The fee cycle around the project.

The distinction that matters

The argument in this piece depends on a distinction that the industry routinely blurs, because blurring it protects the wrong actors.

Some of the disciplines that attach to a project are genuinely required. Planning consultants where the local authority requires them. Acoustic and transport consultants where the planning conditions specify them. Building Research Establishment Environmental Assessment Method assessors where the certification has been committed to. Construction Design and Management advisers where the regulations demand them. Fire engineers where the scope involves them. These are necessary disciplines, mandated by regulation, planning policy, insurance requirements or the client's own commitments. Inside a coherent team, integrated into delivery rather than reporting alongside it, they earn their fee.

What sits alongside the necessary specialists is something else. It is a failure economy. The actors whose business model depends on the failures fragmentation produces. The lawyers drafting at length because longer contracts justify larger fees, and who come back at the back end to argue about what their own clauses mean. Insurance brokers layering cover against risks the procurement route is creating. Claims consultants and quantum specialists who would not exist on a well-administered project. Forensic delay analysts. Expert witnesses. Adjudication specialists. The advisers who attach at the start because complexity attracts them, and return at the end because complexity has generated work for them. These actors are funded by the failure of the primary team, not by the primary scope of the project.

"The failure economy is real, sizeable, and rarely named in the rooms where procurement decisions get made."

What the failure economy costs

None of the necessary specialists are individually wrong to exist. The problem is what happens when they are all assembled around a project with no coherent structure holding them together, and the failure economy is allowed to attach in parallel. The client ends up with a team of advisers who do not talk to each other, do not share information, do not agree with each other, and do not see the project as their responsibility. Each one is defending their own scope. Each one is positioned to extract fee without being accountable for the outcome. The cost at the front end is high and visible. The cost at the back end is catastrophic and mostly hidden.

The back end is where the bill lands. A project with a fragmented adviser team produces defects, because no single discipline was accountable for quality across the whole. Claims, because the contract was drafted by a lawyer who never saw the site, administered by a consultancy running commercial bias, and priced by a contractor who carried risks the design had not resolved. Incomplete works, because the commercial conversation and the delivery conversation were in separate rooms from day one.

The insurance claims arrive. The legal disputes begin. The forensic accountants turn up. The same lawyers who drafted the contract come back to argue about what their own clauses mean. Every one of them charges again. The fee cycle that attached itself to the project on day one returns at practical completion for a second pass.

Who actually loses

The traditional framing is that the client buys the project and the supply chain pays the price. That is only partly true. Almost everyone in the picture loses something, and the failure economy is the only part that genuinely wins.

The client loses on price, because the inflated tender return and the adviser fees are both paid by the client. They lose on programme, because a fragmented team cannot hold a schedule. They lose on quality, because an adversarial supply chain does not do its best work. They lose on the asset itself, because value engineering under late pressure strips specification that was needed. They lose on their own credibility, because the capital projects lead who approved the route is on the hook when the project overruns. They lose on their capital base, because every pound overspent is a pound not available for the next project.

"The client pays at every stage and operates the asset for decades afterwards. No other party in the picture pays as much."

The supply chain loses, which is the most visible loss. Contractors who priced the risk honestly still lose money because the risks were unpriceable. Subcontractors are paid late, settled short, or left exposed when a tier one contractor fails. Trades leave the industry when the job ends in dispute. The workforce absorbs the cost of every dispute, in the immediate redundancies when a contractor fails, and in the slow depletion of people who decide the industry is not worth the aggravation.

The traditional consultancy loses too, which is the loss the industry rarely discusses, because the consultancy looks like the party that is winning. In the short term, on any given project, it often is. In the medium and longer term, the losses are real. The firm loses on its people, because the daily reality of the model is demoralising and the best staff leave. It loses on its reputation over time, because projects that end in disputes build a shadow around the firm's brand. It loses on its commercial exposure, because aggressive administration creates liability and professional indemnity insurance prices the pattern over time. It loses on its juniors, who are the future of the firm and who are being trained inside a model that is discouraging them from staying.

What is left when the failure economy is starved

The only parties genuinely winning are the ones inside the failure economy itself. The claims consultants. The forensic specialists. The expert witnesses. The law firms whose work grows when projects fail. The insurance brokers whose fees grow with the risk they are pricing against. This is not a large group. It is a small number of firms and individuals whose business model depends on the failures of the primary team, and even for them the pay depends on the rest of the industry continuing to absorb the cost.

The way out is the structural one. A consultancy whose model does not depend on the failure economy persisting. A consultancy that benefits from a coherent team rather than a fragmented one, that makes its money from commercial judgement inside delivery rather than from coordinating parallel workflows. The necessary specialists belong on the project, integrated into the team. The failure economy can be starved.

"Once the team is coherent, the conditions that feed the failure economy stop existing."

When the structure is right, the lawyers still draft, but once, against a contract the team intends to administer. The insurers still cover, but priced against a coherent risk picture rather than a fragmented one. The administration is honest from month three, so the month eleven crisis never assembles. The supply chain is paid on time. The project completes as a handover rather than as a settlement.