Anti-Competitive 'Homearchitect.ie' Carries RIAI Logo

[mulp]

Following on from past threads dealing with ‘Tenderme.ie’ and ‘Onlinetradesmen.ie’ has anyone considered the implications of this set-up?
See: http://www.homearchitect.ie/

The current RIAI House magazine contains a double page spread advertising the services of “a network of RIAI architects” who are operating in a manner which must contravene the Competition Act, 2002.
The RIAI’s logo features prominently on this website, which implies to the consumer that the Institute backs and supports this ‘network of architects’ who charge fixed fees of €500 for an initial visit (€125 per hour). This type of concerted action to restrict price is deemed illegal precisely because it is bad for the consumer not good, as claimed by the network’s organizers. Want proof: Many RIAI architects are offering initial consultations via their own websites for FREE, not €125 per hour.

Some issues for consideration:

1. Competition Law.
The service is described as a “licensed network” of “RIAI Architects”, who will be charging the client a fixed fee rate of €500 for a four hour visit and €800 for a seven hour visit.
How can such a network of architects circumvent the Competition Act? The Competition Authority would quite correctly deem this to be a cartel, i.e. Architects acting in concerted practice to restrict variation in price to the consumer.

2. Other RIAI Member Architects.
Other RIAI Architects competing for similar work may not wish to enter into this network or may not agree with the “strict selection” criteria touted.
Their website prominently displays the RIAI logo. Is the Home Architect service partly run by the RIAI, and do they agree with fixed fees being charged for architect’s work? If this were the case, it must compound the anti-competition issues.

3. Fees.
RIAI Architects compete for domestic work. Many are happy to meet with prospective clients for initial visits for no cost at all, as a means to securing work.
This is extremely useful to clients as it allows them to assess the architect and his ideas before committing to any service.
They can then agree to part company, or engage the architect for a full, or various options of partial service.
This service plan charges a fixed fee of (€125 per hour), prior to the client knowing which architect will even be appointed, or if they are even remotely compatible. (Compatibility being as much the client’s decision as the architect’s).
Prospective clients can currently find, and consult suitable architects, through the RIAI search facility and numerous other means such as The Golden Pages, ‘ArchitectureNow’ and architect’s own websites. All for no fee.
Is it appropriate that some RIAI members should direct the public to a service, which removes the benefits of free competition to both client and architect, and charges a fixed price for the privilege?

4. Organizers Cut.
In the absence of any information on the website, it must be assumed that the organizers receive a percentage of each consultation, with the remainder going to the architect involved.
If this is the case, it should be communicated to the client, so that they are aware they are paying an arrangement fee to a private company, in addition to the architect’s own fee.
All of the above matters are of concern to architects competing for this scale of domestic work. The level of advertising and publicity currently supporting this venture has a real risk of inviting potential clients towards an expensive, fixed-price service for which they have no guarantee of compatibility with an as yet ‘unknown architect’.
The Institute, and its members, would undoubtedly be better attracting clients through the soon to be enhanced RIAI Arch-Search service. Through this, free competition on price and service can be promoted.
Importantly: the potential client would benefit most.

Finally, the site’s text content appears to be almost entirely plagiarized from a UK website – http://www.architect-yourhome.com (a group who don’t fix prices or call themselves a licensed network of RIBA Architects).
Says an awful lot!

[DOC]

Some good points there mulp - did you consider bringing to the attention of the RIAI?

E 125/hr......nice if you can get it!

[icbarros]

This seems to be a new service by Studio D Architects. And Greg Tisdall is a long term member of RIAI council...
I think these guys are just trying to survive and maybe they didn't realise these issues and they will easily correct them if brought to attention.
??

[missarchi]

mega what? hours...

Free visits and what not are fine but at the end of the day...

architects are shooting themselves in the foot and NLMA could be deemed anti

so could a number of big projects

[parka]

‘network of architects’

This seems to be very misleading, is there a 'network' or is it Studio D?

[reddy]

I don't know if this is anti competitive though or just plain NOT competitive. The initial consultation price seems to be too high so surely people will vote with their feet.

This kind of cooperation often occurs in public service tendering where small practices create a group to tender for a job on the basis that on their own they cannot compete by reasons of minimum turnover/staff levels/insurance criteria.

I think fair play to them if it works.

[mulp]

This kind of cooperation often occurs in public service tendering where small practices create a group to tender for a job on the basis that on their own they cannot compete by reasons of minimum turnover/staff levels/insurance criteria.

I think fair play to them if it works.

A group of small practices cooperating to tender for A job is of course providing A firm quote for one job. The group are still openly competing against everyone else.

This 'network of architects', which is apparently backed by the Royal Institute of Architects in Ireland, demands the same fixed price every time. The RIAI backing and resulting level of publicity negatively affects the prospects of other small RIAI practitioners who compete fairly for such work.

Interesting that Greg Tisdall is a long term member of RIAI council...
Makes it difficult to comprehend how he was not aware of the Competition Act given the work undertaken by the Competition Authority vis-a-vis fee scales etc.

[SirRaymondMang]

E 125/hr......nice if you can get it!

Anyone out there getting fees like this from your clients?

[mulp]

Anyone out there getting fees like this from your clients?

I'm going to put up a post a bit later highlighting a few issues with "HOUSE" magazine.
Constructive criticism from users might help change this RIAI publication into one that is of real use to Architects and the potential clients they wish to attract.

In the mean time, the current issue contains an article which helpfully informs everyone that “architect’s fees range from 12 – 18% of the build cost for the full RIAI service” .

WOW!

[wearnicehats]

I hate to piss on your campfires but there is another way of looking at this:

In March 2009 the Society of Chartered Surveyors estimated the build cost of a detached 1250sqft detached house to be in the region of €185/sqft. That’s in Dublin – it falls to c. €133/sqft in Galway but let’s stick with Dublin

1250sqft at 185/sqft = a build cost of €231,250

Taking the lowest advised figure there of 12% that equals a fee to the architect of €27750.

Let’s analyse the horror brought about by €125/hour

That equates – based on a 7.5 hour working day – to 29.6 days of work for initial brief, design drawings, planning drawings, construction drawings and site supervision.

And that’s to break even – you have to reduce that number by the profit percentage you need. And then remember that the €27750 is a gross fee – inclusive of office overheads, costs, travel, printing etc.

Inclusive of tax.

Let’s say you’re a 2 person practice and the nett fee on that job, if you’re lucky, is c. €11-12k, you work out how many commissions you’re going to need to make a living at 12%

[henno]

That equates – based on a 7.5 hour working day – to 29.6 days of work for initial brief, design drawings, planning drawings, construction drawings and site supervision.

while i agree entirely with what youve posted wnh...

i have to say that a major factor in some public distrust of architect fee rates is due to some architects charging those rates on builds that did not deserve them.... ie 1250 sq ft bungalow with standard outline spec..... those rates are based on what can only be considered the 'ultimate' or 'platinum' service.... when the project simply deserved the 'basic' service.. ie planner pacifying design, standard 310 cavity build, no off standard details, 6 stage payment inspections....

[wearnicehats]

while i agree entirely with what youve posted wnh...

i have to say that a major factor in some public distrust of architect fee rates is due to some architects charging those rates on builds that did not deserve them.... ie 1250 sq ft bungalow with standard outline spec..... those rates are based on what can only be considered the 'ultimate' or 'platinum' service.... when the project simply deserved the 'basic' service.. ie planner pacifying design, standard 310 cavity build, no off standard details, 6 stage payment inspections....

you've succinctly described the reason why the country is covered with shite houses

[henno]

you've succinctly described the reason why the country is covered with shite houses

no, the reason the country is covered with shite houses is squarely down to the planners who allowed them....
no permission = no build

[sinnerboy]

I hate to piss on your campfires

Go on - you LOVE it

[wearnicehats]

no, the reason the country is covered with shite houses is squarely down to the planners who allowed them....
no permission = no build

Well, yes, ultimately but the planners can only review what’s in front of them.

The point I was trying to make is that, ultimately it’s a business and to essential thing, obviously, is to run your business efficiently. Part of that efficiency is an economy of scale. The replication of detail saves thinking and drawing time. The replication of an entire design is, therefore, profit gold. The downside to this is, of course, that the same banality spreads inexorably across the country as clients who don’t care meet consultants who care even less.

Innovation does not equal efficiency and, therefore, does not equal profit on tight fee margins

The paradox here of course, is that an innovative design, once replicated, is no longer innovative. So you must innovate again and the spiral continues downwards to the nearest Credit Union. I was merely assuming that this collaborative effort is intent on good progressive design and trying to show that, contrary to opinion, the percentages are not high

[sinnerboy]

1250sqft at 185/sqft = a build cost of €231,250

Taking the lowest advised figure there of 12% that equals a fee to the architect of €27750.

Let’s analyse the horror brought about by €125/hour

That equates – based on a 7.5 hour working day – to 29.6 days of work for initial brief, design drawings, planning drawings, construction drawings and site supervision.

And that’s to break even – you have to reduce that number by the profit percentage you need. And then remember that the €27750 is a gross fee – inclusive of office overheads, costs, travel, printing etc.

Inclusive of tax.

Let’s say you’re a 2 person practice and the nett fee on that job, if you’re lucky, is c. €11-12k, you work out how many commissions you’re going to need to make a living at 12%

Dichotomy outlined nicely . Why many architects shy away from this work - from the very clients who need and distrust them most

[goneill]

I can't understand your problem MULP.

Lots of people form alliances for the purpose of promoting their business, and it doesn't necessarily mean it is anti-competitive. If it was designed to affect market prices then you might have a case, but a small group in a sea of unemployed architects are unlikely to even aspire to that.

There is a good argument that they might help each other keep up to date with practice developments introduce standards for doing things, and generally offer an improved service, but with the continuity of personel that you don't always get in larger practices.

€125 is not an astronomical rate - the last time my car was serviced at a main dealer it was €110/hr for a mechanic's time only. It is true that many architects will not charge for an initial consultaion - we don't - but I often think we might earn more respect from our clients if we did. If we don't value our time - why should our clients? If this recession ever ends, I think the only way forward for small practices will be to form just the type of alliance described. There will be no prospect of government work without QA and high turnovers, as this may be the only way of getting into it.

So instead of complaining about this network being "anti-competitive" (while at the same time charging too much!) why don't you form your own?

Your accusation that a respected member of the RIAI is breaking the law is a very serious one.

[SirRaymondMang]

I hate to piss on your campfires but there is another way of looking at this:

In March 2009 the Society of Chartered Surveyors estimated the build cost of a detached 1250sqft detached house to be in the region of €185/sqft. That’s in Dublin – it falls to c. €133/sqft in Galway but let’s stick with Dublin

1250sqft at 185/sqft = a build cost of €231,250

Taking the lowest advised figure there of 12% that equals a fee to the architect of €27750.

Let’s analyse the horror brought about by €125/hour

That equates – based on a 7.5 hour working day – to 29.6 days of work for initial brief, design drawings, planning drawings, construction drawings and site supervision.

And that’s to break even – you have to reduce that number by the profit percentage you need. And then remember that the €27750 is a gross fee – inclusive of office overheads, costs, travel, printing etc.

Inclusive of tax.

Let’s say you’re a 2 person practice and the nett fee on that job, if you’re lucky, is c. €11-12k, you work out how many commissions you’re going to need to make a living at 12%

Surely €125/hour is inclusive of profit and overheads?

[mulp]

I can't understand your problem MULP.

Lots of people form alliances for the purpose of promoting their business, and it doesn't necessarily mean it is anti-competitive. If it was designed to affect market prices then you might have a case, but a small group in a sea of unemployed architects are unlikely to even aspire to that.

There is a good argument that they might help each other keep up to date with practice developments introduce standards for doing things, and generally offer an improved service, but with the continuity of personel that you don't always get in larger practices.

€125 is not an astronomical rate - the last time my car was serviced at a main dealer it was €110/hr for a mechanic's time only. It is true that many architects will not charge for an initial consultaion - we don't - but I often think we might earn more respect from our clients if we did. If we don't value our time - why should our clients? If this recession ever ends, I think the only way forward for small practices will be to form just the type of alliance described. There will be no prospect of government work without QA and high turnovers, as this may be the only way of getting into it.

So instead of complaining about this network being "anti-competitive" (while at the same time charging too much!) why don't you form your own?

Your accusation that a respected member of the RIAI is breaking the law is a very serious one.

At last it clicks: Yes, it is a serious problem. One compounded by the fact that the RIAI appear to be supporting it and it is "organised by a respected member of the RIAI".

The last time you looked around for car servicing costs did you find a 'licensed network' of separate SIMI members all offering to do your work for the exact same price? Even car dealers (pure business people as opposed to professionals) have been taken to task by the competition authority when fixing new car prices, and they were all selling the exact same product (brand).
Have you missed what happened to the Vintners when they tried to to fix prices in order to actually stop any price increases?

Lots of people do indeed form alliances to promote their business, but most of them know the law in relation to fixed pricing.
Ignorance of the law is not an excuse. Not even in desperate times.

As I said initially, the new & improved RIAI Archi-search site should be promoted and advertised by the institute rather than a service which is anti-competitive, bad for clients and bad for other RIAI member Architects.

Finally what is the intention of your comment: "Your accusation that a respected member of the RIAI is breaking the law is a very serious one."?
Is it mean't to worry me? Will you be telling me next that he has impeccable qualifications and won a host of awards?
Please reread my post. I made no mention of any individual RIAI member. That was contributed by others. I then commented that it "Makes it difficult to comprehend how he was not aware of the Competition Act..."

This Protectionist Nonsense is one of the many factors which together contribute to such a low engagement of RIAI architects for domestic extension and one-off new-build work.

Try and take a look from the outside in for a change. You'll be surprised what it is everyone else sees.

[mulp]

€125 is not an astronomical rate - the last time my car was serviced at a main dealer it was €110/hr for a mechanic's time only. It is true that many architects will not charge for an initial consultaion - we don't - but I often think we might earn more respect from our clients if we did. If we don't value our time - why should our clients? If this recession ever ends, I think the only way forward for small practices will be to form just the type of alliance described. There will be no prospect of government work without QA and high turnovers, as this may be the only way of getting into it.

So instead of complaining about this network being "anti-competitive" (while at the same time charging too much!) why don't you form your own?

By the way...
Who said €125 per hour was astronomical? Not me.
My comments on this fee were in relation to:
1. Its fixed price;
2. The fact that many other RIAI members offer initial consultations for FREE, not €125 per hour;
3. That this gives clients no opportunity to even know which architect they will be appointed with before paying €500;
4. And that the client must be paying the organiser's fee in addition to the architect's, without being told.

The reason I don't just go and form my own? For all the reasons stated!

[wearnicehats]

Surely €125/hour is inclusive of profit and overheads?

that's what I said!

[wearnicehats]

At last it clicks: Yes, it is a serious problem. One compounded by the fact that the RIAI appear to be supporting it and it is "organised by a respected member of the RIAI".

The last time you looked around for car servicing costs did you find a 'licensed network' of separate SIMI members all offering to do your work for the exact same price? Even car dealers (pure business people as opposed to professionals) have been taken to task by the competition authority when fixing new car prices, and they were all selling the exact same product (brand).
Have you missed what happened to the Vintners when they tried to to fix prices in order to actually stop any price increases?

Lots of people do indeed form alliances to promote their business, but most of them know the law in relation to fixed pricing.
Ignorance of the law is not an excuse. Not even in desperate times.

As I said initially, the new & improved RIAI Archi-search site should be promoted and advertised by the institute rather than a service which is anti-competitive, bad for clients and bad for other RIAI member Architects.

Finally what is the intention of your comment: "Your accusation that a respected member of the RIAI is breaking the law is a very serious one."?
Is it mean't to worry me? Will you be telling me next that he has impeccable qualifications and won a host of awards?
Please reread my post. I made no mention of any individual RIAI member. That was contributed by others. I then commented that it "Makes it difficult to comprehend how he was not aware of the Competition Act..."

This Protectionist Nonsense is one of the many factors which together contribute to such a low engagement of RIAI architects for domestic extension and one-off new-build work.

Try and take a look from the outside in for a change. You'll be surprised what it is everyone else sees.

before commenting on the legal side of it does anyone know how exactly this process works? Is this a network of individual companies or is it a single company that then pays individual companies? Or is it a collaboration?

I appreciate Mulp's comments on tendering but, in a sense, is it any different from me not being able to take on a commission and handing it over to a friend? this is very common, especially where small firms club together to share office space

For the record if I was in any way interested in nixers I might give an initial consulation free but no way would that last more than an hour. if it was a full day - as this lot do for a larger scheme - I'd definitely be charging a minimum of 500 bucks, probably more. It would be percentage based thereafter though, not an hourly rate

[SirRaymondMang]

That equates – based on a 7.5 hour working day – to 29.6 days of work for initial brief, design drawings, planning drawings, construction drawings and site supervision.

And that’s to break even – you have to reduce that number by the profit percentage you need. And then remember that the €27750 is a gross fee – inclusive of office overheads, costs, travel, printing etc.

Inclusive of tax.

Sorry, but then your sums above are not to 'break even'. The profit is already included in that fee?

€125/hour is not a break even rate.

[wearnicehats]

Sorry, but then your sums above are not to 'break even'. The profit is already included in that fee?

€125/hour is not a break even rate.

sorry, maybe I wasn't clear. I was merely dividing the rate into the fee to prove a point. You're right in that an hourly charge out fee will factor in all the overheads, profit etc. for a company

That's slightly different to my point which was that the 12% fee has to cover everything - profit, overheads etc. I just used the 125 to give an indication of the time that can be spent on a job before you're eating in to the bottom line

[wearnicehats]

before commenting on the legal side of it does anyone know how exactly this process works? Is this a network of individual companies or is it a single company that then pays individual companies? Or is it a collaboration?

I appreciate Mulp's comments on tendering but, in a sense, is it any different from me not being able to take on a commission and handing it over to a friend? this is very common, especially where small firms club together to share office space

For the record if I was in any way interested in nixers I might give an initial consulation free but no way would that last more than an hour. if it was a full day - as this lot do for a larger scheme - I'd definitely be charging a minimum of 500 bucks, probably more. It would be percentage based thereafter though, not an hourly rate

sorry - just noticed that it's €800 for the 7 hour session. question still stands though