Wednesday, July 25, 2012

When agents are better than lawyers, and vice versa

Agents and lawyers both negotiate contracts. They both seem to fill very similar roles. And they both want your money.

So how are you supposed to know whether you need one, the other, or both?

Oversimplifying the role of each of an agent and a lawyer:
  • If you need to know what is the best deal out there without knowing why it's best or how the changes could impact you, talk to an agent.
  • If you need to know why something is a problem and how you can change it for the better without knowing what's the best you could do, talk to a lawyer.
  • If you want both, use both.
Like I said, I'm oversimplifying. So in more detail here's what I mean.

The job of an agent is to get you a job, or place your manuscript, or similar things. They are in the trenches negotiating the price and terms for these kinds of things all day long. If you're being offered a 15% royalty on a $10,000 advance, an agent is going to know very well whether you're getting a good deal, and if not then the agent will know what you should be asking for. That doesn't mean an agent is going to get you the most money available in the world. But they are definitely likely to know how much they should ask for on behalf of someone in your position. And they also tend to be involved a lot earlier in the course of a transaction: by the time the contract is actually being created, an agent's work should be done.

So if you're looking at a deal where you don't get to negotiate the terms and the other side will never change from its forms, an agent is likely to be all you need. It's not a good use of money to pay someone who will tell you the indemnification provisions in your contract are horrible if you don't get a vote on them.

But if the deal is complicated and has a lot of moving parts, or it's a new type of deal that hasn't come up very often, that means the documentation will be more customized. That means an agent won't be in the comfort zone of talking about standard business terms, and there will be more contract drafting going on. You'll need to discuss things like cross-default provisions (what happens if the studio doesn't make the web series out of your book?) and cross-collateralization (making sure the studio doesn't recoup the royalties from your novel against the advance from your video game). And by definition a lawyer is comfortable working on the text of a contract, so where there's drafting going on that's another time you'll want a lawyer involved. So if you're doing a complicated deal you'll want to have a lawyer.

In some of these deals an agent might even be overkill. If you're converting your video game into a group of novels and a web series, deals with all of those parts haven't come along all that often to date. So an agent doesn't have a lot of comparable data to use. In that case you're flying blind or making up for yourself what's a good price, and your bigger concerns may be making sure you're not locked into things that you don't want. That's not an agent's strong suit.

Hey, if you've been offered a $1M advance on a trilogy with video game tie-in, I'd hire both sides. There are things that seem standard but an agent might not know about them (example: there are things your publisher can forget to put in the option clause that make the option void, so a lawyer might tell you it's safe to take a particular option clause because it'll never bind you). And there are things that look like legal terms but the agent has seen so many deals that they can have better suggestions than the lawyer (example: agents have seen studios try to take every deduction known to humanity, so an agent might see these traps). And of course they both (hopefully) have good minds for the business and they can bounce ideas off each other.

Now that you're done dreaming of the $1M advance, think about the services you actually need when deciding whom to hire, and hire the skill set that will help get you there. But one additional point: if an agent tells you that you don't need a lawyer, hire a new agent. And if a lawyer tells you they can do everything an agent can do, then get a new lawyer. They might be right in this particular case, but these two jobs are two jobs and not one for a reason.

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