Overview

This report seeks to provide a portrait of architectural firms across Canada from the sole proprietor to the mid-size firm to the large corporate firm. The report also highlights firms that have been consistently profitable over the past three years. How do they conduct their business and what practices do they follow that differentiates them from other firms?

The most obvious point of contrast between architectural practices is firm size, as measured by number of employees. On virtually every measure, the small architectural practice is distinct from the larger firm. As an example, consider the age profile of architects within the firm. Among the very small firms it is quite rare to find any architects under the age of 30, indeed only a third are under 49. By contrast, over half of the architects in the larger firms (51+ employees) are under 49.

Larger firms offer many opportunities that are less available to those working in smaller firms. For example, within the larger firm there is a substantial increase in your access to professional development and training, and your benefit package will likely be much better. Working for consistently profitable firms offers similar advantages.

Larger firms command higher billings rates. They also tend to update their billing rates more frequently. Perhaps because the gap was growing, the percentage increase in billing rates has been the greatest among smaller firms. Consistently profitable firms have also shown the greatest increase in billing rates (17% over the past three years).

Regardless of your role in the firm, there is a clear correlation between the size of the firm and your compensation. Consistently profitable firms occupy the mid-ground between the smaller and larger firms. The likelihood of receiving a bonus also increases by firm size. Consistently profitable firms are passing along bonuses that are of the same magnitude as firms with 11 or more employees.

If you work for a very large firm, the chances are that your firm is spending about $100,000 annually on marketing and public relations. Consistently profitable firms are also spending in this area and using a variety of techniques to market themselves, e.g. community involvement, email, a website, newspaper and magazines,. In contrast, over one-third of small firms say they are spending nothing on marketing. Those that do spend in this area are relying primarily on community involvement and networking.

Finally, depending on the size of firm you are working for, you will see a considerable difference in the number of RFP’s you respond to and competitions that your firm enters. Very large firms have responded or competed about 60 times over the past three years. In contrast, the sole proprietors have done this twice. Consistently profitable firms are responding and competing with greater frequency than the average firm.

Age, benefits, billings, compensation, marketing – these are but a few of the differences that exist in architectural practices across Canada. It is our hope that this report will allow you to compare your practice to similar practices but also give you insight into the remarkable variation that exists based on a firm’s employee size, billings, region and profitability.

Introduction

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