If only there were a simple answer! Understanding the cost of a product is usually pretty straightforward.  But architects provide a wide range of services. Even the drawings they produce are technically called “instruments of service.”  In simple terms an architect’s “cost of services” could be calculated as: (value of an architect per hour) x (number of working hours to complete project).

So, what is an hour of an architect’s time worth? An architect’s hourly rate is calculated similarly to other professionals:

• Staff Salaries: Various positions have different salaries based upon expertise, experience, and responsibilities. The diagram below, from Indeed, shows the average architect’s salary in Missouri.
  • A well-managed project will limit the involvement of a higher-paid principal to critical issues and delegate the drawing production work to less costly staff.
  • Larger firms also have more non-architecture staff such as a business manager (like me), marketer, graphic designer or administrative assistant. These staff are rarely utilized directly on projects but are essential to keeping firms in business.

• Staff Benefits: These include things like medical, dental, and vision coverage as well as life insurance and 401(k) contributions. The American Institute of Architects (AIA) surveys show that providing good benefits are key to attracting and retaining talented and experienced staff.
• Direct Overhead Costs: Costs that stay the same regardless of volume or the number of projects that a firm has. Examples include rent, computer hardware and software, phones and internet, licensing and fees/taxes to stay in business
• Variable Overhead Costs: Costs that vary based on a firm’s project volume. Professional Liability Insurance ($$$) and Office supplies are a good example.
• Profit: As with all businesses, a certain percentage of profit is factored in to reward a firm for the risks they assume in taking on a project.

It is the second part of that equation (the number of working hours to complete a project) where things can get tricky. Clients, understandably, want to know how much their architect will charge before they hire them.  But architects, without crystal balls, can’t predict exactly how many hours of each staff person’s time will be needed to complete each unique project.  As a result, contracts can be written in a variety of ways to protect both parties:

• Hourly: The architect is paid by the hour. These contracts are sometimes used for very small projects or when a client is not exactly sure of the size or complexity of a project that they may pursue.  An hourly contract is sometimes written for the Schematic Design (SD) phase only, so that a scope of work can be established.  Then, a contract with a known maximum can be written for subsequent design phases.
• Hourly to a Maximum: The client knows the maximum they could pay and the architect is incentivized to manage their time so as to cover their costs.
• Stipulated Sum: The project must have a very clear scope of work for an architect to arrive at a predetermined figure. When this is possible, the client then knows the total cost from the beginning.
• Percent of Construction: When a project budget and scope of work is set up front, sometimes an architect can set the cost of their services on a percent of the construction costs. The percent might be anywhere from 4-20% of the construction cost, based on factors like the actual services desired, the project’s complexity or how many consultants are required.  Note that design costs are added on top of the construction cost – one of many considerations in the total project budget.

 

While the cost to consult with an architect is a very important factor in determining who to hire, architect Bob Borson noted in his blog, it’s but one of many considerations.  Selecting an architect is more complex than buying a widget; it is starting a relationship.  Ultimately, he says a client must decide “do I like this [architect] enough to want to work with them.”

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