Practice Management

Practice Management (PcM) focuses on the management of architectural practice, including professional ethics, fiduciary responsibilities, and the regulations governing the practice of architecture. Candidates must demonstrate an understanding of and abilities in business structure, business development, and asset development and protection.

Passed 03/11/22

Study Recommendations

  • The exam is 2 hour 40 minutes, and 65 questions.

  • The majority are multiple choices (choose 1-4), with a minimal amount of drag and place and hotspot questions.

  • There are two case studies usually ask how to assign the best employee/team for the project requirement. Allocate at least 1hour for case studies.

  • The exam does not ask you to remember all AIA contracts and detailed definitions of accounting terms.

  • Some calculations questions are hard, skip if it takes more than 8 minutes.

  • Remember every question is one point regardless of difficulty. Plan your time well and don't spend too much time on each question.


Suggested Readings

PPI ARE 5 Review Manual link

Chapters 1-3

The Architect's Handbook of Professional Practice link

See AHPP relevant Sections link

AIA Contract Documents link

B101, C401

Exam Contents (you must know)

SECTION 1: BUSINESS OPERATIONS

  • Hiring and Employment

      • Employment contract: might include non-compete, no moonlighting clauses.

      • Employment at will: no contract, terminate/quit without reason.

      • Contractor: relationship control, financial control, behavioral control

  • Business Regulations

      • Civil Rights Act, Wage and Fair Labor Standards Act, Family and Medical Leave Act, ADA, OSHA, etc.

      • Employer withhold income tax, social security, medicare from employee's income and remit to IRS.

      • A/E Firm generally need to carry Professional Liability, Commercial General Liability, Commercial Auto, and Workers' Compensation insurance.

  • NCARB Code of Conduct + AIA Ethnical Standard

      • Read and evaluate questions with common sense.

      • i.e. Not practice in another state without that state's registration. Always give collaborator credit.

  • Standard of Care

      • Architect should always avoid staying "highest standard" "best quality" in contract.

      • Warranty/guarantee of construction/budget/performance are NOT insurable.


SECTION 2: FINANCES, RISK, & DEVELOPMENT OF BUSINESS

  • Financial Wellbeing

      • Overhead Rate, Utilization Rate, Billing Rate, Multiplier.

      • Balance Sheet and Profit & Lost Statement.

  • Risk

      • Associated factors: Client, Delivery, Project, Schedule, Cost.

      • Research client expectation, reputation, available funding. Settle basic service in contract. Communicate with client clearly about scope and budget.

      • Carry professional liability insurance and maintain standard of care.

      • Assign competent staff on tasks, junior level staff need to be under PM's direct supervision.

  • Quality Assurance / Quality Check process

      • Skim through AHPP sections.

SECTION 3: PRACTICE-WIDE DELIVERY OF SERVICES

  • AIA B101

      • Architect's responsibility, Owner's responsibility, Contractor's responsibility.

  • Project Delivery

      • Design Bid Build, Design Negotiate Build, Design Build, Construction Manager as Advisor, Construction Manager as Constructor, Integrated Project Delivery, Bridging, Design-Assist.

      • Stipulated Sum, Cost Plus Fee (with and without Guaranteed Max Price), Unit Price.

  • Defense of Claims

      • Betterment, Statue of Limitations, Statue of Repose.


SECTION 4: PRACTICE METHODOLOGIES

  • Business Organization

      • Sole Proprietorship, Partnership, Limited Liability Company, Limited Liability Partnership, S Corporation, C Corporation.

      • Understand the different types' advantages and disadvantages.

  • Practice Methodology

      • Efficiency Based, Experience Based, Expertise Based.

      • Horizontal (Departmental) organization vs Vertical (Studio) organization.


ARE 5.0 Handbook PcM.pdf
AHPP15e_ARE5_PCM.pdf