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Market squeezes free designs from architects

Paul Snyder
paul.snyder@dailyreporter.com

Wisconsin architects are putting themselves at risk by gambling free design work on the front end of projects for a chance to land the jobs and the paid work that comes with them.

“I’ve been there,” said Josh Johnson, president of the American Institute of Architects Wisconsin. “I had a client I was working with that didn’t know whether he was going to build or not, and I went ahead and did a lot of work — floor plans, elevations, 3-D drawings — at no cost.”

Although it establishes good faith between an architect and client, it does not necessarily guarantee follow-through on a project, said Johnson, of Madison-based Aro Eberle Architects Inc. In fact, he said, it is becoming a common practice that could permanently mar the architectural economy.

“It’s scary,” he said. “You’re putting in this work at no cost for a project that might not happen at all.

“The developer automatically has less money into a project if you’re doing that favor on the front end, and they can also take your drawings to competitors and say, ‘Look, 90 percent is already done. Finish this up.’”

It is an inappropriate way to do business, said Melissa Destree, founder of Madison-based Destree Design Architects Inc. But it is also the way the industry seems to be heading.

“Planners are just proposal-ing people to death,” she said. “Like, in construction, you’ve got some firms lowballing prices just to keep busy. The model is changing out there.

“Maybe it’s a nice perk for some people, but in the long run, they might suffer. Reliability, for an architect, is a life-safety issue.”

Some architectural firms are barely clinging to life. Last year at this time, Johnson said, AIA Wisconsin had more than 1,500 members, but the organization has since lost more than 100 members.

“I really started to notice it in late summer and early fall last year,” he said. “I just kind of realized, ‘I haven’t been called to build anything lately.’”

Yet some phones are ringing. After several months of steady decline, the Architectural Billings Index, which tallies paid work nationally in the architectural field, showed its first jump in March before falling slightly — 43.7 percent to 42.8 percent — in April.

“I think there’s a glimmer of hope,” said William Babcock, executive director of AIA Wisconsin. “But the question still goes back to: Is it going to be sustained?”

Babcock said some type of recession hits every decade, but the current downturn is particularly troubling because it is leaving architects with no alternatives.

“In the 1980s and 1990s, it was about markets,” he said. “Whether it was energy or the tech bubble, you could find jobs elsewhere. Now you can’t just pick up in Wisconsin and have a better chance than you did somewhere else.”

Destree said despite weathering a decrease in work since December 2007, her firm survived without layoffs.

On April 1, the company was offered six new jobs on top of 16 others it is working on.

“There was a long time when I was afraid to pick up the phone because everyone was just putting jobs on hold,” she said. “It’s just a matter of communicating with bankers and who you owe money to. But we have been very fortunate.”

Despite increased interest and a healthy volume of work, Destree remains cautious.

“Ask me again in two months,” she said. “Because then all this work will be done.”

One comment

  1. An architect will reduce their risk of non-payment, and have strong leverage to get paid if they utilize lien rights and prove their plans were utilized in the project.

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