Compensation Strategies for Architects

How do you get paid? How to you structure your fees as an architect? Architects love to talk about this topic!

This week at EntreArchitect Podcast, Mark R. LePage shares his Compensation Strategies for Architects.

Note: This episode is about how Mark structure’s the compensation strategies for his own firm. These strategies work for him. You should structure your fees in ways that work best for you and your firms. Entrearchitect.com has lots of information on understanding fees, how to be profitable, and how to figure out what your fee should be.

Inspired by the EntreArchitect Facebook Group

Our Facebook group is active with architects throughout the world. Everyone can share successes and failures in an open, transparent forum that’s private for only those who are in the group. It’s free to join, but you must be an architecture student or architect of any type and any size firm.

Every week, Mark and other EntreArchitect Facebook group members post several thoughtful questions and all members of the group are able to collaborate on varying topics such as the following:

• How do you remain confident in a room full of folks with many years of knowledge and experience ahead of you?


• What does everyone do for secondary/passive income?


• I’m running out of cash and I don’t have a single client or project to work on. I just started, but it’s really stressful knowing that the source of cash is diminishing and soon I won’t be able to attend to my family’s needs. Any thoughts?


• I’m currently working with the most dysfunctional husband and wife client of my career. They can’t make or keep decisions and they incessantly argue about the smallest things using the most brutal terms right in front of me. I always thought that a good residential architect should also be a good marriage counselor, and I’ve prided myself on those skills, but I have met my match. Any suggestions, comments or similar stories?


• Are you struggling with the transition from CAD to BIM?


• What’s a good construction detailing book?


• What kind of car do you drive and what does that say about you as an architect?

Background

Mark has a small architecture firm, Fivecat Studio Architecture, made up of himself and his wife, Annmarie. They’re based about 40 minutes north of New York City, and they focus on high-end additions and alterations.

Fee Structures for Fivecat Studio

Fivecat Studio’s basic compensation is 12% of the cost of construction. Depending on the client or the project, they may use different types of fees.

A hybrid fee starts with an initial payment of about 10% of the project prior to the schematic design phase. At the end of schematic design and having a full understanding of the project, they get a construction cost estimate. If the client wants to move forward, they put together a scope of work and base their fees on a schedule broken into $25K increments of construction costs.

Mark’s preference, the percentage of construction fee is based on the client’s budget. Once they know what the client wants to spend, they can put together a proposal. After a schematic design is complete and approved, the project goes through to bid and the fee adjusts to the final cost of construction.

Hourly works for a lot of other architects, but for Mark, hourly has