Session 2: Firm Foundations

Date: October 4, 2013
Location: American Institute of Architects – 1735 New York Avenue Northwest
Time: 12:00 pm – 5:00pm
Led by: Jeff McBride, AIA, LEED AP BD+C & Michael Rouse, AIA, NCARB

Session 2 PDF
Agenda
Speakers

Summary

On October 4 the Christopher Kelley Leadership Development Program (CKLDP) met at the AIA National Headquarters to discuss the topic of Firm Foundations.  The session focused on three major themes: how architecture firms are started, how firm finances work, and how senior leadership works at established architecture firms.   Over the afternoon the CKLDP participants explored these themes with local architects through two roundtable discussions and a presentation.

The first roundtable discussion explored the barriers and opportunities architects face when starting an architecture firm. Five principals from young architecture firms participated in the roundtable: David Bagnoli and Adam McGraw of McGraw Bagnoli Architects, Sacha Rosen and Lee Rubenstein of R2L: Architects, and Griz Dwight of Grizform Architects.  The discussion covered a broad range issues including: the logistics of starting an architectural practice, best practices for transitioning from previous offices, methods for procuring new work, and advice for young professionals considering starting their own firm.

It was exciting and inspiring to hear the principals talk about their diverse experiences starting their firms.  For instance, Dwight Griz opened his firm with only a single project and a belief that the firm could succeed, while McGraw Bagnoli Architects and R2L: Architects were both slowly launched over a number of months with well developed business plans. However despite their different approaches, all the principals in this round table agreed on the importance of building and maintaining a strong networks.  This included not only a broad network of potential clients and partners for the new firm, but working to ensure that the launch of a new firm did not alienate past employers.  They also agreed that early projects are an important tool for young firms- to both showcase their design talent and get their name out to a larger audience via word of mouth.  The roundtable discussion ended with all the parties agreeing that starting a firm, while incredibly daunting, has been extremely rewarding and a worthy adventure.

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Yolanda Cole of Hickok-Cole Architects followed the first roundtable discussion with a great presentation titled ‘Keeping the Boat Afloat’.  With simple graphics and a step-by-step narrative, Yolanda was able to clearly explain how firms develop fees, how market factors affect fees, and how to manage projects and manpower to keep on budget.  Yolanda even had financial modeling of a fictitious firm to demonstrate how architecture fees relate to firm success and profits.  Ms. Cole spoke not only about how to use these tools when running a firm, but also how young professionals can apply them in their current positions.

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The final event of the afternoon was another roundtable discussion focused on the transition, ownership and management. This roundtable focused on the experiences of three firms:  David M. Schwarz Architects represented by Craig Williams, Hartman-Cox Architects represented by Lee Becker and RTKL represented by Karl Stumpf.  Over the course of the roundtable discussion a number of issues were covered including: firm history, legal structure, decision-making policies, project management, ownership transitions, and office culture.

The final roundtable discussion focused on strategies to ensure business success over the long-term.  The speakers highlighted the importance of making business decisions that reflect the identity and character of a firm.  Long-term planning should take into account the influence that location, type of work, and staff leadership has on business decisions.  For example, the speakers pointed out that each architecture firm at the roundtable is intentionally structured differently (Hartman-Cox is an LLP, DMS is a PC, and RTKL is owned by a publicly traded company) and is thus able to respond to different areas and locations of practice.  There was general agreement between the firms that leadership transitions are one of the most sensitive and important elements of business longevity.  It was fascinating to hear the steps that each company has taken to ensure not only successful transitions in leadership, but also to use these transitions as an opportunity to strengthen the firm.  For example, Karl Stumpf noted that previously at RTKL, vice presidents bought shares of the firm and were able to keep them in perpetuity.   Today, RTKL’s transition is focused on the next generation of leaders and promoting those people to the management level in the company.  To encourage this transition, VPs are required to sell their shares to the next generation of leaders within the firm.

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