I am bringing a new commision (small corporate interior) to the small office that I work at. This is work I could do on my own - but would prefer not to moonlight even if I would make way more money.
At the office I'm billed out at $85....does it seem reasonable for my boss to offer me 10% of the fee for bringing new work to the firm?
I believe there should be payoff for work that you bring to the firm (and my boss agrees with this - he brought work to the places he worked before he started his own practice as well....he mentioned feeling disastisfied with the outcome of the typical "finders fee" he received).
Any one with experience regarding this?
vado retro
May 12, 07 10:52 am
isn't part of your job to front for your firm by promoting it at cocktail parties and through other networking opportunites? like when you are working your second job at starbucks to pay your student loans and in between makin a grandedouble decaf white chocolate moccacino and that vente no whip extra shot extra not fat lattecino to promote your firm to the soccer moms in the cafe who redoing their kitchens and family rooms? i know its expected of me.
SuperBeatledud
May 12, 07 11:32 am
that's because you're not a very good barista man.
quizzical
May 12, 07 11:39 am
"me" or "we" ?
I agree with vado - you have to decide early on whether you're working for yourself or for the team - if you have your hand out every time you do something good, you're only working for yourself. where do you draw the line? hey, boss, how about an extra $200 if I do a good job on this flashing detail?
I think it's fine for your boss to give you a finders fee as encouragement. but, the real test is how you, and your boss, conduct yourselves over time. If you keep bringing in profitable work and your boss keeps recognizing that with raises and promotions, then you getting somewhere. if the relationship remains nothing more than a few bucks on those odd occasions when you bring a small project to the firm, then you're nothing more than a comissioned salesman.
think, and conduct yoursel, long term.
vado retro
May 12, 07 11:41 am
b3tadine[sutures]
May 12, 07 12:28 pm
i think a commission is due if just for the simple fact that you could have taken the job and gone out on your own, that is of course you could.
pwood
May 12, 07 1:15 pm
Absolutely I agree that part of my job is to promote my firm and I do....however when a client comes to Me personally (in this case becasue of my own previous furniture company)- I have to decide whether to keep the business myself or share it with the company I work for now.
I have chosen to do just that.....so i'm not sure where the "team player" critique is coming in. I guess I would like to keep this constructive. less about baristas, soccer moms or how i'm selfish.
My co-workers and friends think I should have taken the job for myself - I disagree - I think that is a selfish impulse - I don't think the expectation of being compensated in a small way for bringing revenue to a firm is.
My boss has been in the exact same situation. He understands and agrees that those who take initiative to bring work to the firm should be awarded in some way.....I respect him for that. This is not a handout for doing my job...its good business practice.
Why would people bring work to a firm if there wasn't an incentive?
What is typical of a finders fee?
Are there any alternative arrangements to a finders fee?
In my case I'm looking at about $3000.
is this typical, assy huge or way to small?
How big was your finders fee?
Why do you think I should not get one?
BrewedFresh
May 12, 07 1:24 pm
You should definitly get a finders fee. On another note, there is no reason not to be selfish when it comes to your job, thats the way to get ahead in life. I would have kept the job for myself. It's not bad business practice at all, they came to you, not to your firm. This is capitalism, everyman for themselves. :P
Steven Ward
May 12, 07 2:02 pm
i completely disagree.
BrewedFresh
May 12, 07 2:37 pm
it's all good... everyone has there own opinion.
pwood
May 12, 07 2:38 pm
you can also get ahead at work by bringing work to the firm
stone
May 12, 07 2:57 pm
pwood ... what's the total amount of the net fee ?
vado retro
May 12, 07 3:16 pm
you prolly also agreed to a noncompetetive clause when you hired on. whether you remember it or not is a different story.
file
May 12, 07 3:38 pm
this topic has come up in our firm from time to time. the issue with "commissions" per se is that they don't necessarily motivate the kind of new business development that most firms really need -- in fact, they sometimes tend to motivate the wrong kind of behavior.
what most firms really need is the right kind of work, with the right kind of clients and with the right kind of fee. if those ingredients are in place, then the project will be successful for the client, will be successful for the firm and will earn a reasonable profit that can be shared among the firm and its employees.
we came down on this issue by thinking of the problem in two categories -- a) the referral of the client to the firm; and b) the profitability of the project when all the dust settles. we pay a modest "finders fee" - on the order of 5-10% (depends on the size of the project.) then, if the person who brings the work to the office also manages the work (which, in our case, is fairly typical) we have an agreement that a % of the profits of the job are "bonused" to that person once the project is closed out and all the fees are collected.
this has worked well for us and promotes a fairly consistent level of profitable referral from non-owner staff.
Steven Ward
May 12, 07 5:49 pm
that was WORTH a double-post.
treekiller
May 12, 07 5:51 pm
OF- well said. it's hard for a boss to say no to a performance bonus.
snooker
May 12, 07 5:52 pm
I was always to the understanding this kind of networking for the firm might just lead you to an associate position in the firm and if your damn good at it maybe one day a partner. My experience tells me don't put your hand out begging. Hold back and bring in the next job, cause sooner or later it is going to pay off.
However, I wonder if your post would be different if we were experiencing a bad economy right now. It seems like architects can be more selective about projects these days, although I did not experience the 90's recession to know how bad it really was.
binary
May 12, 07 8:37 pm
should have done it at night.......
quizzical
May 12, 07 10:09 pm
Fogey and File and DCA each provide constructive thoughts above. I've had a further thought of a broader nature.
The people who work in our firms are compensated for their aggregate contributions each year through a combination of salary, benefits and bonuses. We can discuss for weeks whether our profession does this well and fairly - and whether we can do more. That is not my point.
My point addresses whether the staff in firms are there primarily to develop successful careers in those (or similar) firms or whether they merely are biding time there before starting competing firms. Surely, there are some of both, but which predominates?
I believe there is a great consolidation underway in our profession - meaning, a strong trend toward larger and larger firms. Small and medium size firms will continue to exist, but increasingly larger portions of the market will concentrate in large firms.
If this assessment be somewhat accurate, it will become increasingly difficult for the average young practitioner to ever start a firm. If that be true, then more and more young professionals will need to find ways to establish successful practices within established firms - meaning they must develop the ability to develop new clients and new business of their own.
Having practiced for 35 years, I accept the idea that firms have a responsibility to train and provide developmental opportunity to their staff - and to compensate them fairly for their contributions. But, in the end, individuals must decide for themselves the skills and abilities needed for success. Paying finders fees and commissions are not, in my view, fundamental to determining whether a young professional will exercise the judgment to see the true path to success.
liberty bell
May 12, 07 11:17 pm
Excellent post, Fogey, and your counterpoint/addenda too, quizzical.
I have a strong "servant's heart". I wonder why I'm self-employed?
quizzical
May 12, 07 11:39 pm
LB - I see no contradiction between "a strong servant's heart" and "being self-employed." Please explain your post.
bRink
May 13, 07 12:37 am
Great posts here.
There was a point made about "for the good of the firm." I think part of what this comes down to is, trust issues, from an employee perspective and from an employer perspective... The best organizations IMHO are ones that are "people organizations". When I say that I mean successful, profitable, sustainable, that can retain the employees, and where the employees do the best work.
A strong employee is one that works for the good of the firm, for all of the people working beside them, depending on and trusting in that comradery with their peers and leadership. A strong organization would be one where employees trust their employer to give them that security, to compensate them for their efforts, and to provide strong leadership, and be committed to their growth, while employers expect and trust in each employee to be committed to doing the best for the firm... Its sort of like the Japanese business model: employees and employers that both mutually feel committed to their organization for life.
High turnover is a cultural problem IMHO, it's bad for efficiency and it's bad for the work itself, it's also very costly for employers. It also creates a self serving model of the labor market.
Before recession hit in Japan for example, unless economic circumstances prevent it, employees tended to enter an organization, and once there, were socially committed to the success of that organization for life, and they don't generally quit or change jobs... In this model, employers, managers, are dedicated to their employees as well, it is their duty to take care of their organization, it's personal, maybe moral... I think things have changed somewhat since then...
The average american today changes their job 9 to 13 times within their working lifetime, or put another way, the average american job lasts 3.6 years. (median figure, meaning half of us can expect more job changes than that).
Is long term dedication to an organization in this day and age by employers and employees simply no longer possible? Is this an outdated and outmoded idea? Nowadays turnover seems to be expected by both employer and employee... (see the turnover thread) Is "the common good", the ideal of the people organization, comradery in workplace just some kind of foolish, idealistic, naive model about organizational culture and design? I don't think so, and I don't think most people deep down think so either... maybe it's about humility as well...? trust and humility are strengths for an organization.
A good employer (successful one) is one that steps up and offers fair compensation. A good employee is one that steps up and does well for the overall good of the organization. A good organization is one where the people are the organization.
will galloway
May 13, 07 9:12 am
interesting comments.
i agree with old fogey all the way, probably because my partner and i are now thinking about bringing in someone to work for us (possibly to become partner at some later point)...
i think a big part of progress in a firm is connected to performance. to be cynical, from this perspective, one gig is not a trend. if it was more than one gig, and over several years, and leading to nice profits, etc then there is leverage. if not then it may be an example of seeing more than is actually there.
to be honest i don't think 1 in 10 of the people in my old firms have a clue about bringing in work or the major stress and effort my ol bosses put into keeping their firms running...i have an incredible amount of respect for anyone who can bring in projects that can make money for a firm...and do so over several years...not an easy thing at all.
about japan...my first office here still treats me like a long lost son. i still work for/with them and am good friends with the head principal (became friends after i left)...so there is some truth about that whole loyalty thing...and it goes both ways....but i have to admit it also means that my ol boss is saddled with staff who are not worth their salaries and he can't bring himself to let them go...
to be realistic however, as much as i like my old boss i would not be anywhere if i had stayed in that office and things are MUCH better for me since i quit . this is not a failing of the system, more one of ambition. i have more than my share perhaps, but most in the office emphatically do not. and it is not set up to reward initiative. To the contrary, the reverse is true...merely being loyal and paying good wages is sometimes not enough.
some person
May 13, 07 9:50 am
Don't get me wrong: I think the concept of paying a finder's fee is rather odd, and I've never seen the specific practice at any firm I've worked for.
However, I have experienced two philosophies of how employers treat their employees:
1. "Any employee can rise to the top." While all firms say this, not all act in a way that supports it. Those firms that support it show employees the path to the top and give them ownership in the firm and the immediate position. (meaning employees are empowered to do great things, have determination for success, and always learn more).
2. "We'll take care of bringing in the work. You take care of doing the work. Head down. Don't look up. Don't screw up, either." In this type of firm, it is a mystery of how to break through the ceiling or even what the firm's focus is. The firm appears to take on work just because it is available, with seemingly little evaluation criteria. The employee has little choice in the projects he/she is assigned to.
This brings up another point that OldFogey touched upon: The boss is always accepting and turning down work he thinks is or isn't proper - and if he's smart the last thing he's going to get into is a constant negotiation with his employees about whatever little jobs they happen to be presented with which may or may not fit the firm's mission.
I think that it is important for employees to understand the mission of the firm and why the principals select the commissions that they do. This stems from the "hedgehog concept" in Good to Great. It involves a constant assessment from both the principals and employees about the work they do and "what can we be the best in the world at?" Perhaps I'm a unique type of worker-bee, but thinking about these big picture items keeps me going at times.
hrm... what was the original question? I don't care - this is a really good discussion so far. Thanks to OldFogey, quizzical, liberty bell, bRink and others.
pwood
May 13, 07 3:46 pm
interesting posts.....I am feeling a little on the defensive with all the comments about looking for a handout.
I am not trying to haggle over compensation - only to see what typical arrangments may be.
my compensation is performance based....not a finders fee.
I will be managing the project. These terms were suggested by my boss - I never brought up compensation - it was suggested.
The nature of the discussion with my boss concerned whether the project would be a good fit for the firm. Apparantly I am the first employee to bring in work - the (small) firm is indeed interested in the project. We will be moving forward with the project.
As it turns out the first thing my boss said when we sat down was "I was running this morning and was wondering about when someone would step up and bring work to the firm".
These are honest questions, I'm young and looking for advice. I have never brought work to a firm and I do not know anyone other than my boss who has.
The nature of previous posts tend to be employee vs. employer - which i find unforunate. I am very much interested in the good of the firm.
pwood
May 13, 07 5:18 pm
thanks fogey - I think I have it under control - just wanted to get some piece of mind by hearing what others have dealt with.
quizzical
May 13, 07 7:56 pm
pwood - sorry if we put you on the defensive. i've re-read your posts and still feel the words and phrases you used conveyed a sense that you were being - or feared being - shortchanged.
nevertheless, glad you cleared the air and clarified your views. the written word can be tricky at times.
i will say that this has been one of the most interesting threads in years. thanks for getting it started. and, good luck with your project.
Steven Ward
May 14, 07 7:47 am
i also misunderstood your first post, pwood. very sorry. was reading it in the context of the previous 'finder's fee' thread from the day before that i linked above. in that one, there was much more of a boss/me attitude.
if you've been asked to figure out what it's worth to have brought this job in, i guess you'd have to start by looking at the potential fee and whether it's likely to be a profitable job or a loss leader/marketing/exposure type job. you might have some sense of this now, though you'll never know for sure until the end.
if your employer's not looking for a lump sum, how about dividing the job into phases and taking some % of the profit from each phase. if schematic is assumed to be 30% of the job and you get it finished with less than 30% of the fee, take a spoonful of the gravy. but, likewise, if cds are assumed to be 40% and they take 45% of the budgeted time, no profit-skimming for you. obviously the terms will be more specific to how your office works, but the boss may appreciate you assuming some of the risk of the job.
or he may just want to cut you a check and be done.
who knows?
whistler
May 14, 07 12:57 pm
We do the performance deal as well, doesn't often happen but when it does its important for that person to be involved as its a great learning ground for the person bringing work into an office ( both if they want to one day run their own office or to work into a partner role in a large corporate setting). I also like to be able to then base the a performance bonus on a specific tasks. The work still has to get done though and that why its sometimes better to use the resources of the complete office. its difficult when the person is so junior that they really can't run the job, Im not sure how that should be handled and perhaps the most awkward scenrio, particularly if the potential work has the abiltiy to be significant, or roll into multiple jobs.
farwest1
May 14, 07 1:06 pm
I guarantee that if you bring work into your firm, when it comes time to give raises and promotions, your "rainmaker" status will be considered. Think of this as a long-term payoff.
The people who bring work in make partner a lot more quickly than those who can just draw a stunning flashing detail.
On the other hand, if you're going to leave in a year or two, then bringing work in may not be worth your time.
archie
May 14, 07 7:19 pm
You know, the average profit an architecture firm makes is just around 10% of the net fees (fees not including riembursable expenses and engineer fees) So if your firm is average, and this project is of average profitability, a 10% finders fee is all the profit the project would make.
In my firm, we split the profits with someone who brings in a job. Usually, the profit is pretty small- lots of small projects the person has a personal interest in (like an addition to their church or work for a non profit) and we keep the fee low.
To me, if someone wanted a finders fee, I would find it kind of depressing. I would have been thrilled that they took the initiative to bring in work, but then when they stuck their hand out, it would have kind of taken that away. Do what is right becasue it is right, and it will always pay off in the long term. I brought lots of work into my previous firm, and I was the first person to be asked to be a partner in the firm. Later, when I left to start my own firm, the bringing in the work part was a natural- I had learned to do it at my old firm without the financial and liability risk and was now totally prepared to be on my own.
StarchitectAlpha
Jul 16, 16 5:49 pm
So entitled millennial here. I understand what the older guys are saying on this post and if there were firms that treated their employees well I'd understand the mindset of contributing to the health of the organization. But from what I've witnessed in my career that started in 2011 was mostly firms that axe people as soon as the work ebbs at all. My first firm they would hire a few people one month and then be firing a few months later, repeat process. Eventually after 2 years I found myself in a situation where my main account was no longer providing work and I was let go with no warning. This was a at firm where after someone else was let go the partner said, " you are all tools for this firm and if we don't find a use for a certain tool we throw it away" So I do side work now, not out of greed but as an insurance policy of continued work and experience. Secondly I have been at 5 firms now, I have neither seen nor experienced any sort of mentorship to me or other employees. It's purely draft as fast as you can, and if you get slow or bored obviously you aren't dedicated. So the seond part of the reason I do side work is it helps me actually learn and progress something that doesn't happen at most firms because you tend to leave doing what you came in doing, and if you need IDP you have to leave to get.
hub hub
Mar 9, 18 9:42 am
I'm a practice owner now for 10 years and have been on both sides of the fence in the past, initially as employee, then contractor, now employer.
Being more wise now I must caution everyone on taking 'private jobs' at the same time as being an employee unless you really know what you're getting into and know more about your own goals.
If your goal is to establish your own practice, with all the anguish pain and potential rewards that follow, then sure take that private job as long as you quit your current one.
However don't take it on yourself at all if you don't want to set up your own business now. The reason is you can't have it both ways - you can't have the best of both worlds, it would actually become more the worst of both worlds. You need to commit your time either to your employer, or time to your 'new business'. Working on both sides does not work even if you think it does. Think: Risk and liability, mistakes, possible court action, cash flow issues, resource deficiencies, working through day time, distraction during work, splitting your time, using office contacts, not dedicating enough time for your business and no business development, no business goals, no business plan.
If you take it on yourself, I would recommend you go to your employer, be upfront, and ask for you to be moved to become a 'subcontractor'. Sounds rough, but that keeps the door open, and is the first step to being independent and establishing your own business. Plus it is honest to your current employer that you may not be able to dedicate your time fully. This is what I did and I felt much better, was able to then 'softly exit' as private work increased, but more importantly the relationship with your employer is clear and everyone knows where you stand, and you know what your goal is.
Of course, if you don't want to do this then yes, I would simply recommend you pass the job to your employer, and let the chips fall as they may in renumeration. But don't be critical if you don't get extra cash because of that, because your employer may have just saved you from a horrible and traumatic experience, and in the end there may have been no profit in the job anyway.
If you leap, make sure you LEAP and grab the bull by the horns. Don't try to hedge bets and be in the middle, it does not end well.
MDH-ARCH
Mar 9, 18 11:56 am
I somewhat agree but disagree at the same time. It's no secret that if you want to be "successful" in this career and make good money / have control, you really have to be the boss. If you are licensed and turn down work because your a "good employee" then you will never reach that boss goal. But if you quit your day job to do your own project that may net you a few thousand dollars, you will be high and dry. Employers obviously don't want employees "doing their own thing" but I if you want to get ahead and make your goals happen, you have to hustle, moonlight and make it happen...
randomised
Mar 9, 18 12:30 pm
If you can afford not to moonlight in the beginning, sure tell your employer upfront...but the more likely scenario is that you're already self-employed, people simply need that stable 9-5 income when doing work on the side, from experience that side cashflow can be slow and unpredictable. Working at an office for 40hrs a week leaves plenty of time to do projects on the side during evenings and weekends if that's what you want to spend your free time on.
hub hub
Mar 9, 18 10:47 pm
It is a failing of most architecture university courses to not have business units. Consequently, all graduates, and later architects, have a sense of 'oh I can do that, it's easy'.
CandS
Mar 19, 18 6:23 pm
I am dealing with a somewhat similar situation.
I worked on my own for a year or so and was head-hunted to work as a PM for a firm that does strictly K-12 work. They know I work on my own (still have projects/contracts) and they don't care - I'm not competing with their bread and butter and vice versa.
I have a client from my own practice who is connected to a school district, so I am working to bring that district to the office - their last bond failed partly because of the districts current architect/arrangement, so should I succeed in securing them and they subsequently succeed in passing a similar bond, it would mean roughly $5.8m in billings. I couldn't do the districts work myself so I am not missing out on projects or fees, but the cynic would certainly question bringing that kind of revenue to an office with no reward.
I'm not doing it because I want anything - I'm doing it because this firm is better than their current one and my private client has done right by me so if I can help him as well, I will.
I don't plan on retiring with this office - I took the offer mostly for the experience and to try something new, so I don't plan on moving my way up. But like Tom Hanks says in Charlie Wilsons War, "...it's always good to be owed favors."
I am bringing a new commision (small corporate interior) to the small office that I work at. This is work I could do on my own - but would prefer not to moonlight even if I would make way more money.
At the office I'm billed out at $85....does it seem reasonable for my boss to offer me 10% of the fee for bringing new work to the firm?
I believe there should be payoff for work that you bring to the firm (and my boss agrees with this - he brought work to the places he worked before he started his own practice as well....he mentioned feeling disastisfied with the outcome of the typical "finders fee" he received).
Any one with experience regarding this?
isn't part of your job to front for your firm by promoting it at cocktail parties and through other networking opportunites? like when you are working your second job at starbucks to pay your student loans and in between makin a grandedouble decaf white chocolate moccacino and that vente no whip extra shot extra not fat lattecino to promote your firm to the soccer moms in the cafe who redoing their kitchens and family rooms? i know its expected of me.
that's because you're not a very good barista man.
"me" or "we" ?
I agree with vado - you have to decide early on whether you're working for yourself or for the team - if you have your hand out every time you do something good, you're only working for yourself. where do you draw the line? hey, boss, how about an extra $200 if I do a good job on this flashing detail?
I think it's fine for your boss to give you a finders fee as encouragement. but, the real test is how you, and your boss, conduct yourselves over time. If you keep bringing in profitable work and your boss keeps recognizing that with raises and promotions, then you getting somewhere. if the relationship remains nothing more than a few bucks on those odd occasions when you bring a small project to the firm, then you're nothing more than a comissioned salesman.
think, and conduct yoursel, long term.
i think a commission is due if just for the simple fact that you could have taken the job and gone out on your own, that is of course you could.
Absolutely I agree that part of my job is to promote my firm and I do....however when a client comes to Me personally (in this case becasue of my own previous furniture company)- I have to decide whether to keep the business myself or share it with the company I work for now.
I have chosen to do just that.....so i'm not sure where the "team player" critique is coming in. I guess I would like to keep this constructive. less about baristas, soccer moms or how i'm selfish.
My co-workers and friends think I should have taken the job for myself - I disagree - I think that is a selfish impulse - I don't think the expectation of being compensated in a small way for bringing revenue to a firm is.
My boss has been in the exact same situation. He understands and agrees that those who take initiative to bring work to the firm should be awarded in some way.....I respect him for that. This is not a handout for doing my job...its good business practice.
Why would people bring work to a firm if there wasn't an incentive?
What is typical of a finders fee?
Are there any alternative arrangements to a finders fee?
In my case I'm looking at about $3000.
is this typical, assy huge or way to small?
How big was your finders fee?
Why do you think I should not get one?
You should definitly get a finders fee. On another note, there is no reason not to be selfish when it comes to your job, thats the way to get ahead in life. I would have kept the job for myself. It's not bad business practice at all, they came to you, not to your firm. This is capitalism, everyman for themselves. :P
i completely disagree.
it's all good... everyone has there own opinion.
you can also get ahead at work by bringing work to the firm
pwood ... what's the total amount of the net fee ?
you prolly also agreed to a noncompetetive clause when you hired on. whether you remember it or not is a different story.
this topic has come up in our firm from time to time. the issue with "commissions" per se is that they don't necessarily motivate the kind of new business development that most firms really need -- in fact, they sometimes tend to motivate the wrong kind of behavior.
what most firms really need is the right kind of work, with the right kind of clients and with the right kind of fee. if those ingredients are in place, then the project will be successful for the client, will be successful for the firm and will earn a reasonable profit that can be shared among the firm and its employees.
we came down on this issue by thinking of the problem in two categories -- a) the referral of the client to the firm; and b) the profitability of the project when all the dust settles. we pay a modest "finders fee" - on the order of 5-10% (depends on the size of the project.) then, if the person who brings the work to the office also manages the work (which, in our case, is fairly typical) we have an agreement that a % of the profits of the job are "bonused" to that person once the project is closed out and all the fees are collected.
this has worked well for us and promotes a fairly consistent level of profitable referral from non-owner staff.
that was WORTH a double-post.
OF- well said. it's hard for a boss to say no to a performance bonus.
I was always to the understanding this kind of networking for the firm might just lead you to an associate position in the firm and if your damn good at it maybe one day a partner. My experience tells me don't put your hand out begging. Hold back and bring in the next job, cause sooner or later it is going to pay off.
yesterday: http://www.archinect.com/forum/threads.php?id=57484_0_42_50_C
it's got kiwis!!!
well said OF. certainly worthy of posting twice.
OldFogey: excellent post.
However, I wonder if your post would be different if we were experiencing a bad economy right now. It seems like architects can be more selective about projects these days, although I did not experience the 90's recession to know how bad it really was.
should have done it at night.......
Fogey and File and DCA each provide constructive thoughts above. I've had a further thought of a broader nature.
The people who work in our firms are compensated for their aggregate contributions each year through a combination of salary, benefits and bonuses. We can discuss for weeks whether our profession does this well and fairly - and whether we can do more. That is not my point.
My point addresses whether the staff in firms are there primarily to develop successful careers in those (or similar) firms or whether they merely are biding time there before starting competing firms. Surely, there are some of both, but which predominates?
I believe there is a great consolidation underway in our profession - meaning, a strong trend toward larger and larger firms. Small and medium size firms will continue to exist, but increasingly larger portions of the market will concentrate in large firms.
If this assessment be somewhat accurate, it will become increasingly difficult for the average young practitioner to ever start a firm. If that be true, then more and more young professionals will need to find ways to establish successful practices within established firms - meaning they must develop the ability to develop new clients and new business of their own.
Having practiced for 35 years, I accept the idea that firms have a responsibility to train and provide developmental opportunity to their staff - and to compensate them fairly for their contributions. But, in the end, individuals must decide for themselves the skills and abilities needed for success. Paying finders fees and commissions are not, in my view, fundamental to determining whether a young professional will exercise the judgment to see the true path to success.
Excellent post, Fogey, and your counterpoint/addenda too, quizzical.
I have a strong "servant's heart". I wonder why I'm self-employed?
LB - I see no contradiction between "a strong servant's heart" and "being self-employed." Please explain your post.
Great posts here.
There was a point made about "for the good of the firm." I think part of what this comes down to is, trust issues, from an employee perspective and from an employer perspective... The best organizations IMHO are ones that are "people organizations". When I say that I mean successful, profitable, sustainable, that can retain the employees, and where the employees do the best work.
A strong employee is one that works for the good of the firm, for all of the people working beside them, depending on and trusting in that comradery with their peers and leadership. A strong organization would be one where employees trust their employer to give them that security, to compensate them for their efforts, and to provide strong leadership, and be committed to their growth, while employers expect and trust in each employee to be committed to doing the best for the firm... Its sort of like the Japanese business model: employees and employers that both mutually feel committed to their organization for life.
High turnover is a cultural problem IMHO, it's bad for efficiency and it's bad for the work itself, it's also very costly for employers. It also creates a self serving model of the labor market.
Before recession hit in Japan for example, unless economic circumstances prevent it, employees tended to enter an organization, and once there, were socially committed to the success of that organization for life, and they don't generally quit or change jobs... In this model, employers, managers, are dedicated to their employees as well, it is their duty to take care of their organization, it's personal, maybe moral... I think things have changed somewhat since then...
The average american today changes their job 9 to 13 times within their working lifetime, or put another way, the average american job lasts 3.6 years. (median figure, meaning half of us can expect more job changes than that).
Is long term dedication to an organization in this day and age by employers and employees simply no longer possible? Is this an outdated and outmoded idea? Nowadays turnover seems to be expected by both employer and employee... (see the turnover thread) Is "the common good", the ideal of the people organization, comradery in workplace just some kind of foolish, idealistic, naive model about organizational culture and design? I don't think so, and I don't think most people deep down think so either... maybe it's about humility as well...? trust and humility are strengths for an organization.
A good employer (successful one) is one that steps up and offers fair compensation. A good employee is one that steps up and does well for the overall good of the organization. A good organization is one where the people are the organization.
interesting comments.
i agree with old fogey all the way, probably because my partner and i are now thinking about bringing in someone to work for us (possibly to become partner at some later point)...
i think a big part of progress in a firm is connected to performance. to be cynical, from this perspective, one gig is not a trend. if it was more than one gig, and over several years, and leading to nice profits, etc then there is leverage. if not then it may be an example of seeing more than is actually there.
to be honest i don't think 1 in 10 of the people in my old firms have a clue about bringing in work or the major stress and effort my ol bosses put into keeping their firms running...i have an incredible amount of respect for anyone who can bring in projects that can make money for a firm...and do so over several years...not an easy thing at all.
about japan...my first office here still treats me like a long lost son. i still work for/with them and am good friends with the head principal (became friends after i left)...so there is some truth about that whole loyalty thing...and it goes both ways....but i have to admit it also means that my ol boss is saddled with staff who are not worth their salaries and he can't bring himself to let them go...
to be realistic however, as much as i like my old boss i would not be anywhere if i had stayed in that office and things are MUCH better for me since i quit . this is not a failing of the system, more one of ambition. i have more than my share perhaps, but most in the office emphatically do not. and it is not set up to reward initiative. To the contrary, the reverse is true...merely being loyal and paying good wages is sometimes not enough.
Don't get me wrong: I think the concept of paying a finder's fee is rather odd, and I've never seen the specific practice at any firm I've worked for.
However, I have experienced two philosophies of how employers treat their employees:
1. "Any employee can rise to the top." While all firms say this, not all act in a way that supports it. Those firms that support it show employees the path to the top and give them ownership in the firm and the immediate position. (meaning employees are empowered to do great things, have determination for success, and always learn more).
2. "We'll take care of bringing in the work. You take care of doing the work. Head down. Don't look up. Don't screw up, either." In this type of firm, it is a mystery of how to break through the ceiling or even what the firm's focus is. The firm appears to take on work just because it is available, with seemingly little evaluation criteria. The employee has little choice in the projects he/she is assigned to.
This brings up another point that OldFogey touched upon: The boss is always accepting and turning down work he thinks is or isn't proper - and if he's smart the last thing he's going to get into is a constant negotiation with his employees about whatever little jobs they happen to be presented with which may or may not fit the firm's mission.
I think that it is important for employees to understand the mission of the firm and why the principals select the commissions that they do. This stems from the "hedgehog concept" in Good to Great. It involves a constant assessment from both the principals and employees about the work they do and "what can we be the best in the world at?" Perhaps I'm a unique type of worker-bee, but thinking about these big picture items keeps me going at times.
hrm... what was the original question? I don't care - this is a really good discussion so far. Thanks to OldFogey, quizzical, liberty bell, bRink and others.
interesting posts.....I am feeling a little on the defensive with all the comments about looking for a handout.
I am not trying to haggle over compensation - only to see what typical arrangments may be.
my compensation is performance based....not a finders fee.
I will be managing the project. These terms were suggested by my boss - I never brought up compensation - it was suggested.
The nature of the discussion with my boss concerned whether the project would be a good fit for the firm. Apparantly I am the first employee to bring in work - the (small) firm is indeed interested in the project. We will be moving forward with the project.
As it turns out the first thing my boss said when we sat down was "I was running this morning and was wondering about when someone would step up and bring work to the firm".
These are honest questions, I'm young and looking for advice. I have never brought work to a firm and I do not know anyone other than my boss who has.
The nature of previous posts tend to be employee vs. employer - which i find unforunate. I am very much interested in the good of the firm.
thanks fogey - I think I have it under control - just wanted to get some piece of mind by hearing what others have dealt with.
pwood - sorry if we put you on the defensive. i've re-read your posts and still feel the words and phrases you used conveyed a sense that you were being - or feared being - shortchanged.
nevertheless, glad you cleared the air and clarified your views. the written word can be tricky at times.
i will say that this has been one of the most interesting threads in years. thanks for getting it started. and, good luck with your project.
i also misunderstood your first post, pwood. very sorry. was reading it in the context of the previous 'finder's fee' thread from the day before that i linked above. in that one, there was much more of a boss/me attitude.
if you've been asked to figure out what it's worth to have brought this job in, i guess you'd have to start by looking at the potential fee and whether it's likely to be a profitable job or a loss leader/marketing/exposure type job. you might have some sense of this now, though you'll never know for sure until the end.
if your employer's not looking for a lump sum, how about dividing the job into phases and taking some % of the profit from each phase. if schematic is assumed to be 30% of the job and you get it finished with less than 30% of the fee, take a spoonful of the gravy. but, likewise, if cds are assumed to be 40% and they take 45% of the budgeted time, no profit-skimming for you. obviously the terms will be more specific to how your office works, but the boss may appreciate you assuming some of the risk of the job.
or he may just want to cut you a check and be done.
who knows?
We do the performance deal as well, doesn't often happen but when it does its important for that person to be involved as its a great learning ground for the person bringing work into an office ( both if they want to one day run their own office or to work into a partner role in a large corporate setting). I also like to be able to then base the a performance bonus on a specific tasks. The work still has to get done though and that why its sometimes better to use the resources of the complete office. its difficult when the person is so junior that they really can't run the job, Im not sure how that should be handled and perhaps the most awkward scenrio, particularly if the potential work has the abiltiy to be significant, or roll into multiple jobs.
I guarantee that if you bring work into your firm, when it comes time to give raises and promotions, your "rainmaker" status will be considered. Think of this as a long-term payoff.
The people who bring work in make partner a lot more quickly than those who can just draw a stunning flashing detail.
On the other hand, if you're going to leave in a year or two, then bringing work in may not be worth your time.
You know, the average profit an architecture firm makes is just around 10% of the net fees (fees not including riembursable expenses and engineer fees) So if your firm is average, and this project is of average profitability, a 10% finders fee is all the profit the project would make.
In my firm, we split the profits with someone who brings in a job. Usually, the profit is pretty small- lots of small projects the person has a personal interest in (like an addition to their church or work for a non profit) and we keep the fee low.
To me, if someone wanted a finders fee, I would find it kind of depressing. I would have been thrilled that they took the initiative to bring in work, but then when they stuck their hand out, it would have kind of taken that away. Do what is right becasue it is right, and it will always pay off in the long term. I brought lots of work into my previous firm, and I was the first person to be asked to be a partner in the firm. Later, when I left to start my own firm, the bringing in the work part was a natural- I had learned to do it at my old firm without the financial and liability risk and was now totally prepared to be on my own.
So entitled millennial here. I understand what the older guys are saying on this post and if there were firms that treated their employees well I'd understand the mindset of contributing to the health of the organization. But from what I've witnessed in my career that started in 2011 was mostly firms that axe people as soon as the work ebbs at all. My first firm they would hire a few people one month and then be firing a few months later, repeat process. Eventually after 2 years I found myself in a situation where my main account was no longer providing work and I was let go with no warning. This was a at firm where after someone else was let go the partner said, " you are all tools for this firm and if we don't find a use for a certain tool we throw it away" So I do side work now, not out of greed but as an insurance policy of continued work and experience. Secondly I have been at 5 firms now, I have neither seen nor experienced any sort of mentorship to me or other employees. It's purely draft as fast as you can, and if you get slow or bored obviously you aren't dedicated. So the seond part of the reason I do side work is it helps me actually learn and progress something that doesn't happen at most firms because you tend to leave doing what you came in doing, and if you need IDP you have to leave to get.
I'm a practice owner now for 10 years and have been on both sides of the fence in the past, initially as employee, then contractor, now employer.
Being more wise now I must caution everyone on taking 'private jobs' at the same time as being an employee unless you really know what you're getting into and know more about your own goals.
If your goal is to establish your own practice, with all the anguish pain and potential rewards that follow, then sure take that private job as long as you quit your current one.
However don't take it on yourself at all if you don't want to set up your own business now. The reason is you can't have it both ways - you can't have the best of both worlds, it would actually become more the worst of both worlds. You need to commit your time either to your employer, or time to your 'new business'. Working on both sides does not work even if you think it does. Think: Risk and liability, mistakes, possible court action, cash flow issues, resource deficiencies, working through day time, distraction during work, splitting your time, using office contacts, not dedicating enough time for your business and no business development, no business goals, no business plan.
If you take it on yourself, I would recommend you go to your employer, be upfront, and ask for you to be moved to become a 'subcontractor'. Sounds rough, but that keeps the door open, and is the first step to being independent and establishing your own business. Plus it is honest to your current employer that you may not be able to dedicate your time fully. This is what I did and I felt much better, was able to then 'softly exit' as private work increased, but more importantly the relationship with your employer is clear and everyone knows where you stand, and you know what your goal is.
Of course, if you don't want to do this then yes, I would simply recommend you pass the job to your employer, and let the chips fall as they may in renumeration. But don't be critical if you don't get extra cash because of that, because your employer may have just saved you from a horrible and traumatic experience, and in the end there may have been no profit in the job anyway.
If you leap, make sure you LEAP and grab the bull by the horns. Don't try to hedge bets and be in the middle, it does not end well.
I somewhat agree but disagree at the same time. It's no secret that if you want to be "successful" in this career and make good money / have control, you really have to be the boss. If you are licensed and turn down work because your a "good employee" then you will never reach that boss goal. But if you quit your day job to do your own project that may net you a few thousand dollars, you will be high and dry. Employers obviously don't want employees "doing their own thing" but I if you want to get ahead and make your goals happen, you have to hustle, moonlight and make it happen...
If you can afford not to moonlight in the beginning, sure tell your employer upfront...but the more likely scenario is that you're already self-employed, people simply need that stable 9-5 income when doing work on the side, from experience that side cashflow can be slow and unpredictable. Working at an office for 40hrs a week leaves plenty of time to do projects on the side during evenings and weekends if that's what you want to spend your free time on.
It is a failing of most architecture university courses to not have business units. Consequently, all graduates, and later architects, have a sense of 'oh I can do that, it's easy'.
I am dealing with a somewhat similar situation.
I worked on my own for a year or so and was head-hunted to work as a PM for a firm that does strictly K-12 work. They know I work on my own (still have projects/contracts) and they don't care - I'm not competing with their bread and butter and vice versa.
I have a client from my own practice who is connected to a school district, so I am working to bring that district to the office - their last bond failed partly because of the districts current architect/arrangement, so should I succeed in securing them and they subsequently succeed in passing a similar bond, it would mean roughly $5.8m in billings. I couldn't do the districts work myself so I am not missing out on projects or fees, but the cynic would certainly question bringing that kind of revenue to an office with no reward.
I'm not doing it because I want anything - I'm doing it because this firm is better than their current one and my private client has done right by me so if I can help him as well, I will.
I don't plan on retiring with this office - I took the offer mostly for the experience and to try something new, so I don't plan on moving my way up. But like Tom Hanks says in Charlie Wilsons War, "...it's always good to be owed favors."