Guest post by Justin M. Jacobson, Esq. for the TuneCore Blog
Being that I’m an entertainment attorney, I would be remiss to not acknowledge the inherent bias in this article; however, whether you work with me or one of my colleagues around the globe, the usage of a competent attorney or legal representative is of paramount importance to an entertainer’s career. In many instances, the usage or lack thereof may be the difference between a successful career and one that is filled with headaches in addition to heartbreaks.
With that said, we will now look at how an attorney fits in, some criteria for selecting the appropriate individual as well as some other important information related to working with a lawyer.
While there are many attorneys, certain ones specialize in different areas of law and others are “general practitioners,” who may work in a variety of unrelated legal fields. Generally, when selecting a lawyer for music or entertainment business matters, it is prudent to select an attorney specializing in the entertainment field. This is preferred as most entertainment industry related matters require specialized knowledge and familiarity to achieve the most advantageous results.
An attorney typically handles all legal matters for their client, including managing and advising on trademark and copyright matters as well as drafting and negotiating all industry related contracts. These include recording contracts, publishing contracts, distribution agreements, sponsorship agreements as well as numerous other specialized deals. A lawyer may also assist with business entity formation and its associated formalities in addition to possibly advising and drafting wills and other estate/trust documents to preserve their client’s wealth.
Some attorneys may also assist their entertainment clients with any foreign visa or other immigration matters to facilitate travel and proper work authorization for performances and appearances. The service that attorneys provide can coincide with others offered by the artist’s other professionals, including their personal management and/or business manager.
In addition to catering to an artist’s legal and business needs, these specialized advocates typically also work with and are familiar with other industry professionals who can help further their client’s careers. These include potential access to talent managers, booking agents as well as motion picture companies, record labels and music publishing company decision-makers. In addition to these matters, attorneys can potentially “shop” projects such as unsigned music to record labels and music publishers for deals, provide advice on music promotion and marketing as well as on other related entertainment business matters. This includes advising on proper royalty administration and management, such as indexing a musician’s work with the proper performing rights organizations and other licensing bodies.
Such services are essential to an artist’s financial growth and career success.
As with hiring any professional, it is imperative prior to retaining an attorney, that the artist researches the lawyer. It is wise to review a counselor’s current clients, ask for references as well as discuss payment arrangements for the attorney’s services prior to engaging them. Typically, an attorney will work with a retainer; possibly an hourly retainer, a monthly arrangement which could also include a specified percentage, or on a per-project, flat-fee basis.
A monthly retainer typically is a set fee that an artist pays each month for a specific amount of allotted time at a specific rate that the attorney commits to the client’s matters. An hourly retainer is a situation where an attorney bills at a stated hourly rate based on the amount of time that is spent on the particular client. A percentage rate could be based on a percentage of how much the artist earns for an entire year or other defined period of time or a percentage of a specific deal that the attorney negotiates or is otherwise involved in.
Finally, a flat-fee, per item basis can be established where a pre-determined rate is negotiated and paid for a particular matter, such as preparing and filing a trademark or copyright application or forming a corporate entity. The actual rates charged are based on each individual attorney and typically range from $150 to $200 an hour upwards to $500 to $750 an hour. The percentages earned typically range anywhere from 5% to 20%, depending on the amount the final fee comes out to. In addition, an attorney may bill the artist for incidental costs such as telephone calls, postage, FedEx costs, photocopies and other related expenses.
Additionally, all of these matters should be discussed and agreed to in advance by the parties prior to commencing the attorney-client relationship. Therefore, it is smart to and some states require a written retainer agreement to be signed and agreed upon by the attorney and the client. The engagement letter should outline the fee arrangement, the applicable hourly rate and which expenses are to be charged to the client. This retainer agreement can and should be reviewed by an independent attorney to ensure the artist fully understands the scope of it.
Another important factor to be aware of when engaging an attorney is whether a conflict of interest exists between the attorney and the artist. A conflict of interest exists when two clients’ interests are adverse to each other. This could potentially exist when an attorney represents both an artist and the manager or Management Company attempting to “sign” the artist. There is an inherent conflict between the needs of the artist versus that of management. In these instances, it is essential that the attorney acknowledges the existence of the conflict of interest.
This conflict could be resolved by one of the parties hiring a new attorney to negotiate the agreement on their behalf who is free from any potential conflicts of interest or by having the clients negotiate the agreement between them and utilizing the single attorney merely as a “scribe” who memorializes the agreement that the parties independently make. A waiver acknowledging the potential conflict of interest and waiving it is essential and should be executed to protect all of the parties involved.
Furthermore, there have been potentially avoidable situations that have arisen where the use of an attorney could have avoided these common pitfalls. One of these mistakes is the absence of contract assistance on behalf of an artist when reviewing and negotiating an agreement with a third-party. The lack of assistance may cause the entertainer to potentially sign an unfair or severely “one-sided” agreement or enter into a deal without fully understanding all of the contractual language as well as the potential long-term ramifications that the provisions impose.
An attorney may also be useful in highlighting potential legal barriers that an artist could encounter if they choose a particular course of action. This includes advising on the proper licenses and agreements with third-parties, such as licensing for a particular vocal or sound “sample” work. Such advice is provided to ensure that the creator has the proper rights that they desire and so that they can utilize the work as they envisioned.
While there are obvious drawbacks to a third-party representative consulting and representing an entertainer in their everyday business; the potential downfalls that may occur as a result of a misunderstood agreement could have wide reaching negative implications. An artist may see the additional cost that a professional representative imposes as prohibitive; but, the long-term value, experience and connections that they possess could be infinitely more valuable to the talent’s long-term career advancement and justify this expense.
There will always be unscrupulous and less than competent advisers; however, for the most part, the competent and top quality ones usually rise. In particular, this industry is very reputation and referral driven; so, those who do not do their job properly are quickly replaced with more competent representatives.
This article is not intended as legal advice, as an attorney and/or other professional specializing in the field should be consulted. Attorney Advertising. Prior results do not guarantee a similar outcome.