Reduce fees, hold them steady, or redefine your scope of services? in a recession, when setting the right price is crucial, there's no easy option.rnCharles thankauseb, principal of TEK Architects in New York, knew the economy was on the skids by last year, when he started hearing stories about firms slashing fees and clients driving harder bargains. But he came face-to-face with the downturn for the first time in November: A client threatened to go with its No. 2 choice unless Thanhauser dropped his fee on a small project to $195,000 from $250,000. He agreed, although at that price it wasn't clear he would turn a profit. "We needed the work, and we'll take on any work that keeps everyone employed," Thanhauser says of his 18-person firm. In the current climate, he notes, clients have a take-it-or-leave-it attitude, because "they're hip to the fact that there's desperation out there."rnAs architects grapple with the economic slump, opinion is divided over whether to lower fees to secure business. Some strongly believe that lowering fees sets a risky precedent: Irvthe long run, it could hurt a practice and the profession in general, because even when business picks up, clients will still expect a discount. The problem, says Hugh Hochberg, a partner in the Coxe Group, consultants to design professionals, is that "markets remember lower fees for decades," a position that can be difficult to recover from. Instead of lowering a fee, Hochberg suggests reducing the scope of work involved or offering higher-value services.
展开▼
