Spec Work? My Dirty Little Secret

I have a confession to make: I recently did some free work for a local contractor, and this wasn’t the first time. Can you forgive me?

Photo from Flickr © Brad Stabler

Whew, it feels good to get that off of my chest.

Ok, so my tongue is firmly planted in my cheek. But it is true, I did give away a freebie, and I’ve done so in the past. And I admit, a part of me feels I committed a misdeed in a dark corner.

In the U.S. we architects call this “spec” work- doing something for free with the hope that it will bring in paying work later. Spec work can range from something as small as consulting on a color selection to drafting a set of architectural plans. I’ve worked in firms where we did copious amounts of spec work for contractors or potential clients- developers, investors, and others. But other firms where I’ve worked have steered clear of giving out anything for free.

Some say that providing something for free lessens its value for the recipient. And of course there is the issue of liability. Publicly, architects repudiate this practice. Detractors argue that it brings down the architecture profession as a whole.

Few publicly admit to the practice because, well, no one wants to be the architect giving away free work. But I have a suspicion this is more common than we like to admit.

The scenario goes like this: A developer ‘friend’ with whom the architect may have worked in the past approaches the architect about a new venture. We will call it the “spec-taculous mall”. The developer reassures the architect that the spec-taculous mall will be a resounding success and that all the banks and financial backers are on board with the ‘idea’ of the project. But there is a small catch.

The bank needs a set of construction drawings before the loan will be funded. Oh, nothing fancy you know, just a few elevations, a floor plan, and maybe an exterior rendering. That’s all. Oh, and one other thing- there isn’t any money for architectural services. At least not from the start. But as soon as the drawings are approved, the money will flow freely and the spec-taculous mall will be a smash-bang success. We can all retire to Tahiti.

While our sinister tale is fictional, the situation is all too real. And although the correct response here is clear (h#ll no!), not all situations are so cut and dry.

Detractors argue that this practice cheapens the perceived value of an architect’s services. But it is easy for those who have plenty of work to cast stones from their ivory towers.

For those struggling to make ends meet, it is hard to turn away a potential lead for business development.

What do you think? Is this a valid strategy for an architect? Will this practice help or hinder your firm? Has anyone had success (or conversely failure) with this strategy? Please leave your comments below!

 

Enoch Sears
I am a licensed California architect who loves researching and sharing about running a great architecture business. I founded Business of Architecture to help solo architects and small firms run a better business so they can have the peace of mind to focus on creating great architecture.
Enoch Sears

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29 Responses to Spec Work? My Dirty Little Secret

  1. Will September 1, 2013 at 4:46 pm #

    My belief is that if your potential client doesn’t value what you do and your time enough to pay you, even if at somewhat reduced fees for reduced work, then they do not respect what you are doing for them. I do not work for free, it is doubtful that the client does either.

  2. George F June 19, 2013 at 6:14 am #

    Interesting discussion with good points both ways and I’m late into this discussion as well. My opinion is that we are in a business and sometimes you have to give to get. I have done some of this type of thing (sometimes successfully) and have really learned to trust my gut. If it seems too good to be true, it probably is and I think we’re all smart enough to look at an idea (and the client) and see if either has any chance of success. I can’t see taking a project all the way through the process unless there is a potential large pay-off at the end particularly in this economy. The fact is that our developer clients do things “on the come” all the time. It’s what they do. They spend large amounts of money sometimes just to see if a project is feasible and take a lot of risks. I believe the bottom line is that we have to trust ourselves and evaluate each situation on it’s own potential risk and reward. As long as we don’t do something we know is stupid in the hopes it will work out (anyone done that before?) I think it’s fine to stick our necks out sometimes.

  3. Kristin Cross April 25, 2013 at 8:40 am #

    Why is this a known problem in the architecture profession? Are there other professions that have the same issues? We all know the Bar Association has done a good job of protecting its members; is there anything the AIA / RIBA should be doing to save us from ourselves? (Yes we have the same problem in UK).

  4. Octavian Ungureanu, Architect February 24, 2012 at 1:21 am #

    @Merrill
    1. The respect can’t be measured in money.
    2. Example if some spec work that I am doing right now:
    – An old client (We designed a 20.000.000 $ building for him in the past)
    – An opportunity to build 325.000 squared feet with apartments on a land that he doesn’t own but he was asked to associate to.
    Now I make some sketches to see how many very small apartments can be built in this plan and make some cost estimations. Basically it is some sort of feasibility study.
    The point is that if it is not feasible, there won’t be any project, nor for me, nor for my client, nor for the land owner. If this is feasible, there will be a business of about 15.000.000 $. For this I a going to provide architectural and engineering services.
    You see, there is not a free work, there is the work needed to get the job. As the sell persons make hundreds of calls to make their sells, I make some free work to get a big project. The design percentage of this project is more than 2011 income. It will be the first big project since the crisis began.
    3. Consider the free work as an marketing investment, but a very well targeted marketing campaign. On a marketing or advertising campaign you spend money. The free work means money or time.
    4. Consider the free work as an effort made by the architect to be part in a business. Not a service provider, but actually a part of the business. The service provider is replaceable, it is the subject of a biding procedure.
    5. Compare the free work with the architectural contest submissions. For a contest you are not payed, but you might have to pay a tax, spend money. It is the same. Why is a contest free work noble and the free work for an old client degrading?

    • Enoch February 25, 2012 at 7:50 am #

      Octavian, as always, thanks for your comment. I’m seeing a trend with here: it seems that spec work needs to be done with a clear goal in mind and with clear expectations. If that groundwork is laid, it can turn out to be a win-win for all involved!

    • Rob July 15, 2012 at 7:47 am #

      If it is a business respect DEFINITELY can be measured in money. Everything in business can be measured in money because that is what businesses do – spend and receive money.

      If someone doesn’t think the DESIGN portion of your job is worth money, then what do you do that has value? After the get through this milestone, why should they pay for the work on the next one. After all, if you say no then why shouldn’t they get some student or d.i.y.er with a bootleg copy of AutoCAD 2000 draft up your drawings for you to stamp? You know, for like $1,000 – after all you didn’t draft them.

      Doing work for free and doing work in which you bank the client (work prior to funding, but for a contracted fee) are both dangerous, but at least one values your services.

      Here’s the other thing – if they don’t realize that design has cost associated with it, they have missed other equally costly items and their venture WILL fail. Or they are crooks. Neither of which are people you want to get into business with.

      • Enoch July 17, 2012 at 5:34 am #

        Good points all Rob. From what I’ve seen good design is mostly valued as icing on the cake, or as a baseline of what is expected not a value-add. This is unfortunate.

  5. Rob February 23, 2012 at 6:35 am #

    Spec work or ‘If-Come’ can work. It has been a significant part of my pratice for a long time. The key to doing this work correctly, however is that it requires planning, agreements and is not free. I work in an if-come capacity with a few select developers. A couple of them have in-house contractors (design/build) and a couple do not. In these cases I have formed long term, trusted relationships with these companies. I provide design work up front in order to help them get a project. Quality developers put a lot of effort into a highly competative environment to get a project. I bring value to the table (my services) and extract payment in the form of a good project fee (if the developer gets the project). Doing work this way requires me to apply the same risk=reward model that I apply to all projects. There is significant risk in taking this type of project. The success rate tends to be about 1 in 4. The reward is therefore high. I charge a higher fee for projects that are produced this way. With one developer, I charge a standard fee, but I charge a ‘bonus’ at closing that equals twice the fee for the portion of work done “up front”. This has worked well over the years and has provided me with steady work. That said, it is important to manage the risks. You have to work with an established developer with a proven track record. I only work with a select few, and would not work with a developer that I think does not have a shot at a particular project, especially if they do not have a track record of producing that type of project. I also work out an agreement upfront. It spells out how much work I will do, what the deliverables are, and locks me in as the architect if the plan moves forward. Keep in mind that in these type of projects, I am performing Concept Design (sometimes Schematic) only in the up front period.

  6. Donald Bordui February 14, 2012 at 2:59 am #

    To secure work requires to firstly build trust and secondly support a Client’s business case. At certain times, for a business case to become successful, we require to perform spec work to make it possible for the project to be realized.

    In short, we must support our Clients businesses to facilitate for most of the work to become possible. If you have Clients that have all their financing in oder for new projects, you will all to often deal with companies that already have an architectural practice of choice, unless they want to try something else.

    Trust here is developed and under most circumstances the Client will engage the Architect that did the spec work because they are comfortable with the architect. Selecting the work of an architect might in part be fee based, but it is so much more about the softer factors on how visions, values and relationships sync.

    • Enoch Sears (@BusinessofArch) February 14, 2012 at 9:28 am #

      Donald, thanks for the excellent comments. You make a good case for using ‘spec’ work to develop trust. It is possible to develop that trust without doing spec work? What do you think?

  7. Charles Matthews December 18, 2011 at 5:19 pm #

    What do you think of completing the spec work, but as with everything else, make a contract. Include a clause that says something to the effect that the work is schematic design, and that compensation will be required as a combination of a fee for the work and a percentage of the development once the cash is there.

    If they don’t pay you, slap a lien on the land as soon as you find out. The freebies are why we don’t get paid the $500 per hour we should get in the first place.

    • Enoch December 21, 2011 at 5:16 am #

      Charles, thanks for dropping by. This sounds like an excellent strategy.

      • Octavian Ungureanu, architect December 21, 2011 at 7:33 am #

        Yes, I do spec work! It is only for interesting projects.
        I don’t close contracts for them as Charles says (excellent idea!), but for each this kind of proposals I usually print out a cost sheet of the construction. This includes land costs, construction costs, permit costs, architectural and engineering services costs + a set of evaluations for the elementary units (a total cost per apartment if it is a block of flats project or a cost per squared meter for office building projects).
        I actually use this kind of cost evaluations even for the design bids. It is a high valued information for the prospective client and it helps to be noticed against the competition.
        Again, for some design bids we usually make a short study of the project, highlighting the most compelling tasks. As an example, we always make a study for the underground parking for office and residential building architectural projects. There is a local law that asks for a specific amount of parking plots and and there is a big difference if the future building will have 1,2 or 3 underground floors to meet the legal demand.
        This kind of work usually pays. Even if the specific project was dropped, the prospective client will come again.
        The main idea is that the prospective is in a phase when actually there is no clear project and all this is his path to decide to invest or not. Doing this kind of work first of all makes you, the architect, somehow a partner of the future investment and helps you be in contact with developers, learning what their needs and goals are.

        • Octavian Ungureanu, architect December 21, 2011 at 7:35 am #

          Oh! Many of our biggest projects started as spec work.

          I thank you because till today I didn’t know the “spec” word!

  8. Michael December 3, 2011 at 9:21 am #

    OK, I’ll admit it too! I’ve been involved in “if-come” projects. I’ll also admit that FEW of them ever come to fruition. What I do to protect myself as much as I can, when in this situation is to make sure the “client” understands that if he or she , pays up front the price is “X” , and if I am “onboard if it comes” the price is X+Y ! Sometimes I loose (really?) and sometimes I win. Life is often a crap shoot.

    • Enoch December 21, 2011 at 5:14 am #

      Michael – thanks for dropping by. Life is a crap shoot, but that is where the experience and good judgement come into play, no?

  9. Jim November 30, 2011 at 11:01 am #

    Enoch:
    An interesting discussion, and while I agree with Cathy that sometimes it makes sense to defer fees (with a written agreement outlining all of the terms and conditions and timetable for payment), my experience is the same as Merrill’s: rarely is it wise to simply do work for free and hope for something down the road. No matter how good it looks, that carrot on a stick is still just a carrot on a stick. Usually the donkey chasing that carrot is pulling a big load, and all he gets is worn out and the carrot doesn’t even fill him up.

    • Enoch December 21, 2011 at 5:13 am #

      Jim, this has been my experience as well. Sometimes the perceived opportunity seems to great to lose, but rarely is this the case.

  10. Cathy November 5, 2011 at 2:00 pm #

    I agree and disagree with the article. I am a practicing architect, but have started to look at developing my own projects. Because i am “in” the deal from the beginning, i am willing to defer my fee until the very end, when we sell the project. Yes, it’s a risk that the project won’t sell, or we won’t make a profit, but this way i am going in with my eyes open.
    Developers and contractors and business owners are deal-makers, and you just have to ask for what you want. Get a contract that says you’ll be paid something eventually. If all you want is future work, have your contract state your firm’s name will be attached to all marketing for the project. It never hurts to ask. But always get it in writing, before you start drawing.
    P.S. We have never done this type of spec work for free, but we do lower our fees for non-profits. And here again, you can tell how much they appreciate your expertise by how they treat you. We try not to make the same mistake – respect us and we’ll work for you again.

    • Enoch November 8, 2011 at 3:18 pm #

      Cathy, thanks for your thoughtful input. I’m still trying to figure this out so it is nice to hear a balanced perspective from a seasoned architect. Good point about getting the expectations in writing. Definitely a professional move and I know that this is required by the Professional Code (last time I checked).

    • Joshua December 24, 2011 at 7:33 am #

      Thanks to Cathy for verbalizing a frustration I have had doing sub contractor work.
      Yes! architect as a subcontractor to structural engineer who is taking on a free standing building as a subcontractor to a civil firm! The bright side is that I am only in for the design and material selection. The downside is that I accepted the job for the check, after hearing that an architect was not desired for the job (ignorance as to what we do I think/hope). So my sub-sub-contracting work is really on the down low. Taking the job with out the respect was a hard pill to swallow. Frankly I regret it every time I sit down to work. So I will chalk it up to experience and not make the same mistake twice. “Respect us and we’ll work for you again.” Thanks Cathy.

  11. Meleca November 4, 2011 at 4:06 pm #

    Agree with Merrill, but we find more and more architects are giving away spec work in the hopes that they’ll get paid on the ‘if come’. So how do you compete when developers/clients can get work for free from someone else?

    We constantly try and judge what work we spec and what we charge for. Typically if it’s a potential client that is likely to turn into an ongoing business relationship- we are likely to provide initial spec work – with the thought that we can recoup those fees in the long run.

    Given the economy – especially how hard its hit the A/E profession – it’s very difficult to remain competitive if you turn potential clients away who won’t pay for initial work. It’s a tough balancing act to determine where and when you draw the line.

    We will never experience business as it was 5 years ago where developers were throwing money at conceptual ideas and designs.

    Just as not all doctors and lawyers are the same – not all architects are the same either. We spend more time marketing and proving why we are the better choice based on our talent and experience. We also do a better job at forecasting and managing projects so we come in on time and under budget.

    • Enoch November 8, 2011 at 3:15 pm #

      Meleca, thanks for the balanced counterpoint.

  12. Merrill November 2, 2011 at 3:23 am #

    Definitely not a valid practice. You named all the reasons why. I would be interested in a scenario where this practice did not backfire, and where it actually brought in work. I have yet to see it. The real way to get respect and work is to charge for it. Wallking away, or simply stating that you will, has the strange effect of inducing clients looking for a freebie to respect you and pay you. The people who hire architects, or entertain the thought of doing so, are typically very wealthy, and my experience with that class of people is that they are often extraordinarily cheap- only paying bills when their feet are truly in the fire and always pushing pushing pushing to see how little they can pay and how much they can get for it. The mentality among the very wealthy is often that the end justifies the means, and that if some people get shorted it is their own fault for not playing the game correctly. As you well know Architects (if I may generalize)are so focused on their craft that they tend to be naive, trusting, eager to please, and willing to work for other, so called higher forms of compensation than money, which they view with some amount disdain. This mentality is easily manipulated by those experienced in the world of business which is really a cut throat winner takes all craft where legal action, deceit, bribery, greed, and general low lifery is commonplace.

    Architects, like doctors and lawyers before them, need to wise up, and craft with shrewdness their service niche into something equally profitable. Profit is the true measure of respectability, to those who wield both power and purse.

    • Enoch November 8, 2011 at 3:14 pm #

      Merrill, I see what you are saying. Sometimes it is hard to implement. That carrot on a stick looks really good sometimes.

    • Alan September 23, 2012 at 4:38 pm #

      Merrill I agree. Doing work for free is generally a mugs game. The developer will pay all others, his accountant, his legal team. Yet the most important one of all, the one who will tell him what he can get out of the site, the one who provides the basis of his business plan he expects to work for nothing, at risk! Why carry someone else’s risk? If this is your modus operandi you need to agree a high fee at the outset to offset the risk.

      The only context where this can more safely work is in some design and build context. BUT you need to know the contractor well and you need to be paid well on the work that proceeds to cover the cost of the work that does not.

    • Sheerja February 5, 2013 at 4:20 am #

      I completely agree with Merrill on this (sorry if I’ve entered very late in the discussion). This topic is very interesting because it comprises one of the most important aspects of architectural ethics which is often not looked upon. Architecture, unfortunately is not a “clear” profession where the person-to-person relationship is defined by contracts, legal agreements and work orders. It’s essentially a symbiotic relationship with a major trust factor involved. In many cases, when an architect is still unknown, he is tested by the prospective client if he’s capable of handling a major responsibility. So it’s better judgement on the architect’s behalf to take up the challenge and try to nail it. Try to think of it as participating in a competition project where an architect PAYS to participate in something which holds no promise. Of course, the situation is different if it’s a habitual client. So if an architect agrees to do the initial concept for free it’s only if there is a prior understanding between the client-architect that at least some part of the work will be compensated. We’re not philanthropists, are we?

      • Enoch February 6, 2013 at 5:49 am #

        Sheerja – its never too late to join the conversation as the conversation is always continuing here! Thanks for your input!

    • Nathan Reasons June 8, 2013 at 12:46 am #

      Well said Merril, I second that! You teach people how to treat you and if you give it away for free that is what they will come to expect. Any developer / client that can’t afford some up front fees for conceptual design sounds like high risk to me and should be stayed away from. This is exactly the reason that the profession is struggling to to prove it’s value.

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