How does RedBook earn its fees?

What do clients pay RedBook?

We make it crystal clear to all clients that, as an agency, we earn revenue principally from commissions paid to us by the Partners we introduce to clients. How this is charged depends on the level of service required by clients. These include:

Team Assembly: RedBook asks clients for an engagement fee of £6,000 (plus VAT) to assemble a project team. This includes signature RedBook services such as our Taste Exploration exercise, Partner interview process, curating the project team, fee analysis and cost benchmarking. It’s a huge amount of work upfront for which we charge our client this modest engagement fee.

Project Guardian: When clients require further support, a Project Guardian acts as a single point of contact usually until a contractor is selected, ensuring the project stays on track during this early yet critical stage, often clients ask us to stay on throughout the lifespan of the project acting as their trusted advisor, which is also fine. On larger projects, we often bring in an independent Project Manager once work starts on-site. Our fee to the client for this service is charged as a monthly retainer of £6,000 + VAT. It covers a myriad of services, including reviewing professional contracts, managing site surveys, advising on contractor selection, managing consultants’ invoices and monthly progress reporting. 

RedBook FastTrack: This is RedBook’s ultimate white-glove service, which delivers significant projects up to 30% faster than industry standard by deploying some 50 robust acceleration techniques and 60 delay-mitigation strategies as part of our unique FastTrack Playbook. The cost of this service to the client is charged as a percentage of the construction budget, depending on the size of the project. All clients receive terms of business, setting this model out in black and white. We ensure our client and Partner contracts are fully compliant with anti-bribery legislation, and these are regularly reviewed in the light of evolving case law.

How much do Partners pay RedBook?

We make our design team recommendations based on the Partner(s) who are most suitable for the project, ensuring we are always free of financial influence. For that reason, all our Partners join the RedBook roster on identical terms – within their professional discipline – avoiding any risk of bias. It’s worth noting that since we launched in 2011, we’ve never faced a dispute with clients or Partners over commission, a record we are proud to hold. It’s also important to note that no Partners pay to be on our roster; it’s purely by merit only. 

We charge our Partners the following commissions, which are detailed in client contracts:

• 12% on design and delivery professional fees
• 7.5% on FF&E
• 1.5% on construction costs (up to £10m and 1% thereafter)

Do Partners pass on the cost of commission to clients? 

We do everything in our power to prevent this from happening using the following checks and balances.

We first set our commission at a fair level for Partner firms to absorb – in their marketing budget, for example – so they can avoid passing the commission on to clients through raised fees.

Secondly, Partners are contractually obliged to absorb the RedBook commission rather than pass it on to clients.

We also always provide our clients with options per discipline to choose from (e.g., three interior designers or three architects), which our Partners are aware of, thereby creating a competitive tendering process and a fair market rate. 

Lastly, and perhaps most significantly, all our fee analyses are now compared against the RedBook Index [RBi]. This industry-first data bank provides us with up-to-date figures on the average fees charged by professionals across the luxury property sector, against different budget values. During the fee analysis, we’re often asked to include clients’ own professional candidates to offer a further benchmark, which we gladly do. All proposals are scrutinised in the same way. This creates what bankers like to call an ‘internal market’, limiting the inclination to inflate fees.

Below, we’ve prepared an example fee analysis looking at figures presented by three anonymous interior design practices submitted for a 7,750 sq ft property in central London. We’ve assumed an FF&E budget of £145/sq ft across the whole property, which equates to a silver level of specification according to the banding established in the RBi. The RBi column sets out the industry average for comparison.