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by Donald Passman
Most lawyers in the music business don't charge just on an
hourly basis. For the ones that do, the rates are usually
from $125 per hour for new lawyers, up to $450 or more for
biggies. Some of us charge a percentage (usually 5%), while
others do something known as "value billing," often with an
hourly rate or retainer against it. (A retainer is a set monthly
fee that is either credited against the ultimate fee, or it's
a flat fee covering all services. "Value Billing" means that,
when the deal is finished, the lawyer asks for a fee based
on the size of the deal and his or her contribution to it.
If the lawyer had very little to do with shaping the deal,
but rather just did the contract, I think the fee should be
close to an hourly rate (though I'll get heat for telling
you this because it's usually more). On the other hand, if
the lawyer came up with a clever concept or strategy that
made you substantial sums of money, or the lawyer shaped or
created the deal from scratch, he or she will ask for a much
larger fee. If your lawyer "value bills," you should get some
idea up front what it's going to be, so that there aren't
any rude surprises. At minimum, get a ballpark range.
Checklist
Here are some questions to ask your potential lawyer:
1.
Do you have expertise in the music business?
2.
What do you charge? In addition to fees, do you charge for
costs? (Everyone charges for long-distance phone calls, messengers,
etc., but some charge for every page of photocopying, faxing,
etc, while others are much looser.)
3.
Ask if the lawyer has a written fee arrangement. In California,
lawyers are required to have their fee arrangement in writing
in order to enforce them (a major incentive to get them in
writing). Ask for a copy of the fee arrangement so you can
review it. Also, the lawyer can't insist on your signing it
in his or her office--the California Bar considers that too
intimidating. So take it home.
It's
unethical in California for lawyers to have an agreement with
you that can't be terminated at any time. If it's a percentage
arrangement, be careful about what happens to the percentage
after the term.
You
should ask if they object to your having the fee arrangement
reviewed by an independent advisor, preferably a lawyer, but
at least a personal manager or business manager. No legitimate
lawyer will object to this, and in fact, they should encourage
it. If it's at all possible, you should have your fee arrangement
with your lawyer reviewed independently--especially if it
involves a percentage. And, if it isn't possible to do this,
make sure the lawyer explains it to you in detail and that
you understand it.
4.
Ask for references of artists at your level, and check them
out. Does this lawyer return phone calls? Do they get deals
done in a reasonable period of time? "Reasonable" in the music
business is not going to be anywhere near the speed you would
like. It's not uncommon for a record deal to take four or
five months to negotiate, especially if you're a new artist
and can't force the record company to turn out a draft quickly.
Four to five months is a realistic time frame, but if it goes
beyond that, someone isn't doing their job. I've always been
amused by a story I heard from a new client when I was a young
lawyer. He had been represented by another lawyer, and he
said, "I know my record deal is good. It took over a year
to negotiate."
5.
Do you have or foresee any conflicts of interest?
Conflicts of Interest
A lawyer has a conflict of interest when his or her clients
get into a situation where their interests are adverse. This
is easy to see, for example, when two clients of the same
lawyer want to sue each other. However, it's also a conflict
of interest when two clients of the same lawyer make a deal
with each other.
Lawyers
are ethically required to disclose their conflicts of interest
to you. Your choice is either to hire another lawyer, or you
may "waive" (meaning you choose to ignore) the conflict, and
continue to use the same lawyer.
Because
the entertainment industry is a relatively small business,
those of us who practice in this field are continually bumping
into ourselves when our clients make deals with each other.
Most of the time these situations are harmless and can be
handled simply, in one of several ways:
1.
Each of the clients gets another lawyer (rare unless it's
a pretty serious conflict).
2. One
of the clients gets another lawyer (much more common).
3.
The clients work out the agreement amongst themselves (or
else the manager, agent, or business manager negotiates for
them), and the lawyer merely draws up the paperwork, not representing
anyone's interest.
When
you are interviewing attorneys, you should ask if they have
or foresee any conflicts of interest. Most ethical lawyers
will bring it up before you do, but you should ask anyway.
Donald Passman is a Los Angeles-based
music attorney with the firm of Gang, Tyre, Ramer & Brown.
Specializing in music business law for over 20 years, his
clients include major publishers, record companies, film companies,
managers, producers, songwriters, and artists such as REM,
Janet Jackson, Quincy Jones, Tina Turner and Green Day. On
a regular basis, we will be excerpting from Mr. Passman's
best-selling book, "All You Need To Know About The Music
Business."
©1991, 1994, 1997 by Donald
S. Passman
From "All You Need To Know About The Music Business"
by Donald S. Passman. Reprinted by permission of Simon &
Schuster, Inc.
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