Reply To: Question about fee structure.

[Tanya Olson]

Great points that I concur with in both Andrew’s and Nick’s comments – stick to schematic on lower budget projects and use an hourly fee calculation.

Our firm does not use the percentage calculation for fees unless required to by the client (some govt. agencies / municipalities). We use a structured fee proposal (Schematic, DD, CD, CA, Bidding, etc) based on an in-depth spread sheet calculating project hours by phase, including office work and other leg work that you wouldn’t charge LA fee rates for. We do provide the total per-phase fee to the client as part of our proposal / contract (not the spread sheet – thats internal) along with a very detailed description of what that phase includes and does not include. 

This way the client knows exactly what they’re getting for their money and we know that we are getting fairly compensated for our time as well as being covered for additional services. We do sometimes give people a break in fees depending on the circumstance; in one case a discount so the client had incentive to get the property surveyed as it saves us time, money and accuracy.

Not to mention the ethical implications of the percentage of project budget fee. Unless the client has a very specific and set budget I have a hard time seeing how this sets up a collaborative and trusting relationship when they may be concerned or watchful that you are designing to a particular fee rather than their need.