Music Biz: The Role of Music Attorneys

Only a few years ago, the best advice on the subject of finding an attorney to represent you in the music business consisted of the following:  find an attorney who has experience in the music industry.

This is still useful, if unsurprising advice; however, with the proliferation of online music and the growth of the "new media" applications, the definition of "the music industry" has changed drastically. 

Musicians today are getting involved with new media in a variety ways, ranging from webcasting to online distribution to podcasting.  Since this trend won't fizzle anytime soon, it is smart to find legal counsel with broad experience in new media or web 2.0 licensing and development issues, as well as the traditional background in recording and publishing deal negotiations.

Negotiation skills and general legal counsel are only a part of what attorneys bring to the table in the music industry. 

Many attorneys are also de facto business advisors and professional matchmakers, bringing parties together for new projects.  Some attorneys administer copyrights and collect and receive funds on behalf of their clients.  And, of course, when deals go sour, an attorney coordinates the litigation process to resolve the claim.

Finding an attorney requires some research and the best place to start is word of mouth.  Ask other musicians, managers and studio owners for recommendations. 

The music industry is a relatively small network of professionals who tend to interface on a regular basis. One of these places is music industry conferences.  Attorneys often participate at these events as panelists and their bios are published in the conference materials.  In addition, it is easy to strike up a conversation at one of the many cocktail parties that occur during a typical conference.

For the less socially inclined there are a variety of lawyer referral services, some of which specialize in arts or entertainment related law.  Among the more prominent of these organizations is California Lawyers for the Arts in San Francisco, Santa Monica and Oakland.

In addition, there are similar Volunteer Lawyers for the Arts offices in cities such as Chicago, Atlanta and New York.  Typically, these non-profit services charge a nominal administrative fee to refer the client to an attorney for a free or low-cost initial consultation. 

Many of these organizations also provide regular workshops and clinics which are informative and provide yet another method of networking with attorneys.

In addition, your local public library or county law library may have a directory called Martindale-Hubbel which lists lawyers ranging from personal injury to bankruptcy to probate - but this is probably more information than you would want to sort through initially.

Of course, you can also scour the web to locate an attorney.  A number of the top-notch entertainment law firms maintain websites with information about the firm, articles and links to other music resources.

Once you have located a potential attorney, look some more.  It is always a good idea to interview a number of candidates, if possible. Beyond the issue of fees and music industry experience, there is that intangible element of personality.  Since you may end up dealing with your attorney on a semi-regular basis, it is an added plus if you relate on a personal level. (It also helps if the attorney actually likes your music.)

Speaking of fees, it is important to understand whether the attorney will be charging you for the initial consultation.

Beyond that, fee structures can vary widely, but there are several primary methods in the industry. Firstly, there is the hourly rate.  Hourly rates can vary quite a bit based on geography and experience, but as a ballpark range you can expect $250.00 to $450.00. 

Secondly, many entertainment lawyer charge a percentage (usually 5%). While this may provide the client with an advantage in some cases, the client should also consider that the other members of his or her team (i.e., agent, manager, business manager) also take a percentage, thus making what's left of the pie that much smaller.

Flat-fee billing is utilized by some attorneys for specific projects such as incorporating or registering a trademark.

Lastly, value billing is becoming more common in the industry - this means that at the conclusion of the deal, the attorney asks for a fee that is based upon the extent of the services rendered and the size and nature of the deal.  It is a good idea to establish some upfront parameters for this kind of arrangement.

In all cases, the client 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, long distance phone calls, and possibly photocopies.

As stated above, attorneys perform a wide variety of services in the industry.  However, the one which is of the most interest to many musicians who are just starting out is the activity known as "shopping"for a deal with a record label.

It is well known that record labels typically will not accept unsolicited materials, but, instead prefer to receive submissions from lawyers or managers who are known to the label executives.  My personal criteria for shopping a project are as follows:

1. Do I like the music?
2. In my opinion, is the project commercially viable? and
3. Is this project in line with my particular contacts?
    

(An additional factor is whether there is enough time in the schedule to shop the project.)

Attorneys usually are compensated in one of three ways for shopping a project

1. an upfront flat fee;
    
2. a percentage of the deal or
3. a contingent flat fee which is payable upon closure of the deal.
    

By and large, the most common method is number 2, but there are a couple of important points to be aware of when entering into a percentage deal. Firstly, be clear what sources of income the percentage is applied to.  For example, it could be a percentage of the advance, the first record, or the entire deal. Secondly, it is a very good idea to have the legal services reviewed by outside counsel. Certainly, no reputable lawyer would object to your doing so, and should in fact encourage it.

I mentioned already that the music industry comprises a relatively small network of companies and individuals.  The problem that arises for the client is 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. 

That being said, conflicts are not limited to attorneys - it is also common to managers, agents and other professionals in the industry.  The bottom line is that the client needs to be informed and then needs to feel comfortable based on the facts and circumstances as presented.

It is important to ask questions and to have reasonable expectations when working with an attorney.  An informed client is a good client, and there are many great resources books and online information sources that can answer some basic issues about copyright and publishing, for example.

An experienced and established music attorney can be a valuable member of the artist's team, but it is the artist's ultimate responsibility to be aware of his legal and fiscal status and obligations.  Furthermore, while a "connected" lawyer can get your tape in the front of the right pair of ears, it is ultimately the creativity and vision of the artist that can make the deal happen in the end.

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