MUSIC LAWYERS

            How and when should you obtain legal counsel?  While lawyers are expensive, not obtaining good legal advice can be more expensive in the long run.

            Every lawyer has horror stories about clients signing contracts and then bringing them in for review.  The time to see an attorney is before you enter into a legally binding agreement.  A legally binding agreement can be a 50 page publishing contract, a one page letter agreement, or a simple oral promise, sealed with a handshake.  Therefore, I suggest that you see an attorney as soon as you generate serious interest from a publisher, record company, or anyone else indicating a desire to work with you.  That way, your attorney can play an active role in negotiating and drafting the terms of the agreement to your benefit.  When you are first starting out, and have little bargaining power, all your attorney may be able to do is explain what the various provisions of the "take it or leave it" contract mean, but that might well make the difference between your signing a bad long term contract and deciding to wait for a better deal.

            Depending on the amount of financial, time, and other commitment involved, it may be wise to consult a lawyer about a number of other issues, including business structure, (sole proprietorship, partnership, corporation), tape shopping, copyright matters, tradename registration, or even general advice about how the industry works and the legal decisions and choices that will confront you as an aspiring songwriter.

            As for actually finding a lawyer, my town, Austin, Texas, is full of them.  The trick is finding a qualified entertainment attorney.  You've probably seen lawyers advertising that they are "board certified" in family law, criminal law, etc.  In Texas, "board certified" means the State Bar of Texas has recognized that lawyer as having a specialty in a given area of law.  Unfortunately, the State Bar of Texas does not "board certify" lawyers as specializing in entertainment law.   Entertainment law is not part of the regular curriculum at law schools and is not covered by the state bar exam. To find out whether an attorney is really qualified to represent and advise you concerning the rather specialized provisions of a publishing or recording contract, you'll have to do some investigating.  The three most important factors to look for are experience, trustworthiness, and compatibility.

            In the summer of 1992, I set about compiling what I thought would be a list of Austin's entertainment lawyers.  I consulted various directories, including the Texas Music Industry Directory, the Austin Chronicle Music Industry Guide, and the Entertainment and Sports Law Section of the State Bar.  I came up with a list of about 40 lawyers.  I wrote them.  Then I called them.  What I discovered was that very few of these lawyers actually practiced entertainment law, but were instead interested in attracting entertainment clients and learning about entertainment law.  Only about 10 had any significant experience in entertainment law.  Of those 10, only a handful devoted more than 10 to 20% of their practice to entertainment law.

            Ask your fellow songwriters and musicians who they use.  Are they happy with their attorney or do they feel ripped off?  If you have used an attorney in the past on some matter unrelated to entertainment law, ask that attorney to refer you to a qualified entertainment lawyer. 

            Compile a list of several lawyers and then visit with them, asking specific questions about their experience, other clients, and music or publishing in general.  Also ask about their work style, who would actually work on your files, how promptly phone calls would be returned, and fees.  Hourly rates in Austin commonly range from $100 to $350 an hour.  Lawyers often "value bill", charging a flat fee for particular matters, regardless of the time spent.  Still others will take up your cause in return for a contingent fee, or percentage of future earnings related to the matter at hand.  Will you be charged extra for legal assistant time? Secretary time?  What about other expenses, such as copies, postage, long distance, and filing fees?  These are all areas to explore with any prospective attorney.  Many attorneys will offer a free or reduced-rate initial consultation, which will enable you to get a better feel for whether the attorney's style fits yours, and will also enable the attorney to evaluate your needs and give you a ballpark estimate of the legal expenses involved.

            Like Austin, many towns have an organization of lawyers and/or accountants who provide free professional services to income-qualifying artists.  Many pro bono organizations will provide legal and accounting representation to low income applicants.  Even if you don't qualify for free work, you may get a referral to a member attorney or accountant, but again, investigate.

            A good way to quiz a prospective attorney, and to minimize your legal fees once you have one, is to educate yourself about the music business.  This Business of Music by Sidney Shemel and William Krasilovsky; Breakin' In To The Music Business by Alan Siegel, All You Need To Know About The Music Business by Donald Passman,  The Musician's Business & Legal Guide by Mark Halloran and Music, Money & Success by Brabec & Brabec are good resources.  Check the library and bookstores for others.  Also, contact your local community college or similar institution about music business courses.

CONFLICTS OF INTEREST

            Not long ago, a friend of mine who owns and operates a local recording studio told me about a band that had been recording some demos at his place.  Lo and behold, the band was offered a recording contract.  My friend recommended that they call me to review the contract before they signed anything.  They told him, "That's alright, the record company already has a lawyer." 

            If you were sued, you wouldn't hire the plaintiff's lawyer to be your lawyer, too.  The plaintiff's attorney represents the plaintiff, and in the context of a lawsuit, what is good for the plaintiff is usually bad for the defendant and vice versa.  Each side should have it's own attorney, to fight for its interests.  Most lay persons instinctively know this.  For better or worse, our legal system is based on adversarial representation.  Truth and justice are supposedly arrived at when each party has separate legal counsel zealously fighting for its side and defending against the other.

            Conflicts of interest arise when a lawyer attempts to represent adverse interests.  Generally, a lawyer may not represent one client whose interests are directly adverse to those of another client.  That makes sense.  Avoiding representation of adverse interests helps maintain public confidence in our legal system.  When a client pays a lawyer, the client has a right to expect undivided loyalty.  A lawyer's vigorous representation of one client may be compromised as the attorney seeks to avoid antagonizing his or her other client.

            Sadly, these truths are increasingly lost in the music industry.  Over the last few months several new clients have come to me, (both record companies and artists), at least partly as a  result of their dissatisfaction with their old counsel over what they perceived to be conflicts of interest.  In each case, the parties were engaged in negotiating  record contracts, only to find out that their lawyer represented the other party on a fairly regular basis.

            One reason attorney conflicts of interest are so prevalent within the music business is that music attorneys have more than legal advice to offer their clients.  One thing an artist may be looking for in a music attorney is contacts.  Does this attorney have some special "in" with that record company that will open some doors for the artist?  An attorney who represents ABC Record Company probably has a much better shot at getting your demo tape to the right people at ABC Records than some other lawyer.  But that plus is the very source of a conflict of interest.

            Just as in a lawsuit, the negotiation of a recording or publishing contract is ultimately adversarial.  It may be informal, even friendly, and the deal points may appear fair to all concerned, but the interests of the artist and the company conflict.  Each party wants royalty calculations and a term that will be beneficial to that party, but such provisions can usually only be achieved at the expense of the other party.  If ABC Records offers you a contract, you should have your own attorney evaluate and negotiate the deal for you.  Obviously, ABC's attorney is the wrong choice, but you should also make sure your attorney doesn't have some vested interest in keeping ABC happy.  Maybe your attorney represents ABC on other matters or tape shops to ABC trying to get deals for other artists.  Such an attorney may not be willing to risk angering ABC by "nit picking" over provisions in ABC's standard form contract.

            Your attorney's fee structure may also lead to a conflict of interest.  If your attorney is working on a contingent fee basis, expecting to be paid only if a record deal is signed, he or she may have an incentive for you to sign a contract that is not really the best you can do.  Some record companies will advance a few thousand dollars to an artist's attorney so the artist can at least have a lawyer look over a proposed contract.  That way the artist can't come back later and say he or she wasn't represented by counsel.  Depending on the particular arrangement, (whether the advance is paid up front or only upon contract execution, whether the lawyer depends on regular referrals from the company, etc.), the lawyer may have a vested interest in keeping the Company happy at your expense. 

            It's not just the big bad company versus the artist.  An attorney may represent a small indie label and a big name artist who records for a major label.  If the indie wants the big name artist to contribute a track to a compilation or tribute album, it may find itself agreeing to terms that it shouldn't because the lawyer's loyalties are divided.

            And it's not just beginning artists and indie labels who find themselves with conflicts problems.  In September of 1992, Billy Joel filed a $90 million suit against his former lawyers.  The suit has since been withdrawn.  Among other things, the suit alleged that Joel's former lawyers, (having been hired for Joel by his former manager), often sacrificed Joel's best interests when they came into conflict with his manager's interests.  After all, the lawyers had to keep Joel's manager happy to keep their big name client.  (Although most artists want their manager to "take care of the business end of things", I  encourage artists to hire their own lawyer.)

            Conflicts of interest can arise innocently.  Suppose a band wants a partnership agreement or wants to incorporate.  Theoretically, each potential partner or shareholder, (i.e., each band member), should have its own lawyer to make sure no one member receives an unfair advantage.  But at some point this becomes impractical.  Can a five piece band really afford five lawyers?  Most bands can barely afford one.  And remember, with each lawyer added to the mix, comes the likelihood of prolonged drafts and redrafts attempting to satisfy the various lawyers. 

            There are also gray areas.  Can the same lawyer represent different bands, who are essentially competing with each other for record deals?  Must artists seek out music lawyers with no contacts in the music industry?  The law does allow clients to "waive" a conflict of interest under various circumstances.  For self-protection, a lawyer will often have multiple clients sign a waiver of conflict form or letter.  It should disclose to the clients the nature and dangers of the conflict, so the parties can make an informed decision.

            To guard against a conflict of interest, ask your attorney what dealings he/she has had with the "other side."  Ask yourself, "Who is the client here?  Who has the power to hire/fire this lawyer?  Where do his/her loyalties really lie?  Who does this lawyer look to for payment?"  Ask these questions early and often.  Awhile back, I had several artist clients over to my place for some of my world class margaritas.  I shared with them my good news, that I had just been retained by a local reputable record company, to review its contracts.  I knew I was one of the "good guys" when my artist clients, while happy for my new source of business, were simultaneously disappointed, because they already knew I would consider myself  "conflicted out" of representing them with that particular label.