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PROFESSIONAL PRACTICE III

THE ARCHITECTURAL FIRM

PREPARED BY ADRIAN R. TOISA


Twenty-first-century practice requires architects to adopt
an entrepreneurial approach dependent on risk-tolerance,
self-awareness, and comfort with unpredictability. Starting
a firm gives architect’s opportunity to leverage talent and
drive to create a work-life that is both personally satisfying
and financially rewarding.
1
-Entrepreneurial Practice: Starting an Architectural Firm
The Architects Handbook of Professional Practice, 15th
edition

PREPARED BY ADRIAN R. TOISA


Intended Learning Outcome

i. Identify and explain different kinds of


business model for design professionals.

ii. Define the business model.


1

PREPARED BY ADRIAN R. TOISA


Course Content

i. Background
ii. Definition
iii. Architectural Firm – Genesis (Factors that
enable expanded capacity and reach of start-
up and small firms) 1

iv. Architectural Firm – Design Firm Business


Models 2

PREPARED BY ADRIAN R. TOISA


INTRODUCTION
Background
•Architects (master builders)
have existed since early in the
recorded history.

•The earliest recorded architect is


Imhotep (c. 2600 BCE) and
Senemut (c. 1470 BCE). Both of
them are noble but there are no 1
writings exist to describe how 1) Statue of Imhotep in the Louvre
these architects performed their Pyramid and 2) Statue of kneleling
Senemut from the Brooklyn
work. Museum 2

PREPARED BY ADRIAN R. TOISA


INTRODUCTION
Background 2

•The oldest surviving book on


architecture, De Architectura by
Vitruvius describes the design
and construction of towns,
buildings , clocks, and machines
but provides no information
about the organization of
architect’s assistants and the
professional practice.

•It is generally accepted that 1


ancient architects, throughout 1) De Architectura by Vitruvius – Front cover of the edition of Lyon (1552)
2) Marcus Vitruvius Pollio (C. 80-70BC – 15BC)
human history, most of them
were wealthy individuals.

PREPARED BY ADRIAN R. TOISA


INTRODUCTION
Background 2
•19th Century – architecture
began to be practiced as a full-
time profession.

•The oldest active architecture


firms on record are the Luckett &
Farley in Louisville, KY and the
SmithGroup in Detroit, MI, both
been founded in 1853.

•In UK, Brierly Groom is the


oldest continuing practice 1

founded in 1750 at York, England. 1) De Architectura by Vitruvius – Front cover of the edition of Lyon (1552)
2) Marcus Vitruvius Pollio (C. 80-70BC – 15BC)

PREPARED BY ADRIAN R. TOISA


DEFINITION
Architectural Firm
•A company which employs one
or more licensed architects and
practices the profession of
architecture.

•A company which specializes in


providing architectural services
to clients. Such firms typically
hire architects along with
support staff who help the
T. I. Vasquez Architects & Planners Inc. @ The Bayleaf Hotel, Intramuros
architects do their jobs, and may 20110731. Photo courtesy by TVA&P Inc.
be part of larger company which
handles many aspects of design •In RA 9266, Architectural Firm means a sole
and construction process, from proprietorship, a partnership or a
contracting to interior corporation registered with the proper
decorating. government agencies.

PREPARED BY ADRIAN R. TOISA


ARCHITECTURAL FIRM - GENESIS
Start-up & Small Firms
The ability of start-up and small
firms to succeed in the new
economy has increased owing to
a number of factors that enable
expanded capacity and reach.

•Infrastructure

•Collaboration
Photo from http://www.huffingtonpost.com/jake-newfield/6-reasons-
•Global Practice why-you-should-_2_b_8677046.html

PREPARED BY ADRIAN R. TOISA


ARCHITECTURAL FIRM - GENESIS
Start-up & Small Firms
Infrastructure
Technology is enabling architects
to start their own firms to
expand their capacity and the
possible types of engagements.

The chance to leave a larger firm


and go out on one’s own does
not necessarily mean giving up
large projects or participation Photo from http://apict.net/project/assessment-and-design-for-building-
team that executes them. technology-infrastructure/

The evolution of file sharing technologies,


Working with larger project firms building information modeling (BIM),
does not necessarily require a big multiplatform collaboration, and online
operating budget. project communications and management
tools have enabled small and start-up
practices to quickly develop offices that are
PREPARED BY ADRIAN R. TOISA cost-effective, flexible, and scalable.
ARCHITECTURAL FIRM - GENESIS
Start-up & Small Firms
Collaboration
New firms can serve as expert
consultants, contract production
staff, or valued collaborators.

Founders of start-up firms have


the opportunity to thoughtfully
assess their skills, strengths, and
areas of interest to determine
project opportunities that are Photo from http://charity-team-building-events.com/charity-team-
good fit. building-collaboration-cause/

New firms have the option of expanding their


Depending on the nature of the services to include the construction phase
project team arrangement, firms through ongoing collaboration with
ca take on discrete tasks or serve contractors. Architect-Led Design-Build
in support role, demonstrating offers possibility of influence and revenue
value and expertise. (commensurate with the additional risk)
PREPARED BY ADRIAN R. TOISA beyond the design phase of project.
ARCHITECTURAL FIRM - GENESIS
Start-up & Small Firms
Global Practice
New firms can serve as expert
consultants, contract production
staff, or valued collaborators.

Founders of start-up firms have


the opportunity to thoughtfully
assess their skills, strengths, and
areas of interest to determine
project opportunities that are Photo from http://starrforce.com/2011/09/salesforce-search-tips-part-1-
good fit. our-best-practice-of-the-week/internetglobal-communication-concept/

New firms have the option of expanding their


Depending on the nature of the services to include the construction phase
project team arrangement, firms through ongoing collaboration with
ca take on discrete tasks or serve contractors. Architect-Led Design-Build
in support role, demonstrating offers possibility of influence and revenue
value and expertise. (commensurate with the additional risk)
PREPARED BY ADRIAN R. TOISA beyond the design phase of project.
DESIGN FIRM BUSINESS MODELS
Start-up & Small Firms
When starting a firm, being
intentional and strategic about a
business model may be
challenging. Understanding the
options and proceeding with self-
awareness is essential.

A business model is a plan that


articulates what business is
being conducted and how the
business will generate income.

David Maister, author of many


books on management of
professional service firms, has
identified 3-business models that
are common in organizations.
PREPARED BY ADRIAN R. TOISA
DESIGN FIRM BUSINESS MODELS
Start-up & Small Firms
Efficiency-Based Firms
Efficiency-based firms are
focused on fast and les-expensive
project delivery.

Often specialize in one project


type or a narrow range of
services and tend to serve clients
that are looking for standard
solutions and quick turnaround.
Efficiency-based Firms rely on repeatable
Founders may hire more less processes
experienced person for
production assistance because
efficiency-based firms do
projects with a significant
amount of routine work.
PREPARED BY ADRIAN R. TOISA
DESIGN FIRM BUSINESS MODELS
Start-up & Small Firms
Efficiency-Based Firms

Hiring more less experienced


person will help to keep
production cost down, while
freeing the founder to acquire
more work.

With repeatable elements and


standard processes, project
delivery can be streamlined. Efficiency-based Firms rely on repeatable
processes
Profitability is dependent on
volume and productivity and Sustainable success in these firms requires
relatively easy to obtain once continuous improvement of work process
systems are in place. and staying current with technology and
trends.
PREPARED BY ADRIAN R. TOISA
DESIGN FIRM BUSINESS MODELS
Start-up & Small Firms
Experience-Based Firms

Experienced-based firms are


proficient at solving non-routine
and complex design problems.

Requires founder to have


knowledge and experience in
solving complex design problems
and serving on teams that
regularly execute significant Experience-based Firms rely on applying
projects accrued knowledge

The initial management


challenge is to match the project
task to the “pay grade”.

PREPARED BY ADRIAN R. TOISA


DESIGN FIRM BUSINESS MODELS
Start-up & Small Firms
Experience-Based Firms
Hiring a skilled and
experienced architect to assist
the founder once the workload
of the firm grows, as opposed to
intern, may be the best practice.

Virtual collaboration with other


experienced collaborators is also
an excellent strategy for project
delivery. Experience-based Firms rely on applying
accrued knowledge

Sustainability is enhanced when they are


adept at creating and acquiring new
knowledge from doing projects that can be
applied to future commissions.
PREPARED BY ADRIAN R. TOISA
DESIGN FIRM BUSINESS MODELS
Start-up & Small Firms
Expertise-Based Firms

Expertise-based firms have


service offerings that rest upon
deep knowledge and/or
exceptional talent.

These firms include those


headed by “starchitects”, with
their unique style and abilities,
or, more commonly, specialists in
a narrow band of professional
knowledge.

Expertise-based Firms rely on deep


knowledge or unique talent.
PREPARED BY ADRIAN R. TOISA
DESIGN FIRM BUSINESS MODELS
Start-up & Small Firms
Expertise-Based Firms

For founders who have deep


knowledge or unique talent, an
expertise-based firm may allow a
financially successful one-person
firm to be established and
sustained.

Administrative help is advisable


to free the principal to complete
billable work.

Few, if any, mid-level and junior


staff are needed to complete the
work. Expertise-based Firms rely on deep
knowledge or unique talent.
PREPARED BY ADRIAN R. TOISA
DESIGN FIRM BUSINESS MODELS
Start-up & Small Firms
Expertise-Based Firms

More commonly, expert


practitioners will partner with
experts in their related field to
offer a broader range of services.

Many also connect with


academic institutions that allow
expert practitioners the
opportunity to teach and
facilitate research activities.

One- or two-person firms can


be very successful using this
model since profitability often Expertise-based Firms rely on deep
depends on high hourly rates for knowledge or unique talent.
services. PREPARED BY ADRIAN R. TOISA
DESIGN FIRM BUSINESS MODELS
Start-up & Small Firms
Generalist practices may be particularly
Any Projects That Comes successful for firms established in smaller
Through The Door communities.
(Opportunistic vs Strategic)
The downside of this strategy is for many
Most design firms will start in practitioners and start-ups is that it may limit
an opportunistic manner. the depth of professional knowledge
acquired over time, leading to fewer
Having a project to do is a opportunities for complex projects.
prerequisite to starting a firm.

All opportunities need to be


explored, but not all
opportunities must be accepted.

Accepting any project that


comes along can lead to a strong
generalist practice and can be a
strategic choice in itself. PREPARED BY ADRIAN R. TOISA
DESIGN FIRM BUSINESS MODELS

Business models of the design firms relate


to the level of project complexity and
specialized knowledge.

PREPARED BY ADRIAN R. TOISA


DESIGN FIRM BUSINESS MODELS
Start-up & Small Firms
The core competencies , personal
connections, and interests of firm leaders
will attract certain clients and projects
even if there is no intentionality.

At some point in the firm’s life, especially


if firm growth is a goal, a more
intentional approach to the firm’s
business model will be required.

Once a firm’s business mode is


understood, firm growth or sustainable
stability as a solo practitioner or small
firm becomes more possible.

PREPARED BY ADRIAN R. TOISA


END OF PRESENTATION…

REFERENCE
Architectural Firm
RA 9266 – The Architecture Act of 2004
The Architect’s Guide to Small Firm Practice (Wiley 2010), by Rena M. Klein, FAIA
The Architect’s Handbook of Professional Practice 15th Edition
http://www.di.net/almanac/stats/oldest-architecture-firms/
http://shop.columns.com/marcus-vitruvius-pollio.aspx
http://digi.ub.uni-heidelberg.de/diglit/vitruvius1552