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"Attorneys
vs. Agents vs. Managers”
by
Glenn T. Litwak, Esq.
I.
Introduction
Attorneys,
agents and managers all perform services for the entertainment
industry. Sometimes they work in cooperation with one another
and at other times there is competition amongst the three.
This article will discuss the advantages and disadvantages
of the various types of representation for individuals and companies
involved in the entertainment business.
This
article provides general information and should not be considered
legal advice. For
advice and guidance regarding any particular legal problem, an
experienced attorney should be consulted.
II.
Entertainment Attorneys
A.
Overview
Entertainment
law is a broad field and there are many different types of attorneys
practicing within it.
Generally, attorneys are broken down into two categories,
litigators and transactional attorneys.
Litigators handle claims and lawsuits such as breach
of contract, copyright infringement, fraud, etc.
Transactional attorneys generally draft and negotiate
contracts; for instance, negotiating a recording agreement with
a record label or production legal counsel on an independent
film ( the attorney would handle all the contracts relating
to the film such as those for the actors, director, producers,
etc.).
Within
the field of entertainment law, some attorneys practice both
litigation and transactional law; however many entertainment
attorneys specialize in one area or the other.
Entertainment
law can be broken down into several major categories: film,
television, music and, more recently, multimedia.
Some attorneys also describe their practice as “intellectual
property law”, which encompasses patent, copyright and trademark
law.
B.
Should I Use an Attorney?
Attorneys
should be retained to analyze, draft and negotiate contracts.
Some entertainment attorneys also provide additional
services for clients.
For instance, in the music field, some lawyers find recording
deals for artists.
C.
Finding a Lawyer
First
and foremost, it is recommended that anyone seeking an attorney
find an experienced attorney familiar with the type of law and
industry the client is involved in.
You do not want an attorney who specializes in family law
handling the sale of your screenplay.
You should specifically ask your attorney how much experience
he or she has had with your particular legal problem.
For example, if you are a struggling musician looking for
a recording agreement with a major label, how much experience
does the attorney have in finding deals with record labels?
If you are litigating a copyright infringement case in
federal court, how many of those types of claims has the attorney
handled? How many
trials has he or she been the lead attorney on?
In
choosing an attorney, perhaps the best advice is to follow the
recommendation of people you trust, such as friends or colleagues.
In addition, many local bar associations have referral
services. Non-profit
organizations, such as California Lawyers for the Arts, also provide
referrals to entertainment attorneys.
D.
Fee Agreements
Once
you have agreed to retain an attorney, it is very important that
you have a written agreement with the attorney that you completely
understand. Attorneys
work on three basic types of fee arrangements:
- Hourly.
You are charged for the attorneys time by the hour. Experienced entertainment attorneys generally charge $250 to
$350 per hour in the Los Angeles area.
However, you may be able to find an attorney for
less depending on your particular legal needs.
For instance, if your attorney likes working with
documentary filmmakers, he may be willing to accept a lower
hourly fee with regard to certain matters.
Make sure your attorney provides monthly, detailed, itemized
bills for his services. Remember that in addition to all attorney fees, you will be
charged for all costs such as copying, postage, long distance
telephone calls, etc.
Some attorneys charge a minimum of a quarter of an
hour for their services.
- Flat
Fee.
In this type of fee arrangement, the attorney agrees
to take a set amount for services.
For instance, an attorney may charge $1000 to draft
a management contract between a personal manager and an
actor. Under
this arrangement, you will know up front exactly what the
attorney’s fees will be.
Some attorneys prefer not to take a flat fee for
obvious reasons. If
negotiations over the contract are protracted, and more
than the attorney expected, he will be making less than
he anticipated per hour for his work.
Conversely, if you come to an attorney who has recently
drafted the exact type of contract that you need, she may
be able to modify her other contract and do the work in
a very short amount of time.
- Percentage/Contingency
Fee.
Some attorneys charge on a contingency basis which
means that their fee is a percentage of the gross
amount recovered or received by the client.
For instance, personal injury cases are almost always
done on a contingency basis with 1/3 or 40% of the gross
settlement, verdict or judgment paid to the attorney. In the entertainment field, it is common for attorneys to charge
5% of a writer’s or actor’s income for handling a client’s
legal work. For
the struggling actor/writer/director who does not have the
money to pay an hourly fee, this might seem like an appealing
alternative. However,
if the artist becomes very successful, 5% can turn into
a substantial sum of money.
E.
Communicating with Your Attorney
One
of the most common complaints against attorneys is that they do
not return phone calls promptly or at all.
Attorneys have ethical obligations to communicate with
their clients. The
communication does not have to be by telephone. It can also be by mail, fax or email. Try to agree on a method with your attorney for communicating
the status of your legal matter.
Also, find out exactly who is doing the work.
Is the attorney going to be handing over your case to a
junior associate who will actually be doing the work on it?
In
sum, it is important to find an attorney who you are comfortable
with, who is qualified and experienced in your type of legal problem
and who you feel you can work with. If you do feel as though the attorney you hired is not working
out, you do not have to continue to utilize his services.
Under California State Bar Rules, a client is free to change
attorneys at any time he or she wishes.
III.
Agents
A.
Overview
Agents
procure work for actors, writers, directors, etc. The
three biggest talent agencies are Creative Artist’s Agency (CAA),
International Creative Management (ICM) and The William Morris
Agency. There are
also many other good agencies such as The Gersch Agency, Writers
and Artists, Endeavor, and United Talent Agency.
Many talent agencies have separate music, television,
film and literary departments.
Generally, if you are an unknown actor, writer or director,
it will be quite difficult for you to obtain representation
by CAA, William Morris or ICM.
Obviously, the talent agencies make their commission
based upon your gross income, and they would prefer to represent
someone who is already generating income.
B.
How to find an Agent
People
often ask how they can obtain an agent.
Once you are successful, the agents will find you.
However, until that time, it requires considerable
effort. If you
have a personal manager, often they can help you find an agent.
Sometimes entertainment attorneys or friends in the
industry can also be helpful. Showcasing your talent at a forum attended by agents is another
way to find an agent.
C.
Recent Developments
Recently there has been a tremendous amount of upheaval
in the agency business.
One of the top agents in Los Angeles, Jim Wiatt, who
was Co-President of ICM, quit ICM and set up shop at William
Morris. Wiatt brought
many of his star clients with him to William Morris.
Also, within the last year, Michael Ovitz, former head
of CAA, has set up a management company (AMG), which has triggered
a nasty dispute with his former agency.
CAA has indicated that they will not represent any client
which is also represented by AMG.
This has caused CAA to lose a number of big name clients.
A.
Overview
Managers
coordinate and oversee the career of actors, directors, writers
and musicians. They
are not regulated by the talent Agency Act and generally receive
commissions of 15 to 20% of the client’s gross income.
Some managers exclude certain income from their commissions.
For instance, if a manager obtains a new client who is
already established in the music business and wants to branch
out into television and film, the musician may insist that the
manager only commission his television and film work.
Generally,
managers will attempt to enter into a written agreement with their
clients detailing the relationship.
However, a written contract is not required and there are
many instances of managers representing talent based on an oral
contract for many years.
Recently,
some high profile agents have become managers.
One reason is that managers are not restricted to the
10% commission required by the Talent Agency Act.
Another reason is that managers can become producers
of their clients’ projects, whereas agents cannot.
For instance, if a client becomes the star of a television
show, his or her manager can become executive producer of that
same television show and receive additional income (a producer’s
fee).
Managers
generally represent a smaller number of clients than agents
do. They focus
on strategizing and monitoring the client’s overall career.
Personal managers should be differentiated from business
managers. A personal
manager manages the client’s overall career as far as what direction
it is taking, what projects a client should do, etc.
A business manager is generally a CPA or accountant who
manages the investments and financial matters for the artist.
B.
How to Find a Manager
Most
managers prefer to represent talent that are already generating
income so that they can earn commissions right away.
However, there are managers who are willing to develop
new talent. If
you are an actor or musician, one way to attract a manager is
by performing. Otherwise,
you can find a manager through references and referrals.
Once again, if you have an agent or entertainment attorney,
they may assist you. Also,
friends and relatives who are involved in the entertainment
industry can steer you in the right direction.
C.
Procuring Employment
Managers
are precluded from “procuring” employment for talent.
In other words, a manager is not supposed to obtain a
job for an artist directly.
However, they can do it in association with an agent.
As a practical matter, managers often do assist their
clients in obtaining employment.
D.
Management Agreements
Management
contracts are typically one to three years in duration. Unlike
a contract with an attorney, an artist cannot automatically and
for no reason terminate a contract with a manager for a set number
of years before its expiration.
E.
“Advance-Fee Talent Services”
Clients
should be aware of “advance-fee talent services” that target people
trying to break into the entertainment industry.
These services claim to consist of managers who promise
to procure employment for their clients for up-front representation
fees. Many people
feel that it is unethical to take money from a client before actually
finding them employment.
In addition, managers are not supposed to solicit employment
for their clients.
Assembly
Bill 884, recently approved by the California Legislature, regulates
the behavior of these advance-fee talent agencies.
Basically, the bill governs the managers’ contracts with
artists and requires a $1000 surety bond to be posted with the
state’s Labor Commissioner.
In addition, the bill ensures the client a right to cancel
the contract and to receive a refund of fees already paid. Assembly
Bill 884, although still awaiting the governor’s signature to
become law, attempts to protect actors (especially child actors)
entering the entertainment industry from less reputable managers.
F.
Recent Developments
The
role of managers came under examination in a recent lawsuit
filed by Gary Shandling against his manager, Brad Grey and Grey’s
company. Shandling
claimed that Grey breached his fiduciary duties to him by (1)
taking advantage of his relationship with Shandling to further
his management company; (2) attaching himself to Shandling’s
projects as a producer; and (3) establishing a separate entertainment
company by using Shandling’s services to assist in locating
new talent.
Shandling
asserted that he was not fairly compensated for his services
and contributions. Shandling and Grey recently entered into a confidential settlement
of this dispute.
Many
managers waive their management fees when they produce a client’s
project, so the manager receives only a producer’s fee and not
his usual management fee.
Some commentators have indicated that in light of the
Shandling case, a manager should always get a specific conflict
of interest waiver with a client when included in a client’s
project. Additionally,
some attorneys recommend that if the manager creates a separate
entertainment company which uses a client, the client should
be included in the company.
If the manager does enter into a business relationship
with a client, the client should have independent legal representation.
V.
What Type of Representation
Do I Need?
If
you are a writer, actor, director or musician, what type of
representation do you need? Do you need a manager, an agent, an attorney or some combination
of the three? Generally,
an attorney is needed once you have to negotiate a contract
on your behalf or, of course, if you are involved in litigation.
You may also need some legal advice about how to protect
yourself; for instance, if you are pitching an idea or submitting
a screenplay. Obviously, there is no problem in obtaining an attorney on
an hourly basis as long as you can pay the fees.
Recently
there has been a trend of high profile talent who have decided
not to use an agent and simply rely on an attorney and/or manager.
If a top movie star can make $15 million or more per
picture, someone in that position might think that he or she
doesn’t need an agent because he or she is so well known that
employment opportunities will come to him or her anyway.
Such high priced talent might not want to give up the
10% commission, which could be substantial.
Some
talent may simply decide to pay an attorney by the hour to negotiate
his or her deals. However, one should be careful in this regard because agents
sometimes perform services some attorneys do not - such as “packaging”
projects. Also, agents
may help clients obtain lucrative sponsorship deals or help them
transition into new careers (e.g. an actor becoming a recording
artist).
In
conclusion, the representation an artist needs will depend on
many factors including the income he or she is generating, the
field he or she is involved in and his or her future needs and
goals.
©
GLENN T. LITWAK, 1999 ALL RIGHTS RESERVED
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