As a lawyer for the design industry, I have drafted hundreds of design contracts and have been involved in countless designer vs. client disputes, always resulting from the unplanned end of a contract relationship. My experience has led me to believe strongly that the industry must shift toward what I call “The New Transparency” – using contracts as part of a comprehensive approach to client education that encompasses the entire design process and relationship between designer and client.
Beyond the Markup Conversation
For too long, conversations about transparency in interior design have fixated almost exclusively on product markup. While markup disclosure may be one aspect of transparency, it represents only a fraction of the value designers provide. The New Transparency moves the focus away from this single dimension and toward a holistic understanding of the design professional’s role.
When clients fixate solely on markup percentages, they commoditize the industry, looking for the lowest mark up so they can save money and — intentionally or not, depriving the designer of revenue. As designers your job is not to get them the lowest price, the sale price or to price match what they find on the internet. The real value of a designer extends far beyond the difference between wholesale and retail pricing – it includes expertise, vision, project management, and the ability to transform spaces in ways clients simply couldn’t achieve independently.
Educating Clients on the Full Compensation Structure
A truly transparent approach educates clients on all aspects of a designer’s compensation structure. This includes:
- Design fees for conceptual work and creative development
- Product revenue from items provided as a retailer (including industry-standard markups)
- Implementation hours for project management and execution
- Portfolio rights for professional photography of completed projects
Each component plays a vital role in sustaining a professional design practice and delivering exceptional results.
I often question whether clients truly understand how designers make money, or if they choose to ignore it in their quest for the lowest price for their luxury items. Either way, by explaining this structure upfront in clear contract language, designers can remind clients that they are entitled and expected to make money, they do not have a moral or ethical obligation to share vendor pricing or to get their clients the lowest available price. The goal should be to shift conversations toward the comprehensive value this industry provides.
Clear Contract Language: A Foundation for Trust
The cornerstone of The New Transparency is clear, straightforward contract language. Consider this example of language that I recommend be added to the first few paragraphs of a design agreemnet:
“This Agreement outlines our compensation structure, which reflects the industry-standard approach for professional interior design services. Our compensation includes design fees for creative concepts, revenue from products we provide as your retailer (including standard industry markups on furnishings and materials), hourly charges for project management and implementation, and the right to photograph completed projects for our portfolio. This comprehensive approach is the established norm in our industry and benefits you by providing access to our professional sourcing capabilities while ensuring we can deliver high-quality design outcomes and efficient project execution.”
This language accomplishes several important goals:
- It establishes the compensation structure as industry-standard
- It clearly outlines all components of compensation
- It explains how this structure benefits the client
- It sets appropriate expectations from the beginning
Benefits of The New Transparency
When designers embrace this approach, both parties benefit:
For clients:
- A clearer understanding of the value they’re receiving
- Fewer surprises during the project lifecycle
- A more educated perspective on the design process
- Confidence in working with a professional who values openness
For designers:
- Fewer uncomfortable conversations about pricing
- No question about whether the client “gets it” with regard to pricing
- Stronger client relationships built on mutual understanding
- Freedom to focus on delivering exceptional design rather than defending compensation
- A more sustainable business model
Implementing The New Transparency in Your Practice
Begin by reviewing your contract language. Does it explain your full compensation structure in clear, accessible terms? Does it help educate clients on industry standards? If not, consider revising it to reflect The New Transparency principles.
Next, incorporate this approach into your initial client consultations. Rather than avoiding compensation discussions, address them proactively with confidence. When clients understand that your compensation structure is both standard and necessary for delivering excellent results, they’re more likely to value your services appropriately. Make sure your client respects you and understands that you are a business, not a creative best friend.
Conclusion
The New Transparency represents a maturation of the designer-client relationship. By moving beyond narrow discussions of markup percentages to comprehensive education about process and value, we create stronger partnerships with our clients and a healthier design industry overall.
In an era where information is readily available but professional expertise remains invaluable, transparent communication about our full compensation structure isn’t just good ethics – it’s good business.
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Wendy Estela P: 860-812-1758 |