Ask The… Music Lawyer April 2016
The ‘Ask The…’ blog series continues with those mysterious folk who sit in their offices creating problems for the rest of us in the music industry because “clause 3b [iii] is worded inappropriately” and other such nonsense.
I am, of course, being facetious.
Some of the nicest people I know in the music industry (which, as you either know or can imagine, has more than its fair share of ignorami) ply their trade as lawyers and regardless of the stereotypes floating about in a world already fit to burst with hearsay, offer quite simply an essential service.
“If you’re in the music business, you’re in the copyright business”.
Never a truer word has been committed to digital ink on this blog and it is of upmost importance you remember this tiny idiom.
It’s these tricky little titbits of intellectual property that will ultimately result in an artist earning a living from his/her craft and therefore any deal they make should be tooth combed by someone trained in the relative judicial law the contract is written in.
Following are crowd sourced questions from various areas of the music industry answered by three lawyers at the top of their game. The contributors are anonymous in order for them to give the most honest answers possible without fear of feeling the wrath from the aforementioned ill-educated.
What asset is the most important to protect in the current music industry?
A) The traditional view would be the copyright in your songs. These publishing rights sill underpin everything, so it’s really important, that you don’t sign away those rights on unfavourable terms, at an early stage, as it can end up costing you a huge amount in the long-term.
A more contemporary view would be that the artist’s most valuable asset now is their brand. The intellectual property value in your logo and image rights can potentially hold far more value than copyrights in your recordings or compositions. So in multi-rights artist endorsement deals, you will often find companies willing to pay only relatively small amounts to publishers and record companies for the use of the songs/recordings in a campaign, whilst the personal appearance or use of star’s image/likeness/logo often carries a much higher price tag.
In reality though (and this isn’t really a lawyer’s answer), I think the artist’s most important asset is their audience. It’s the audience who will buy the CDs, come to shows, buy t-shirts, and ultimately sustain a career. It will be the relative size and engagement of that audience which attracts not only investment from record labels and publishers but also interest and partnerships with brands and other third parties, who want to gain access to that audience through association with you as an artist.
B) I couldn’t say which is the most important – the various activities an artist can undertake are all potentially equally important. Keep back as much as possible – i.e. don’t give away a share of your non-recording ancillary income (i.e. income from merchandise, live, sponsorship) to a record label without a significant financial investment on the part of the label in your career or in the promotion of an album or an investment in a tour etc.
For any assets given away, you should alternatively try to ensure you retain the right to control and approve the way they are exploited/controlled. If a label is willing to pay three figures to acquire these rights then I appreciate this is easier said than done.
C) Personally, I think it’s your publishing rights. More and more opportunities for synching are there for bands and it can be a nice little revenue stream. As the band gets bigger I’d say there is a shift to the most important asset being the band name. Call me cynical, but some fans will buy anything as long as it has the band name on it. This goes for merchandising and licensed products as well as bumping up licence fees that you can demand.
How has the role of the lawyer changed over the years, and what responsibilities does the lawyer have to their artists in the current climate?
A) I only started about seven years ago, but even when you speak to people who have been doing this for a lot longer, it seems clear that the last few years have seen an unprecedented rate of change.
Gone are the days of one-size fits all recording or publishing deals. We see an incredible scope and variety of deals and structures and at the moment, no single model seems to be proving the perfect recipe for success.
So more than ever, our role is about presenting all of those different ideas and models to managers and artists’ to help then try to come up with a plan and structure which works for them. I think we have a real responsibility to give our clients this complete picture so that they know exactly what their options are and can make informed choices about the direction their career will take.
B) I’ve had to learn different models – no two deals are the same any more. For example, this morning I have been dealing with a manager who only wants to take 10% commission, a record label that won’t agree to calculate option advances by reference to a mini-max formula and an artist who has been offered a management deal by a mobile telephone company.
I get three or four new enquiries a week from artists who think that I can bring in a good record deal for them. I always explain I can never do this – in fact, I’ve never really understood how a lawyer can do just that. I do know lots of A&R and have friends and many contacts in the music biz – but I don’t expect any of them to offer a deal to an artist put forward by me just because I think they are any good. In fact, the rule tends to be that if I like the artist then that’s the kiss of death and nothing will happen.
I am however happy to make intros and put people together (i.e. a label with a distributor or a songwriter with a producer) if I think they will work together. I don’t think I’m making massively important intros here – just you know – helping clients out where I think people might be able to collaborate together.
C) The age old perception of suits, leather arm chairs and gallons of whiskey is dead. Nowadays we are out at gigs, talking to studio owners and producers etc., to make sure we keep up with the scene. For me, it is really important that bands see my love of music and not envisage me sitting behind a big oak desk in a stuffy office. This growing involvement has also lead to a more managerial role for some bands who need proper guidance, but don’t want to sign up a full-time manager. Responsibility wise, I think it’s very important to understand a bands ‘wish list’ and then advise them based on their aims for the future. For instance, if they want to go at it full time, will the advance see them through whilst recording? This is very important as record companies are taking fewer risks so less money is being handed out.
Can you hand on heart say that you 100% advise on ‘the right thing’ to do rather than ‘the thing that will earn you the highest fee’?
A) Absolutely unequivocally yes.
B) I always advise the right thing to do. In fact, if I didn’t, then I’d be at risk of losing my job. Solicitors are regulated (by the Solicitors Regulation Authority funnily enough) and we have to comply with duties we owe to clients and third parties – if we do not then we run the risk of being struck off.
If the advice on a deal had to be that the artist should not sign, then I would tell them this – irrespective of the fact the label might be offering me a substantial contribution towards my fee if the deal went ahead. Its good karma – what goes around comes around.
C) It would be difficult to remain in a business if the basic emphasis was not on adding value to a client. We use a fixed fee system to cut out the perception that lawyers sit twiddling their thumbs watching the billable hours clock up. The number of honest and fair lawyers far outweighs the bad seeds that are found somewhere in every industry. The music industry, in particular, is often based on word of mouth recommendations and referrals, so if a lawyer wasn’t doing the right thing by their clients, they wouldn’t last long.
When does a band need a lawyer, and how should they go about choosing the right one?
A) As early as possible. Even if there’s no legal work to do at first, it pays to have someone you trust in place, and on hand so that you know any legal work can be carried out seamlessly if and when things do start taking off. In terms of choosing one, speak to other, established artists, and see who they would recommend. Try to speak to or meet a few different lawyers if you can, and try to find someone who combines the right mix of both solid professional experience, and enthusiasm for your music (often there can be plenty of one, but less of the other!).
B) You need a lawyer when you enter into a commercial relationship with a third party. If you are a band working together then I’d recommend that you speak to a lawyer sooner than later to sort out a Band Partnership Agreement to specify how profits and losses should be split, how to admit/fire new and leaving members, and what rights you have to use the band name and so on.
Usually, the first time I’ll see an artist is not until they are offered a management deal or a record deal i.e. – when they receive a contract.
I see new artists every week who have no such deals in place but still want to appoint a lawyer – they come see me for these so-called ‘beauty parades’. I try to gel with the artists I see but sometimes that’s easier said than done when it’s 9pm at night and I’ve been at my desk since 6.30am.
C) I think there is a big difference between ‘needing’ a lawyer and simply starting a relationship with one. There are benefits to getting a band agreement in place early on so that if someone leaves, you are not left squabbling about who has the right to use the band name, who owns what bit of equipment or which member is entitled to royalties from any songs you have written. What I would urge bands to do is to give a lawyer a call. Nice lawyers will talk to you at no charge, get to know a bit about your band, understand your aspirations etc. and then give you some food for thought, perhaps in areas you may not have considered. Once you have had this information, you can decide whether ‘now’ is really the time that you ‘need’ a lawyer. At the end of the day, it’s different for every band.
What is the standard advice you give to a band who is approached by a small, regional independent label who want to take publishing and master rights for little or no advance?
A) I would ask: Is this your only option at this stage? What exactly is that independent company going to do for you which you couldn’t do yourself? I think a lot of the time nowadays, so many things which those labels could have provided (access to recording equipment, promotion, distribution, marketing etc) can be accessed directly by an artist with a laptop and a bit of savvy and tenacity.
If the label can offer you something you really couldn’t be doing yourself (for example, if that label has a proven track record of nurturing talent and helping it grow), then there may be a case for granting them certain rights for little in return – but relinquishing both master and publishing rights so early on, would really be a last resort.
B) I’d want to know what investment the label are making. It’s fine to give away these rights if the label is making a substantial contribution towards the marketing and promotion of the first album or for a tour etc (with early termination rights as stated above if things don’t work out). If no guaranteed investment is being made and the label was unwilling to renegotiate the offer, then I’d probably tell the band to run a mile.
C) This is a difficult one. Having been in bands myself, it’s very easy to be led by your heart. Before rushing into anything, I’d recommend some pretty basic questions are asked. For one, why do they want both publishing and master rights? It may quickly come clear that the label is going for a ‘grab all’ approach, and actually has no links to music supervisors etc, or a good track record in the publishing world. You also need to think about what it is you really want. Your ultimate aim may be to secure a deal with a major, but a smaller label could act as a stepping stone and give you some valuable exposure. The detail of each deal will be very important so make sure you understand exactly what it is you are signing up to and for how long. Finally, if you’re holding out for an epic advance, a quick word of warning: We have seen advances getting smaller as fewer risks are being taken. However, you will need to make sure you have enough to get that all-important record recorded.
Lawyers are contacting bands extremely early these days, is this legitimate A&R, or is it ‘throwing enough shit until something sticks’?
A) For a lot of the reasons which come out in the questions above, I think it makes sense to be involved early. So many key decisions (for example, choice of manager, and when to say “no” to a deal which isn’t in your best interest) I also think it’s important that we stay very aware of emerging acts so that we’re on board from day one.
Ultimately, at this firm, we have to be extremely selective about the acts we end up working with. We can only devote a finite amount of time to working with new artists, so it makes sense for us to try to pick those acts who we think have a genuine chance of success. I’m a huge music fan, and a big part of choosing which acts we take on, comes down to whether we love the music – but we’re not A&R, so listen closely to people we trust in the industry, to try to get an idea of what’s hot.
B) I’ve never contacted a band directly. I do go out to see a lot of new live music – probably about two or three nights a week – and now and again I’ve met new artists who’ve asked for my card which is always nice, but I can’t think of an occasion when I have specifically targeted an artist I wanted to represent. Like I explained above, just because I like someone I don’t see why that means everyone else will and that they are going to be a commercial success.
I am aware that there are other junior lawyers out there doing this – offering free initial legal advice. To be honest, most music lawyers will provide some free initial advice anyway no matter how famous or new to the business you are.
C) The most important thing to remember here is that most music lawyers (the ones worth their salt at least) are first and foremost genuine music fans. The second thing is they regularly deal with producers, labels, recording studios, publishers etc. the people who can get your music recorded and released. Those connections early in a band’s career can be just as valuable as being spotted by a traditional A&R. Finally, prevention is always better than cure. It’s much more favourable to protect yourself with good advice from the outset rather than having to go through costly legal proceedings if you find out the deal you’ve signed up to isn’t all it’s cracked up to be. Oh, and all record contracts have a clause in them which means an artist should have it reviewed by their own lawyer.
It’s a common acceptance that music lawyers in the USA have more power than they do in the UK – is this true? And if so why?
A) They certainly have bigger offices! Someone remarked to me recently that a visit to one NYC lawyer’s office (who can remain nameless) was uncannily similar to that of Al Pacino’s character in The Devil’s Advocate.
I’d say the most successful acts a lawyer represents, the more powerful that lawyer will be perceived to be. As those lawyers will be deemed to be “in the thick of it” and people in the industry will generally want to maintain a good relationship with them. In the US, this is amplified – because as the relative size and success of the artists is so much greater, so will the perceived power of the lawyers who represent those acts.
B) Not that I’m aware of. I am New York qualified so I speak to attorneys there as well as in Nashville and LA regularly. Some lawyers are of course impressively fierce but that’s really just a cultural/style thing – ultimately they still take instructions from the band or management or the relevant label. I’ve never found a US-based lawyer to behave unreasonably. We all do the same job. I spoke recently to a friend who is a successful music lawyer in New York to ask her whether US attorney still takes a cut of an advance to sign an an artist and I was told she hardly ever sees this either anymore. I have myself heard of a UK-based music solicitor who did get paid a lot of money by a label to sign a particular artist recently – but that’s another story and I’m not really one to gossip.
C) I think this perception is down to US lawyers traditionally taking a more managerial role in the career of its clients. I’m not sure I would call it power, rather ‘involvement’. Maybe the power perception is because many high profile music law cases are fought in the US (and inevitably the US lawyers get a name check!). Lawyers in the UK are getting in on the management side a bit more nowadays; it really depends on what the band needs/wants. For instance, we do have contacts at labels which, if we feel it is appropriate, we would use to get a band’s music heard. After all, it worked for the Libertines!