Do I Need an Attorney
Part 2: Navigating Contract Negotiations
by Russ Miller
In last month’s column, we discussed whether or not you should hire a lawyer for your business dealings. This time we dive a bit deeper into a few specific topics that you may have to deal with at some point in your career. I asked my attorney, Paul Quin, for his input once again. Let’s dig in!
What do I do about bad deals made without using an attorney?
This is the familiar story of the artist getting taken advantage of by a big business. I was once naive and bought into the whole “we’re all family” argument in regard to some business dealings I had with companies when I was younger. Unfortunately I overlooked the fact that they were big corporations with full legal departments that didn’t necessarily share my sentiment. I unknowingly signed papers that removed me from royalties, patents, and other serious income possibilities. The products became successful, so if I had the knowledge I do now, I might be napping on a yacht in the Caribbean today. It was a lesson learned the hard way, for sure.
I asked Paul Quin about when to get an attorney involved in contract negotiations. “Do it as early as possible,” he says, “and definitely once something has been committed to in writing. But you can be contractually tied with just a memo, an oral agreement, or even an email, so get your lawyer involved as early as you can. Pending your relationship with the business or person you’re dealing with, it’s sometimes beneficial to have your lawyer work behind the scenes by advising and drafting contracts for you. Sometimes having the formal involvement of a lawyer can escalate the stakes too high too soon. But you should always discuss a potential deal with your attorney first.”
To continue to grow, focus on what you do at a high level.
My wife’s uncle is a great NFL coach. I’ve asked him many questions over the years about NFL dealings. One of his answers that stuck out was in regard to the players’ contracts. He told me, “We negotiate the players’ deals with two things in mind. First, we want them to be an incredible asset to the organization. That means on the field but also as a business investment. So if they become superstars, the team profits from it in every way. Second, we want them to focus on playing. We don’t want them to have any money or personal issues that could affect their performance.”
To operate on such a high level consistently, these players have to stay ultra-focused. The team doesn’t want them worried about their electric bills. Of course, the average NFL player’s contract involves more money than the average drummer’s contract, but the principle is the same. We need to put extra emphasis on our artistry. So if we need to hire somebody to alleviate the time, effort, and worry involved in legalities, then it makes sense to do so. Paul has represented me in several legal dealings over the years, and here’s his input on this topic: “Our dealings haven’t been atypical. I spend some time chasing down money owed, but most of the time I’m dealing with contract negotiations and revisions, whether that’s with management, agents, record labels, or publishers. Many independent labels have good intentions but struggle when it comes to meeting obligations concerning royalty statements. I spend some time keeping them honest. Publishing, licensing, and royalty agreements can be complicated as well. And negotiations for sync licenses have become an increasingly important part of my practice. Because sync licenses are unfixed (rather than statutory, like mechanical licenses), negotiations can be time-intensive and can require a lot of strategy to make sure you receive fair payment.
“There’s also an educational component to my practice when working with younger artists,” Paul continues. “Although overflowing with talent, they often enter the industry with little knowledge of how it works. Making sure that they’re protected from the outset takes a lot of time. Oftentimes it’s cheaper to have an attorney get involved before you sign an agreement than it is to help you get out of one.”
What are some basic recommendations for someone starting out in the music business?
Paul has great advice on this topic: “Younger players need to learn how to protect themselves from liability. That can be done though forming a business entity. In most cases an LLC works best, but that can change depending on the situation. If you’re playing in a band, you should always have a band agreement, which is a contract between the members that will set forth how profits and losses are shared. The contract should also include whether or not money will be pooled for common purposes, how voting on band issues will be determined (unanimous or majority), and who can use the band’s name if you break up. The purpose of the agreement is to anticipate problems and develop solutions in advance. This will save money if acrimony leads to lawsuits. Also, every artist needs to understand how publishing works, and how he or she can collect through ASCAP, BMI, SESAC, and other organizations. Protecting your creation will impact your longevity in the business.”
With that said, I want to make sure to point out that it’s very important to know when to bring in an attorney. You can potentially tarnish your reputation and put off people if you say, “Talk to my lawyer.” Sometimes I know the people involved in a deal really well, so I don’t want to alienate them by putting an attorney between us. In those situations, I might do the entire negotiation myself, taking Paul’s advice on the side and then letting him review the contracts once they’re drafted. Or sometimes I’ll have Paul look at a contract first. The bottom line is that it’s not easy to make a living in the music business. You have to be on top of your game, knowledgeable, and prepared, while also remembering to keep the focus on doing what you wanted to be doing in the first place—playing music!
Russ Miller has recorded and/or performed with Ray Charles, Cher, Nelly Furtado, and the Psychedelic Furs and has played on soundtracks for The Boondock Saints, Rugrats Go Wild, and Resident Evil: Apocalypse, among others. For more information, visit russmiller.com.