How Do Architects Calculate Their Fees?

Ask the Architect


by Frank Cunha III

There are a few ways, but here are a few true and tried techniques that may work for you:

1.  Hours & Hourly Rates
Calculate the fee based on actual hours of service.  It is important that even if you are a single practitioner or small office that you calculate the fee based on different rates based on the work being done, even if by the same people.  For example, you should bill a higher rate to do “principal work” like reviewing and signing and sealing drawings and specs vs “field work” like documenting existing conditions or “designer work” like drafting details.  Have set prices for each level of service (so as not to under-bill or over-bill for different tasks).

2. Cost of the Construction Project
Take a percentage of the overall “brick and mortar” cost for a project.  The percentage may change as the size and scope of the project changes.  This is tricky as some clients may or not be ready for the soft costs associated with design fees.

3. By sheets
Take the number of construction drawings and put a “per sheet” price on it.  This works for simpler projects often referred to as “bread and butter” design work which can include repeat fit out work, small residential or commercial projects, or repeat work where you can anticipate the amount of effort required to successfully complete a project.  (Hint: You may want to have different prices established for sheet sizes and typical notes and standard details -vs- non-typical design work).

4. Combination of 1, 2. 3.
I like this method best.  Using the techniques developed above work backwards and forwards to check and cross check your fee.  If that doesn’t work, here’s one more technique that might be useful:

Image: (C) Ed Arno, New Yorker Cartoonist

5. SWAG
Take a “Scientific wild @$$ guess” based on your experience with projects of similar size and scope.  Often Architects will go back and look at previous projects to determine how many hours is required to complete a project.

Good Luck!

We would love to hear from you on what you think about this post.  We sincerely appreciate all your comments.

If you like this post please share it with friends. And feel free to contact us if you would like to discuss ideas for your next project!

Sincerely,
Frank Cunha III
I Love My Architect – Facebook

FC3 ARCHITECTURE+DESIGN, LLC
P.O. Box 335, Hamburg, NJ 07419
e-mail: fcunha@fc3arch.com
mobile: 201.681.3551
direct: 973.970.3551
fax: 973.718.4641
web: http://fc3arch.com
Licensed in NJ, NY, PA, DE, CT.

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10 Comments on “How Do Architects Calculate Their Fees?”

  1. drndark says:

    Reblogged this on drndark.

  2. nmpacella says:

    In my experience, clients respond more positively to fees based on the services provided and the hours it will take to provide them. Carefully delineate what the project scope of work is (what you and your client agree on) and then assign the personnel and the time it will take to complete.The real question is what are your competitors doing. I agree with your advice to assign time costs based on skill levels required to complete a task and not on the person alone.

    Also, small typo in the first paragraph – area vs are.

  3. Jorge Prieto, AIA says:

    Our office usually uses two main methods for calculating our fees. First and simplest depending on the client is the percentage of construction cost, ranging from 8 to 12%. The second is to use a multiplier times the estimated hours to complete the project (based on previous project experience). We then brake down the hours per job classifications and make adjustments as required. We have had very few clients come back and negotiate the fees.

    • fc3arch says:

      Sounds like you have educated clients. Thanks for sharing!

      • chris butzon says:

        Amazing and wonderful for you! You must be doing high profile custom work to command 8 – 12% fees. Most of us can’t get more than 7, and usually closer to 4.5%, especially in government work and work for repeat clients like developers. By the way, I am both an architect and a client of architects, and work for a government agency.

  4. Jeff Abrams says:

    We do mostly residential design work. A custom house fee is often calculated along the lines that Frank has provided. A remodel, however, is often custom design and drawing on speed. I, therefore, always try to obtain an hourly rate and adjust to the client, location, degree of difficulty, if necessary. I provide a close estimate (educated guess) or goal for the fee as this helps keep the design portion of the project on course. Most of the design/drawing/spec part of construction process is a complete learning experience for the custom/remodel client and they eventually understand why we earn the big bucks.:-)! We sometimes work out an hourly for design and conference time with a fixed amount for the contract documents.
    Builders are another animal altogether. Since all products and subcontractor services in our region (wild west) are quoted by the square foot, that,s what is expected. I try to extrapolate the hours required for the tasks requested and use an efficient multiplier for design time and a builder set of drawings. We also have many previous and similar fees to fall back on.

    It’s always a bit if a crap shoot, so I prefer hourly when possible – many ways to skin the cat!

  5. okunowo timilehin says:

    Over here its pretty different, for the small and basic residential jobs we often charge 4.75% of the total estimated cost of construction, which is mostly negotiated, most clients believe the calculated cost is too expensive. Another challenge is a number of both hungry architects and draftsmen do designs for clients at unimaginably cheap prices hereby degrading the value of and respect for our work and making clients believe what should be the value for quality work and design expensive and will rather go for a cheaper charge. Another method is the hourly rate like you said, and yes 8-12% must be high profile custom work. I stick to my 4.5 – 4.75% cut and make sure i do excellent jobs each time so clients get good value for their money.


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