Writing / Fees
How to raise your fees in 2027
Firms in the top tier of BQE’s 2026 architecture benchmarks bill $290 an hour against $112 at the bottom, and the billing multiplier was the strongest predictor of revenue growth in that data (BQE, 6 August 2026; BQE sells the software that measures this). The pressure runs the other way: 56% of firm leaders told the AIA that negotiating fees is harder than two years ago (AIA ABI special questions, January 2026 data, released 18 February 2026).
17 October 2026 · 6 minute read
Rate beats volume, in the only data that tests it
BQE’s 2026 Architecture Benchmarking Report compares firms using its practice-management software, and the spread in price is the widest in the data. The top tier bills $290 an hour; the bottom bills $112 (BQE, 6 August 2026). The billing multiplier, your rate over your direct labour cost, was the strongest predictor of revenue growth in that sample, and utilisation and realisation showed almost no correlation with profit margin. Firms in the top quartile for margin grew revenue 6.9% year on year against 0.3% for the bottom quartile, and the firms with the highest backlogs wrote down nearly three times more billable work and ran margins 8.2 points lower.
BQE sells the software that measures these things, and its sample is firms that bought it, so take the direction rather than the decimals. The direction is consistent with every other benchmark we have read: the margin is decided when the price is set, and busier is not the same as better paid.
| Figure | What it says | Source and date | Status |
|---|---|---|---|
| $290 against $112 | Hourly billing rate, top tier against bottom tier | BQE, 6 August 2026 | Vendor; verified |
| 6.9% against 0.3% | Revenue growth, top-quartile margin firms against bottom quartile | BQE, 6 August 2026 | Vendor; verified |
| 8.2 points | Lower margin at the firms with the highest backlogs, which wrote down nearly three times more work | BQE, 6 August 2026 | Vendor; verified |
| 56% | Firm leaders who find fee negotiation harder than two years ago; 15% much harder | AIA ABI special questions, 18 February 2026 | Verified |
| 20.5% | Median operating profit on net revenue, year-end 2025, a record for the survey | PSMJ, 25 June 2026 | Headline verified |
| 50% and 64% | Design-services firms planning to raise markup or margin, and to pursue larger-budget projects, in 2026 | Houzz Q1 2026 Pro Barometer via Pro Builder, 23 January 2026 | Secondary; architects grouped with designers |
The pressure you are raising fees into
The AIA’s January 2026 special questions found 56% of firm leaders saying that negotiating design fees is more challenging than two years ago, 15% saying much more challenging, and 62% among firms billing $1 million or more (AIA, released 18 February 2026). The same round rated developers and private individuals as not very profitable clients for 29% of firms. A residential practice raising its fee is raising it with the client type most likely to push back.
At the same time, the firms that benchmark are posting record results. PSMJ’s 2026 survey reports a median operating profit of 20.5% on net revenue for year-end 2025, the highest in its history (PSMJ, 25 June 2026). Those are larger firms that measure themselves, and we do not suggest 20% is normal for a two-person studio. The point is narrower: fees are being raised and held somewhere in this market, by firms that know their numbers.
What your peers say they will do
Houzz’s Q1 2026 US Pro Barometer, as reported by Pro Builder on 23 January 2026, asked design-services firms how they planned to respond to 2026. 64% said they would pursue larger-budget projects, 50% said they would increase markup or margin and 30% said they would improve employee productivity, while 65% expected material costs to rise. The barometer groups architects with other designers and reaches us through trade coverage, so treat it as a mood rather than a measurement. A widely quoted ASID figure on interior design firms raising prices could not be verified at source and is left out.
How to do it
New clients first
A rate rise is easiest on the proposal you have not sent yet. Set the new hourly rate and the new fee basis, then quote every new enquiry at it from a fixed date. Nobody who has not seen the old rate will argue with the new one. Existing clients follow at the next natural break: a new phase, a new project or a renewal, with notice.
Phase-based proposals
A single total invites a single negotiation. A proposal in phases, each with a written scope and a fee, moves the conversation to what the client wants to include. It also lets you price the uncertain early work hourly and the defined later work fixed, which is the structure small firms most often find profitable (AIA, 18 February 2026). The fee proposal playbook sets the phases out.
Scope clarity
Every fee rise that failed in our experience failed on scope, because the client could not see what the higher number bought. Write the deliverables and the exclusions, and write the change process, so the fee is for a defined thing. A higher fee for a vague scope reads as greed; the same fee for a listed scope reads as a price.
Replying to a discount request
At a 20% margin, a 10% discount halves the profit on the job. That is arithmetic, not a survey finding, and the fee discount impact calculator runs it on your own numbers; what a fee discount really costs explains why the delivery cost does not move when the fee does. The reply that works trades scope for money rather than giving money away.
Thank you for being direct about the budget. The fee reflects the scope we agreed, and I would rather adjust the scope than the quality of the work. Three options: we could leave out [item] and reduce the fee by [amount]; we could phase the project and fix the fee for stage one only; or we could keep the scope as proposed at the fee quoted. Which would you like to look at?
From [date] our hourly rates will be [new rates], our first change since [year]. Work already agreed under a fixed fee is not affected. For time-based services, the new rates apply to work from that date, and we will confirm the estimate for any current stage before it applies. Check that your existing agreements allow a rate change, and have a lawyer review the wording if they do not.
What to measure afterwards
- Effective hourly rate on each project: fee earned divided by hours spent. This is the number the rise is meant to move, and the project profitability calculator returns it.
- Billing multiplier: revenue over direct labour cost. BQE’s finding is that this predicts growth; track it quarterly.
- Write-downs: hours worked and not billed. A fee rise that is quietly written down at invoice is not a fee rise.
- Win rate on the new rate, by count and value, over twelve months. Expect some loss at the margin; the question is whether the fees won cover it.