Breaking down the Practice Management (PcM) Division

What is the ARE 5.0 Practice Management (PcM) Division?

As you know, having the right technical knowledge is a prerequisite for running a successful architecture business. But equally important is an architect’s ability to run their own practice. 

Many choose to take this exam first, as it can help them familiarize themselves with the structure of the ARE division exams. However, the Architect Registration Exam tests may be taken in any order, and studying for them in their entirety can be very beneficial. In fact, the 5.0 exams now more closely align with how a project flows through an office – instead of broken up by relevant topics. But, no matter which order you choose to take the divisions in, the first step is establishing your exam eligibility.

Getting ready to take the ARE

Once you’ve decided to take the ARE 5.0, the first thing you’ll need to do is establish an NCARB record. To obtain an NCARB record, you’ll complete an online application at the NCARB website. Then, you’ll need to select your jurisdiction and receive eligibility to test from that specific board. Because each jurisdiction sets its own rules, you’ll need to ensure you meet the criteria before requesting eligibility. Once eligible, you’ll be able to schedule your exam appointment.

Because the exam’s six divisions are taken separately, you’ll need to schedule an exam for each division of the ARE 5.0. The cost of any individual exam and retake is $235, bringing it up to $1,410 for one attempt at all six divisions. NCARB now uses a Score Validity Policy that passed exam divisions will be valid until the end of the next version of the ARE - so 5.0 exams will be valid until the end of 6.0, but many jurisdictions still require all exam divisions to be completed under the old 5-year Rolling Clock policy, so confirm with your jurisdiction what timeline you'll need to complete the exam in. For more help getting registered for the ARE, read our quick-start guide.

What is the format of the PcM exam?

On test day, you’ll have 2 hours and 40 minutes to complete the PcM exam (excluding the allowed 30-minute break time). The test is made up of 65 questions in four key content areas:

• Business Operations

• Finances, Risk, & Development of Practice

• Practice-Wide Delivery of Services

• Practice Methodologies

While there’s not a specific number of questions on each of these four content areas, there is a general breakdown of how many questions you can expect per area. According to NCARB, the practice management exam is broken down like this:

• 13-17 questions relating to business operations – 20-26% of the test

• 19-23 questions relating to finances, risk, and development of practice – 29-35% of the test

• 14-18 questions on practice-wide delivery of services – 22-28% of the test

• 11-15 questions on practice methodologies – 17-23% of the test

It’s important to note that even though NCARB breaks down each content area into sections, the actual exam is NOT neatly divided into sections. Topics can and will be presented in any order. For example, there may be a practice methodology question, then a finance question, then a business operations question, and so on. 

Questions will be either individual questions or part of a case study. There are two case studies per division. These case studies simulate real architecture projects, including key information and additional resources. The test taker must make evaluative judgments based on the information presented to answer a set of questions relating to the case study.

Now that you can visualize the format of the practice management exam, let’s take a deeper look at each content area you’ll need to know.

What are the Practice Management Division exam sections?

As you’ve seen, the PcM exam has four sections, each covering a different aspect of managing an architectural practice. Here’s what you need to know about the objectives of each content area.

Business Operations

This section covers all aspects of running an architecture firm with four objectives. To do well in this content area, you’ll need a thorough understanding of staffing, regulations, insurance, ethics, and the appropriate standard of care. 

Objective 1.1

The exam will test your ability to assess resources within the practice. You’ll need to have a firm grasp of the criteria and protocols for hiring, assigning work, evaluating staff, human resources, scheduling, and professional development. You’ll also need to understand the capital expenditures of running a firm, including opportunities for expansion of the current practice or addressing changing needs.

Objective 1.2

The second objective will test your ability to understand and apply the regulations and requirements that govern the work environment. For this objective, you’ll need to know the laws, regulations, and insurance standards related to running a practice – including health insurance, worker’s compensation, general liability, and labor laws.

Objective 1.3

The third objective in the business operations content area will test your knowledge of ethical standards and accepted principles in a given situation. You’ll need to understand laws, rules of conduct, and ethics when dealing with clients and in general business operations.

Objective 1.4

The last objective in this content area will test your application of the appropriate standard of care, including its implications for providing your professional services, how errors and omissions can impact your business, the responsibilities of addressing climate change, and responding to unknown conditions for the health, safety, and welfare of the public.

Finances, Risk, & Development of Practice

In this section, you’ll test your knowledge of running and developing a practice. Finances, mitigating risk and liability, negotiating services, and contracts are all covered in this section. This section represents the largest portion of the PcM exam.

Objective 2.1

The first objective in this content area involves evaluating the financial well-being of a practice. To do well on this objective, you’ll need to know how to analyze financial data, business strategies, and strategic priorities of a firm to identify ways to position the practice.

Objective 2.2

The second objective tests your ability to identify practice policies and methodologies for risk, legal exposure, and insurance coverage. It’s also necessary to be able to apply conflict resolution and quality management techniques to various situations that arise within a practice.

Objective 2.3

The last objective in this content area involves selecting and applying practice strategies for a given business situation and policy. To be successful in this objective, you’ll need to have a firm grasp on negotiations, contracts, scope creep, scope adjustments, and strategies for protecting intellectual property in certain situations.

Practice-Wide Delivery of Services

In this content area, your focus will be on how projects impact the firm as a whole, including determining if a project is right for your business, what the project entails, and the contracts involved in providing your professional services.

Objective 3.1

The first objective focuses on analyzing and determining a response to a service request. As a provider, you’ll need to assess the scope of services, the completeness of requests, and whether or not there are public interest conflicts. You’ll also need to be able to determine your fee and propose it to the client.

Objective 3.2

This objective will test your ability to analyze a variety of contract types and delivery methods to determine which contracts and agreements are right for the project, as well as which delivery methods are best.

Objective 3.3

The final objective in this content area will test your ability to analyze and evaluate a project’s potential risk or reward to a firm. You’ll need to account for the value, liability, risk, opportunity, and projected benefit when determining a project’s impact.

Practice Methodologies

In this section, you’ll need to analyze a practice’s structure and how to coordinate projects and services within that practice. The practice methodologies content area is the smallest of the four sections in the PcM division.

Objective 4.1

This first objective tests your ability to analyze the impact of practice methodologies in relation to the structure and organization of the practice. Therefore, you’ll need to understand the various business structures and how evidence-based design affects the firm’s goals.

Objective 4.2

The second objective in this content area focuses on the impact of various methodologies throughout all phases of a project lifecycle, including evidence-based design, integrated project delivery, or phasing.

How to study for the PcM exam

Now that you know what general topics this division’s exam will cover, it’s important to study. Between divisions, there is an overlap in what reference materials you’ll need to know. Here are a few of the best ways to study for the PcM exam.

Familiarize yourself with the reference materials

It’s important to familiarize yourself with the reference materials most frequently cited on the practice management exam. Having a broad understanding of these materials will give you a great knowledge base for the exam. Here’s a list of PcM study materials right from the ARE 5.0 Reference Matrix:

• 2020 AIA Code of Ethics and Professional Conduct

   AIA Office of General Counsel, The American Institute of Architects, 2020

• The Architect’s Handbook of Professional Practice (AHPP) 

  The American Institute of Architects, John Wiley & Sons, 14th edition (2008) and 15th edition (2014)

• Law for Architects: What You Need to Know 

  Robert F. Herrmann and the Attorneys at Menaker & Herrmann LLP, W. W. Norton, 2012

• Model Rules of Conduct

   National Council of Architectural Registration Boards 2018-2019

• Professional Practice: A Guide to Turning Designs into Buildings

   Paul Segal, FAIA, W. W. Norton, 2006

• AIA Contract Documents

  : A201-2017, General Conditions of the Contract for Construction; B101-2017, Standard Form of Agreement Between Owner and Architect; C401-2017, Standard Form of Agreement Between Architect and Consultant

It’s important to note that memorizing these references will not help you apply them. Therefore, you’ll need to focus on a broader understanding of the concepts and best practices illustrated in these materials rather than the facts and figures they provide. 

Use Amber Book for your exam prep

There are many ways to prepare for the ARE 5.0. No matter what you choose, you’ll need to dedicate time to studying for the exam. That includes reviewing the information, familiarizing yourself with case studies, and taking practice exams. One way to do this is by using Amber Book. 

Amber Book is equivalent to a university-level course that’s focused on helping you pass the ARE 5.0 exams and getting licensed. While pass rates for the PcM division exam are just over 50%, those who complete at least 75% of the Amber Book course have a pass rate of over 85%! 

 In addition to an online animated course, you’ll also get a 375-page workbook, case study examples, practice questions and exams, digital flashcards, last-minute “panic” notes, and more. 

Ready to pass the ARE with Amber Book? 

Amber Book is a course developed by licensed architect and professor Michael Ermann, AIA. As the first person to pass all six ARE 5.0 divisions, he’s taught over 17,000 people how to better prepare for the ARE. Amber Book covers all six divisions of the ARE 5.0 – Practice Management, Project Management, Programming & Analysis, Project Planning & Design, Project Development & Documentation, and Construction & Evaluation. Because the ARE is now more comprehensive, there is a lot of study overlap – and the Amber Book course was built to help.