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566: Should Architects Give Away Free Work? with Enoch Sears & Rion Willard | Otter.ai

566: Should Architects Give Away Free Work? with Enoch Sears & Rion Willard

Enoch Sears30min

Enoch Sears

00:00

Like if you know how to sell so well why are you giving it away for free? Hello and welcome back architect Nation. I'm Enoch Sears. And this is the show where you'll discover tips, strategies, and secrets for running a profitable and impactful architecture practice. Today we're going to have a conversation about this topic, should architects work for free. Now we're gonna dive into this. And one piece of just warning as we dive into this conversation, this is an opinion piece. So take that with a grain of salt, you're going to be hearing for myself, Enoch Sears, founder Business of Architecture, my co founder here at Ryan Willard Ryan, welcome to the show.

Rion Willard

00:36

Thank you very much. Aniko is pleasure. So

Enoch Sears

00:38

just for those of you who aren't familiar with Business of Architecture, what we do for the past decade, plus, we've worked exclusively with small architectural practices to help them on the business side of the practices, helping them conquer overwhelm, helping them become what we call the free architect, where they have agency to do the kind of projects to get valued for their skills and expertise. And this idea of giving away free work, it is not the first time that this has come across our desk. This episode is sponsored by Smart practice, the world's leading step by step business training program that's helped more than 103 architecture firm owners structure their existing practice. So the complexity of business doesn't get in the way of their architecture. Because you see, it's not your architecture, design skills that's holding you back. It's the complexity of running a business, managing projects and people dealing with clients, contractors, and money. So if you're ready to simplify the running of your practice, go to business of architecture.com forward slash smart to discover the proven simple and easy to implement smart practice method for running a practice that doesn't get in the way of doing exceptional architecture. Hello,

Rion Willard

01:47

listeners, we hope you're enjoying our show. We love bringing you these insightful conversations, but we couldn't do it without the support of our amazing sponsors. If you're a business owner, or know someone who would be an excellent fit for our audience, we'd love to hear from you. Partnering with us means your brand will reach over 40,000 engaged listeners each month interested in becoming a sponsor, please send us an email at support at business of architecture.com.

Enoch Sears

02:10

Recently, Ryan, notice an article in the building design online in the UK, under the category of intelligence for architects and this is by what we'll talk about the author in a second, but the title of pieces this, how doing work for free can actually help you increase fees. And then all of our Lowry, who is the author began to tell us about his approach to giving away free work to win products. Right? Would you mind summarizing that for us?

Rion Willard

02:38

Yeah, so And we've had Oliver on the on the podcast, and they run a he runs a very successful practice in London. And I was very impressed with their, in general their their business innovation and the way that they practice. And, you know, they've worked with some good business consultants, and they know their stuff. They know that they know what they're doing. And the general article was talking about these kinds of capacity viability reports. So I'm assuming that it's probably quite a lightweight piece of work to help a developer make a decision about either purchasing a plot of land, or going ahead with the deal. They're kind of in a position where they're uncommitted, perhaps, or they haven't got investments secured. And they're, and that they are doing work, which plugs in that gap helps the developer maker make a decision or move the project along. And then they get paid afterwards, when they negotiate the fees for the for the rest of the project. And it sounds like that, you know, that's a quite a well established way that they operate with developers, perhaps they operate with new developers like that. Sounds like they do have new developers, and they do it with old clients as well. And it's part of them, it's part of their marketing budget. So I think that would already be a little bit different from lots of architects when they've already got a kind of budget set aside, so and it wouldn't surprise me knowing their practice that they'll probably be very aware with timesheets, of how much money they're actually spending on these three bits of work, who's involved with it. And then they kind of get an hour cost of what how much resource they're putting into it, what it's costing them, they write it off in their marketing budget. And, and then it kind of helps them close, close work that's, in principle what they're talking about doing. So it's not it's not like doing whole jobs for free. It's he was liking it to the monkey's fist idea, which we've spoken about loads before here, that kind of little, something smaller that you throw out that helps bring in a bigger piece of work afterwards.

Enoch Sears

04:52

Exactly. And so right so the monkey's fist Ron's referring to if you haven't listened to the previous episodes is it's a nautical term, and it's a pretty kind of knot, you actually tie the knot. And so it's it comes out cylinder not cylindrical, spherical. So if you can imagine the spherical knot, and the why the reason why that's important is because when you're trying to toss a rope as a sailor, it's like trying to toss a spaghetti noodle, it's gonna go all over the place. And so the monkey's fist idea is, when you're talking a boat or something of the sort, you want to have something that's heavy at the end that you can toss over to the shore, where the Longshoremen can catch it, and then begin to pull the boat into shore and then tie it up. So he uses this idea of the monkey's fist in the article talking about us that that little piece that we throw onto the shore, and then it gets taken, they pull us into the shore because it gets our foot in the door. So when we're talking about free working well, first of all, I mean, my hat is off to Oliver for actually like writing an article about this, because let's face it, no surprise, this is common practice in the architecture industry, there must be a manual somewhere, for people that do develop work stating that the way to get work is to give it away for free. I mean, it's almost a cancer in the architecture industry is just, you know, giving away work. So what we're really here going to talk about a focus on is what's the difference between using free work strategically, as opposed to just giving away free work. Because in our extensive work with practice owners and haven't run architectural practices or self, what we find is oftentimes giving away free work devaluing ourselves and just giving it away because we have to masquerades in our mind as a strategic decision. Yeah.

Rion Willard

06:29

Yeah. And I think what for us? Well, I think what's interesting is we've seen so many of our own clients who have done this practice. And again, you know, it's interesting that Oliver was actually one of the first people on the podcast that spoke proudly, as well. But no, we do this, this is a practice that we engage in, and it works for us. And, and, you know, it's part of our marketing budget. Whereas I've had many other architects who, when I'm spoke to them on the podcast, don't say that they do that. And then afterwards, they say, actually, you know, we do that they spill the beans, they spill the beans when the when it's not recording, and they're like,

Enoch Sears

07:09

Okay, to get that off my chest.

Rion Willard

07:12

Thank you for listening. So, I think that's, that's an important to recognize, and Oliver also in the article, he does, acknowledge, and addresses, you know, makes, it makes it a statement about how he is, you know, he's concerned about the ever crumbling architectural fees that exists in the industry. So, and I think it's important to make a distinction here of what they're doing, and undercutting, for example, which is also another sort of insidious practice that happens in, in architecture all over the place. And I think when you're winning, when you're winning a job, I would even call it winning out calling it you get access to work on a job for a fee, which isn't enough for you, that's really losing a job. Because now you've got to work with this losing job for the next 18 months. Terrible.

Enoch Sears

08:16

thing, right? It's like, when you drop your pants, you could be mooning the other party or you could be about to get screwed. So the point is, is that you can't judge a book by its you can't just see something and say, Okay, I know that that's wrong, right? That's not That's not workable. That's not gonna work out. Okay. All right. So we think about free work. This is the idea like not all free work is created equal. And and what Ryan's what Ryan's bringing up here is, you know, if, if you're undercutting, because you know your margins, you've set up a team that's highly efficient, you know that you're going to walk with a 20% margin, and you can undercut all the other firms. Go for it, right. But that's not what actually happens in architecture, what actually happens is firms end up out of desperation and neediness because they need the work, they cut their fee, they slashed their margins, which means they can't invest in the right people. They can't invest in marketing, they may be even foregoing their own salaries and bonuses, which is starving the business and so this is an unhealthy business practice. Going back to our our analogy about dropping the pants, they're getting screwed.

Rion Willard

09:26

And they're doing it to themselves. Yeah. And then there's also I mean, just think about how much free work architects do during a during a project they've got you know, how many change orders that they don't qualify and price up and then hold the the client accountable for them paying how much extra work do they do all throughout the process of trying to do something How much work do they that architects do for free which is really for themselves in over two Designing or putting things through iteration after iteration after iteration. You know how much how much free work is given away in that way as well how much work is how much work is forced to be given away by undercharging? If you haven't got the right fees on a project, you are giving away free work. Okay? Because you're not making any profit on it, you'll lose that you're making, you're making a loss.

Enoch Sears

10:28

And it's not like there's a shortage of free work in architecture, okay, there's no shortage of free work, what we're standing for here is you actually getting paid. So there's a few principles to consider as you're looking at whether working for free is going to be a strategic decision or not. And it comes down to the intention and the understanding behind the act. So for instance, the principle here is if you're going to give away free work, number one, is that certainly part of your marketing budget at the beginning of the year, did you set a marketing budget, and you've you've already written off those hours. The second thing is Ryan was Ryan, and you were you and I were talking beforehand. And one of the things that that we help firms do is to start charging for the work that they did for free in the past. And they find that nothing changes. But what does change is they end up bagging an extra $20,000 for a piece of work that they used to give away for free.

Rion Willard

11:20

Yeah. And that that's one of the simplest things with this, and particularly these kind of Viet viability studies with with developers. Okay. And when we teach our clients how to sell and how to have some selling conversations, and then they start packaging up these are we you know, sometimes we refer to them as a low commitment consultation, or capacity study or a discovery report, or whatever it is viability report needs an options view, give it whatever name you can, people start getting paid for it, and they used to give that stuff away. So if you can get paid for it, why wouldn't you get paid for it?

Enoch Sears

11:59

Absolutely. And on more on the needs and option review, you can go check out the work of Richard Petrie has some Google his name has some great content out there about how to charge for an initial consultation that you're currently giving away for free. So where did we land so we talked about, you know, doing work for free can actually help you increase your fees? Yes, it can. However, with the caveat, if you're going to do work for free, there needs to be an exchange of value we say needs to be there's there's this psychological principle that people value what they pay for. And other words, your price in your life when I was I mean, I gave my kid a beautiful bicycle for Christmas, he got it for free. He left it out over the wintertime by the summertime, it was completely rusted over. Now, on the flip side, when I was a kid and I bought, I had a paper route. And I saved up $300. And I remember there was this red Bianchi mountain bike at the store that like I had been looking at this for like six months, it was back in the early 90s, just this beautiful cherry red and had like the knobby tires on it. And it was $300 which was a fortune in paper out money. So I saved the money bought and bought the mountain bike and you better believe that I kept that mountain bike. I mean, I kept it lubed and oil that was like it was like, That thing was always spick and span I took I upgraded the components on it, I took great care of it. So one of the challenges that you need to recognize if you're going to be trying to use a strategy of using work for free to get work is number one, how do you maintain parity with your with the other party? Meaning if you're going to give them some value? What value are you getting an exchange, and this is oftentimes a conversation that doesn't happen. So typically, what we find architects do is they go do the feasibility study for free, but there's no handshake, there's no idea that I'll get the work. Once I do the study, what we actually see is sometimes the architect will go do the work for free, the developer say that's fantastic. And then they go into hire another practice, right? That's because you weren't strategic about the free work you're giving away. So if you're giving away free work, do it knowingly understand what the cost is, and have an agreement in place with the other party, where there's an equitable exchange of value. And perhaps you can just wrap that in the fee of say, Look, this feasibility study, we spent $5,000 on this, we're going to recoup that once the project gets approved. And by taking this feasibility study from us, you're committing that you're going to use us as the architectural practice to actually do the work. So these are all but these here's the thing, these are all up to negotiation, it's upon you, as an architectural practitioner to decide what it is that you want to do. And that's why my hat is off to Oliver here. Because although his his stance is unpopular, and he got some flack for it online, even though many firms actually do it, he actually from reading the article, I can see that he's very clear on what he believes in what's right for him he's not doing it because he's pressures not doing it because of lack of cash flow. At least the case he's making the article is that he's doing it intentionally. So if you're going to be giving something away for free the principle here Here's make sure that there's an understanding from the other party and send them an invoice that zeroed out. Because the last thing you want to do is the seat. Here's the danger of giving away work for free is you undermined your expertise and your value at the beginning. Even though clients will tell you it's not the case, your esteem, your gravitas goes down in their mind. When you give the work away for free,

Rion Willard

15:27

yeah, that this this idea of you're you're giving the work away? Or you're perhaps let's call it you're not collecting payment now. And this is this is different.

Enoch Sears

15:39

Well said good distinction tell

Rion Willard

15:40

so right. So so we have clients who have pieces of architecture who negotiate with developers, and they share in the risk with the developer. Now sometimes I'll hear architects, they'll say, Oh, well, the developers, you know, squeezing us, they're telling us that we need to share in the risk. And so you know, we've dropped our fees. And you're like crying out loud, what you're now taking on more risk, okay, the developers taking risks, but the developers gonna, the developer is gonna get some really kick ass reward at the end of it, what are you going to get, you're going to get a project, which your fees are now squeezed on.

Enoch Sears

16:20

Stay up late at night meeting deadlines for a developer who wants it done two weeks ago, I mean,

Rion Willard

16:25

you haven't know how amazing you haven't won anything you haven't gotten. You've taped, now you're taking risk with no reward. So some of our clients that Business of Architecture, they're very smart. And they often negotiate with a developer, they might negotiate a base rate for the first part phase of work, maybe up to planning for example, and, and they might negotiate a rate where they're getting their covers, covers their costs covered, and then then negotiate a bonus charge on each unit that they're going to get planning permission for. So they've structured it a slightly different way, rather than just getting flat fee. Okay, and if they get lots of units on approved, then they can, they can work out to get paid way more than they would have done if they were getting just a regular regular fee. And often when people do that, though, they do put both options, okay, so here's my normal fee, that you pay me regularly pay me upfront, or you pay me in stages, as the project moves along, if you want me to share in the risk and reduce the amount of money that you're taking, you're investing in these soft costs, before you get kind of investor certainty, then the fee will go up on the other side when I get the approvals. Okay? So for example, if you want to just pay the regular price, then it's $10,000. If you want me to lower my fees, at the front end, or give you a bit of space for your, you know, whilst you're getting funds from investors, then let's say it's $3,000, upfront, and then it will be another $15,000 Once approvals have have happened. So, whatever, whatever it is, but there's there's some sort of exchange there or maybe there's an exchange and equity. We've seen people do that before. Where, you know, the architect, we've got a client at the moment who's doing this that they're buying into the project, they are working for free, but they are getting ownership equity in the end development. So they're putting in sweat equity into the project. Totally different. Absolutely.

Enoch Sears

18:38

Yeah. I mean, great so there's Ryan just gave you a couple strategies. The idea here is that you don't need to use like giving away free work is one of the tools in the arsenal that you have available to as a powerful business person and look here's here's where I stand on this you Ryan our listeners if you want to give away work for free giveaway work for free go giveaway giveaway ton of work, just go work for free. It's like we don't care I don't care I don't you know, go do it. Just Just go move into a harvest I mean, you know, use a whatever give it away for free, it's all good go for it. And that there will always be the architects who are not given away for free driving by and their Lambos or their souped up Tesla's or their little their drones and once we get the drones their classic Ferrari you know pin faria what what's the the nice like the the old victories

Rion Willard

19:28

and the GT GT five or TT? days? Yeah, there'll be waving

Enoch Sears

19:31

to you as you're riding your bike. As you know, nothing gets bikes don't let me denigrate bikes. I'm a bike rider myself. But the point is, is if you want to give away free work, I know that there's nothing here on this podcast, we're going to say that's going to dissuade you otherwise. So go for it. If you need permission to give away free work you have you heard my official permission, go giveaway free work.

Enoch Sears

19:56

And if you're not looking for that, if you're like, you know if you're one of our listeners, who values being profitable and doing great design work, then giving away free work can be a strategic arrow in your arsenal. And we can talk about strategies to make sure that you're not losing value. When you give away free work, you're actually increasing the overall value. And this is probably the yardstick

Rion Willard

20:16

and you're mooning not dropping the pants. There we go. They both

Enoch Sears

20:20

require dropping the pants. Ryan, I remember I was a ruffian back in in grade school we had this is just to complete tangent. So those of you that have the plus 30 seconds on your podcast, you might want to hit that right now. But we were so bored in middle school that like literally we would, we would sit out in the field, and there was this gigantic baseball field. And it was right by this very busy road. And there were no the kids that hung out that used to hang out somewhere else. And so we'd get bored sometimes. And we would just drop our pants and we'd stick them up to the fence and just move in the people. You know, nowadays that would not be acceptable at all in school, you'd probably you know, they see how you'd have to see a psychiatrist or so who knows what would happen nowadays.

Rion Willard

21:00

Oh, I did some good mooning. Did you? Yeah, I still, even now if it's if the situation is right, if it calls for it.

Enoch Sears

21:12

All right, Ryan, it's great. Great. So So look, those of you are listening, you know, here, we've taken an unconventional approach here. And what we stand for is we stand for you ultimately capturing value. So if you know if it's a net positive, in other words, this is right here, Oliver saying here, and this is my bottom line. Like this is right. This is how I look at it. If Oliver knows that, that given away free work as a net increase to his company, and it's a knowledgeable in tension conscious decision for his practice. Go for it. Right. But most architectural practice owners aren't doing that they're giving away free work because the status quo, it's because the way it runs in the industry. And I would even challenge those of you who are doing it intentionally to say, you know, what, if you're a better if you're a better salesperson, you could get paid for that work, because let's face it, we don't need a lot of smart, intelligent architects out there selling architectural services for free, I could go down to local hire High School, and I could hire a bunch of teenage girls that could go and close projects by doing free work, right? So you have yourself a built in Salesforce, just go go to the high school, hire a couple of icicle kids, they're gonna go out, they're gonna sell your products for you for free. You can have a little fliers that say, Hey, we do free feasibility studies. Not a problem, right. But as an architect, as someone who's highly trained as someone who's intelligent as someone who knows how to sell, that's a waste of your expertise. That's a waste of your talent. It's a waste of your ability to sell. Like if you know how to sell so well, why are you giving it away for free? Right? talk him into paying you handsome dollar for it. And then what happens industry then you have more money in your practice, profits start rolling in.

Rion Willard

22:53

I think it's interesting when we because we've seen so many practices deal with this in different ways. You know, I've just mentioned a few ways. Earlier, you know what we're talking about making sure that there's some sort of exchange of value. We've seen practices before who have set up their client set up developers on like a subscription. So developers paying like a monthly monthly rate, and then it doesn't have to be a lot of money. But then any any site that comes along, then it's part of their membership.

Enoch Sears

23:26

fee, you just pay us PJ go pay the set, cinco rice, and then it's all you can eat as many feasibility studies as you want.

Rion Willard

23:33

When knock them out for you. This is some, there's some exchange. But again, we could be creative with it. And it's about why give away something for free that you could charge for. And if you can't charge for it, ask yourself, is it to do with my sales? salesmanship? Or is it? Is it because I'm just is it because just because I'm being lazy? Is it? Because do I actually know what the costs are? Have I've given the work away for free, you know, the other the other thing that architects do a lot when they give work away for free is the, you know, going to site meetings and giving away lots of consultative advice, blah, blah, blah, blah, blah, giving out loads of ideas, visiting sites, things like that. No charge, never hear from the client again, or the prospect again, or

Enoch Sears

24:25

they go with the other firm who charged them a lot of money. That's, that's, that's the worst Ryan when you go to a job site, and you do that you put on the dog and pony show for free and you're thinking man, we provided so much value to this client. They're gonna love us, they're gonna go with us, and then they disappear. You don't hear from them until you see the newspaper article that talks about how they hired the firm. That was three times as expensive as you are. Oh. Oh, that hurts.

Rion Willard

24:50

Painful. I had. I was having a conversation with somebody not too long ago, an architect about free work, and they were are asking me do I go and do public talks for free?

Enoch Sears

25:06

Oh, the gotcha Ryan, do you do those for free?

Rion Willard

25:10

It depends. What do you mean totally depends. So sometimes I will do them for free, and I have done them for free. Other times, I will charge, okay. And often I'll ask, if there's a fee involved for the for the talk, if there is no fee involved for the talk, then I will make sure that I can have the marketing assets. So like a video, I'll make sure that they've got video and audio and that their team is producing it and that they can then we have free usage of the of the videos to do as I do as I please. And then that becomes, in most cases, a very valuable thing, there might be another negotiation that's involved in terms of access to their audience, their mailing list, all of that sorts of stuff. And don't have, you know, that works in terms of an exchange of value. And I'd make a distinction here as well of like, a public talk, where you're in front of 100 people, and your broadcasts, broadcasting and you're giving away, say, kind of good advice. This is good. This is marketing, this is a good marketing opportunity, that is going to result in potential new leads in new projects. Or I can create a marketing asset out of it, which is going to have a longtail, which we can use again and again and again. And I'm not paying for anything to to have it created. That's very different. From me having a one to one conversation, or consulting based conversation with a prospective client who has the means to be able to pay me and giving away a whole load of free advice specifically tailored to their practice. It's very different. Yeah.

Enoch Sears

26:58

And the fancy pantsy business people from from Harvard would call that asymmetric risk reward. In other words, have very little risk for a gigantic reward. You're getting in front of you're getting in front of 100 people one hour of your time. And the return on that could be huge. Whereas if you're doing a feasibility for someone, it's going to take you probably several hours or longer to do that. Right. So it's a it's a lot more of your time you're doing it for one client. And there's potential for this thing to go south. And there's no guarantee of actually winning the work unless you have some sort of contract in place. Yep, yep. So, you know, seller, be warned. I mean, just just, you know, as you're listening to this podcast, listen to Ryan and I just talked about this idea. Look, we know what's out there. We know that there's a cancer in the industry of architects devaluing ourselves is because we've been so beaten down by clients who are looking at the bottom line, that we begin to buy the narrative, that our expertise is not valuable, it's only going to get worse as AI starts to increase. You know, there's going to be other solutions that begin to rival what an architect can do, your value is going to be in standing and what you do best, which is your creative thinking, your problem solving, your risk reward analysis, the things that a machine will never ever be able to create. Alright, Ryan, closing thoughts here,

Rion Willard

28:17

base to teach IQ, be thoughtful, be creative, negotiate, work out your risk reward when you're doing this sort of stuff. And don't give away. Don't, why give away free work when you could charge for

Enoch Sears

28:31

it? And decide, like, do whatever you do, do it out of power, not out of scarcity. Yeah. And that's a wrap. Oh, yeah. One more thing. If you haven't already, head on over to iTunes and leave a review, we'd love to read your name out here on the show. This episode is sponsored by Smart practice, the world's leading step by step business training program that's helped more than 103 architecture firm owners structure their existing practice. So the complexity of business doesn't get in the way of their architecture. Because you see, it's not your architecture design skills that's holding you back. It's the complexity of running a business, managing projects and people dealing with clients, contractors and money. So if you're ready to simplify the running of your practice, go to business of architecture.com forward slash smart to discover the proven simple and easy to implement smart practice method for running a practice that doesn't get in the way of doing exceptional architecture.

Rion Willard

29:33

Hello, listeners. We hope you're enjoying our show. We love bringing you these insightful conversations, but we couldn't do it without the support of our amazing sponsors. If you're a business owner, or know someone who would be an excellent fit for our audience, we'd love to hear from you. Partnering with us means your brand will reach over 40,000 engaged listeners each month. interested in becoming a sponsor, please send us an email at support at business of architecture.com The views

Enoch Sears

29:57

expressed on the show by my guests do not represent Those of the hosts and I make no representation promise guarantee pledge warranty contract bond or commitment except to help you conquer the world Carpe Diem

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