There are many methods architects traditionally use to calculate fees; including, price per square foot, percentage of construction, hourly or fixed fees.

• Percentage of construction costs. This method may be construed as providing an incentive to be over budget and sometimes ends up being based on unrealistic initial construction budgets that must be adjusted once actual bid numbers are finalized. The result in an increase of the architectural fees without any corresponding increase in the architect’s amount of work provided.
• Price per foot methodology. This method does not accurately represent the detailed work that may be necessary from one style to the next nor does it allow for the client to benefit from economies of scale and repetition in design elements within the project scope.
• Hourly Rates Only. Paying an architect on a strictly hourly rate does not provide incentives to more efficient architects who provide equal priority to creativity, cost effectiveness, and project deadlines.
• Fixed fee. Fixing a fee for specific services can provide the best value for a client and provides incentives to an efficient architect with good project management skills. This method works best when the client and architect work together throughout all stages of the project design process to ensure that the design elements approved by the client are the designs that are ultimately implemented. Once certain milestones are passed within the design process, additional design changes may require architectural change orders to adjust renditions previously approved by a client. These changes can sometime result in an increase in the original fixed fee price either based on an additional fixed fee or an hourly rate for the change order. As a result, this fixed fee structure works best with an architect with clear communication skills, high functioning project management skills and an ability to educate clients regarding their options throughout the design process and before design elements are approved.

For the reasons outlined above, Rick Daugherty Architecture prefers to use a fixed fee structure for most design projects. The firm uses years of historical data from past project; adjusted for current cost trends and the client’s specific list of requirements for the proposed design project to assemble an hourly estimate for the project and, after weighing in factors of risk and liability, the firm’s total retail hourly estimate is then discounted for bulk purchase of the entire contract through a fixed fee arrangement.