B04.01 AIA Consent Decree

documents / B - Managing Client Relationships /

by Charles Nelson AIA, LFRAIA »

One of the milestone events in this gradual erosion of relevance was the 1972 “consent decree” between the American Institute of Architects and the US Justice Department, which spelled the end of proscribed fee schedules.

Industry-wide fee schedules were deemed to be collusive fee-setting and restraint of competition.

The AIA had little choice: Abolish fee schedules (and enshrine that abolition into its rules), or face a lawsuit it would surely lose, with the very likely imposition of a hefty fine, expensive legal fees, and significant loss of reputation for members.

Understandable as the decision was, this milestone was a major factor in the ultimate commoditization and marginalization of design services.

Whenever a service is commoditized, sooner or later most providers will be forced to gradually pare back services, and in the end be forced to sacrifice quality on the alter of competition. That is what has happened (see CSIRO research).

The outcome is that design service fees are stripped of all buffers for absorbing the costs of project change, and this only further frustrates clients’ desire to find providers who can ensure control of construction time and cost growth.

Most thinking people would point out that competition doesn’t necessarily result in commoditization; for example, the automotive industry has almost as many tiers as it has marques.

Famous doctors and famous lawyers charge a lot more for their services than most other doctors and lawyers. And there are a handful of “starchitects” that command high fees and can be choosy about who they work for.

Despite the growth of the nurse practitioner role, quasi-professional legal roles such as real estate conveyancer, and a few other examples, by and large both lawyers and doctors have successfully resisted the commoditization characteristic of most of the architectural profession.

This line of thinking may be worth a book, but it’s not this book.

 

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