Why would anyone seek to promote a suggested (or even fixed) fee scale in a competitive marketplace?
Surely every independent practitioner knows their cost base and how they are able to effectively deliver the required services professionally and to the best of their ability? If Practice A can deliver to a client the requested services for a lower fee than Practice B what is wrong with that?
So why has the RIBA introduced a ‘Fees Toolkit’ to help clients better understand the process and professionalism involved in delivering architectural services? (Incidentally, the toolkit is only available to RIBA members so clients can’t even find out what the benchmarks are!) Could it be the RIBA is an organisation that seems to believe in an anti-competitive, out-dated Victorian mode of doing business? Could it be the RIBA believe a professional (and heaven forbid, an architect!) is not supposed to embrace the world of commerce? Accepting competition is not for the RIBA! Oh no; and especially not competing on fees! No, fees must be controlled and regulated by the RIBA. So how does the RIBA manage to control architectural fees without it being unlawful?
As its charter states the RIBA’s current mantra that it promotes architecture not architects is severely tested when its current President Ruth Reed claims fee competition causes “…serious damage…” (RIBA press release 25.11.10) Clearly, the RIBA (effectively a union for architects regardless of what its charter says) cannot get past the fact the government legislated against price fixing years ago. It is now unlawful for architects (as they did in the past) to collaboratively ‘fix’ their fees. Yet the RIBA appears to do its best to circumvent the law by recommending its members adopt ‘benchmark’ fees. The toolkit is obviously designed to assist in determining what the benchmark should be. In other more straightforward words, the ‘Toolkit’ is the return of the outlawed fixed fee scales in everything but name. It is no more than a comfort blanket to try and protect architects from free market economics.
Taken in isolation, the ‘Toolkit’ initiative is one example of how out-dated the RIBA’s thinking really is and how it diverts resources down a dead end. That practices only take cursory notice of ‘suggested’ fees now is of no consequence to the RIBA and the RIBA also knows fee bidding (ie undercutting) is here and here to stay. Unless you are prepared to turn work away, commercial practices (even RIBA Chartered Practices) also know that insisting on ‘benchmarked’ fees is futile. So the reality of addressing fee competition head on is rejected by the RIBA in the forlorn hope that ‘clients’ will be prepared to stump up benchmark fees to prop up a profession that cannot accept it should get paid what it is worth and not a penny more. The fundamental flaw in the toolkit is the basis on which the assumptions essential to determining a fee are based as they underpin the toolkit. For example; architects believe they have a divine right to exclusively deliver those services when the law states they don’t. If architects are confident their services have a value beyond a benchmark arbitrarily set to what they think they are worth, they have nothing to fear from market economics. The reality however is quite different. Architects hide behind a protected title and most would like to see – and more importantly assume – the function is protected as well. This distorted view produces flawed logic.
Compare a talented fledgling designer with a talented young tennis player of similar age. If the RIBA represented tennis players its view would be all professional tennis players should be paid equally, according to a formula set by the RIBA, regardless of individual talent. (Translated; all architects provide identical services and deliver them equally competently therefore the base cost of those services should be standardised.) The modern competitive world however, ensures that tennis players are paid according to their ability to compete and win. For anybody with a talent for tennis, the only barriers to success are application and effort. For anyone with a talent for architecture however, the barrier to success is how to compete in a saturated, mature but declining marketplace. Application and effort is not enough and ‘standardised’ fees make competing virtually impossible. Why would any client employ a start-up practice who insists on charging benchmarked fees (as the RIBA imply they should be doing by using the toolkit) as opposed to a practice that has been in business for ten years or more but also charges the same fee? Quite obviously a client is highly unlikely to employ the start-up practice. It is therefore self-evident to any business person that a less experienced start-up practice (who cannot rely on patronage for work) has no option other than undercutting fees thereby allowing them to compete with more experienced and established practices that will always have an advantage in a competitive marketplace.
In conclusion, the RIBA’s covert aim to ‘control’ fees is intended to maintain the monopoly of an established elite and to make sure competition is stifled. A ‘Fees Toolkit’ is not a modern solution to getting paid what you are worth and is no more than a manifestation of an ingrained culture where work is divvied out by men in smoke filled clubrooms; much like those that exist within the RIBA in fact.
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