The Players' Roles

Design fees: Architects generally use one of two billing methods: hourly, or a percentage of the project's construction costs. Before looking at these methods in more detail, it's helpful to first outline the range of services that (some) architects can provide. The scope of services you require will directly impact the total design fee.

Hourly Billing: The architect charges an agreed rate per hour, often varying the rates based on the personnel doing the work. In addition, reimbursable expenses like travel time, copying, printing, etc. are billed. This puts control of the architect's time (and design fee) in the hands of the clients- the more time you want, the more it costs. Architects working by the hour often give the client an estimate of what the total fee will be, and roughly what work they anticipate they will produce for that fee.

Percentage Billing: The architect charges a set percentage of the total construction cost. For example, on a $300k project at a 15% fee, the cost for the architect would be $45k.

Pros and Cons: Many clients feel that there is an disincentive for the architect to try to minimize construction costs, if his/her fee is based on a percentage of those costs. Whether this is true or not, the suspicion it engenders damages the trust that is critical to the architect - client relationship. For example, it may be hard for the client to trust the architect's recommendation of a particular contractor, if that contractor's bid turns out to be higher than another's. Because almost all design decisions that the architect will make or consult about have a cost implication, percentage billing can taint the entire process.

However, we recommend hourly billing for a different reason. It is difficult to know in advance exactly which services a client will find necessary from the architect. For example, some clients find it valuable to have the architect very involved in choosing lighting and plumbing fixtures, while other clients will complete that task themselves. In a fixed percentage contract, the architect and client must itemize in advance exactly which services are included. Many clients will not know what help they need until they get further into the process.

It's is also problematic to simply list services that will be performed, without a thorough description of what is, or is not, included. For example, the architect may say that "tile selection" is included. Tile selection may range from simply specifying a particular tile to generating twenty different colored perspective drawings of tile layouts for the client to choose from. This is true for lighting, cabinetry, etc.

We feel the fairest and most cost-effective billing system is hourly billing, with estimates given for each phase, and detailed, frequent billing statements to keep the client abreast of all design costs.