Ricky Ray Ricardo: Mergers and acquisitions have always happened, but recently, I’ve noticed what feels like a consolidation event in the Australian architecture profession, with large practices getting rapidly bigger, and the appearance of various big international practices establishing here.
In a free-market economy, you tend to see consolidation over time, where an industry becomes dominated by a small number of major players. This is everywhere in Australia: so many industries having a duopoly or a “big four”, and then a large number of much smaller operators. In the built environment, we’ve seen this happen in engineering, which is now dominated by a handful of national or global players, when it didn’t used to be like that.
Do you think this is happening in Australian architecture?
Annabel Lahz: I think that at the moment we’re seeing a hollowing out of the profession. Many medium-scale practices are merging to become bigger, so they can compete with larger practices. This is because our whole procurement system in Australia is set up for large practice, requiring tenderers to have capability, track record, certain insurance, et cetera. Despite this, the majority of architects work in small practices, with 20 or fewer people.
If this trend continues – and I believe it will – it creates a situation in which a disproportionate number of architects can contribute meaningfully to the public domain. That imbalance is troubling, as it results in underrepresentation.
The mid-sized practice has traditionally been the sweet spot for someone who wants to do public work, but doesn’t want to step into the culture of a large firm. With that type of practice disappearing, it’s polarising people’s options to either small practice or large practice. It makes for an unhealthy ecosystem.
Dimitty Andersen: I have noticed that in South Australia, recently, we’re witnessing the opposite, with a number of small or micro practices – two, three, four people – splitting off from medium-sized practices. We’re also seeing some interstate practices open very small satellite offices.
At the same time, you’re quite right: big national practices are still growing and picking up work here. There’s a “Bunnings effect” happening, in the sense that some practices are becoming a one-stop shop for services.
I think what we will see in SA is the entire spectrum of very large to very small practices competing for the same projects, because there are just not enough projects in the pipeline.If we are not selecting the right teams at realistic fees, we will see negative impacts on project outcomes and a decline in our ability to retain talent across the profession.
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RR: I’ve worked on probably hundreds of tenders across most sectors over about ten years – by no means as many as either of you, but enough to notice that tender requirements seem to only get more onerous, particularly when public money is involved.
Do you think current government procurement policies and processes inherently favour scale over small and medium enterprise?
AL: Yes, definitely. It’s a real problem, and I think it’s a significant contributing factor in the rise of large practices, and in small and medium practices feeling they need to merge and become bigger in order to compete for public work. There are lots of reasons businesses merge: to get into different markets, gain access to certain kinds of projects or perhaps get into another city. But in big-picture terms, I think procurement in Australia is set up for large practice.
I’d like to introduce a third possibility for smaller or medium-sized practices, which is strategic alliances, or federated alliances, which I think are a little more formalised. Alliance structures allow each practice to maintain their ownership, culture and structure, and come together with specialised skill sets for specific projects. However, for that to happen, changes in procurement law are needed so that strategic alliance partnerships are permitted and not penalised during tender evaluation.
We have always used a strategic alliance structure to complete larger projects, such our laboratory projects at the University of New South Wales, where we teamed up with Wilson Architects, who brought specialist laboratory experience to our team. Increasingly on public tenders, both in an alliance and solo, we’ve been beaten by fees that are frightening. I am constantly surprised by how low many firms will go! In many instances, these low fees have been from large practices.
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RR: Annabel, you touched on some of the reasons why practices merge. Succession is a live issue in many practices, particularly as founding directors near retirement. It can be very tricky to line up internally. Do you see mergers or buy-outs as a sound succession strategy in their own right, or is it more often a last resort?
DA: The way businesses were established 10 or 20 years ago is quite different from how you’d set them up today.
In my experience, many practices are still owned by majority shareholders who were founding partners, and that model probably reflects a time when access to capital was far easier – driven largely by home ownership and the ability to borrow against property.
Practice owners need to be mindful that the people they hope will take over their businesses are facing a very different landscape: different economic conditions and often a different attitude towards owning – or not owning – a practice at all.
Mergers provide an opportunity to retain skills and talent within the profession, where the alternative may be to lose that capability altogether. I really like Annabel’s suggestion around alliances. If there was a recognised and streamlined mechanism to make collaboration or alliancing part of business as usual, it would open up more options for practices of all sizes.
AL: In the past, we’ve looked at an employee ownership trust model that is very popular in the UK, but which the current tax system in Australia is not set up for. The shareholders in the firm sell their shares to an employee ownership trust. When you are at the firm, you get the benefits of the shares (dividends) and when you leave, the shares remain.
For me, it’s interesting to consider why firms merge and why they acquire. An acquisition is like buying something. The office that’s being acquired may provide the existing owners with a way to retire, or it might give their staff a more assured career path, but ultimately, they and their culture are consumed into the purchasing entity. For them, the acquisition might bring revitalisation; new skills or markets, or perhaps a new design focus and reputation – there could be a range of reasons.
A merger, which I think has more positive potential than an acquisition, can be very good if it’s a merger of like minds, the cultures are aligned and everyone is singing from the same song sheet.
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RR: I’m glad, Annabel, that you brought up the distinction between merger and acquisition. In design media, we hear about mergers; we don’t hear about acquisitions, and I think that’s probably because they’re always cast as a merger, which is the softer, cuddlier narrative, right?
And these mergers or acquisitions are usually framed as two like-minded firms coming together on equal terms to form a stronger, more exciting practice. Is that always genuine, or is it still taboo to talk openly about commercial realities like ownership, succession, growth, ambition or risk, which are often the drivers?
AL: I think we hear the word “merge” more often than “acquire”, even if it is an acquisition, because it has more positive overtones.
DA: In my experience, there is a mystique that surrounds architectural business. Ownership and leadership structures can feel opaque, particularly for younger generations. Greater openness about roles and responsibilities, how decisions are made, long‑term vision, succession strategies and how finances operate would help demystify how practices really function, and open up the opportunity for conversation about the future. This transparency can support greater self‑determination, enabling people to make more informed choices about their journey within the profession.
The idea that there’s one “right” way to run a practice – or that it’s simply a choice between big or small – is too simplistic. It overlooks the many ways architects can build sustainable, relevant practices and adapt as the profession continues to change.
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RR: Dimitty, I have a question for you on how to navigate a successful merger or acquisition as the smaller player. Mergers and acquisitions are often discussed in terms of strategic upside, but they also carry risks around practice culture, staff retention and identity. Could you talk a little about your experience, how you successfully integrated your staff into another entity and how you kept them?
DA: I started my practice Dimitty Andersen Architects when I was quite young and, due to the nature of how it evolved – and I would say also being a female architect – it was mostly a residential practice. I had two staff and we had a lot of capability.
For us, the merger with Grieve Gillett Architects (GGA), a medium-sized practice, was an opportunity to expand the typologies we worked on, and to broaden our opportunities both horizontally and vertically. That was really successful.
We had an engagement year – a “try before you buy” – before we were completely integrated into the business and I was made a director. During that time, we met frequently – socially, more formally within the practice and at the accountant’s office.
I was clear about my motivations for the merger, and from my perspective, GGA was also clear about what they were hoping to achieve. There was generosity on my part in saying, “I’m all in; I’m going to give this the best possible shot I can.” And there was generosity on their part in that they did not micromanage things. They were on board with new emails, rebranding, new company structure and all those sorts of things, without getting down into the weeds.
At the core, there was a willingness to come together that we then worked towards. And I think communication across the whole of an architecture practice is key.
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RR: And does your project portfolio live on with them? Did you sell it with the business?
DA: I took all my projects over, and when we later consciously uncoupled, I left all the projects there. All my projects live on with them and some are still being built. Some that I delivered under my own name are now removed from their website.
I’m quite interested in this idea of “unmerging” of practices, particularly concerning people leaving a mid-sized or larger firm to set up their own practice. It is nice to be independent and work for yourself or in a small group, but I wonder, is there something about our medium to large business models that isn’t working?
AL: In Sydney, I think it’s a matter of cultures aligning between firms. For employees in medium and large-size practices, problems arise when their practice merges and the culture changes to one they are not comfortable with. As a smaller practice, alliances allow us to work with another practice and see if it fits.
There are different ways of doing the alliance, such as where one practice does the upfront work and another back-ends it, which we try and avoid. We prefer when each practice brings something specific and we all contribute from beginning to end in an equitable way. Alliances have allowed our staff to work on larger jobs than they would normally be able to work on, in a practice of our scale.
DA: The world that younger people are growing up in is very different from the one Annabel or I grew up in. As a profession, we need to be open to evolution and change. That means listening to younger people and having open discussions around ownership, career progression and how they see the future. If we do that, we can start to review what that means for the practise of architecture – design or otherwise – instead of relying on a single, traditional model of what an architect does.
– Annabel Lahz is a highly respected architect with an impressive body of work including education, public and urban architecture. In addition to directing Lahznimmo Architects, established in 1996, Annabel currently sits on the NSW State Design Review Panel. In 2024, Annabel was the recipient of the Marion Mahony Griffin Prize, which recognises a female in the field of architecture with a distinctive body of work.
– Dimitty Andersen is an architectural leader who founded her own bespoke practice at the age of 30, gaining hands-on experience through the delivery of small-scale projects. In 2015, Dimitty joined Steve Grieve and Paul Gillett to form the medium-sized Adelaide practice of Grieve Gillett Andersen, where she led the design and delivery of a number of memorable, public-facing projects. Today, Dimitty is part of GHD Design, where she enjoys the complexity and demands of large-scale social infrastructure projects.
– Ricky Ray Ricardo is a communications specialist working across architecture, landscape architecture and the built environment. A former editor of Landscape Architecture Australia, he writes and advises on design, practice and urbanism.
ArchitectureAu Business brings together leading practitioners to share their insights on navigating the contemporary challenges of architectural practice and business. Stay tuned for the next roundtable on how to integrate artificial intelligence into architectural processes, featuring James Loder, Josh Fitzgerald and Sian Willmott.