Unbudgeted CEO Requests at 68 Percent of the Fee

Convert the verbal request into a priced, written proposal before anyone opens CAD.

1. Correct the premise first, politely. There is no retainer; the fee is fixed against a defined scope. Say it once, factually, and offer to walk through the fee basis with the PM and the CEO. Misunderstanding a commercial term is not an insult; letting it stand is a mistake.
2. Separate scope from revision. Compare the requests against the scope language: two schematic options and two revision rounds per phase are covered. Three additional options, a full test fit for a different building, and photorealistic lobbies are new services. Show the comparison in a short table rather than asserting it.
3. Quantify before proposing. Estimate the new work: the 40,000 sq ft test fit at roughly 60–80 hours, three planning options at roughly 40 hours, two photorealistic renderings at 20–24 hours each, plus re-coordination time. Present hours, rate ($145/hr), total fee and the schedule effect on the four-week DD milestone.
4. Offer a staged authorization. The test fit is the most decision-relevant item (it may change which building the client leases); propose authorizing that first and deferring renderings until the footprint is settled. Clients accept small, sequenced approvals far more readily than one large number.
5. State what proceeds in the meantime. Base-scope design development continues; the new work starts when the authorization is signed. Stopping all work would be an overreaction and a relationship risk. Do not perform the work 'to be nice' and invoice later - the contract makes written authorization a condition, and unwritten work is where fixed-fee firms lose money and friendships.

• Send it by email with a signature block, and copy the CEO's assistant so the approval path is clear.

Four compounding risks, all avoidable with one email.

• Fee recovery. The additional-services clause requires written authorization. Work performed without it is difficult to collect, and pushing for payment after delivery damages the relationship more than asking now. The firm would be spending roughly 150–190 unbudgeted hours - over $20,000 at the contract rate - against 370 remaining contract hours, jeopardizing the base scope's profitability.
• Schedule and quality on the base scope. Design development is due in four weeks. Diverting the team to a 40,000 sq ft test fit in that window either delays DD or compresses it, and a compressed DD produces the RFIs and change orders that damage the firm's reputation more than a fee conversation ever would.
• Professional liability. If the test fit informs a lease decision and is produced quickly and unreviewed, the firm is exposed for advice given outside its authorized scope and outside its quality-control process.
• Precedent. The CEO will treat uncharged work as the baseline, and the PM - who is measured on budget - has an incentive to keep it that way. This is the client's largest referral source; the way to keep a client is a clear, unembarrassed commercial conversation, not absorbed costs that breed resentment.

Do not stop base-scope work to make the point. Continuing the contracted design while the proposal is pending is both commercially and ethically correct: it protects the client's schedule and demonstrates good faith without conceding the scope question.

The firm cannot be directed to donate work, and it should not threaten to walk off the base contract either. Escalate in writing.

Steps:

1. Principal-level letter or meeting. Move the conversation from PM level to principal-to-principal and to the CEO. Frame it around the CEO's own objective: the test fit exists to help choose a building, and a rushed, uncoordinated 40,000 sq ft fit test is a poor basis for a lease.
2. Written notice of the scope position. Confirm in writing that the additional items are outside the contract, that base-scope design development continues on schedule, and that the additional work is available upon authorization. Remainder: this notice is the firm's protection if the client later claims abandonment or delay.
3. Offer a reduced but real authorization. Propose a capped, fixed-price package for the test fit alone - the one deliverable that actually drives a decision - and deliver it on a defined date, with renderings deferred. A smaller yes is worth more than a principled stand.
4. Do not withhold base-scope deliverables to force payment. Withholding contracted work creates a claim against the firm and can raise licensing-board issues depending on jurisdiction.
5. Set a decision date. Tie it to the DD milestone: additional work confirmed by Friday is included in the DD package; later authorizations move the milestone.

If the client still refuses: complete the base scope professionally, document every request and every declined authorization, and let the relationship settle. If the firm later needs to pursue the additional work commercially, the written record of refusals - not the unbilled hours - is what supports the position.