Transformers

So will architects at last do it too?

Certainly Paul Hyett, the outgoing RIBA president, is keen for architects to band together to form giant practices. And he is leading from the front. Last month, his firm, Ryder, merged with giant American firm HKS to form a 700-strong company that has offices spread across the USA and Britain. This makes it one of the 10 largest architectural practices in the world.

So will the rest of the architectural profession now follow their lead and merge practices? The answer is, probably not – at least, not on Hyett's model. Far more than any other building industry profession, architects show little inclination to join megaconsultancies – about 65% work happening at the opposite end of the scale, in practices of three people or fewer. And the RIBA's practice department reports that recent growth has been mainly through organic expansion rather than mergers.

Accordingly, George Ferguson, who takes over from Hyett as RIBA president this week, and is keen to defend small practices, is promoting a different model. He favours the formation of consortiums or alliances that leave the original firms intact. Ferguson is also leading by example. In 1986, he pioneered the architectural consortium in Britain by forming Acanthus, a loose constellation of what is now 12 smallish practices stretching from the Shetlands to Devon. He also formed the Concept Planning Group with two other firms to tackle the regeneration of Bristol's harbourside.

What Hyett's megamerger and Ferguson's loose alliance have in common is that they are serious moves to restructure the architectural profession. Both presidents devised their models for architectural practices in response to a crisis in the architectural profession.

This crisis was first enunciated by Hyett at last year's RIBA conference. Whereas presidents of professional institutes habitually blame the rest of the world for their members' ills, Hyett bravely did the opposite.

"As a profession, we are not in good shape to cope with the new demands placed upon us," he said. He went on to argue that a mismatch had emerged between what clients wanted and what architects were able to give them. Most practices were to small to tackle the large public sector PFI projects, or to win places on the frameworks being set up by public authorities to better integrate their supply chains. "This means we are wasting talent, missing opportunities and increasingly failing to respond to the challenges now before us," he concluded.

Hyett argued that, to tackle a typical PFI projects such as a £100m district general hospital, or a £50m bundle of schools, the profession needed to reorganise itself into large practices. He pointed out that large and well-respected architectural departments had existed in local and health authorities as recently as 20 years ago, and these should now be recreated by the private sector.

He might have added that, if British practices did not rise to the challenge of the scale of public-sector projects, large American practices would step in and take their place. Many of the current generation of PFI hospital projects have been won by American practices such as Anshen Dyer, RTKL and HOK International, with the most recent American entry to the UK's healthcare scene being Hyett's American confederates, HKS.

Mergers and alliances
The mismatch between supply and demand is more than just a matter of competitiveness within the building industry. It has an impact on the civic well being of the wider society.

This is an issue that concerns CABE, the architectural watchdog, which has repeatedly slammed poor design standards in PFI education and healthcare buildings. "CABE is concerned not because architects are going out of business but because customers are getting a bad deal," says commissioner Sunand Prasad. Research carried out for CABE shows that attractive, well designed hospitals shorten patients' recuperation period; by contrast, some PFI hospitals, such as the Cumberland Infirmary in Carlisle, stand accused of increasing the spread of infections through cramped wards (30 May, pages 38-43).

During the same RIBA conference, Hyett passed the baton to Ferguson by asking him to chair a task group to investigate how architectural practices could restructure themselves. Although he praises Hyett for his hard analysis of the problem, Ferguson takes a softer approach to the solution.

"I think there was quite a lot of flak after Paul's speech, certainly from small practices," he says. "It's a more complicated issue than a purely economic one, because of the type of people we are. We are designers, idealists in many respects, people with our own visions for the future, people who care more about creating things than we do about money sometimes, maybe to our own detriment.

So the question of practice has as much to do with lifestyle as it has to do with productivity."

Accordingly, Ferguson and his group looked at ways of making the most of the small firm structure. "It's necessary to restructure the profession, but finding less painful ways of doing so was part of the aim," he says. In fact, Ferguson takes a quietist attitude to the creation of large practices. "If PFI, PPP and other government procurement methods are resulting in only the largest practices getting the bulk of the work, there's going to be a natural progression for some of the bigger practices to merge and become even bigger. This will sort itself out commercially."

Instead, Ferguson argues that it is the smaller practices that are in need of the RIBA's help. "Now where I think we can make some difference is in helping to realise the talent that lies in smaller and medium-sized practices and enabling them to be used on larger projects. And that is in the way of networks and partnerships and co-operative ventures."

Ferguson wants to create a range of generic models that practices can adopt to form co-operative ventures. The RIBA practice department is currently drawing up and legally vetting standard forms of agreement for the first of these generic models, with others to follow on later.

The most straightforward of Ferguson's proposed alliances is a joint venture between an inspired design architect and a larger firm that acts as lead consultant and provides the bulk of the manpower resources. Ferguson cites the precedent of Jeremy Dixon and Edward Jones working with Building Design Partnership on the Royal Opera House scheme.

A second co-operative model is a consortium formed between two or more consultants. It could consist of architectural practices that band together to increase their geographical coverage, on the model of Ferguson's own Acanthus consortium, or it could combine architects with other professions or with design specialists in areas such as conservation or healthcare. A third model is an ad-hoc consortium composed to tackle a single large project.

There is, of course, more to winning a big public sector commission than forming an instant consortium. "Clients want to see a disciplined working unit, not a loose collection of practices," says Hyett. "They will ask who is responsible if things go wrong, and they'll want to know how the professional indemnity insurance works." Keith Snook, the RIBA's practice director, has some advice. "Studies of all kinds show that things go wrong at joins," he says. "Make sure the roles, duties and responsibilities are spelled out with clarity so that, if they were visually mapped, they would produce a jigsaw shape with no overlaps – not the Olympic ring emblem, which has both gaps and wasteful overlaps."

When it comes to the costly and fraught issue of professional indemnity insurance for consortiums, Ferguson recommends distributing insurance equally among the parties, as he did when forming the Concept Planning Group. "So if you've got someone who's insured for £10m and someone insured for £1m, then you've got a problem, unless the project is big enough to make it worthwhile to equalise. If you can't, then you have to resort to the model of there being one lead practice, and the others acting virtually as subcontractors. There is a third way, which I greatly favour, and that is single project insurance." Although Ferguson thinks the industry is moving slowly towards single project insurance, he adds that "the insurance industry and the legal profession seem to have a vested interest in continuing the mess of insurance that we have at present".

Although he does not plan to reveal his restructuring proposals and their standard forms of agreement until September, other architects are already thinking on similar lines. Last month, five of the UK's most prominent design architects – Feilden Clegg Bradley Architects, Penoyre & Prasad, Hawkins\Brown, Allford Hall Monaghan Morris and van Heyningen and Haward Architects – formed a loose alliance to tackle PFI projects. The confederation was pointedly christened PFI5. According to Richard Feilden, partner of Feilden Clegg Bradley, the fact that the PFI5 is made up of smaller practices gives it a unique selling proposition when competing against large commercial practices for big PFI schools bundles. "We can bring distinctiveness and individuality to each school," he says.

Ferguson's loose assembly model can even be merged with Hyett's mergers and acquisitions approach. Stuart McColl, chairman of SMC Group, is a man with a mission to merge his way to an 800-strong global practice. McColl's management approach, however, is to leave the merged firms to function as independently as possible; they only come together to tackle larger commercial projects.

Design quality
Support for architects has also come from recently formed organisations such as CABE and the Construction Industry Council. Graham Watts, the chief executive of the CIC, says: "There is a very strong movement in which CABE and CIC promote design quality in architecture, such as through the design quality indicators. These have the effect of enhancing the role of architects in the procurement process." For its part, CABE can take credit for alerting the government to the value of design in public buildings. Starting with Tony Blair's Better Public Buildings manifesto, published in 2000, it has persuaded every government department and many local authorities and NHS trusts to set up architectural champions to promote design quality in their building projects.

Although, CABE's Prasad stresses that the commission is "architecture-friendly, not architect-friendly", he says the quango is "making efforts to make procurement engage with good design through best practice guidance". He adds: "But the best thing a client can do is to get the right team in the first place. That's 50% of the battle."

However, the big stumbling block in improving design quality, and the source of many of RIBA's woes concerning procurement, is the Office of Government Commerce within the Treasury. Last October, CABE and the OGC published a joint document on procurement entitled Improving Standards in the Design of Public Buildings, in which it recommended a review of the OGC's policy of bundling projects into large procurement packages. However, Prasad is sceptical that positive results will soon be forthcoming. "The habits of centralisation result in a smaller market of larger practices, whereas smaller and medium-sized practices give diversity. The message that larger and larger projects militate against good design quality has gone in. But don't expect a rebalance in the procurement process overnight. Unfortunately there's still too much talk about initial costs rather than long-term value."

One of the most encouraging moves on the demand side is a new register of consultant architects that NHS Estates is drawing up with advice from a panel of architects. Significantly, the register overturns the accepted procedure of only including practices with experience in healthcare design, as that blocks the spread of expertise and choice. It is intended that the register will include large and small practices with and without healthcare experience.

"It will encourage health trusts to mix and match small practices with substantial knowledge of healthcare with large practices bringing substantial resources," says Hyett. "It could also batch together large healthcare specialists such as Llewelyn-Davies with small design architects with no healthcare experience."

There is at last a range of solutions on the table to tackle the mismatch between the procurement of architectural services and the structure of the profession. However, it is ironic that, just when the value of architecture is at last beginning to be generally recognised, the value of architectural services is still in question.

If the supply and demand is not resolved, it is not just architects that will suffer.

As Richard Feilden puts it: "Two million children are going to pass through this wave of PFI schools in the course of their 25-year contracts, and we passionately believe that good design will make a real difference to their experience."