Office Management

Practice objectives

The objectives will vary, but every practice should have objectives and these should be recorded in the business plan. The objectives should be agreed by all parties and reviewed regularly. It is all too easy to accept an interesting project that can quite suddenly take the practice in a different direction to the one originally intended, or sooner than intended.

The sudden offer of a project with a big budget and a good fee might be tempting, especially if you have the technical skill and experience to produce the contract documents. However, before deciding to accept the commission you must decide whether it is the right job for your practice now, whether you want the practice to grow that quickly, and how the project will affect staff numbers, office accommodation, PI, furniture, hardware and software, and your cashflow. You will also have to consider whether this is a one-off project and if other projects of a similar size are likely in the future.

Many practices will want to make a good profit and grow the practice as quickly as possible, but not all practices will have these as their prime objectives. A sole practitioner architect might put a stronger emphasis on work/life balance than profit or growth, and their objectives could be as follows:

Whatever your practice objectives, they should be reviewed at least once a year when the business plan is updated, as the objectives will evolve and shift over time. Always have an eye on the future and know where you want the practice to be in one, two and five years’ – time and make these objectives realistic so you don’t feel you have failed if your target is not achieved.

Where will your office be located?

Your office will say a lot about you and the practice, and the cost of premises will vary significantly. There are a number of options, ranging from the use of a room in your house to building your own office premises. The home office might be suitable for one or two people, but not if the practice is three or four strong already and hoping to grow.

After salaries the cost of premises is likely to be the most significant outgoing, so the cost and the type of premises must be carefully considered before you make a decision, and this should be reviewed each year.

If the small practice is to be successful all aspects of the business must be carefully weighed up. If the office accommodation is too expensive, it will make the overheads high and could reduce salaries or put pressure on the office to take on work that pays more but is less interesting, or make staff members feel they must work around the clock to balance the books. If the office accommodation is cramped or dated, not easily accessible or in the wrong location then it could put clients off as well as demoralising the staff.

The home office

If you are setting up as a sole practitioner or employing only one person, you intend to maintain a small practice by choice, your main area of work is going to be domestic, and you have space in your house, a home office can be ideal. You will lose the use of a spare room but the reduced overheads will give your practice a huge advantage over the competitors in rented accommodation, as you will be able to allocate more resources to projects and still make a profit.

Thanks to technological advances it is now possible to run a successful small architectural practice from a relatively small space, such as a single room in your own house or a purpose-built room at the end of the garden, as long as family members are in agreement and the accommodation complies with health and safety legislation. If you are planning to employ staff you may require planning permission for a change of use. Be careful that you do not become liable for business rates and later on Capital gains Tax if you sell your house when it has been used for business purposes. Your accountant will be able to advise you on this.

The big advantage of a home office is the significant cost saving on rent and cleaning, and bills and business rates. The cost of travel is also eliminated, and the travelling time and energy that is saved can be put to good use doing something else such as a walk or a swim before starting work. You can also make lunch in your own kitchen. You will be in for tradespeople or delivery of packages (which might mean you take in packages for everyone on your street!).

You will need suitable building and contents' insurance; not all domestic policies cover the use of the home for business so check with your insurance broker and change your insurance provider if necessary.

If the practice is taking on residential work, the clients who come to the home office will see the rest of the house so it needs to be safe, clean and accessible by car or public transport. If your house is well presented it can be one of the best advertisements for the work you do.

Despite all the advantages of a home office, young architects might find that working from home is lonely and reduces the opportunities for networking and learning from others. Younger architects may have young families and the house might be too chaotic or noisy a place to work and hold meetings with clients. For noisy homes the room at the end of the garden might still be an option, as office activities can then be completely separate from home activities.

Leasing premises

Your office will say a lot about your business, so you will want to choose a space that you can afford, is pleasant to visit, will make the right impression on your clients and will be a nice place to work and to relax with colleagues during breaks. A building beside a canal or river, or a nice view from a meeting room window, or a small sunny terrace with some plants can make even a small space feel more relaxed and interesting.

Availability and the cost of accommodation will vary enormously between areas. The location, the cost of the rent and all associated costs, the length of the lease and any restrictions all need to be carefully considered before you make a decision. Remember, these overheads will not reduce even if the office has little or no work.

There are significant differences between working from a home office and committing to a lease.

Factors to consider when selecting office premises

Items covered by the Workplace (Health, Safety and Welfare) Regulations 1992 include the temperature of the office, lighting levels, ventilation, space standards, sanitary facilities, water for drinking and an area for eating.

You should ask your solicitor to check any business lease to make sure it is suitable for your business. The landlord may request proof of the practice’s ability to pay the rent, a set of audited accounts and a deposit. You may also be required to return the property in the same condition as you found it, so you must budget for decoration and any repairs at the end of the lease.

Serviced accommodation

Some small practices opt for serviced accommodation in a good location like Central London. This can be expensive but has the advantage of being more flexible, with shorter rental periods, while also giving clients the impression of a well set-up office in a convenient central location with shared meeting room or reception facilities and access to printers. If shared by other architects or consultants these premises might also be a more stimulating environment for young architects, and may provide opportunities for collaboration and networking with other architects and consultants, or sharing CPD events.

Buy or build your own office

If you have sufficient capital and you are prepared to tie it up, you could consider buying your own property or building a new one. This could be a small or medium-sized building, and it might also provide opportunities for subletting, depending on the size of the premises and your own practice. The practice will pay rent and this will partly offset the loan repayments or capital invested.

However, buildings are not always a good investment and it is a lot of capital to tie up for a long time, so seek professional advice as to whether this is a good option under your circumstances. Another option might be to build your own premises then sell and lease back the same property.

Managing the premises

Running costs will include:

The responsibility for these tasks should be allocated to one employee or to an office manager if the office is large enough to employ one.

Equipment, hardware, software and BIM

When setting up a new practice you will need a comfortable and quiet space as an office, in an accessible location and with WC, and don't forget tea-making facilities. It should be large enough to hold meetings, but you do not need much furniture, equipment or hardware. In fact, with digital technology, online communication and cloud storage, you probably already have most of what you need on a laptop. You must comply with the Health and Safety at Work Regulations even if you are working in a home office or at the end of the garden.

Furniture

Each workstation will need a desk, some layout space and a comfortable office chair, and you will need a table at which you can have meetings with your clients or with contractors, as well as some shelves and cupboard storage for books, stationery and archives. Archive storage should be off the premises, or in a separate room with a fire door, so it is more likely to survive in case of a fire in the office.

Hardware

You will also need reliable, fast and uninterrupted internet access and a range of useful sundries: back-up hard drives, cameras, measuring tapes, torches, screwdrivers, manhole keys, and so on.

Software

This will vary depending on whether the office uses PCs or Macs, as well as in-house software preferences and staff drawing skills. It is an advantage if your computer-aided design (CAD) software is compatible with the software used by other consultants you will work with, including the structural engineer, quantity surveyor and the company that provides you with surveys of existing buildings.

The list of software below would be sufficient for a sole practitioner or a very small office.

Software licences

Some software and updates can be purchased outright, but most CAD and NBS specification software is now leased on a yearly contract, and updates are included in the lease. The advantage of a lease is that you do not have the same initial capital cost as when purchasing the software and it is always up to date, but the lease arrangements are expensive and when the lease expires you own nothing. You need to assess carefully what software the practice needs and limit the cost of numerous leases. Some leasing companies also provide IT support.

BIM

BIM (Building Information Modelling) is not yet widely used by small practices for small and domestic projects, but this is changing as BIM becomes more widely used on large projects and architects become more familiar with the software, the associated terminology and the advantages.

BIM can be provided at three different levels. For small and domestic projects Level 1 is appropriate, where the architect is the BIM manager and owner of the BIM model. The BIM execution plan prepared by the architect will describe (using a spreadsheet) how information modelling will be managed and carried out during the project, and what information will be issued at each stage, and will also incorporate the employer’s information requirements.

Information can be issued to consultants who do not have BIM software in 2D, and 2D information provided by the consultants can be added to the 3D model by the architect. Information for the domestic client produced with BIM software can be issued in PDF format.

The benefits of using Level 1 BIM include the obvious appeal and uses of a 3D model, and automatic coordination of the model with schedules. Revisions to the model are also added automatically to schedules, and cost estimates can be produced from the model. Level 2 BIM compliance (which means that all parties exchange information between their BIM models) is now compulsory on all public sector construction projects.

When deciding whether or not to invest in BIM, you need to decide:

Before deciding to use BIM, try to speak to a BIM manager in another practice of a similar size to yours and that does similar work, and establish what software they use, what their BIM protocol is for small projects, and whether the decision to use BIM has increased turnover or profit, or the growth and success of the practice.

The RIBA bookshop has a good selection of books on all levels of BIM, including BIM for small practices.

The office manual/quality control

The first step to developing a quality control procedure is to compile an office manual that sets down the principles of running the practice. The quality management systems should be appropriate to the size of the practice. The manual can contain ARB and RIBA codes of conduct; marketing, staff and admin information; financial information; information relating to design and contract administration; and standard documents. The manual should be set up in the early days of the practice when workload is light, and then updated as systems and procedures in the office are refined and developed. Putting a manual together and keeping it up to date will take time, but it will ensure a consistent approach to the employment of staff, the running of projects and the admin tasks in the office. New employees will be taken through the manual during their induction training and subsequently they will be able to use the manual to find, produce and save information in line with office policy and without needing to ask too many questions.

If you are a sole practitioner, you should be able to put all the information relating to your practice in one file. If you have employees, some sections of the manual could be only for use by the director(s), sole trader or partners, with other sections for employees. Keep the manual simple, with only the information you need to run the practice, as the more information there is the more time it will take to update it. Ideally make one person responsible for keeping the manual up to date, and allocate sufficient time for this task.

The contents of the office manual can include some or all of the following sections, depending on the office filing and administration systems and whether you employ staff and have an office manager, or work as a sole practitioner.

General

Office

Tax and finance

Staff

Project administration

Office stationery

A separate file with copies of all office stationery can be useful. The contents might include:

Information management, library, backup and archiving

Office address book

Even sole practitioners and very small architectural practices will have hundreds of names and contact details for past and current clients, consultants, contractors, subcontractors, tradespeople, planning departments, building inspectors, specialist suppliers, the tax office, the bank, and so on. It is important to store this information in such a way that you can find, not just a telephone number, but also the name of the person or company you need.

Outlook and google are invaluable when searching for information, but if you want to remember the name of a subcontractor who worked on a certain job ten years ago, or even the name of a client, the office address book is still useful. The address book can be a digital file kept on your desktop, or it might be hard copy. You should be able to find the information you need quickly, perhaps even while you are on the phone to a client.

The address book might include the following sections:

Office library

Most up-to-date technical information can be accessed online, obviating the need for anything other than a small library in the office for architectural books and books relating to the business side of the practice.

Apart from technical information on products, other key documents can also be accessed online – such as the Building Regulations, the Party Wall Act, and the ARB and RIBA codes of conduct. government websites provide information about company structures, legislation, tax, and so on.

British Standards

The British Standards can be purchased online, but they are expensive. It is possible to buy a contract for access to all the British Standards online, but these contracts are also expensive for small practices that might not use the service frequently and only require a limited number. The cost of the standards referred to in the NBS Minor Works Specification for even a small job could run to thousands of pounds, so you need to consider carefully which ones you or the contractor on site will need, and have copies of these standards in the office. If you refer to a British Standard that you have purchased on a previous contract, make sure by checking online that it is still current.

Document reference system

Some of the information and records in the office will be filed in paper format, but increasingly information is stored digitally. From day one you will need to set up a standard office model for allocating job numbers and saving documents. The model should be used consistently for all the documents produced in the office by all members of staff.

It is important that everybody in the office uses the same system for naming and storing documents. Remember that people move on, but the information they produce needs to remain accessible to others – perhaps for years after the documents are produced.

The reference for each document must be on the hard copy of the document to enable the digital copy to be found easily.

Drawing protocol

For all drawings produced in the office, a drawing protocol should be established so that they are produced in exactly the same way, and when printed they look consistent. Title blocks on the drawings should also be based on a standard.

BIM protocol

BIM Level 1 is appropriate for small and domestic projects. When using BIM, the client’s requirements should be agreed at Stage 1. The BIM execution plan (BEP) will clarify in the form of a spreadsheet who is responsible for the BIM model, and the information that will be exchanged at each stage of the project.

Backing up

There are various ways of backing up digital information, and this should be done on a regular basis. When deciding how often to back up, consider what the cost would be to your practice if all the information between backups were lost.

You can back up to the cloud or a separate drive that should be stored away from the office. Remember that your backup should include all your photos and emails, as well as all project files and admin files.

Archiving

good archiving of job files and other office admin documents, such as the practice insurance policies, bills and invoices, correspondence from the tax office and so on, is essential and will require dedicated storage space in the office or off site.

A good archive will have all the information you might ever need, but no more than this. The full archive for each project should be kept for a minimum of six years after completion of the contract (12 years if contracts are under seal). The RIBA recommends that key documents should be kept for 17 to 20 years.

Archive checklist for a domestic project:

It may also be prudent to keep minutes of meetings, handwritten notes or drawings from site meetings, and correspondence with the client for at least six years. Some of the above information can be stored digitally, including the progress photos, as long as there is a digital backup somewhere else.

In addition, the office should have copies (or access to copies) of all email correspondence. If a claim is made against the practice, this email correspondence can provide much of the detail and dates necessary to defend the claim.

Project filing

Each project in the office will have a few associated files with information under appropriate headings. Depending on the size of the project, there might be separate files for pre-construction and construction. Files can be digital or hard copy.

Headings for a domestic project might include:

A separate hard copy or digital file might contain Stage 1 and 2 drawings, Stage 3 planning drawings, Stage 4 tender drawings and Stage 5 construction issue drawings, specifications and schedules.

Having the information you need on site

If the practice has numerous small jobs on site at different stages and you are doing weekly site visits, it is reassuring as well as time-efficient to have a system that means you always have the necessary information to hand. A system that works well in our office is to have a clear plastic filing box for each project on one shelf in the office. This file is taken on site visits and contains the tender document incorporating the NBS specification, A3 tender drawings, construction drawings issued during construction, and a full set of site instructions to date. As revised A3 drawings are issued, they are stapled to the original tender drawings. This way, the project architect has a copy of all the relevant information on site, including what was priced at tender stage. Any verbal instructions or sketches made on site are kept in the file until a formal site instruction is issued.

The important thing is to have a system that enables quick access to information. All the above could be on a tablet or even a phone, but remember that a small digital screen is sometimes difficult to see on site if it is sunny, or if you are explaining something to more than one person.

On domestic projects where the client is likely to make many changes during construction resulting in revised drawings, always check on site that the contractor and the subcontractors are working to the latest issue.

The role of the practice manager

A sole practitioner is by default the practice manager as well. If the office is small, perhaps the duties of the practice manager are also carried out by an architect, or shared between architects. A larger office will probably employ a dedicated office manager.

The practice manager’s duties and responsibilities might include:

PI and other insurance

The main insurance policies for a small architectural practice are:

Apart from the insurance policies you are required to hold by law, there are many other types of insurance you might have, including travel, private healthcare, permanent healthcare, personal accident, data loss or identity fraud, and so on. Decide what cover your practice needs and take professional advice to ensure your practice has the appropriate level of cover.

The RIBA can recommend insurance brokers who will provide advice and quotes for insurance that complies with the ARB requirements for minimum cover. The cost of insurance can vary, so it might be worth shopping around.

Professional indemnity [PI] insurance

PI insurance can be obtained from specialist brokers, and each year before renewal you must fill out detailed forms relating to your practice income and the level of cover required. Make sure you complete the forms accurately, as failure to declare something important could invalidate your policy. Architects who do basement work might need to accept an increased excess on these projects due to an increased number of claims relating to basements in recent years, so again it is worth shopping around to find the right cover for your practice.

Bear in mind that, if you stay with the same insurance broker from year to year, you will establish a good working relationship, and you will benefit from the advice they can provide if you are concerned about a potential claim. However, it is your insurers or their lawyers, rather than your brokers, who will deal with any actual claim.

Copies of your insurance policies for each year going back to the first year of the practice should be kept in a safe, accessible place in the office in case a claim is made against the practice. Some clients will ask you to provide evidence of your PI cover, and your insurance broker will be able to provide a certificate.

Public sector clients may ask for a very high level of PI cover, which might preclude your practice from bidding for public sector projects unless you are prepared to increase your cover and keep the higher cover in future years. It may be acceptable to confirm that cover will be taken out if the job is won.

Always read the policy that your insurance broker recommends before proceeding. Check for compliance with ARB requirements, limits to the cover, that cover is available for each and every claim, that legal costs are covered, and any exemptions.

The ARB issues guidelines on cover. The minimum is currently £250,000 for each and every claim. However, many small practices, even sole practitioners, will need higher levels of insurance cover than £250,000. The premiums will vary from year to year and will be based on the value of projects completed in previous years, the type of work, and any claims made.

PI run-off cover

When your company stops trading, you are required to provide run-off cover for a minimum of six years (12 years if you have signed or administered contracts under seal). Your broker may advise you to hold cover for longer than the minimum period.

The level of PI cover during the run-off period will probably be based on the highest level of cover held in the previous three years. You must hold insurance at the time a claim is made. It is not enough to have been insured at the time of the incident.

Notification

You must notify your insurers of the circumstances as soon as you are aware that a claim may be made, otherwise your insurance cover may be invalidated. You should also be careful to provide all relevant information when completing application forms. If you fail to do so, you may invalidate your insurance.

Current and further information about mandatory professional indemnity insurance cover for architects can be found on the ARB website.⁸

Building and contents' insurance

You will need to insure the office premises and the contents. This means that, in the event of a fire or flood, you will be able to get the practice back up and running as soon as possible.

If you are running a business from a home office, you must check that your current policy covers the use of your home as an office. If not, change your policy provider to ensure that your business is covered. Check, too, that your insurance will cover employees’ personal possessions.

Make an inventory of all the furniture, equipment, computers and stored material in the office, and keep a copy in the office manual, which should be updated regularly. Check that your policy will replace old with new in the event of a claim. Any items you take out of the office, such as laptops or tablets, should be listed on the policy.

Make sure you are aware of any online risks, for which your practice may need additional cover with a separate policy. Such risks include viruses, fraud, hacking, theft and so on. Your IT consultant will be able to provide advice on how your systems should be set up to minimise the risks, and may warn you of other risks.

Employers' liability insurance

To comply with the Employers’ Liability (Compulsory Insurance) Act 1969, employers must hold insurance cover of minimum £5,000,000 and must display a certificate in a prominent position in the office. This insurance covers employees’ illnesses or injuries caused on or off site. There are exemptions, such as for companies employing only their owner, so check with your insurance broker before taking out this insurance.

Public liability insurance

This insurance cover is recommended, but not mandatory. It will cover third parties when they visit your practice, or damage to the property of third parties caused by the practice employees when they visit other premises or sites.

Health and safety policy

Health and safety law applies to employees working in the office, and when they are on building sites or other premises. The main legislation is the Health and Safety at Work Act 1974. Other acts and more recent regulations relating to health and safety are listed on page 201.

Every practice should base its health and safety policy on a risk assessment, and a copy of the policy should be filed in the office manual. The RIBA publishes a template for adoption online, and RIBA Chartered Practices must set out their policy in writing and apply it to all employees. New employees should be given a copy of the office policy as part of their induction.

The main elements of the policy for a small architectural practice will be:

Employers should consider not only risks and physical illness, but the mental health of employees, such as stress caused by working conditions.

First-aid

The Health and Safety (First-Aid) Regulations 1981 apply to all employers. Requirements include:

Emergencies

In the case of a serious fire and loss of all computers and files, the practice should be able to set up elsewhere on a temporary basis. It should be able to rely on backups and information stored away from the office or in the cloud to continue to run, pending reinstatement of the premises and replacement of equipment.

Diary events and year planner

Every small practice will be subject to deadlines for tax payments, returns to Companies House (for limited companies), payment of subscriptions and renewal of leases, and monthly bills paid by direct debit, as well as regular tasks such as backing up or performance reviews.

You will receive reminders from HMRC, the VAT office and from Companies House, and your accountant and your bookkeeper will request information at specified intervals. Key items and dates can be listed and flagged in the office diary. Some will be specific to your practice and your accounting dates, and other items will relate to the tax year.

It is helpful to have a simple schedule of the events and tasks with dates for action filed in the office manual. The list might include the following:

DIARY EVENTS FOR A LIMITED LIABILITY COMPANY

REGULAR OFFICE TASkS

Bringing in work

Before trying to source work, you must decide what work you want to do, how profitable it will be and whether you have the skills to do it, and that the work is out there so you can pitch for it.

For example, if you have a small practice based in London, and the practice specialises in domestic refurbishments and conservation work, you should have no problem bringing in work. There are thousands of houses in London that are more than a hundred years old, most of which need work doing, and there are plenty of wealthy clients who want to refurbish, alter or extend their homes. Work is relatively easy to source if the practice has a good website and portfolio of completed projects, but this work is complex and profit margins can be tight. Not all practices can make domestic work viable, so it is important to understand the resources you will need for each project and negotiate the right fee.

Larger practices, or small practices with aspirations to grow, will have a marketing plan and a strategy for sourcing projects. This is covered in Part 1, and more detailed advice on the topic can be found in the RIBA Handbook of Practice Management.⁹

Word of mouth

To bring in new work by word of mouth from existing clients, make sure you invest enough time on every project so that it is well designed, well managed, accurately costed, adequately resourced and finished to a high standard, including all snagging items. After Practical Completion, make sure you deal with any urgent defects during the defects period, and sign off any other defects at the end of the defects period. Check with your clients at the end of each stage that they are happy with the design and cost information provided. This all takes time, but if done well your clients are likely to recommend your practice to their friends or family, or use the practice again themselves.

One of the biggest advantages of working from a home office is the low office overheads, so you can afford to allocate not only a senior architect but more time to each project than a practice with higher overheads operating from commercial premises.

Office brochure

As well as having a website, the practice can have a printed brochure. For a small practice, this could be as simple as a two-page document with a few carefully chosen images (one image is worth a thousand words!) and some preliminary guidance on fees – information that will not be published on your website. If the brochure is for domestic clients, it can describe in simple terms the services an architect can provide on a domestic project, and a short description of the necessary approvals. Before meeting a new client, check that the brochure information is up to date, then print a copy and give it to them at the first meeting. It is not a good idea to have hundreds of brochures printed professionally, as they may go out of date and have to be binned before you get a chance to use them. After the first meeting and an informal discussion about fees, services and budget – and once you have obtained an in-principle agreement with your client – you can then send out the (more daunting for a domestic client) RIBA appointment contract for signature.

Practice website

No matter how small your practice is, and even if you are a sole practitioner, it’s worth commissioning a specialist website designer, and a professional photographer for your completed projects. You will still need to write the text and select the photographs, and comment on the proposals at each stage of development. Make sure you allocate enough time for this expensive exercise to make sure you get the best website possible and a good return on your investment.

The website should be set up in such a way that it comes up quickly in online searches, and it should be updated regularly with new photos and news targeted at your potential clients. Avoid lots of text and tiny or pale print, as some clients might not be able to read it. Most clients only require a small amount of legible text on a website, as they will tend to focus on the project photographs. They will probably then look for a phone number or email address to contact the practice directly. When taking calls, remember that the client’s first phone call to you might be one of several others they are making. This first call is therefore important, as the client will be deciding whether or not they want to ask you to take on their project. On your website you can also have links to social media networks such as Facebook or Twitter.

A presence on other websites

If your practice does domestic work and you have good photos on your own website, you may be asked to have a presence on a website such as Houzz. com. Increasingly, this website is used by domestic clients to collect images of what they like and want. The consultants you work with may also ask you if they can give information about your practice or use photos of your jobs on their websites. Always check with the photographer that you have permission to use and publish their photos in this way.

Using social media

used appropriately, social networks can increase awareness of your practice, enable feedback and bring in new business. The main networks of use to architects are Facebook, LinkedIn, Twitter, Pinterest and google. However, be aware of the time required to keep on top of social media along with everything else you will be doing, especially if you are a sole practitioner. Constructive criticism can be helpful, but if you receive negative feedback this way and do not deal with it, this could actually harm your business. If you do not have time to keep up with social media, but you feel it would be good for your business, you could consider paying a company or your website designer to do it for you.

Beware of participating in friendly banter in public, as this could alienate potential clients. It is important to keep your private life separate from your professional life.

Publishing your work

Try to have your work published in the architectural press, and if you are looking for domestic work, in the magazines targeted at your potential clients. Having high-quality photos of your work taken by a professional photographer will make it much easier to have it published.

Competitions

Competitions can be a good way to get experience of designing a building type in which you have an interest. If you win a competition, the practice might get the commission for the whole project, and this could provide work and future growth opportunities for the practice. However, even with limited competitions there is never a guarantee of winning, so you may end up doing a significant amount of work for no fee. However, such work is not necessarily abortive as the project could still be used on the website to show other potential clients your experience, and in this way it might help to secure a future commission.

Awards

Winning an award may mean your work is widely published, and the award can be noted on your website. It can bring your work to the attention of potential new clients and add credibility to your practice. There are numerous yearly awards aimed at small projects, so make a list of these with the deadline dates and consider entering your recently completed projects.

Repeat clients

Repeat clients can be a great source of new work. It is much easier to work with someone you know and understand already than with a new contact. Also, they were clearly impressed with the services provided if they are coming back to your practice.

It is rare to get repeat domestic clients because few have the opportunity of carrying out more than one project on a house, but in our practice we have had a few where our clients moved to other properties. We have also done many projects for one private school – 12 projects in total over a 14-year period.

Referrals

If your practice does domestic work, colleagues you have worked with previously may refer clients to your practice. Architect colleagues may also employ your practice to carry out projects on their own homes, or recommend you to their family members or friends. Other consultants and contractors familiar with the practice may also refer work.

The more people out there who know you, the type of work you do, the quality of your work and the service you provide, the more likely you are to be recommended to potential new clients.

Existing projects

Existing projects nearly always grow, creating more work and more fees. This is a good source of new work as long as you have sufficient resources to cope, and providing you have set up your appointment to allow for appropriate fees to cover the extra work. Domestic clients will probably add work into the project at each stage, and even when the project is on site, no matter how hard you try to fix the brief at Stage 2. For this reason a percentage fee is ideal for domestic work (see pages 59–60) as it means you will not have to go back to your client to negotiate a revised fee every time they add work to the contract. However, you must keep your client informed of the estimated overall cost of the project at each stage, both pre-contract (Stages 2–4) and during construction (Stage 5).

The unexpected commission

Always keep some resources available for an emergency, or for a phone call that brings in a new and exciting project. Depending on your own specialisms and the set-up of your practice, an exciting project can mean various things:

If you need to expand the practice, or even move office to take on a new project, make sure that this is in line with your long-term plans, and that the office can handle the disruption. update your cashflow forecast and your profit and loss forecast, and only accept the commission when you are sure the project is right for the office.

On top of the project work already in the office, you need time to keep on top of office administration, invoicing, chasing payment, CPD, training and the inevitable queries from site or client changes to a brief that you cannot plan for.

Workload programme

FIGURE 1.
Office workload programme

You cannot rely on your memory alone when you run a small practice that does lots of jobs. There will be hundreds of things to remember, and things rarely happen when they are supposed to. Even if you carefully plan ahead each day and week, things can change at short notice.

There are various ways to keep on top of all that is happening in the practice, but workload programmes are an important part of this. The real value of such a programme is the relative ease and speed with which it can be updated, and how much information can be shown on one page.

You will need an office workload programme showing every job in the office, whether at pre-construction stage or on site, as well as including the jobs that are in the defects liability period and those for which your appointment has not yet been confirmed. The programme should be updated at least once a month, as there will be slippage on some contracts, new ones will be confirmed and some may have fallen through or fallen further behind. Colour coding can be helpful, with everything on site shown as red, pre-contract work yellow, approval periods blue, and so on. Keep it simple, and make sure it is always up to date. A quick glance at the programme can remind you of things that need to be done, such as checking whether a planning application has been approved, or that a tender is due back in a few days. (When your clients phone unexpectedly, they will expect you to have all this information at your fingertips!)

If your practice takes on projects as small as £50k, then in theory even a sole practitioner might be working on up to 15 jobs in any one year. If you can get a balance in the practice between a few small jobs and a few larger ones – say up to say £750k – it does make for a lot less information management, and fewer phone calls, emails, site visits and invoices to send out.

Expect all of the following:

The 'to do' list

As well as all the above programming, you will inevitably have a ‘to do’ list with all the admin tasks in the office, and all the tasks on each job that need to be done. I find it helpful, on a Friday afternoon while doing the backup, to update this list. This helps to clear your mind for the weekend, but also helps you to focus first thing Monday morning on what needs to be done, and in what order. It can also be your weekly reminder to check that invoicing is up to date.

Resourcing individual projects

Having agreed a percentage fee for a new project (see page 59–60), the next task is to break the fee down into stages and work out how many working hours are available at each stage. Probably the easiest way to explain how to do this is to give a simple example.

Work out how much it costs to employ the project architect including your time and overhead costs (holidays, sick, NI, pension, benefits, non-productive time, office costs, etc.). For a home office with low overheads, this might work out at salary of the architect multiplied by two, so if the architect is paid £25/hour the cost of the architect is £50/hour. In a larger office operating from rented premises this could be more.

Example

If the cost of the architect is £100/hour including overheads rather than £50/ hour, adjust the hours accordingly. The architect who is paid twice as much has to do the same work in half the time.

The cost per hour of employing an architect will be based on the architect’s salary and associated overheads, so by keeping the overheads low the amount of time spent working on projects can be increased, or you will be able to afford to allocate a more senior architect to the project.

Performance analysis

A quick review of time sheets can show how much time was spent on a project, and this can be compared with the project targets – but bear in mind that most small jobs grow at every stage, so if the budget has increased the time allowance must also increase. Also, it’s not an exact science, so there’s no need to spend hours making your analysis extremely detailed or accurate. It’s enough for a small practice to have a rough idea.

If the time spent is greater than the time allocated at each stage check that you have the right architect on the job, how much they are paid and whether the work is being done efficiently. Check also that your overheads are not too high and query the level of fee that was agreed on the job – it might have been too low. Do not hold your employee responsible for losing money on the job if the fault is yours for agreeing a low fee or having high overheads. Also, if the job is not fully designed before it goes on site, this could give the impression that the early stages are profitable, but increase the amount of time needed later to produce further drawings.

How to avoid abortive work

Many architects fall into the trap of doing abortive work on domestic projects and not getting paid for it. Much of this work is because projects have gone over budget without the client’s authorisation, and it can be avoided by keeping the client accurately informed at all stages about the likely cost of the project.

To reduce the risk of abortive work, architects should follow the RIBA Plan of Work and ensure that the design, brief and budget are confirmed at each stage of the project: Stages 1, 2, 3 and 4 (pre-tender estimate) and Stage 5 (estimated final accounts). If you, as the architect, do not have the skill to provide reasonable budget breakdowns and final account estimates of your projects, and there is no client-appointed quantity surveyor, you should employ a quantity surveyor or an estimator to do it for you. The return on your investment will be not only a better service for your client, but a reduced risk of doing abortive work. The other benefit of accurate budgeting during the project can be higher fees – if you are on a percentage fee then at each stage fee invoices will be based on the correct cost of the work, and not an underestimate.

It is frustrating, costly and time-consuming for an architect to detail some fitted furniture or design the external works only to be told that these works are to be omitted to bring the scheme back in line with the agreed budget. Not only has the work been done for no fee, but the work also has to be undone for no fee. If a client wants fitted furniture and external works, these items should be added to the original brief and costed, and the cost agreed by the client before any design work is carried out. Clients usually agree to these extra costs if they are told about them when the items are added to the contract. If they do not agree to the extra cost, the architect will not do the work, so it does not matter.

All the above assumes that you were properly appointed in the first place, that a signed appointment document is in the job file, and that you did not do a lot of preliminary work in the hope of being appointed. If you do work for free in the hope that you will secure a commission, and you do not get the commission, then the cost of this abortive work must be offset against other jobs.

You will have informed your client in your appointment contract that certain works are outside your percentage fee and will be charged on an hourly basis. Examples include corresponding with adjoining owners, applying for a Thames Water build-over agreement, or protracted discussions around planning and multiple submissions to clear conditions. As soon as you are about to do the work for which you will charge on an hourly basis, inform your client, with an estimate of the hours involved, and get their agreement before you do the work. Otherwise there is a risk that they will say they thought the work was included in your percentage fee and refuse to pay the additional charges.

Reducing the risk of disputes and claims

Your practice should have an in-house procedure for dealing with complaints from clients, and a copy filed in the office manual so all employees are aware of the procedure. Try to deal with complaints before they become disputes or claims.

If you use the standard RIBA appointment contract, there will be provision within the agreement for the resolution of disputes. The choice will be between negotiation, mediation, adjudication or court proceedings. Arbitration on small projects is normally ruled out on cost grounds. However, all the options are expensive when compared to the fees you will charge on small projects, so always try to settle any hint of a complaint before it escalates into a dispute.

Some inexperienced clients make unreasonable demands of their architects and then complain that the architect is not providing the service they expect. Resolving this might just be a question of arranging a meeting and running through the services for which you have been appointed, and explaining that you are happy to undertake additional services on an hourly charge basis.

Other clients might wait until the job is on site, and then send long or frequent emails noting things they are not happy with, and/or making numerous changes to the brief. This is not a good way of communicating, and it can be a sign of future trouble. It might be wise to meet with your client to discuss any issues, allowing one hour for the meeting and issuing minutes. This positive step could be enough to make the client think twice about the number or the length of future emails.

Every practice runs the risk that a client will make a claim against it. The claim might be valid or spurious, but either way it will be stressful, expensive and time-consuming for you, and claims can drag on for many years. This is why you need a healthy balance in the company bank account, and why you have mandatory PI cover – and why it is crucial that the level of cover is adequate for each and every claim and includes all legal costs.

Be aware that many domestic clients also have legal cover included in their building and contents’ insurance, so it will cost them nothing to claim against their architect or their builder. Sadly, there are clients who see this as a way of making easy money, and plenty of lawyers happy to pursue these claims as they make a good living from doing so. This practice is also on the increase, as our society becomes more claims conscious. For domestic clients, there is plenty of advice on Google about how to claim against your architect. This increased risk and the potential cost to the practice of a claim should be carefully weighed up and reflected in the practice fee income targets for each year.

If you think a client is going to make a claim, you must immediately notify your insurers. Your insurers or their lawyers will then advise you how to proceed, and they will not necessarily follow the dispute procedures in the appointment document you and your client have signed.

Here are some simple steps you can take to reduce the risk of claims and disputes: