The good times are challenging, but they're not killing us

Runaway demand leaves design firms with new management problems

In the Northwest and the rest of the continental United States, architects enjoy unprecedented market vitality and professional prestige. For the past three years, backlogs (work under contract and waiting to be completed) have averaged slightly less than a year - about three times what they were during the depths of the recession. The anticipated timing of an overall downturn has been pushed farther ahead. Engineering firms in the building design arena are experiencing similar successes. Indeed, in those rare instances where engineers and architects still cry in their beer, it is more likely to be about the difficulties in dealing with their success than worrying about their survival.

While their names are not exactly household words, the recent addition of many of their prominent projects to the Seattle scene have helped to catapult several design firms into the national spotlight. Recently completed Benaroya Hall, Safeco Field, Saint Ignatius Chapel, Nordstrom's, and Pacific Place follow by less than a decade such established projects as the Seattle Art Museum, Westlake Mall, REI, and the rebuilt Key Arena. The Experience Music Project is underway, and the city will soon birth the central library, City Hall, and Seahawks Stadium. Within and around the city are countless new homes, many funded by newfound wealth in the software and high-tech industries. Despite the grandiosity that many exhibit, a significant number of these homes are noteworthy for their architecture as well.

Increased demand for architecture comes at a time of heightened attention to design in general: That includes industrial design, product design, graphic design, clothing design, and their electronic equivalents, such as web site design.

On balance, this is all good. But the effects of increased attention and demand are very mixed. Here are some trends.

The new emphasis on design has not lowered clients' and customers' expectations for functionality, service, and price/value. In reality, it may have increased their expectations. And they want it fast. Encouraged by rapid, technology-driven change, the instantaneous availability of information, and twenty-four-hour services, society demands speed along with high quality and flawless delivery. The good news is that most clients are saying that design firms have responded well.

Global communications and a sense of easy access to clients around the world entice Northwest architects and engineers to expand the geographies they serve. But firms are finding that technology's effectiveness in transferring information exceeds its success in building and sustaining relationships. Serving a distant client and market usually requires extensive travel. And that means costs to family and firm. At the same time, design firms are experiencing competition from afar.

The number, scale, and complexity of projects have created a staffing shortage with which architects and engineers continue to struggle. The demand for design professionals in the Northwest exceeds the lure of the region - a winner in so many studies on the livability in recent years. The problem is compounded by a period from the late 80s to the mid 90s during which many architects and engineers left their professions and haven't returned. During that same period, the percentage of architectural graduates who entered immediately into practice also declined. Indeed, the biggest need in practice today is for architects with five to 10 years of experience - the group that has traditionally provided so much of the labor in project delivery.

The limited labor supply and the many firms competing for staffing combined to raise compensation considerably. The effects are multiple, and the net results are probably not great for anyone - including the salary beneficiaries. That many new hires are inexperienced relative to the positions they hold puts increased burdens on management to assure quality and provide training. As a result, senior members of the firm are less able to fill what had been their primary responsibilities. Project budgets are squeezed as labor consumes an increased portion of the fee. Highly paid younger staff face the challenge of performing at levels about which they can't even dream. And all members of the firm suffer the consequences of lower bonuses that result from declining profit.

The increasingly significant role of technology in the practice of architecture and engineering has contributed to project quality and, less clearly, to overall productivity. Unfortunately, a whole generation of architects and engineers - who have been schooled consistently with the tools of technology - has honed technology skills far more than verbal and interpersonal skills. The result is people who talk better to their machines than they do to other people. As they face increasingly complex projects that warrant more collaboration, they must work harder to collaborate. Others step into marketing roles without the advantage of ample experience in one-on-one communications so necessary to attain and sustain the confidence of prospective clients.

In something of a contradiction, clients are pressuring for lower fees and more service at the same time that architects have heavier backlogs. Self-confident architects in Seattle and elsewhere are taking this as a signal to be more selective about the clients they serve and the projects they undertake. Even with this selectivity, design firms are realizing the importance of efficiency and error-free delivery. Toward these ends, many design firms have increased their emphasis on training and professional development, not just in the technical aspects of their work, but also in the "softer" aspects of practice such as communications.

Women comprise over half of the students entering schools of architecture in the country, yet in the nine diverse firms noted above, men outnumber women in ownership by ratios of over twenty to one. Divergence in the career paths of individual women, more than current biases, seems to be responsible for this situation. But if a firm wants to access the best new talent in the labor force over the next few years, its chances will be better if women play prominent ownership and leadership roles.

The strength of the market coupled with some firms' inability or unwillingness to accommodate the career advancement goals of their staff has fostered more than the normal number of new firms. The likelihood of success of many of these new practices is higher than their predecessors experienced in prior years, and there seem to be several contributing factors: They leave their current practices having already booked work. They have stronger skills, having compressed more experience into a shorter time period due to the workloads of the firms from which they are departing. With workloads in their existing firms so strong, financial pressures or the prospect of losing their jobs compels few people. Only those with strong entrepreneurial drives and high confidence are likely to leave their current positions, and those who make that choice therefore are quite likely to do well.

New standards for quality and project delivery will not diminish. Nor, in the short term, will volume. There is pent up demand for educational facilities at all levels, for healthcare, for corporate and research facilities in technology and industrial sectors, for retail and entertainment facilities in and near urban hubs, and for conservative expansion in the commercial office sector.

The Northwest can expect to see more efforts by firms from elsewhere to earn a position in the market. But there is a positive side to this trend. Much in the same way that two anchor departments make a stronger mall than only one, the increased presence will contribute to a more vigorous marketplace. All in all, don't pack your bags; Seattle will continue to be a good place to practice.

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