Looking Forward to Monday Morning
A series of essays on business, architecture, and the business of architecture.
Notes on Interior Design
by Daniel Frisch
Posted September 1st, 2023

Inspired by my tenth-grade mechanical drawing teacher, I became intrigued with architecture for its perfect balance of art and science.  As a practitioner, I understand that residential architecture sits at the intersection of two specialized professions – engineering and interior design, both of which profoundly contribute to the systemic and experiential success of any project.  Engineers mathematically calculate and design structural, electrical, and mechanical systems in non-negotiable terms, ensuring buildings withstand earthquakes and hurricanes, and that we enjoy proper plumbing, heating, and air conditioning. Engineering decisions are largely unseen and often under-appreciated, working in deference to the architect’s broader design vision.  On the other hand, interior design and decoration determine how people tactilely relate to spaces through furnishings, material, and color, the most visible and accessible design components.  Successful architects need to be equally comfortable working with the black-and-white dictates of the engineer, and with the nuanced sensibility of the interior designer.

We have collaborated with dozens of designers over the years and have also performed interior design services in-house.  After thirty years of both, we realize we prefer to co-ordinate the services of interior designers who have direct relationships (contracts) with clients rather than providing design services in-house.  To better work with outside designers, we have recently created a senior position to oversee the coordination and integration of designers’ work, just as we do with engineering and code consultants, and with contractors.

Interior designers and decorators come in all shapes and sizes, from the established household name (to some) to the part-time hobbyist.  Pick up any shelter magazine and you will see the same designers featured every month; so much so, that the designer has become a near-equal celebrity to the client whose home is being featured.  Projects being considered for publication are evaluated on several criteria, with the most significant being the wealth and media recognizability of the homeowner, coupled with a willingness to allow the magazine editors, writers, and photographers – and in the end, the reader – a look behind the walls.  Pairing with an equally recognizable designer ensures prominent placement, a win-win for both parties.

Celebrity designers have professional personalities uniquely well suited to large projects with the higher expectations of the super-rich and super-famous.  At the other end of the spectrum, many interior designers provide services in a more accessible and less intimidating manner, and at a lower cost.  The smaller firm or sole proprietor may help a client with a few pieces of furniture, or even just provide a strategy upon which the client can do their own shopping and oversee a project’s execution.  While some designers excel at providing a signature look that is sought and embraced by clients, others support the style and interests of individual clients.  Both strategies can lead to very successful relationships, and as architects, we try to work equally well with either type, and those in-between.

Architecture and interior design differ dramatically in the delivery of services.  Whereas architects solely provide professional services, essentially operating as uber-consultants, interior designers and decorators both provide services and execute projects.  The designer in most cases is the de facto contractor responsible for hiring upholstery workrooms, specialty painters and fabricators, among others.  The architect’s work is largely complete, or at least is meant to be, before work on site begins, whereas a designer’s work runs seamlessly from the preliminary phases all the way through installation.  When disputes arise, architects act as arbiters, mediating between contractors and owners, while designers are prone to find themselves in a position of responsibility without a neutral arbiter.  When helping coordinate the services of an outside designer our office fills the role of neutral arbiter naturally, ensuring disputes are fewer and more easily resolved when they occur.

Just as interior designers come in many stripes, so do their compensation models. The most common being market pricing (to-the-trade), net-plus (a mark-up over costs), and hourly or fixed-price consulting.  A brief overview follows:

Market Pricing (To-The-Trade):
The conventional interior design model is known as ‘to-the-trade,’ wherein the interior designer ‘shops’ at to-the-trade establishments, purchases goods at wholesale (at the most favorable discount available to the designer), and in turn, sells the goods to the client at retail or market price.  The designer may also have an inventory of goods for sale, or proprietary designs for which they alone set the price.  Throughout the to-the-trade model, the actual cost of an item is opaque to the client, no different than food costs in a Michelin-starred restaurant.  This model was dominant when decorator goods were solely available to-the-trade and when prices were neither available online nor could goods be purchased directly by the end-user.  The sales pitch, then and now, is that the designer ‘gives away’ their services, selling goods and services to the client at the published retail price, thereby working for ‘free’ – an arrangement which sounds pretty darn fair, notwithstanding that discounts available to designers by the to-the-trade vendors are typically forty percent (representing a sixty-seven percent mark-up above cost to the designer if anyone is doing the math).

Net-Plus (Towards a New Transparency):
The most common fee structure today between designer and client is net-cost-plus-fee.  In this arrangement, the designer discloses the net (wholesale) price to the client and then charges a mark-up above the net (extended) price available to the designer.  Typically, the designer mark-up is thirty or thirty-five percent added to the actual purchase price of an item.  For items that the designer receives a forty percent discount, the net fee to the designer is less than half of the fee they received in the to-the-trade model above.  In cases such as national retailers like Restoration Hardware where the designer does not receive a significant discount, the additive designer fee may make the extended price greater than retail, although the client is able to shop at less exclusive venues, achieving a lower total project cost.

Hourly and Fixed-Fee Consulting:
This third prevalent fee arrangement allows clients to purchase a designer’s time a la carte and/or to pre-ordain a designer’s total compensation.  While seemingly straightforward, hourly fees tend to devolve to confrontation – “why did it take you so long to find my sofa?” and the fixed fee option is a pre-engagement negotiation in which only one side comes out ahead.  Nonetheless, occasions arise when a client seeks a designer’s creative guidance yet feels comfortable executing the project without the ongoing and full engagement of a designer, whether immediately or over time.

And Something New, at Least to Me:
Amy Lesser Courage, an architect and designer who was my first partner, and who is also my first cousin, shared with me a compensation model she has recently adopted.  Amy has implemented a hybrid billing system, billing her clients a discounted hourly rate and a discounted mark-up on transparent net purchases (twenty percent rather than the industry-standard thirty to thirty-five percent).  The discounted hourly rate accomplishes two things.  First, clients are reminded that there is a cost, even if nominal, to engaging a professional and that the professional’s time should be valued and respected.  Additionally, within this hybrid model, the designer is nominally compensated for consulting on items that are not necessarily purchased, such as selecting paint colors, specifying stone and tile, preparing furniture plans, etc.  Second, and provided the shopping is efficient, the client can advantageously purchase items at a discounted rate, even when the discounted percentage-based fee is added to the designer’s hourly rate.  And should shopping not result in purchases, the designer’s time is not a write-off.  Best of all, we believe this hybrid model is scalable, allowing designers to provide consulting services on small projects and competitively tackle larger ones.

The interior design industry is undergoing a tectonic shift.  New retail offerings and the internet have made home goods more available and affordable, and the designer no longer enjoys a monopoly on design advice and the sourcing of goods.  Since the homeowner is no longer captive, the value proposition has reset for many clients who seek greater transparency.

We also note a decrease in homeowner enthusiasm for hiring a brand name designer with a signature style.  Many affluent homeowners prefer their homes to reflect their design sensibility, and are, therefore, less inclined to hire a designer for status or social validation.  Our clients carefully study the cost of goods and services and negatively react to the cost of many designer-sourced goods.  While there are exceptions, most notably curated and one-of-a-kind and provenanced items, clients seem to prefer spending less than more, and seek interior design models and designers who deliver this less-is-more sensibility with enthusiasm and transparency.