Contract Magazine - April 2018 - 26

Starting New Service Lines: Why Higher Pay
Does Not Mean Decreased Profits
by Evelyn M. Lee, AIA

Evelyn M. Lee, AIA,
writes a regular column
for Contract on business
practices in design and
professional development.
Based in San Francisco,
Lee is regional workplace
manager, west coast lead
at Newmark Knight Frank.
She holds graduate degrees
in architecture, public
administration, and business
administration. Currently
a member of the AIA national
board of directors, Lee
received an AIA Young
Architects Award in 2014.
Her website is evelynlee.com.
Visit contractdesign.com/
businesspractice to read all
of her columns for Contract.

I have been known to say that the design
profession is three recessions away from extinction.
This is not to be fatalistic about where we are
headed but rather to start a conversation about
how we can adapt to continue to thrive in the future.
Most architecture and interior design practices
are perilously tied to the cyclical nature of the
construction industry. Each recession brings with
it the inevitable migration of individuals who leave,
never to return, having found employment in
other industries that often offer better work-life
balance and greater benefits with higher pay.
Why would they come back to our industry,
especially if we let them go at a time when they
needed the most support?
Survival Strategy
To combat the loss of workforce in our
industry, I advocate for design firms to be more
entrepreneurial and consider new lines of service
that will allow them to be stable even when their
clients aren't building. In my role as a workplace
strategist, clients come to me in times of growth
as well as regression, especially when they are
looking to spend less to make more. And while
I currently work at Newmark Knight Frank, I cut
my teeth at an award-winning design firm that
had enough foresight to start a strategy group.
When other firms in the Bay Area were letting
individuals go, it managed to grow. So why then,
have other firms not followed? I was recently
reminded how our industry's lack of business
training often prevents us from fully realizing
new strategic opportunities.

firm with the same years of experience were
earning. I encountered this hesitation from potential
employers no less than four times when I was looking
to make a move to what I hoped would be another
architectural practice. In the end, it is ultimately
why I ended up making the jump to the real
estate industry.
The problem is that the firms were comparing
apples to oranges. Most likely you are not paying
your admin staff at the same scale as your design
staff based on their years of experience. Similarly,
if you start a new service line that requires a
different skillset, and allows you to charge a higher
hourly fee because clients value it, why are employees
in those roles held to the same pay scale as those
in traditional practice areas?
Invest in Your Future
So how do you figure out what to pay and
how much to charge? Fundamentally, you should
approach starting a new service line as if you were
starting a new business. Better yet, it should serve
as an opportunity for you to rethink your entire
practice approach.
That means you must do the necessary
due diligence to understand how to price services,
and what the talent you need to fulfill those
services expects. If you are uncertain where to begin,
I recommend a little reverse engineering. Look
at potential competitors in the new space and use
employment websites like Glassdoor to understand
how much they pay their employees who have
similar skillsets to the ones you need. From there
you can begin to determine how much you can
charge for services provided by those individuals.
I realize the exercise of potentially
identifying and starting new services within your
practice is not easy. This holds especially true
at a time when you are just trying to find talent
to fulfill the work you already have. On the other
hand, the best time to figure out how you are going
to survive as a firm through the hard times is when
you have the wherewithal to spend some time
and money on determining a more sustainable
solution over the long run. The crux of the cyclical
construction industry is that it is predictable.
Knowing this to be true, how we respond could
prevent the extinction of our profession. c

Balancing Act
At the end of last year, I was called to serve
as a reference for one of my fellow strategists.
A design firm was looking to grow a new strategy
practice and wanted confirmation that my former
co-worker was the right individual. I happened
to know that my friend was excited about the firm
but had been in protracted discussions because his
current salary was higher than what people at the
26

contractdesign.com

APRIL 2018

PHOTOGRAPHY: CARL BOWER

COLUMNIST
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Contract Magazine - April 2018

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