FROM ITS SEATTLE BASE, Olson Sundberg Kundig Allen Architects has designed a large and diverse body of residential, commercial, and institutional work in the United States, Canada, Asia, and the Middle East. One reason for the rapid rise in the firm's number of projects over the past decade, says managing partner Scott Allen, is that in the early 1990s, he and his partners decided to expand their geographic reach. “We set an audacious goal of moving from being a local firm to a regional firm to a national firm to an international firm,” says Allen.
But going global requires travel, travel takes time, and, as the saying goes, time is money. More and more U.S. firms are taking advantage of a globalizing economy by taking on projects across the country and abroad. At the same time, the price of airline tickets and gasoline are rising precipitously. And the costs of travel are not likely to decrease any time in the near future
Worried you'll have to fly coach to Shanghai just to make budget? Here's how Allen gets both domestic and international clients to pay for travel time, without putting the firm at a financial disadvantage.
Draw the line ...
“We drew a fuzzy red line around Seattle,” says Allen. “For anything inside that line”—that is, for local projects—”we expect clients to pay for all our travel time. But for projects outside that line, we wanted to ensure that the cost of flying us in wouldn't make us uncompetitive. So we decided to bill our travel time at about 50 percent. That can still be lots of money.” And with more and more firms taking on projects overseas, it is important to consider the length of international travel versus domestic. “To get from here to Hong Kong takes 12 to 14 hours,” says Allen. “But billing for only half those hours makes clients feel they're not being taken advantage of.”
or fix the fee.
“If it's a fixed project fee, travel time is included,” Allen says. “But a lot of our projects—including all of the private homes—are billed by the hour. That means all the hours devoted to the project are billed, from time on the computer to time on the road reaching the building site.” Of course, says Allen, you don't include hours of personal time on such trips, like those spent sleeping or eating.
Be fair—to clients and yourself.
“If you're marketing yourself, you may have to absorb the full cost of your travel time,” says Allen. “The trick is to decide what's marketing and what's not marketing. If we're asked to fly somewhere to show someone a portfolio or to talk about a project, it's clearly a marketing effort. But even then, if the distance and expense involved are great, we may ask for some reimbursement of expenses. We went to Beijing to make a presentation, and they said, ‘We'll pay for your hotel and airfare but not your time.' And that seemed fair.”
Cost-plus, up for negotiation.
“Typically, we bill our expenses at cost plus a small markup for taxes and administration,” says Allen. “It costs money to run expenses through our system. We just want to at least break even on them.” But, he says, that markup can be subject to negotiation on a project-by-project basis, because “often, clients don't want to pay anything but the actual costs.” One solution Allen's firm uses is to have the client book all tickets and deal with reimbursements on its end—that means the administrative costs are the client's, but the architect's costs are still covered.
Class distinctions matter.
“For a short flight, flying coach is no big deal,” says Allen. “But if travel time is more than five or six hours, we feel like it ought to be business class. After all, you're not much good to the client if you're been stuck in a coach seat for 14 hours. Most clients, who are businesspeople, understand that.”
Keep the home fires burning.
“We try to make judicious use of travel, using video conferencing whenever possible,” says Allen. “There's no reason to jump on a plane when you can solve the problem remotely. On the other hand, at key points in the life of a project, there's nothing that replaces a site visit and a face-to-face meeting with the client. That's the art form: to see how little can you travel and still have the impact you need to have on the project.”