Architect as Agent of the Owner
Experts in the art of Negotiation disagree on how to employ agents. An agent is someone who negotiates on your behalf. You might hire an agent because you are bad at negotiating, or because you lack technical knowledge of the issue at hand (e.g. hiring an attorney to negotiate a point of law), or because you fear prejudice (e.g. you are an Asian woman negotiating a deal with an older American white male, and you think he won’t take you seriously).
Once you’ve engaged an agent, experts disagree on how much information you should reveal to him or her. Some feel you should not reveal your true bottom line and alternatives because the agent won’t fight as hard as you would, while others say you absolutely must reveal those things if your agent is to correctly work on your behalf.
And what if your alternative to a negotiated agreement is actually to fire the agent?
One interesting scenario to consider is two parties who have hired attorneys to negotiate some settlement. Your alternative, if you don’t get at least your bottom line number, is to go to court and fight it out.
But maybe you don’t want your attorney to know that, since going to court means a huge financial gain for him. It could introduce a motive wherein your agent has a personal interest in not reaching a settlement.
This is why some people employ a contract that stipulates the attorney doing the negotiation is not allowed to do any subsequent litigation.
While I was learning about these things, I couldn’t help but see the clear parallels to the building industry.
First, there is this tension about whether an architect is considered an agent of the Owner, or simply a vendor. Many professional building owners consider the architect a vendor, and view the relationship as a transaction. Most architects, however, think of ourselves as agents of the owner—a relationship more akin to trusted adviser and guide.
I don’t know the answer to mending this rift, but I do know that what I do on a daily basis is very much akin to negotiating on behalf of the client.
Sometimes, my negotiating opponent is not another person, but the circumstances limiting my designs. I must negotiate with the site restraints, the budget, the codes, my own knowledge, and the building technologies available to me, in order to come up with the best design possible for the client.
But if the client reveals ALL their budget to me, won’t I naturally spend the maximum amount instead of trying to save as much as possible?
What if you crafted the contract such that I got to share some of the savings from bringing in the project under budget? Wouldn’t that give me extra motivation to find savings?
That’s called a performance-based incentive clause. It’s a key ingredient to Integrated Project Delivery (IPD), but can be implemented into any contract.
If the client lies to the architect about what the true budget is, in order to protect some cushion of money, he or she may be missing out on some value.
As an example, let’s say the client says she has $90,000 plus a contingency pool of $10,000. The truth is that the client has $100,000 plus a contingency pool of $10,000.
The client has a laundry list of things he or she wants, and the architect tries every move in the book but simply can’t afford the pool. No pool. So instead, the architect uses some of that extra space to shift things this way and that. That’s a negotiation he makes, as an agent of the owner.
If the architect had known about that extra $10k, the pool would have happened. And a pool adds more than $10k to the house’s resale value, so the client not only doesn’t get the pool, but she also doesn’t get that extra return on investment when selling the house.
And what about the fear of the architect going over the budget? Just like in a negotiation, the client has a “bottom line.” The budget. For conventional delivery practices, the AIA contracts require the architect to re-design for free if the bids all exceed the budget. So the client already has some protection against that scenario.
Under an Integrated Project Delivery agreement, the architect actually gives up profit to help pay for costs above the budget (as do the builders). This is the maximum protection the client can obtain against the agent (architect) going past the “bottom line.”
Crafting good contracts that help align the agent’s interests with the client can help alleviate fears and foster trust. But ultimately, trust is earned over long periods of time. How can our profession earn back clients’ trusts, so they see us as agents with whom they share complete information, instead of vendors?
