Paul Gardner, Esq.: Why you need a Lawyer

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Eunice Moseley
Freelance Associates

Why you need an entertainment attorney

By Paul Gardner, II, Esq.

Attorneys in the entertainment industry usually provide general legal advice and negotiation skills - but this is only a small part of what we do. An experienced and "connected" music attorney can be a valuable member of your team, getting your demo in front of the right pair of ears. A good entertainment attorney should also have in their repertoire, the ability to be your business advisor and your personal "rainmaker." In addition to bringing parties together for the purposes of creating new deals, your entertainment attorney may also administer copyrights and collect funds on your behalf. Of course, if things go wrong regarding any deal transaction, then your attorney can coordinate the ensuing litigation. See Sample Situation #1.

Fee structures for entertainment attorneys can vary. First, see if the attorney is charging you for the initial consultation. Once that is settled, you need to determine which method of payment is best for you - hourly rate vs. percentage vs. flat-fee billing. Hourly rates vary based on geography and experience, but generally you can expect to pay $250.00 to $450.00. Alternatively, entertainment attorneys can also charge a percentage of the deal transaction (usually 5%). But understand that with percentages, you must also consider that the other members of your team (i.e., agent, manager, business manager) also take a percentage, thus further reducing what you ultimately will take home. See Sample Situation #2. Lastly, flat-fee billing is best used for smaller, but specific, engagements such as incorporating or registering trademarks.

The best way to find an entertainment attorney is via word of mouth. Ask other artists and industry professionals for recommendations. In addition to this, entertainment attorneys can often be found at entertainment industry conferences. Attorneys often participate at these events as panelists and usually stick around after the event in order to network and answer questions. However, if you prefer an approach that is less public in nature, then you can contact various lawyer referral services or obtain a copy of the most popular lawyer directory - Martindale-Hubbel, available at your local library.

In all cases, you should expect a written legal services agreement, as well as the requirement to pay an upfront retainer deposit, which is typically held in trust and applied against fees and costs as they accrue. Costs, by the way, are usually billable and can include messengers, fax, overnight mail, travel, long distance phone calls, and photocopies.

Because of the limited number of entertainment attorneys and companies, you should also be aware of the potential for conflicts of interest. Attorneys are ethically required to disclose conflicts of interest. Many conflicts can be dealt with by disclosure and informed consent of the parties. However, some require that the attorney step aside and that the parties retain separate counsel.

Sample Situation #1:
A well known music label decided not to release any more of a well known artist's albums, but that didn't mean that they would be releasing that artist. The artist was not allowed to release their new material for the label, nor allowed out of their contract to record for others. Instead, the label asked the artist to "just" write songs for a fellow label mate for the remaining three years of the contract.

Could you handle this yourself, or do you think it would be best to send in your "connected" entertainment attorney?

Sample Situation #2:

Typically, a new artist is to receive what's commonly referred to as a 10-point deal. In other words, the artist is to receive 10% of the list retail price of net sales of full price albums sold in the United States . Ten percent of the retail list price isn't bad! Right? After all, today's list price averages about $17.98, per CD. Do the math. The artist believes (because they usually speak English, and not legalese) they will be paid about $1.80 for every CD sold. Sell a million records, become a millionaire. Right?

Wrong (and you better immediately hire an entertainment attorney!).

That one sentence giveth . . . but the next 50 pages taketh away to such a point that the artist will never actually receive anything close to $1.80 per record. To start with, the producer gets a third of that. The label only pays on 90% of sales, and deducts an additional 25% for the wrappers. But, all of those numbers are reduced further once the discounts necessary to actually induce the buyers are put into effect, and if the actual technology used resembles anything more advanced than Edison 's phonograph. Furthermore, as if there were not enough reductions, recording, production and marketing costs come to the artist in the form of advances against your net royalties. Thus, you will be paying the label all of the costs associated with putting your record together and getting the public to care about it. After all those aforementioned deductions, your actual royalty rate will probably be less than 50 cents per unit.

Look at it this way. If you are advanced $100,000 from your label, you will likely have to sell more than 200,000 CD's before you ever get a single penny from your work. But, at 200,000 of YOUR CD's sold, about $3,000,000 has moved through the system. Retail and distribution companies have made about $2 million, and your label has made up to $1 million. However, in Artist Royalties, you have not made one dime.

Perhaps you ought to get an attorney to negotiate all of this. So, contact me at the above information!


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