I work in a central London architects practice. Every time I establish a fee for work for housing developers the conversation goes something like this…
Client: Hi, I’ve bought an option on a site, can you do a planning application for me? I need it quick before the option expires.
Me: Sure, that’ll be £X and we can have it done in Y months.
Client: Hmm, seems steep. How’s about I take 20% off but I give you a bonus if you get more than Z homes on the site?
Me: We don’t recommend that approach sir, it means we can’t give you the best service as we might be trying to get more on the site than is likely to be permitted. That means you’re likely to pay us 80% £X and ultimately not get the consent at all.
Client: OK, come on man, share the risk with me here – how’s about 80% fee up to planning and 20% if it gets consent?
Me: But in that scenario I do 100% of the work but might only get 80% of the value of that work?
Client: Development is a risky business man, I’m going out on a limb here – I need you to get this, you need to share the risk.
Me: Sure, OK, I’ll do the work for 80% but you give me 20% of the profit you make when you sell the site with consent.
Client: Are you crazy? What’s the point of me doing this if I’m going to share so much of my profit with you? That’s outrageous!?
Me: So why am I sharing the risk if you’re not sharing the rewards?
Client: 90% £xx?
Me: F*** it, ok then.