Do I really need an entertainment attorney?

Do I really need an entertainment attorney?

By Shara Lerman

I often get calls from clients wondering if they can ask a few questions – but just a few, because they don’t really need a lawyer. After all, they’re working with friends and everything is going well; they just need to be able to get a better idea of what to expect going forward because now they’re getting interest (fantastic!), and they’re sure it will all work out. Or perhaps they’re in discussions with a producer, but it isn’t final yet so they don’t want to hire an attorney until it’s absolutely necessary.

As an attorney who also has a background in producing, I understand this perspective. Attorneys can be expensive, and nobody wants to spend money on legal advice until it’s really necessary. And so people will often do as much as they can on their own before engaging a lawyer.

The other thing I’ve noticed is that people often don’t realize the many other ways an attorney can assist a client. For example, if you find yourself with a manager, but not an agent, you might be surprised to learn that the attorney can be extremely helpful to you at that point. We’ll look at that below.

What are some less obvious examples of situations where you really need to contact an entertainment attorney?
Every situation is different and some people can do more on their own just due to experience, but there are a few key situations where an attorney should absolutely be consulted that are often overlooked:

1. When you have a writing partner.

Anytime you are working with another writer (or writers) and you’re not a WGA member, you need to have a written agreement in place. In the beginning, everything is usually great. You’re both excited about the idea and there’s a lot of great energy surrounding the project. So you begin working and eventually the script goes through a few iterations and suddenly you’re getting interest from producers and/or talent. Everyone is thrilled!
Negotiations begin and – uh oh – you’re not on the same page when it comes to writing credits. Or how to split any proceeds from the sale of the script. And even though you started off feeling like equal partners in the beginning, one person now feels that they have put in more work than the other, etc. The production company won’t go forward until everything is worked out between the writers and the chain of title for the script is clear. Any delay while working it out could cause the producers to walk away. Not to mention the fact that more than a few friendships have been destroyed by these types of misunderstandings.

Nobody wants to wind up in this situation and the way to avoid these sticky situations is to address them early on. It is much easier – and cheaper – to finalize the collaboration agreement in the beginning than it is to work it out down the line.

If you are a WGA member (or deemed to be a “professional writer” by the WGA guidelines) and the producer is a WGA signatory, then the WGA rules will govern items such as credit, compensation, rights to rewrites and any participation to ancillary rights related to the screenplay. An experienced attorney will know when the proper terms are being offered and be able to spot any potential conflicts with the WGA rules and ensure that you are getting the credit you deserve.

I should also note that the WGA terms are often used as a starting point for negotiations for non-WGA writers, but the terms are not binding in those cases and essentially serve as a place to “start the conversation.” As such, it is still a good idea to be familiar with them to understand what the industry standards are.

2. If you might need to obtain the rights to existing material.

If you’re working on your own original content, then great! You don’t need to worry about this item. However, if you’re working on an adaptation, or any story that is either (a) based on pre-existing material (such as a book or character) or (b) is a story about a real person and might require you to obtain “life rights,” then you should absolutely consult an attorney.

It is sometimes possible to negotiate for those rights after the screenplay has been written, but why take that chance? These can be tricky situations and you need to make sure you’re covered. It is heartbreaking when a client comes in with a fantastic story – often one that took a year or more to develop – only to find that they don’t have the necessary rights and the project is likely never going to go anywhere.

At the very least, a good attorney can help you figure out early on whether you need to purchase the rights up front, whether an option to purchase might be appropriate, or if there is another possible solution.

3. When there are contracts involved.

Yes, this is basically a reminder and probably pretty obvious. But this is especially true if the agreements in question are the option or purchase agreements that appear to be simple on their faces, although really, this applies whenever you are signing any contract related to the screenplay or your services as a writer. Why is this an issue? Because people often think:

Can’t I just find this stuff this online?!

This is where the internet is both your friend and your enemy. Sure, there are plenty of sample agreements available online. But not all of those agreements will work for every situation. Some will be out-of-date and not consistent with current market practices. Others will be missing some items that will be needed for a particular deal. The only way to know for sure is – you guessed it! – to consult an attorney who works with these agreements on a regular basis. And believe me, it is much cheaper (and a lot less frustrating) to do it right the first time than to have the attorneys come in later and fix documents that have already been signed.

As much as it is true that there are standard form documents that attorneys generally start with, there are some provisions that are heavily negotiated. Often these involve complicated concepts such as the definition of net profits. Sometimes producers will present an agreement to a writer and tell them that they need to get back to them in a day or so, which is clearly not enough time for the writer to consult their attorney. This is not always done with malice – they may be getting similar pressure from the financiers or others involved in the production. The temptation is just to sign so that the deal doesn’t go away.

Generally speaking, a deal is not going to disappear if you state that you need to run it by your attorney. And if they threaten to walk based on that request, it’s a pretty good indication that the deal may have questionable terms. Regardless, your attorney can usually come up with an interim solution – such as a binding letter of intent – that can show your commitment to the project while giving you appropriate time to review the agreement. Experienced entertainment attorneys understand the time constraints and can advise you on an appropriate amount of time required to review any agreement.

The bottom-line is that a good attorney will make sure you are protected. They will be able to point out issues that may not be obvious from an initial reading of the agreement, including opportunities to negotiate for additional items. This can include everything from additional compensation to credits, or rights upon a default of the agreement, rights to re-purchase your screenplay and/or terminate an option, negotiation for points on the back end, etc. Believe me, when your attorney is going over the list of everything that can go wrong or potential issues, they aren’t doing it to scare you or because they think things actually will go wrong. They’re doing it because that’s their job as a member of your team and they want to set you up for success!

So do I really have to have an agent, a manager, AND an attorney?! This is sounding expensive…

Let’s start by looking at what agents and managers do.

Agents are governed by the Talent Agency Act, which restricts their commission to a maximum of 10%. In addition, the regulations prohibit an agent from taking a producer credit, which means their only source of income from clients is their commission. They tend to maintain a larger number of clients than their manager counterparts, partly due to the fact that they need this larger base for their 10% to become a significant number. Of course, that larger client base usually means less individual attention for each client (other than their “star” clients). It also means that an agent is more likely to take on established clients who are generating income already. And those more established clients probably already have their managers (if any) and attorneys in place.

Managers, on the other hand, are not restricted by the Talent Agency Act and often take a commission of approximately 15%. They are also able to take producer credits, which can provide another source of income for them. Managers tend to have a much smaller client base as they are generally more involved in actively managing their clients’ careers on a day-to-day basis. Managers are also able to focus more on development of clients’ careers as they have alternate sources of revenue to sustain them during that process. A manager with enough clout will often be able to assist their client with getting an agent, but until that time, the manager may be able to make introductions that may generate interest for their clients. However, managers are prohibited from negotiating the deals (i.e. “procuring work”) for their clients.

There are times when a client has been offered representation by both an agent and a manager, but doesn’t want to pay 25% commission. When this happens, there are a lot of reasons to choose one over the other – or to decide to move forward with both an agent and manager – but ultimately these are personal decisions based on the relationship between the parties, the connections that the agent and manager have, their dedication to the client, etc. Many people find that a more hands-on attention of a manager is more attractive to them and choose a manager over an agent if they are only going to go with one of them. In the end, however, it’s the client’s personal choice.

What can an entertainment attorney do if I don’t have an agent?

This is where the attorney can be especially helpful. A manager may not be able to negotiate the deal for you, but an attorney can. So rather than scrambling to find an agent (any agent) to represent you in that deal, having an attorney who can work with your manager makes it possible to get things done quickly. And since you were already going to be consulting the attorney over all of those contracts anyway, it’s a real win-win for everyone. Of course, if you’re in that position, it’s a great opportunity to reach out to agents you’re interested in and ask if they will represent you on that particular deal and it might turn into a longer term relationship.

What else can an entertainment lawyer do?

In addition to the traditional negotiation of the deal documents, some attorneys also assist with packaging and pitching scripts. Usually this means that they have an established network that might include producers, agents, managers, talent and possibly even financiers. They can make introductions and also assist in putting together a full package, including talent, to present to investors. Experienced entertainment finance attorneys will have a good understanding of what each type of investor may be looking for and help you put together the most attractive presentation of your project.
One time when people often overlook the attorney is when they are offered representation. In the excitement of the moment, many times people feel pressured to sign right away. Or they worry that if they ask too many questions or request changes based on their attorney’s input, they will lose the offer. I understand that feeling, but it is also a critical time to make sure that you get things right.   And in order to do that, you should have an attorney look over those agreements.

Another small thing that an attorney can do is to provide a representation letter. This letter confirms that the attorney represents you as entertainment counsel and accompanies a query letter and script submission. This comes up from time to time when a client has been in touch with a production company and they generally don’t accept unsolicited submissions. Sometimes they will accept those submissions if they are accompanied by a representation letter. It’s important to note that there is no guarantee that the materials will be read even with the representation letter and it’s certainly not a guarantee of interest, but a number of clients have had success with these types of submissions.

There are a couple of other added benefits to having a lawyer on your team. It can provide an air of legitimacy and make you appear more professional to producers. In addition, you have someone to point to when negotiations get rough. We lawyers are used to playing the “bad guy” (at least to a certain extent) and it can be an important role. It allows some of the tougher negotiations to take place without damaging the relationship between our client and the producers on the other side. An experienced entertainment attorney will be able to do so while maintaining a productive relationship for the client.