the sliding scale

When Mark McInturff’s clients began canceling large projects in 2008, the Bethesda, Md., architect remembers thinking he could hang on for a year. As the economic drought enters year three, McInturff has held together his band of employees by taking on a flurry of small jobs—a tiny gallery addition to an artist’s house here, a front porch there. Those small projects have been life-savers by keeping revenue flowing between new-home commissions, whose budgets have deflated by about half. “After the big jobs stopped coming in, I didn’t realize how many small things would continue to come in from former clients,” says McInturff, FAIA. “That’s been gratifying.” Gratifying, yes, but the languishing economy means architects are struggling to cope with the increased volume of smaller jobs they must take on to stay in business. They’re looking harder at smaller projects instead of releasing them to younger colleagues who’ve gone out on their own, and holding tightly to whatever comes in the door. The remix brings new challenges. Smaller projects mean more client interviews, thinner profit margins, and more jobs stopping and starting. A more existential dilemma is that architects, used to pinning their reputation on stellar service, aren’t sure how to finesse a lower fee.

“Our motto is: ‘We’re here all day, every day,’” McInturff says. “I have to make sure we’re generating enough work for six people, but managing it is more of a problem.” He’s currently overseeing 25 projects in various stages—40 percent more than in pre-recession times. “In remodeling, as the job drops in size it’s almost as much work as a larger one, but the fee is lower. I’m personally scrambling more, and getting to design a little less.”

run for the money

That scenario is playing out across the country, especially at boutique firms, where the mantra is maximum service for a minimum number of clients. Between managing the daily practice and courting new clients, David E. Neumann, AIA, founding partner at Neumann Lewis Buchanan Architects, typically could maintain a comfortable work and cash flow with three or four major clients at a time. Now, with three principals and seven architects juggling at least twice as many short-term jobs, it’s harder to stay in the loop. “People expect their project to be the responsibility of one of the architects whose name is on the door,” says Neumann, who oversees offices in Washington, D.C., and Middleburg, Va. In better times, “you could guide every project through design and stay familiar with the details, so that when the clients spoke with you, they knew that you knew what was going on.”

Large projects, he also notes, hit a sweet spot after design development, when they spend several months on one production desk. But a glut of small jobs in various phases means constantly rebalancing the office workload. Neumann is putting in longer hours, while also grappling with how to accommodate client requests for abbreviated services. “How can we convey the services they find most essential, while not detailing to a fare-thee-well?” he asks. “Our interest has always been to keep refining what we do. But some of our staff people have been here 13 years on average. I’ll do anything not to let them go.”

The relative scarcity of substantive commissions leaves established firms wondering where to draw the line on skeleton services. With pinched budgets—theirs and their clients’—how far will they go to maintain cash flow? “You’re weighing: Is the product going to be representative of the firm? It’s a question every person in business has to ask,” says Chicago-area architect Julie Hacker, AIA, partner at Stuart Cohen & Julie Hacker Architects. For example, she says she wouldn’t design an addition without detailing the interior. But in desperate times, “You also have to ask, ‘Why are we doing this project?’” Maybe, she allows, it’s to avoid the devastating loss of people they’ve trained.

Another downside to the small-jobs phenomenon is that firms are less able to build cash reserves. In normal times, big projects offset the thin profit margins of smaller ones. To keep revenues flowing on kitchen and bath remodels, Hacker has added a contract clause requesting payment within seven days of billing. “We have figured out how to manage month to month and keep staff and pay insurance,” says Hacker, whose employees work four days a week. “We’re not taking home any money, but we’re doing what we do. People adapt in different ways.”

Some firms embrace the idiosyncrasies of small jobs. San Diego architect Kevin deFreitas, AIA, who works by himself, says his commissions are one-quarter the usual size and three-quarters the effort, but it’s the most interesting work collection he’s ever had. One is a public restroom on Ocean Beach that includes a water harvesting system and LED lights—a $500,000 budget with a $25,000 architect’s fee. “It’s probably the most used bathroom I’ve ever done,” he jokes. Other eclectic projects include an art building addition for a local college and two tiny rammed earth houses on an Indian reservation.