Being underpaid by a contractor friend for years, now he wants to start a design-build firm together. Need a reality check.
I need some outside perspective before I make a decision that could shape the next decade of my career - and the careers of people I’m planning to bring with me. He and I have an insanely close relationship and want to make sure I am seeing everything clearly.
I do all the architectural work for a contractor we’ve worked with for years here in Alabama. He and my boss have had a close relationship for over 20 years. She’s 80. I’m mid-career, working toward licensure, and planning to launch my own firm soon. I’ve come to believe that the length of their friendship and her age are being used - consciously or not - to keep our fees far below market. These numbers would not fly at any other firm, and that’s what’s making me nervous.
The last two years:
• $12M steel plant - we charged him $10k. Yes, ten thousand. Roughly 0.08%.
• Office project I designed - proposal was $100k at 4% (discounted from our usual 5.9% because he’s a friend). Proposal explicitly stated the fee covered architectural, MEP, and structural. Civil was not included.
• Now, a year later, he’s asking us to eat the $35k civil engineering cost out of our fee. That cuts our profit on the project from $60k to $30k.
• Total profit from him across two years: about $50k.
The civil thing is what set me off, because it wasn’t in the proposal. That’s a change order to him, not a cut to my margin. But once I started adding everything up, the whole relationship looks like this. The “friends and family” discount has turned into me subsidizing his construction business with my time, my bosses stamp, and her liability.
Here’s where it gets bigger. We’re currently working on a project that will be upwards of $100 million - and I was probably 80% of the reason we landed it. This project is going to be the launchpad for my own firm. I have friends at big-name firms who are ready to leave their jobs and come work with me based on this trajectory. That’s a level of responsibility I take seriously. If I’m walking them into a firm where the biggest client relationship is structured to erode my margins, I’m setting them up to fail too.
The dilemma: the contractor wants to start a design-build firm together. On paper it sounds great - steady pipeline, shared marketing, integrated delivery. But if the baseline behavior is “erode the architectural fee anytime something unexpected shows up,” I don’t see how that pattern gets better inside a partnership. If anything it gets worse, because now I’m also carrying shared liability and overhead — and I’d be dragging my future hires into it.
Questions for anyone who’s been here:
- Has anyone made a contractor + architect design-build partnership work long-term? What deal terms actually protected the architect?
- How do you reset a “friends and family” fee pattern that’s been baked in for 20+ years, when the relationship predates you?
- Am I crazy for thinking $10k on a $12M project is a red flag no partnership structure can fix?
- For those who left an established firm to start their own - how did you handle a client relationship that came with you but was structured against your interests from day one?
Not looking for validation. I have people counting on me to make the right call.