Minimum fees in the AI Age

The useful part

Minimum fees in the AI Age Recently, especially during slow periods and flat growth, murmurs have grown about the need for minimum fees and rates. Many countries abolished fee scales (1990-2010), arguing they were anti-competitive and that doing so would increase productivity and innovation. When I previously wrote about minimum fees, I received numerous emails and messages cautioning that it was outlawed and shouldn't even be discussed, while others thought it would be beneficial to have a floor on fees.

How it works

• The need for minimum fee rates becomes less relevant as hourly work is placed under downward pressure, and fees become more dependent on the value and expertise your firm brings to the project.
• However, firms will still use various design approaches and methodologies (AI vs BIM vs CAD vs hand-drawn), and this will always be the case.
• He is a registered landscape architect and works as a strategy and marketing consultant.
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What to take from it

When landscape architects calculate fees, they should base them on value, professional expertise, risk mitigation, complexity, and meeting required outcomes rather than on producing a landscape design. Many other issues affect fee calculations in the age of AI, including liability, risk, IP, software access, project compression, and complexity. Many firms also use construction value to determine fees, but in recent years this has become problematic as construction and firm operating costs have risen dramatically, leaving design firms with a shortfall when landscape projects span years rather than months.

Example or evidence

• About Damian Holmes 4268 Articles Damian Holmes is the Founder and Editor of World Landscape Architecture (WLA).
• The world and industry have changed greatly in the past eight years since that article, including COVID, the infrastructure boom and the rise of Artificial Intelligence (AI).
• The larger issue now is that many firms charge hourly rates, which is becoming less tenable when clients see the speed of generative AI.
• This has led clients to request that what would usually take three to six months to develop be delivered in a third of the time.

Details worth keeping

The main points of my previous article were that minimum fees may cause clients to shift scope to drafts people or landscape designers, and that minimum fees may work for a period, but eventually firms will go below the minimum due to a lack of work or increase outsourcing to increase efficiency. Although fees based on construction value may still have a place, the issue often comes when clients ask for breakdowns or hourly rate tables. We can approach this by providing fixed-fee milestones, blended rates, or service hourly rates rather than by discipline or level.

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