediately produces an average salary rate that's pretty consistent with our firm's salary profile.
I know they don't teach this in architecture school ... hope this explanation helps.
BlueGoose - thanks for the business primer. This is the type of in office training that should be a part of IDP. Unless you take business classes or have a boss like you, most interns would never learn this and be at a great disadvantage if they go into business for themselves.
PJN26 I I haven't see a direct benefit yet (other than my unemployment being non-taxable for the first $2500), but I also am taking this as a study break, doing my ARE instead of LEED. So if I understand your thing about unemployment benefits. When my 26 weeks from Virginia run out (which is all their paperwork said I was allowed to get benefits for) I have to reapply for the additonal time?
To BG's credit ~ i fail to understand why so many firms are 'mystical' about how their money flows... I've been with my current firm for nearly two years, have had decent range of exposure to all facets of the process except financial matters... Honestly, it would empower more young employees to work harder if they simply were made aware of the bottom lines and financial goals and obligations of their respective companies. as already mentioned, architecture is a business, and without sharing the operational bits and pieces with your staff, the
I wonder how BlueGoose and the others here approach such an issue with thier "hungry draft-horses" as my boss likes to say...?
still snook - the mental image of me belly dancing conjured by your comment, scares the hell right out of me.
S.Selophane I think so I would contact your local office and ask before your last reporting day. In Illinois we have to reapply. This makes sense since some people ran out of benefits in December and subsequently stopped calling in. I am not sure how far back this goes but even folks laid off a year ago or more can get some kind of extension.
It seems like a good idea to call in. And if your local office is busy try calling an office located in a rural part of the state if all you are doing is getting info.
... goals and aspirations (purpose, if you will) of the firm become diluted... be they artistic (starchitect) or production (the others) or anything in-between.
i fail to understand why so many firms are 'mystical' about how their money flows...
I've found that upper management typically keeps the numbers quiet. What Blue Goose outlined was a short lesson in my BArch pro-practice class, but yes, I agree that there should be more transparency between interns and management about such things. It's knowledge that is necessary to running a well managed firm.
My complaint is that contracts are also something that only upper management handles and keeps relatively quiet. Lower level staff is made aware of "bust the budget" but real numbers are often not released, at least in any context. My most eye opening learning experiences is when I started digging through the contracts on some jobs and really seeing how thin the profits were, if not negative.
If an employer wants good leverage against an intern asking for a large raise, just bring said intern into the wonderful world of contract negotiation. That's the real arena to learn how "cheap" architects really work for.
my perspective about this whole "secrecy" issue is that principals recognize that younger staff simply don't have a clue about all this financial stuff and, for that reason, tend to overreact to the simplest information ... I can't tell you the number of times I've witnessed scenes where an intern learns that the fee on the project is something like $780,000 and simply goes ballistic because "the stinking firm's only paying me a measley $40,000 salary!" The kid simply doesn't have a clue about all the claims that are made on that $780,000.
Of course, if firms were to take the time to train about the economics of professional practice and how fees and contracts are put together, that would take the edge off of this somewhat. But, in truth, the schools could do that same thing and they don't. Firms are saddled with so many post-graduate training requirements, I suppose it's somewhat reasonable that this topic is the easiest to overlook because it really doesn't help generate much 'production' for the firm.
We witness the sort of behavior I describe in the first paragraph above every single day here on Archinect and there's a huge amount of incorrect or misguided information being circulated -- which serves only to further inflame already raw emotions. For that reason, when I have the time, I try to correct mistakes and share what I've learned over 35 years. But, about half the time, I feel like I'm preaching to the deaf.
Know this -- nobody ever sat me down and taught me all this stuff. I taught myself by reading books and attending seminars and participating in the AIA Practice Management Knowledge Community. Come on folks -- it ain't rocket science. All it really requires is some intelligence and the ability to do arithmetic. If you want to know about this stuff it's there for the taking -- all you really need to do is open your eyes and ears and take it all in.
Honestly, aqua and Blue Goose, you're right: interns (myself included, at the time) know nothing about this, but let them work on a contract and they learn damn quick. I recall years ago struggling with the archaic AIA electronic contract software and simultaneously realizing that of the $100,000 fee the firm was getting over 40% of it was going to consultants. That was an eye-opening week for me!
It's good for interns to be in on the realities of contracts, and to understand why billable hours and using time efficiently are so important. AND it's good for firms to clue in their younger staff to the reality of practice (it's also part of our job as mentors and employers, BTW).
Thanks LB - I learned all about contract law and the business side of the profesion from the construction company. Its tragic the lack of knoweledge being passed down at the moment. The owners at most firms are too busy going to golf spas to give a shit. Im employable because of what I learned OUTSIDE the profesion.
Am I the only one who is rooting for this ressession to to go at least 2 more years? Thin the heard, make room for new blood?
Thanks BlueGoose for correcting my numbers...I have to admit that they were a WAG.
The longer I spend in this profession (24 years), the more I become convinced that only way to gain at least some control over your own destiny is as an owner. For years I resisted the idea of hanging out my own shingle, preferring the bigger salary and benefits of being a PM at large firms. However, professional service firms are pyramids in structure and there are very few slots at the top. The firm I spent 11 years at did no mentoring at all for its PMs to move up to principal level, and hired 4 of its last 5 principals from outside the firm. I finally woke up and smelled the coffee, and moved on to a firm that placed me on a principal track.
Now the slowing economy and the reduced size of the firm has placed that principal track on hold indefinitely. <Sigh>
I worked at a large firm in Chicago and although I am way too young to be a principle, I did talk with a lot of senior associates who told me the firm always looks to the outside for principles so not to offend or disrupt the office politic. I always thought the office looked like walking dead anyways, souless creatures with no lives. If anything it could use a little hate, jealousy and passion.
: "Am I the only one who is rooting for this ressession [sic] to go at least 2 more years? Thin the heard [sic], make room for new blood?
The last recession that impacted the profession this severely (early 90s), the only real "thinning" that took place was the almost total loss of an entire generation of young architects. The repercussions of that recession still are being felt today (or, at least they were before this downturn started).
seriously this profesion and education is so broken at transfering the knoweledge I fear it may be almost too late. A big part is the kids dont ask questions and dont want to learn, a bigger part is the weeding out of technical types from schools over the last 20 years, and biggest of all is lack of stable work environments - its so low ball that wages are down, staff levels rise and fall like the tides
evilp - the business side has always been tricky for firms, no matter their size. if everyone knew how to run business straight away, what would prevent staff from jumping the first chance they could to start their own (perhaps more successful firm)?
look, that kind of protectionist attitude exists in just about every service industry there is. you can't hand the keys to the kingdom over to everyone in a company, right?
now, you can teach everyone how their projects become profitable for the firm and how the overall firm financial structure works - the best firms probably do that already. you can show people how that enormous sounding fee gets divided up and how that translates down. you can go over multipliers, net/gross differences, etc. you should be able to cover your basic balance sheet with your staff. but i'm still going to hold onto the contacts list and make sure the clients know i'm making the project happen.
the golf course is just part of the sales job. so are parties, openings, etc. all networking is social networking...
: "Im tired of shitty wages even in the boom years while the boss spends 15-20 weeks a year fucking off
I always find it laughable that the world in which you live (or in which you think you live) is so remarkably different from my own.
I can guarantee you that none of the principals in our firm, and none of the design firm principals I know of in our community (a SMSA with a population greater than 3 million) live even remotely the sort of life you seem to think your firm's principals live.
well i think it's safe to say that every principle in chicago is 'getting his' at this point. it's bad here. and, i heard that both SOM and smith gill did even more layoffs very recently.
I concur - the best architects I ever worked with were small guys, the big firms are are full of terrible architects. I honestly think the only reason they survive ( and theirs far less of them today than there used to be) is the clients are fortune 500, insurance, finance, government, etc. Big budgets that can handle the fluff. Most of them prob couldn't even pull a permit in the suburbs. Its hate and rage today.
Blue Goose - Im not joking an owner Ive worked for spends almost every 3rd week off - not networking mind you, just playing. Selling would be nice. Hell we've begged him to let us sell, let us get out on the street - nope - theirs one salesperson at this firm attitude. I think its a Chicago thing - they all think they are Mies Van Der Rohe.
evil, I heard the same thing in Chicago. One associate partner in a large firm would take 5-8 weeks off every year with his wife, who is a project manager. Its a terrible calculation --- how many junior or intermediate peoples work could afford him such a luxury life? And the funny thing I heard is that he does not have the design ability; the way he works is yelling at young designers and fucked out presentations. Why the firm still keeps him? I dun no - a Chicago gang story?
The Chicago way is not that they all think they are Mies Van Der Rohe - the way is that they pretend they are Mies and you'd better pretend that you are his faithful student, if you have the "luck" working for them.
The Chicago fire, and the Expo, generated the building boom in 1890s and attracted talented architects from new England area. They are called Chicago school - who had the new vision of the city and advanced knowledges. From then Chicago is called a city of architecture. But it almost lost the voice from the Great Depression. Then Mies relocated himself in Chicago and the thing has not changed so much from then---all the architects share the same face, or character. What a shame...a city under the influence of a ghost....
Evil, Your bitterness is frightening. I suggest you see a therapist. Your thoughts are toxic and can become dangerous.
If you are employed, get to work and stop posting on your boss's time. If you're not, get outdoors and get some exercise. Take care of your physical and mental health. Have a nice weekend:-)
Layoffs....layoffs......
I heard that TVS in Atlanta gave out pay cuts today...can anyone confirm this?
Houston Arch, the major problem with what you're saying is that everyone who has been responsible for this disaster has been getting heavily rewarded at our expense. If you're content with this as just "the way the system works" you're the one with issues.
that tomorrow can not be like yesterday is a given
and as they sing in the intro to Craig Ferguson, "tomorrow's just a future yesterday."
not any more, did you attend Z day and what do you think of Abundance?
.med, I am just as mad as you are. But I'm not mad at architects for finally getting a shot at prosperity in the last few years. For a while we were in demand and making some half decent money - FOR ONCE! The entire architectural profession is a tiny insignificant speck in the context of the national economy. Architects didn't create this crisis - we're not anywhere near big enough or important enough - but we sure as hell are caught in the undertow now that it is all crashing down.
I'm mad at banks for packaging subprime mortgages into securities and selling them throughout the global marketplace while disregarding any suggestion that there might be risk involved. I'm mad at mortgage companies for selling predatory mortgages to people without any care whether they could afford them, because the mortgage companies no longer carried any risk for the loans. I'm mad at homebuyers who didn't care how much they could afford, but who bought a house 8 times their annual income and now are wondering why they can't pay their note and want the rest of us to save their asses.
I'm furious at executives at bailed out financial firms who ran their companies into the ground, yet even now are scheming to find a way to loophole to get their precious multimillion dollar bonuses after the government said it would limit their pay.
I'm mad that I have to worry every day about what will happen if I or my husband lose our jobs. I'm mad that some of my good friends who are highly qualified people have had to take major pay cuts. And I'm mad that once again, talented and dedicated young people are going to be drummed out of the field by the economy, and it will be years before the salaries of those who are left get back to where they were.
da under toad...has got ya...houston! Life is going to come around....be happy!
and the Fed goes on bailing out central banks of other countries and punking our government.
extending their imaginary creation.
Where did we get money to bail out other countries banks?
Last time I checked other countries in Asia and the Middle East were bailing us out to the tune of $2 trillion + dollars.
Lets look at some basic facts, taking 2 large corporate architectural practices and comparisons with lawyers of a similar relative rank or position.
--
Architects
HDR
US 10th Largest - revenue [2006] $702.1m, employees 7400
rev/e = $94,878
Lawyers
White & Case
US 10th largest - revenue [2008] $1.372b, employees 4800
rev/e = $286,041
--
Architects
Leo O Daly
US 12th largest - revenue [2006] $106.5m, employees 1200
rev/e = $88,750
Lawyers
Greenberg Traurig
US 12th Largest - revenue [2008] $1.2b, employees 1800 attorneys, so lets say 4000
rev/e = $300,000
--
So these figures exclude expenses, overheads, taxes, etc, but include all employees [not just professionals].
The lawyers trump us by roughly 3:1. Theres your problem. Its either underpayment, or over resourcing.
I dont know what the comparison is when you add similar engineering companies, real estate brokers or developers into the mix...
diabase - where are you getting your numbers, please? and, are you presenting "gross revenue" or "net revenue" for the design firms?
based on credible industry surveys I've seen, net revenues per FTE employee in design firms average considerably higher than the numbers you show. I'll look up the exact figures tomorrow when I return to my office.
while I'm confident lawyers still will exceed our numbers, I don't think the disparity is as large as you suggest.
BlueGoose,
I make no claims to exhaustive research - only 2 highly specialised and corporate firms - but check out this link for architecture firms ranked by revenue. The stats for the law firms were found via their Wikipedia entries.
I believe the underlying ENR list, from which diabase obtained his numbers, reports "gross revenues" not "net revenues". Net billings generally represent about 70% of gross billings -- with the difference typically being passed through to engineers and other consultants. For that reason, the numbers diabase uses above probably are not a totally useful comparison with the "revenues per employee" research for law firms, which generally would not involve much, if any, pass throughs.
However, to extend and build upon diabase's point, the AIA's 2008 Firm Survey reports that architecture firms employing more than 100 people produce average "net revenue per employee" of about $143,000. Average industry figures are lower, mainly because smaller firms tend to bill considerably less per employee than do large firms. While still way below the figures shown for law firms, this is a considerable increase over the numbers diabase produced.
PSMJ research parallels the AIA figures -- PSMJ reports the average industrywide "net billings per total staff" for 2008 to be about $113,000. Assuming PSMJ's distribution among firm sizes to be similar to AIA's research, then "net revenues per employee" at the sort of large firms that diabase was examining is likely to be in the same range as the AIA's $143,000 number.
Our firm is a mid-sized (high 40s), average, everyday sort of design firm. Last year wasn't a particularly great year for us, but we were profitable. For comparison purposes, in 2008 we generated $179,000 in gross revenues per employee and $142,000 in net revenue per employee. Numbers at this level allow us to provide highly competitive pay and benefits, plus the delivery of strong bonuses at yearend.
While I'm doubtful that architecture will ever be as lucrative as the law, my main point in this post is to suggest that a properly managed design firm need not pay starvation wages nor must the owners of the firm take a vow of poverty to pursue their craft. We can make a decent living practicing architecture. But we can't do that just by coming to work every day with the idea that we're going to be artists -- we have to manage our affairs in a manner that suggests our firms are both a business and a profession.
Lots of good info. Since benefits add about 50% to salary costs, at $143,000, you're talking an average salary about 95K -that's good.
Besides the fact that attorneys touch many more aspects of business than architects do, their fee structures are different. They often have open ended fees, billed hourly, as well as a considerable upfront retainer. Architects' fees are almost always capped, being a percentage of construction cost, a lump sum, or (the worst choice) hourly to a maximum. Increases in project scope, except in the case of percentage of construction cost, must be negotiated with the client as a change to the contract.
Think of all the extra money we would make if we could bill the client for all the hours we actually expended.
I thnik discussions like this are very useful, since many firms don't share any sort of financial information with staff.
Correction: meant to say "benefits and overhead add about 50%."
Oh yeah, another reason why we make 1/3 of what attorneys make is that our billing rates are 1/3 of theirs: $100 to 150 an hour vs. $300 to $1000 for attorneys.
benefits and overhead are 150% on average of salaries, not 50%. So if the average is $143000 in billings per staff member, the average salary after overhead $57,200.
blue goose - thanks for sharing those numbers. a lot depends on the company, as you say, but i've seen similar numbers when just comparing companies here in atlanta, via a couple of local business publications (which track the 25 largest firms). the average for the firms over 100ppl was close to 140 per fte - again, maybe unscientific since there's only 12 firms. but, still, your premise is right: manage the practice well and there should be enough to go around...
Has anyone benefited from the stimulus yet? I am just now reaping the benefits of the extended unemployment benefits so that I can afford to focus on the LEED AP exam Revit and searching for architecture jobs. I found out that you have to re apply for unemployment. Even if your benefits ran out a while ago you should reapply. I am still looking for non design jobs but having another round of unemployment benefits will help me stay current on student loans and other obligations.
come on guys ... let's get the arithmetic and definitions correct ... it makes a lot of difference in how you draw conclusions from the numbers.
Payroll burden -- i.e. payroll taxes, vacation, sick leave, group insurance, retirement contributions, etc. -- generally amount to about 35% of total payroll or, alternatively, about 55% of direct labor (time charged to projects).
Office overhead (before bonus payments) -- i.e. rent, computer costs, administrative staff salaries, telephone, etc. and including the payroll burden discussed immediately above -- generally runs 140%-150% of direct labor. Overhead -- because it includes a lot of salary costs -- is rarely, if ever, calculated as a % of total salaries.
Unfortunately, neither of these measures really make much contribution to estimating a firm's average salary -- they just add confusion.
So, in order to reasonably estimate the average salary rate for a firm, let's assume the firm averages net billings per employee = $140,000. Direct labor generally runs about 35% of net revenues, so in this example DL = ($140,000 x .35) = $49,000 of direct labor per employee.
Companywide, the typical firm experiences an average staff utilization rate = about 65% ... dividing DL by this % should give you a pretty accurate estimate of the amount of overall salary expense per person the firm is incurring ... i.e. ($49,000 / .65) = $73,384.
As mentioned above, our firm experiences about $140,000 NR per employee and the calculation immediately produces an average salary rate that's pretty consistent with our firm's salary profile.
I know they don't teach this in architecture school ... hope this explanation helps.
...BlueGoose, where have you been all my internship?!
sitting right here, watching what's going on ....
... can I sit on your lap?
no
BlueGoose - thanks for the business primer. This is the type of in office training that should be a part of IDP. Unless you take business classes or have a boss like you, most interns would never learn this and be at a great disadvantage if they go into business for themselves.
PJN26 I I haven't see a direct benefit yet (other than my unemployment being non-taxable for the first $2500), but I also am taking this as a study break, doing my ARE instead of LEED. So if I understand your thing about unemployment benefits. When my 26 weeks from Virginia run out (which is all their paperwork said I was allowed to get benefits for) I have to reapply for the additonal time?
cowgill....I guess bluegoose has no docking station for a lap dancer.
speaking off some girl gave me her business card last night on it it says 1 free pass before 12am...
To BG's credit ~ i fail to understand why so many firms are 'mystical' about how their money flows... I've been with my current firm for nearly two years, have had decent range of exposure to all facets of the process except financial matters... Honestly, it would empower more young employees to work harder if they simply were made aware of the bottom lines and financial goals and obligations of their respective companies. as already mentioned, architecture is a business, and without sharing the operational bits and pieces with your staff, the
I wonder how BlueGoose and the others here approach such an issue with thier "hungry draft-horses" as my boss likes to say...?
still snook - the mental image of me belly dancing conjured by your comment, scares the hell right out of me.
S.Selophane I think so I would contact your local office and ask before your last reporting day. In Illinois we have to reapply. This makes sense since some people ran out of benefits in December and subsequently stopped calling in. I am not sure how far back this goes but even folks laid off a year ago or more can get some kind of extension.
It seems like a good idea to call in. And if your local office is busy try calling an office located in a rural part of the state if all you are doing is getting info.
and to finish the first paragraph:
... goals and aspirations (purpose, if you will) of the firm become diluted... be they artistic (starchitect) or production (the others) or anything in-between.
I've found that upper management typically keeps the numbers quiet. What Blue Goose outlined was a short lesson in my BArch pro-practice class, but yes, I agree that there should be more transparency between interns and management about such things. It's knowledge that is necessary to running a well managed firm.
My complaint is that contracts are also something that only upper management handles and keeps relatively quiet. Lower level staff is made aware of "bust the budget" but real numbers are often not released, at least in any context. My most eye opening learning experiences is when I started digging through the contracts on some jobs and really seeing how thin the profits were, if not negative.
If an employer wants good leverage against an intern asking for a large raise, just bring said intern into the wonderful world of contract negotiation. That's the real arena to learn how "cheap" architects really work for.
my perspective about this whole "secrecy" issue is that principals recognize that younger staff simply don't have a clue about all this financial stuff and, for that reason, tend to overreact to the simplest information ... I can't tell you the number of times I've witnessed scenes where an intern learns that the fee on the project is something like $780,000 and simply goes ballistic because "the stinking firm's only paying me a measley $40,000 salary!" The kid simply doesn't have a clue about all the claims that are made on that $780,000.
Of course, if firms were to take the time to train about the economics of professional practice and how fees and contracts are put together, that would take the edge off of this somewhat. But, in truth, the schools could do that same thing and they don't. Firms are saddled with so many post-graduate training requirements, I suppose it's somewhat reasonable that this topic is the easiest to overlook because it really doesn't help generate much 'production' for the firm.
We witness the sort of behavior I describe in the first paragraph above every single day here on Archinect and there's a huge amount of incorrect or misguided information being circulated -- which serves only to further inflame already raw emotions. For that reason, when I have the time, I try to correct mistakes and share what I've learned over 35 years. But, about half the time, I feel like I'm preaching to the deaf.
Know this -- nobody ever sat me down and taught me all this stuff. I taught myself by reading books and attending seminars and participating in the AIA Practice Management Knowledge Community. Come on folks -- it ain't rocket science. All it really requires is some intelligence and the ability to do arithmetic. If you want to know about this stuff it's there for the taking -- all you really need to do is open your eyes and ears and take it all in.
Ball's in your court ... !
Honestly, aqua and Blue Goose, you're right: interns (myself included, at the time) know nothing about this, but let them work on a contract and they learn damn quick. I recall years ago struggling with the archaic AIA electronic contract software and simultaneously realizing that of the $100,000 fee the firm was getting over 40% of it was going to consultants. That was an eye-opening week for me!
It's good for interns to be in on the realities of contracts, and to understand why billable hours and using time efficiently are so important. AND it's good for firms to clue in their younger staff to the reality of practice (it's also part of our job as mentors and employers, BTW).
Thanks LB - I learned all about contract law and the business side of the profesion from the construction company. Its tragic the lack of knoweledge being passed down at the moment. The owners at most firms are too busy going to golf spas to give a shit. Im employable because of what I learned OUTSIDE the profesion.
Am I the only one who is rooting for this ressession to to go at least 2 more years? Thin the heard, make room for new blood?
Thanks BlueGoose for correcting my numbers...I have to admit that they were a WAG.
The longer I spend in this profession (24 years), the more I become convinced that only way to gain at least some control over your own destiny is as an owner. For years I resisted the idea of hanging out my own shingle, preferring the bigger salary and benefits of being a PM at large firms. However, professional service firms are pyramids in structure and there are very few slots at the top. The firm I spent 11 years at did no mentoring at all for its PMs to move up to principal level, and hired 4 of its last 5 principals from outside the firm. I finally woke up and smelled the coffee, and moved on to a firm that placed me on a principal track.
Now the slowing economy and the reduced size of the firm has placed that principal track on hold indefinitely. <Sigh>
I worked at a large firm in Chicago and although I am way too young to be a principle, I did talk with a lot of senior associates who told me the firm always looks to the outside for principles so not to offend or disrupt the office politic. I always thought the office looked like walking dead anyways, souless creatures with no lives. If anything it could use a little hate, jealousy and passion.
: "Am I the only one who is rooting for this ressession [sic] to go at least 2 more years? Thin the heard [sic], make room for new blood?
The last recession that impacted the profession this severely (early 90s), the only real "thinning" that took place was the almost total loss of an entire generation of young architects. The repercussions of that recession still are being felt today (or, at least they were before this downturn started).
Similar to what happened with geologists and geophysicists from the mid 80's to mid 90's.
Evil,
I guess you mean PH and they are infamous.
You're spot on! No one teaches you anything about contracts and client relations. It's a very difficult to learn from the outside.
no they actualy had a little talent
seriously this profesion and education is so broken at transfering the knoweledge I fear it may be almost too late. A big part is the kids dont ask questions and dont want to learn, a bigger part is the weeding out of technical types from schools over the last 20 years, and biggest of all is lack of stable work environments - its so low ball that wages are down, staff levels rise and fall like the tides
evilp - the business side has always been tricky for firms, no matter their size. if everyone knew how to run business straight away, what would prevent staff from jumping the first chance they could to start their own (perhaps more successful firm)?
look, that kind of protectionist attitude exists in just about every service industry there is. you can't hand the keys to the kingdom over to everyone in a company, right?
now, you can teach everyone how their projects become profitable for the firm and how the overall firm financial structure works - the best firms probably do that already. you can show people how that enormous sounding fee gets divided up and how that translates down. you can go over multipliers, net/gross differences, etc. you should be able to cover your basic balance sheet with your staff. but i'm still going to hold onto the contacts list and make sure the clients know i'm making the project happen.
the golf course is just part of the sales job. so are parties, openings, etc. all networking is social networking...
: "Im tired of shitty wages even in the boom years while the boss spends 15-20 weeks a year fucking off
I always find it laughable that the world in which you live (or in which you think you live) is so remarkably different from my own.
I can guarantee you that none of the principals in our firm, and none of the design firm principals I know of in our community (a SMSA with a population greater than 3 million) live even remotely the sort of life you seem to think your firm's principals live.
Where the hell are you anyway?
BlueGoose,
There's a lot of what Evil describes in Chicago
Or some anyway
well i think it's safe to say that every principle in chicago is 'getting his' at this point. it's bad here. and, i heard that both SOM and smith gill did even more layoffs very recently.
I concur - the best architects I ever worked with were small guys, the big firms are are full of terrible architects. I honestly think the only reason they survive ( and theirs far less of them today than there used to be) is the clients are fortune 500, insurance, finance, government, etc. Big budgets that can handle the fluff. Most of them prob couldn't even pull a permit in the suburbs. Its hate and rage today.
Blue Goose - Im not joking an owner Ive worked for spends almost every 3rd week off - not networking mind you, just playing. Selling would be nice. Hell we've begged him to let us sell, let us get out on the street - nope - theirs one salesperson at this firm attitude. I think its a Chicago thing - they all think they are Mies Van Der Rohe.
evil, I heard the same thing in Chicago. One associate partner in a large firm would take 5-8 weeks off every year with his wife, who is a project manager. Its a terrible calculation --- how many junior or intermediate peoples work could afford him such a luxury life? And the funny thing I heard is that he does not have the design ability; the way he works is yelling at young designers and fucked out presentations. Why the firm still keeps him? I dun no - a Chicago gang story?
The Chicago way is not that they all think they are Mies Van Der Rohe - the way is that they pretend they are Mies and you'd better pretend that you are his faithful student, if you have the "luck" working for them.
The Chicago fire, and the Expo, generated the building boom in 1890s and attracted talented architects from new England area. They are called Chicago school - who had the new vision of the city and advanced knowledges. From then Chicago is called a city of architecture. But it almost lost the voice from the Great Depression. Then Mies relocated himself in Chicago and the thing has not changed so much from then---all the architects share the same face, or character. What a shame...a city under the influence of a ghost....
Evil, Your bitterness is frightening. I suggest you see a therapist. Your thoughts are toxic and can become dangerous.
If you are employed, get to work and stop posting on your boss's time. If you're not, get outdoors and get some exercise. Take care of your physical and mental health. Have a nice weekend:-)
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