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More projects, more staff, less fees for lighting designers

6 January 2012 13.00 GMT


(UK) - mondo*arc's 2011 International Lighting Design Survey research unveils a mixed bag with more projects being won but less revenue being generated. However, it is clear that the role of the lighting designer is being cemented and this can only be good news for the future...

Now in its third year, mondo*arc's survey of 50 lighting designers was able to extrapilate some interesting analysis due to the comparative data that is now available. In fact, the 50 has now turned to 46 due to two companies not responding and two not now operating (one being taken over by a larger organisation so comparative results were not possible; and one having been wound down with its work taken over by a newly established practice - again comparative results were not possible). Plans to expand the sample are under way for next year’s survey.

Depending on who we talked to, the lighting design profession has either turned the corner or it is in serious trouble. In actual fact, the answer often depended on which region(s) you practice in, how big your firm is and how diverse your work is. Those that have a diverse portfolio now appear to be reaping the benefits whereas those that have, for whatever reason, remained in a single market have, for the most part, suffered a downturn.

Paul Traynor’s (Principal of UK firm Light Bureau) response was typical of those who had a good year: “For us, 2009 was awful, 2010 was better and 2011 has been exceptional. In the depths of the downturn, the hospitality and residential sectors thankfully remained firm and in the recovering months (particularly 2011) the commercial sector seemed to return strongly. I think that the fact that lighting designers stayed busy during this recession is testament to our increased value and credibility since the last major recession which saw demand for our services all but dry up.”

Tapio Rosenius of Lighting Design Collective echoes the importance of diversity with a sorry tale of the state of the profession in Spain: “The market in Spain is in dire states. 46% of the registered architects are unemployed. There are very few proper projects on the go or starting. Lighting design practices are mainly one man bands. We are now the second biggest in the country and we only started two and a half years ago! Only those with international work are surviving. The lighting design profession however is clearly developing here and receiving more exposure. Many academic courses have been established as well as APDI (Spain’s lighting design association).”

What is clear from the results is that the lighting design practices have taken on more work in 2011 (an average of 43 per practice compared to 41 in 2010) but these projects have, on the whole, been smaller and have earned less revenue.

This is borne out by Jim Youngston of Gabler-Youngston in the USA: “I see a lot more requests for proposals, which is encouraging, but am finding that most of our new work is on a very rapid schedule and that larger, longer term, ‘pipeline filling’ projects are still few and far between.”

Average gross revenue per practice has dropped from US$1,508,000 in 2010 to US$1,475,533. Bearing in mind that, in 2009, this figure stood at US$1,600,000, we can see that there has been a steady, if not dramatic, drop in turnover since the survey began. Couple this with an actual increase in staff (from just over 13 per practice in 2010 to just over 14 per practice in 2011) and we can see that revenue per head has fallen more sharply from US$115,143 in 2010 to US$104,583 in 2011.
One may be tempted to apply the basic equation of turnover divided by number of projects to find out the average project fee but there are obviously other factors that need to be applied. However, as an exercise this results in a basic average fee per project of US$34,315 in 2011 compared to US$36,780 in 2010. Based on the number of employees and projects completed in 2011, the average number of projects per employee is three.

Financial constraints caused by more design practices (whether bona fide lighting designers or not) with highly competitive fees, manufacturers and architectural / engineering firms with their own lighting design departments have all put downward pressure on fees.

James Long, owner of James Long Studio in the USA, has first hand experience of this phenomena: “What I’m seeing is architectural firms offering professional lighting design services as a way to increase revenue. Clients/architectural firms are expecting deep discounts - they site the state of the economy resulting in less projects to go around. The looming threat is if your costs are not in line with their thinking they will shop the project around until they get what they want. One client actually used ‘Think Ikea’ as a reference for their budget. Sometimes you just have to walk away. In a strange twist we are working with a client who parted ways with the original design team but kept us on to work with a new design team.”

However, the region where this sort of practice seems to be most prevalent is Asia where the need for lighting design has exploded. This point is emphasised by Stephen Gough of Project Lighting Design, based in Singapore: “This year was challenging. We are finding that competition is increasing in Asia with many smaller or start up firms offering ridiculous fees. In particular the China market is becoming difficult as developers try to leverage us down to lower fees using the smaller firms as fee benchmarks. I also see some of the larger firms offering highly competitive fees and just taking tons of work. I don’t know how they can expect to maintain any level of quality or indeed find the qualified staff to do the work. Having said that we are soon to open an office in Shanghai with a view to consolidating our position in the China market.”

André Tammes, founding director of LDP in Australasia, is particularly scathing of the situation: “As the European and American economic mess worsens, we are seeing an increased rate of ‘suicide pricing’ for projects in Asia by lighting designers from the afflicted countries. This is deplorable because it represents only a short term, last gasp, fix for those who are struggling, inevitably resulting in an under-servicing of projects and creating confusion in the minds of clients who are led to believe that they can obtain high quality service for implausible levels of fee. Bad news which will take years to work its way out of the system.”

And JK Yao of Chroma 33 in Taiwan: “People are becoming aware of the disadvantage of using LEDs, which is a good sign. Unfortunately, there are more so-called lighting practitioners but, sadly, most focus on marketing and not professionalism, especially in the Asian market.”

Returning to the notion of diversity and it is interesting to note the national / international split of work between different regions. The overall average across all the lighting design firms is 58% national and 42% international work for 2011. However, this is heavily skewed by practices from the US who’s work is 75% domestic - understandabe for such a huge market. Compare this to European firms who’s 53% national average is nearer that of the overall average; and to UK firms who’s international projects actually exceed the domestic workload 56% to 44%.

Many responses to the survey stated that it was the fewer, international projects that brought in the higher fees, whereas less profitable projects in their own country were the bread and butter work that kept them going.

Overall however, the feeling is one of positivity for the future with more responsibility falling to the lighting designer, even long after the project has been completed. This can only help with the establishment of lighting design as an essential profession within the building fraternity.

Keith Bradshaw, partner at Speirs + Major in the UK, can see the way it needs to go: “We are working harder now than ever for fees but this is common to all professional services home and abroad. In an odd way we are relishing the challenge and the manner in which the market is making us stay extraordinarily focused and targeted. The value of what we do needs to be crystal clear and fundamentally connected into the project such that clients understand lighting design as essential and not a ‘nice-to-have’. Proving one’s worth continues to be a defining factor of our profession.”

Perhaps we should leave the last word to Louis Clair of Light Cibles (offices in France, Spain, Malaysia, Singapore and China) who is typically upbeat about the role of the lighting designer in the future:

“Something is slowly changing. In France, clients are demanding more responsibility, even five years after a project we are still responsible for it by law, just like architects. In Asia the movement is starting. Instead of just using our ‘concept designs’ and not asking us to control the construction as it was ten years ago, clients start to look for long life installations and start to accept our fees and our recommendations for construction control. It is now normal to demand three years guarantee for lighting fittings, even if they are made in China. I think our role needs to become more professional and we will soon have less problems with people having no experience and asking for low fees and commissions from manufacturers.”

 

What the lighting designers had to say...

“I see lighting legislation as an opportunity to be more creative.  Lighting legislation is not a problem. It has only pushed us to design in a way that has never been seen before. Design without constraints usually lacks the spark of creativity that comes from overcoming obstacles.” Paul Gregory, Focus Lighting, USA

“In Italy there is a huge problem in the recognition of the role of  the lighting designer. Unfortunately, most companies that produce luminaires give free lighting ‘design’ executed by their technical departments just to sell their luminaires, taking work and respect from the lighting designer. These projects are only technical - they have no artistic and creative content. There should be collaboration between lighting designers and manufacturers to have real lighting design projects.” Francesco Storaro, Italy

“Stay current, stay creative and stay global. This is how you stay successful in my opinion.” Ted Ferreira, CD+M Lighting Design Group, USA, China & Middle East

“The demand for lighting design services in India is growing but we face an uphill task in educating the clients against strong commerce driven information that aligns their thoughts in predetermined directions. Major challenges also exist in the lack of trained and skilled installation teams.” Kapil Surlakar, LIGHT@WORK Design Consultants, India

“It is exciting to be witness to great change and indeed disruption in the lighting design industry. We embrace it all.” Charles Stone, Fisher Marantz Stone, USA

“The main challenge is projects starting and then stopping so you resource your commitment appropriately and perhaps turn down other work and then the project that you think you have stops. We had at least six major project commissions that stopped soon after which is very disruptive and problematic to managing a lighting consultancy or any other business for that matter. dpa has had a lot of projects finish and open in 2011 so it has been an exciting period seeing years of work complete. We are generally very optimistic about our business and we have seen a significant rise in major project enquiries and commissions come to us in the fourth quarter of 2011.” Nick Hoggett, dpa, UK, Japan, UAE

“Poor cash flow and delays on projects have been a real challenge.” Paul Pamboukian, South Africa

“The construction Industry is in a mess. Hardly anyone (particularly the end-user / client) understands the LEED implications and cheap installation still seems to be the driver - ‘To hell with the future!’. In that respect little has changed since the ‘60s when single bar electric fires were installed just because they were cheap. When the regulators start to get tough on environmental issues then we might see a sensible move towards capital expenditure on energy efficient solutions. Can’t wait!” Lawrence Titton, Visual Energy, UK & Middle East

“The market for lighting designers is getting harder. There is more competition and more time and effort to get good jobs.” Mike Helbling, Vogt & Partner, Switzerland, Germany & Austria

“We are still finding compatibility issues with some combinations of LEDs, drivers and architectural control systems – as such we have had to employ a full time technical manager to work with manufacturers to help us avoid these issues.” Darren Orrow, Into Lighting, UK

 

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