The Truth About the Music Business: A Grass Roots Business and Legal Guide!

By Steve Moore, B.A., J.D.

If you are seriously considering a career in the music business save yourself a LOT of money and get this book, it's worth reading every page and will save you a TON of money in legal fees, heartaches, time wasted, dreams wasted and all of the talent will NOT get you to where you want to go without a GUIDELINE which is EXACTLY what this book is. It's a road map to success in the music industry!

• Language: English
• Publisher: BookBaby
• Release date: Feb 27, 2005
• ISBN: 9781483554532

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The Truth About the Music Business

PREFACE:

If you want to be in the music business or you are already in the music business and would like more information about how to protect yourself in your professional life and business ventures, then this may be the book for you. You may have already decided on a particular area in the music business or then again, maybe not. However, whether you are an artist or writer, sideman or front man, engineer or producer (live or recorded), booking agent or promoter, studio manager or owner of your own independent studio, major label executive or independent record label, etc., learning more about the business and legal end of what you are trying to pursue will be extremely useful on your path to success.

To that end, if you’re REALLY serious about the music business, you better arm yourself with some knowledge that will protect you! Didn’t Warren Zevon say If I had it to do all over again, I’d arm myself with a law degree and submachine gun.i? Well this book is designed to arm you with a pocket guide to the basic concepts of law and business that may affect you. It will also lay a foundation so that you will know when you need to hire a good lawyer so that you can forego the machine gun.

You may find that a good deal of the information in this book is plain old common sense, and for the most part it is. But there is a lot of stuff that I have had to deal with either personally or for my entertainment clients through the years and when you’ve seen what I’ve seen, you tend to learn from it. This book is intended to answer some simple questions and to shed some light on some basic issues such that one can get a general idea as to what one can do to further ones music career and how to avoid some costly mistakes. Regardless, my sincere hope is that you will be able to find some valuable information that may help you at some point in your career.

So now it’s time to start collecting all those big checks, riding in limousines, and dating super-models…right? Better guess again. Don’t forget about the business part of the music business. There are many pitfalls along the way and the road is long and extremely rocky. Get ready to start treading water while the sharks are circling; the water is wide, extremely deep, and the current is strong.

Stop to consider how you plan to handle your business affairs before you set out on your road to success. Have you thought about a business plan, a business structure, business licenses and tax considerations, the costs of doing business, getting all of your contracts in order so that you won’t get burned, and making sure that you always get paid? Mistakes can be costly…so Get it right…the first time!

You will learn about entertainment lawyers, what they can do for you, how much they charge and how, as well as a lot of other useful information about attorneys. You will learn how to COVER YOURSELF without hiring a lawyer first and even IF you have to hire one!

I will give some fairly detailed information about selecting a business structure and this book will give some simple ideas about setting goals and incorporating them into a simple business plan. It will also cover some basic information on how to promote and market your business, as well as some very useful tips that can be used to help you or your business to be more memorable and therefore more successful.

Since Copyrights and related intellectual property are the cornerstone of the music industry, we will cover the basics of intellectual property such as Copyright to protect your work and Trademark to protect your name so that choosing a name will NOT come back to bite you. It will talk about other areas of intellectual property such as patents, trade secrets, publicity, and privacy rights.

We will also cover the basics of music publishing and the basics of digital music rights and how important digital rights are to the future of the music business. We will discuss the differences between demos and master recordings, as well as what to expect when you go into the studio. We will discuss the basic elements of a record deal and whether or not you really want to sign with a major label or whether you should try to do it yourself by taking a proactive approach to your career.

We will also cover all of the people that you may need to hire throughout your career such as a business manager, personal manager, road manager, booking agents, publishers, accountants, attorneys, personal assistants, public relations, and other ancillary services that you may need. Furthermore, it will give you an idea as to when you may need these people as well as a breakdown as to how much of your money will be going out the door when you hire these people.

We will also briefly discuss the general principles of contracts so that you can at least familiarize yourself with contracts. This book will discuss what makes up a contract and whether or not a contract has to be in writing. Does a contract have to have a bunch of terms such as whereas and heretofore, or can it be in plain old English so that anyone can understand it? This book will also discuss the basics of negotiating and how you can try to stay one up with your business dealings.

We will also discuss some of the questionable practices that you may encounter from some rather unsavory characters in the music industry. Of course, there is also a chapter on collecting your money, which will discuss how you can make sure that you are collecting all of your royalties from publishing or music deals and more!

We will discuss what you can do if have the bad fortune to have to sue someone to protect your rights or what could happen if you were to get sued. The more you know about a lawsuit, the more likely you will want to avoid one. IF you have no choice but to sue, then you will know the anatomy of a lawsuit—best evidence rules, Hearsay, witnesses, etc. There are many tips as to what you can expect and what you should file, where to file, what to say, etc. should you have to go to court for any business reason.

Also, just for reference, there is a chapter on organizations that you may consider joining to further your goals and to increase your networking prospects, as well as how these organizations can help you. There is also a chapter on music conferences, festivals, seminars and the like, as well as what you will need to do to prepare for these events and make the most out of your time and money spent on these events.

Since insurance is such a big part of your business and personal life, there is a chapter on what type of insurance that you may need, how to find the right agent, what to do if you need to file a claim, how to deal with adjusters and what rights you have if you feel that you are not getting what you paid for when you bought your insurance.

Finally, in the last chapter we discuss wills and estates. No matter what happens nobody gets out of here alive. Therefore, we will discuss making plans for what will happen to you and your property such as your copyrights and the rest of your personal property once you have shuffled off this mortal coil.

For our purposes here and throughout this book, I will use he when I may mean he/she, as I don’t want to be gender specific and exclude the vast number of qualified females out there. You may find a good deal of information that you already know or you may wonder why certain topics were included in the first place. To the end, this book is not intended to be condescending in any way. But rather, is designed to be a primer of sorts to cover the most basic concepts that you could face in the music business so that you can be prepared for just about any situation.

CAVEAT: This book contains NO LEGAL ADVICE and is not intended to be a replacement for a qualified attorney!

Chapter One

Entertainment Attorneys

The Pocket Guide to Entertainment Lawyers

Life is a board game…and the lawyers have read the rules on the top of the box…

D. Doucette

We’ve all heard our share of lawyer jokes and some are actually warranted. Perhaps you’ve heard what some say is the first lawyer joke:

First kill all of the Lawyers. William Shakespeare

Even though this statement by William Shakespeare may sound funny, it is actually quite serious and may have quite an opposite meaning. Although we can’t possibly know what Mr. Shakespeare meant by this statement without asking him, many argue that Shakespeare was not saying that we should actually kill all of the lawyers, but rather his intention was to say that if there were no lawyers, then there would be nobody to take up for or be the advocate for the common man. In our society, with all its rules and regulations, lawyers are a necessity whether you like it or not and unless you want to have to read all of the rules and know a great deal of the laws that govern our everyday lives, then you are better off having a lawyer to protect your rights when you can’t do it yourself. So, for those of us in the entertainment industry that brings us to our first question.

What is an entertainment lawyer?

The term Entertainment Lawyer covers a wide spectrum of different types of practitioners. I have often heard it said that an entertainment lawyer is usually just a general practitioner that happens to do entertainment law or that just represents people or companies in the entertainment industry. That generalization can be very much true in some or even many cases, but entertainment lawyers come in all shapes and sizes as well as abilities. Some may strictly be negotiators and never set foot in a courtroom while others may be strictly litigation attorneys, who focus on entertainment related issues or who solely represent music companies for their litigation needs. Some entertainment attorneys work for big companies as in-house counsel and never represent individuals. More often than not, Entertainment Lawyers are a combination of different types of legal practitioners and they are able to focus on a wide spectrum of issues that face those of us in the music industry. Some entertainment lawyers were even musicians, songwriters, or artists in their former lives and some still are, but the law is a jealous mistress and to truly master the ins and outs of entertainment law requires a great deal of effort and time, which doesn’t leave much time for creative pursuits on much more than a part time basis, if at all.

What does an entertainment lawyer do?

Your entertainment lawyer can offer a number of different types of services to you and can be there (and most times should be there) to help you negotiate the maze of contracts that you will encounter during your entertainment career. But in some cases an entertainment lawyer may be required to handle certain personal matters for his entertainment clients such as divorce(s), wills, trusts, and even criminal matters as each of these types of matters may have certain types of entertainment issues. For instance, a divorce between parties where one or both parties is an artist or songwriter will have any number of different entertainment related issues such as the evaluation of a song catalogue, artist royalties, assignment of copyright(s), etc. Of course, if you are going through a nasty divorce, you may want to hire a divorce specialist but he will not usually be very well versed in entertainment issues and thus he will have to consult with an entertainment attorney to make sure that he has covered these important issues completely. Wills and trusts may have the same types of issues since copyright laws protect the creator of the copyright for his life plus seventy years so the client must have the foresight to protect his intellectual property rights long after he is gone. Also, copyright infringement can be a criminal matter as there are criminal penalties provided for in the copyright code. Finally, there are times when a client may have run abreast of the law by doing something like shooting a gun off his tour bus, getting a traffic ticket, getting a drunk driving charge, be arrested for playing a gig under what the venue or promoter deems to be a trademark infringement which also carries criminal penalties or any number of other criminal matters which can arise during the course of an entertainer’s life. When an entertainment client finds a lawyer that they trust, they like to deal with that lawyer even when they may have to hire another lawyer. I’ve seen all types of matters and all of the above are actual cases that were either handled by me, my firm, or another attorney.

Your attorney may also be able to handle a number of different business issues such as setting up your business, helping out with tax issues, or he may work closely with your accountant in regards to business or tax issues. Regardless, it’s most important that your entertainment lawyer has an extremely good understanding of contract law and be well versed in all types of entertainment contracts. He must also be completely well versed in intellectual property rights, which are the cornerstone of the music industry: Copyright, Trademark, Trade Secrets, and sometimes Patents. However, we will save a more in depth discussion of contracts and intellectual property rights for later on in this book, as these issues are critical to anyone’s future in the entertainment industry and are worthy of a much more detailed discussion.

Sometimes lawyers that purely negotiate are called solicitors while those that go to court are called barristers. This is especially true in Canada and the United Kingdom or in legal systems that model themselves after those countries. However that distinction is not normally used in the United States. Whatever he may be called: Attorney, Lawyer, Barrister, Solicitor, Counselor, or any number of other colorful names, he can play an invaluable role in your affairs and when you need one, all of the lawyer jokes that you’ve heard will seem a lot less funny.

The most important thing to know is that a good entertainment lawyer can make a huge difference in your career. They can steer you out of trouble if you have the good sense to see them first before trouble happens or they can get you out of trouble once you’re in it, which can unfortunately happen in the blink of an eye. Unless you are extremely lucky, at some time or another you will encounter problems where you will be glad that you have a good attorney on your side. Unfortunately, more often than not people either can’t afford to see an entertainment lawyer for every issue that may come up or they just don’t think that they’ll need a lawyer until it’s too late. It’s very much like a car mechanic. If you see your mechanic regularly and keep your car in good shape, then you are less likely to have major problems. But bad things happen and cars break down and eventually you’ll end up paying for major repairs. This analogy can be very true of your legal needs. If you retain an experienced lawyer to assist you along the path of your career, you are much less likely to have to pay him to fix major problems down the road and you will be very glad that you retained a lawyer first.

We all go into our business ventures with the anticipation that we’re going to be successful and that things are going to work out for the best. And why shouldn’t we? Nobody would go into any business venture without some degree of optimism, as well as hopes for some degree of success. However, more often than not, the people that you do business with don’t live up to their promises or some other unanticipated situation will arise where you will have wished that you had sought the advice of competent legal counsel. This is especially true when you sign an agreement that comes back to bite you, when you enter into some businesses deal that may go awry at some point in the future, or before some unanticipated event may arise where you are exposed to some legal liability. I can’t tell you how many of my clients completely trusted the people with whom they were working only to find out later on that they were being taken advantage of in more ways than one. Unfortunately, I saw a good deal of this type trust with creative or artistic types, as they were just glad to be offered any type of deal and they preferred to live their day-to-day lives without having to deal with the pressures of business issues, etc. In the case of songwriters, they’ve got enough to deal with just trying to write hit songs and to constantly crank out good material day after day and year after year. In the case of artists, they have enough to do touring, making appearances, recording in the studio, etc. and trying to keep themselves in a position that they won’t get dropped from their label and eventually fade into obscurity. This is why many songwriters sign publishing deals so that their publisher will handle their copyrights and why they hire business managers to handle their money so all they have to focus on is writing songs. This is also why most artists hire personal managers and/or business managers and sign record deals where all they are expected to do is be an artist. But no matter if you are a songwriter, artist, musician, or anything else, if you don’t know what is going on with your business matters and know how to mind the store, then you are possibly setting yourself up for a hard fall or at least an eye opening wake up call. Experience can cost money and you don’t want to have to buy more than you can afford.

Again, many artists, songwriters, or musicians, etc. get themselves into some type of non-advantageous business deal because they were just getting their first deal or deals. They were not very well established in the entertainment industry and therefore they didn’t have a very strong negotiation position. If you are about to sign some type of major deal and you have been discussing this deal with your publisher, label, manager, or whatever don’t think for one second that all is what it appears to be and that you can handle it on your own unless you know exactly what you are doing and exactly what your contract says. I can’t tell you how many times I had clients that were told that a deal said one thing, only to find out that the contracts actually were very different than what was verbally promised. A good entertainment attorney will be able to negotiate a great deal of points or issues on your behalf, explain exactly what a deal entails, as well as advise and guide you through the maze of problems which may occur somewhere down the line during the term or even in the event of the termination of your contract.

What can an entertainment lawyer do for me?

Consulting an attorney and keeping him on retainer can be a good way to make sure that someone is always in your corner to represent your concerns. If you pay your lawyer today, you’ll probably save money, headaches, and a whole host other problems tomorrow. It’s amazing what even just a letter from a lawyer will do when it comes to making people own up to what they are supposed to be doing and even though lawyers get a bad rap in our society today when the proverbial stuff hits the fan, you will be pretty darned glad that you have one on your side.

A really good entertainment lawyer will also be beneficial in furthering your career. He will have many connections in the music industry and can be a valuable tool in shopping a deal for you, getting you in to meet the right people or any number of other different types of assistance with your career. If you submit your material to a major publisher or major record label without any request for you to do so, you will pretty much be guaranteed to receive your material back with a huge stamp on it that says RETURN UNSOLICITED. The reasons for these companies not accepting material from unknown outside sources are many. I will discuss three of the main ones here.

First, these companies are already bombarded with material from legitimate and trusted sources. If they were to accept material from just anyone who walks in off the street or who sends material through the mail, they would never be able to get through it all. There are thousands and thousands of people out there trying to get a deal of any kind and these companies just don’t have the man-power to handle all the material that they receive. By having entertainment lawyers act as gateways and to cull through the crop, these companies are much more likely to receive viable or commercially exploitable material as no entertainment lawyer that is worth his salt will want to put his name behind something that could jeopardize his hard earned reputation with his contacts at successful entertainment companies.

Second, if these companies were to open your letters with your songs or recordings enclosed they could be proven to have had access to your material for the purposes of a copyright infringement suit. There are thousands of people out there writing songs every day and the chance that some of those songs are similar to each other is fairly good. Every song has a title and a story line as well as a melody. The chances that a song title is exactly the same as another song are extremely good, but song titles are NOT copyrightable. The chances that the lyrics are very similar are less likely but still pretty good as the lyrics often follow the title and therefore, could be very similar. Finally, since most popular songs are based on simple hooks or melodies, and the chances that those hooks or melodies are similar are pretty fair, as even though there are millions of combinations of chords and melody lines most songs usually follow some type of formula which make them pleasing to the ear and more likely to fit in with the sound of the times. Having two songs written by two different parties at two different times and at two different places that are exactly alike may be an extremely long shot but still there is a chance it can happen and that’s a chance that these companies can’t afford to take or even have to defend themselves from less than appropriate or even legitimate claims.

To prove infringement you must be able to prove substantial similarity and access and if these companies were to accept unsolicited material, then half the proof for an infringement action is there. All that would be left to prove would be substantial similarity and even though that is a tough burden of proof, these companies could very easily end up spending a good deal of money defending numerous copyright infringement suits whether they are warranted or not. Since they have this policy of NOT accepting unsolicited material, they have a pretty solid defense against anyone being able to prove access and are much less likely to lose any infringement suit if any suit were ever even filed. Over the years, I’ve had lots of people call my office wanting to file a copyright infringement action because they feel like a song on the radio is very similar to a song that they have written. In some cases, the songs were very similar and I have even seen a song or two that was almost identical, but there was no way to prove that the writer or company that published the song or the company that released the song had access to the similar song that was allegedly infringed upon. Therefore, there was really no way to bring the lawsuit. So, by having an entertainment Lawyer submit your material, the prospective company that you are submitting material to feels much more at ease that they will not be likely to be involved in some type of frivolous suit if they accept that material.

Third, if you have a reputable manager or an entertainment lawyer that is well connected you are much more likely to get through the door as these companies know that your manager or attorney aren’t working for free and therefore serve as a natural weeding out process. Further they know that your manager or attorney will not want to waste a valuable opportunity to pitch a client that they don’t believe in. In fact, you probably won’t have a reputable manager unless you have some degree of commercial viability nor will you be able to get an entertainment lawyer to pitch you unless he believes that you have a very good chance of making it. Once a manager or lawyer takes a fairly marginal act or an act that really doesn’t stand a chance of getting a deal to any of their contacts, they most likely won’t be taken seriously the next time they come knocking on a company’s door. So, both lawyers and managers are very, very careful about whom they may be willing to pitch to their contacts at major labels, publishers or other companies.

Another thing to remember is that your lawyer or prospective manager has an opinion too and that opinion may not be what you want to hear or even the correct one. There is no accounting for taste and just because one person may not care for your particular music doesn’t mean that your career is over. I have been in the business as an artist, songwriter, and musician, long enough to know that what I like isn’t necessarily what is going to be right for commercial radio, and so I always used the measure of commercial exploitability when trying to decide whether or not to pitch something. Is the product of good enough quality that I won’t end up being embarrassed if I pitch this to my contacts? It is a purely subjective call so don’t get discouraged if the first people you meet don’t believe in your product enough such that they can work with you. Keep trying to find a manager or lawyer that truly believes in your ability and your material. After all, your relationship with your attorney may not be on an informal or personal basis but it should be based on mutual trust, respect, and belief in each other’s abilities.

One thing that I don’t recommend is hiring a local lawyer that says that he does entertainment law, unless you happen to live in a major metropolitan city where there are a good deal of lawyers to choose from with a good deal of experience in entertainment issues. Anyone can say that he is an entertainment lawyer even if they only represent one or two local artists that have absolutely no chance of ever getting you a deal, as they just don’t have the necessary contact. So ask any prospective lawyer about his experience in the entertainment field. He may not be able to reveal his client list without their consent, as that is confidential, but he should be able to give you some idea as to the depth of his experience as well as how he may plan to handle whatever issue that you may be asking to him to handle.

No matter what your talents may be, this is absolute and for sure--don’t expect the lawyer to want to spend his/her time without some type of compensation and they don’t come cheap. So, this brings us to the next question.

What does a lawyer charge?

An attorney’s time and talent is pretty much all that he has to offer. He has worked very hard to be able to offer his services and has spent a great deal of money getting there too. It takes 4 years of undergraduate school and really good grades to be a candidate to apply to law school. You also have to take the Law School Aptitude Test (LSAT) and make a pretty high score just to be considered for acceptance. Once accepted to law school, it takes 3 more years to get a degree and the ones with the highest grade point averages get the best jobs and law school is extremely competitive. So much so that I thought that many of my law school peers were absolute Nazis. In some schools, the attrition rate, or dropout rate, is incredibly high so much so that even just finishing law school can be a real accomplishment. To make matters even more difficult, after getting out of law school, then the lawyer has to pass the Bar Exam, which is usually a three-day test that is not the easiest in the world to pass but one can pass it if they wish. In fact, I’m sure you’ve heard about people who have taken the bar exam several times before they passed just so that they can begin to work as an Attorney. Finally, once you become an attorney, its trial by fire everyday as every new answer brings home ten new questions and the law is incredibly complex and always changing. A lawyer has to continue to learn every day, put in incredibly long hours, and the work is extremely difficult and sometimes overwhelming. So treat your attorney with the respect that he deserves as you can rest assured that he has earned it.

Once becoming a licensed attorney, some lawyers set out on their own from the outset while others work for a firm. Still others work for a firm and then set out on their own. Whatever the case may be, whether a solo practitioner or an associate or partner in a firm, there are many expenses that must be paid to keep that business afloat. There’s rent, phones, advertising, malpractice insurance, Continuing Legal Education (CLE), volumes and volumes of books, updates, legal journals, staff, postage, copiers, computers, office furniture, files, paper (and they burn through tons of trees a year), etc. All of these expenses for the cost of doing business or overhead make the rates that lawyers charge continually increase and usually these costs of doing business, as in all businesses, are eventually passed on to the client.

Retainers

In some instances, you may want to consider hiring an Attorney to be there for you at any time that you may need him. If this is the case, you can pay your attorney a general retainer to be used when that time comes. This way he should be much more willing to take your calls when you need him before he takes the calls of those that have not paid him. That is, if and when you may need him and it is more likely than not that you will. Of course, if you are just starting out then you may not need an attorney in the very near future. If you are not that far along in your career, then trying to retain a lawyer may not be a very good idea, but if you are ready to start taking your music to a higher level, then you may want to consider retaining an attorney.

If you have an issue that requires an attorney, then that attorney most likely will require you to pay an up-front retainer first before he will begin working for you on a case or other legal matter. This retainer will insure his services until that retainer is gone. Depending on the Attorney, he may continue working on your case or legal matter and bill you for his services thereafter. Furthermore, if your particular legal issue is involved in Court Proceedings, then he cannot withdraw from your representation unless he has the Court’s permission. However, if it is in his retainer agreement that if you don’t pay him another fee within a certain time or pay your bills on time; he can withdraw from your case and possibly put a lien against any earnings you may get from your case, publishing advance, etc. This is very important to note, so I will repeat myself, if you have retained a lawyer to represent you in a court matter, he cannot withdraw unless he has the permission of the court and there may be matters that he must take care of even though your initial retainer has been depleted. If that is the case, you may get a bill for services for which he was required by law or the court to further your court case and thus incur further costs including drafting, filing and appearing in Court on a Motion to Withdraw from your case. So, you can bet that if you don’t pay your lawyer, he won’t be working for you for very long and you may end up owing him more money just so that he is able to be relieved of his duty to represent you.

Be that as it may, there are several different ways that a Lawyer may charge as follows:

Hourly Rates

The most common type of billing is the hourly rate. They can range from $75 and hour for the least experienced or junior associates to over $600 an hour for senior Attorney’s or partners with vast experience in their field. Most all lawyers bill in fractions of an hour. Usually, they mark their time by .1, .2, .25, and .3, et seq., which equals tenths of hours. Most have a minimum of .2 hours, as they usually can’t handle any certain task in less than that time.

For example, let’s say that your Attorney is working on another matter other than your case (which is very likely as they usually have many clients that demand their time) and you call him on the phone. The attorney has to drop what he is concentrating on and take your call. He may discuss your matter with you for a couple of minutes or more and yet he still charges for .2 hours. Well the reason for this is that once he hangs up the phone with you he has to give some thought to the ramifications of your call, then make note of your phone call for the file, place the note in the filing bin or in your file, then he may give your file a review, mark his billing sheet and then he can return to what he was concentrating on at the time of your call. It may be hard for others to understand but these little distractions can be very taxing as the Attorney wants to make absolutely sure that he has not made any mistakes or that he hasn’t misquoted the law in some way. So the lesson to be learned here is to not make unnecessary calls to your attorney. If he has something important to relate to you, he will. If you absolutely have to call, make sure that you are prepared and that you ask concise questions to make sure that you don’t waste his valuable time or your valuable money.

Another scenario is a letter. Many lawyers charge .3 hours for a letter. The reason for this is that many attorneys don’t type and must dictate a letter. They have to dictate a letter, send the tape for typing, then review the typed letter, perhaps send it back for errors or redactions, and then sign the letter. More often than not, when an attorney has a conversation with a client or an opposing an attorney, he will document the conversation with a letter and then send a courtesy copy to the client to keep them informed of what is going on. Of course, the file may have to be reviewed again and a copy of the letter must be placed in the files, etc. So in order to be thorough, it usually takes about .3 hours.

Another scenario that you should be aware when it comes to billing is that no lawyer can be expected to know all of the law all of the time. Even if the lawyer is very skilled and keeps up with as many changes in the law as he can, he still has to do research to make sure that the law on your particular issue has not changed. If he were to miss a certain change in the law and apply an old law to an issue in your case or matter then he may cause you irreparable harm and therefore be subject to a malpractice suit. For these reasons the Lawyer is always as thorough as he can be and always strives to represent his client to the best of his ability. So always be mindful that your attorney is ethically bound to do the best work that he can for you but it’s not always the easiest of tasks for him to do so. There is always a lot more going on behind the scenes than you may imagine.

Flat Fees

Sometimes a lawyer may charge a flat fee for a particular service. This is especially true if he knows in advance how long it may take for him to perform that particular service. Some examples of situations where a flat fee are in order are in contract drafting, contract negotiation or perhaps setting up a corporation or any other matter that may be done in a certain amount of time. The Attorney will sometimes charge a flat fee for a service with the proviso that if the matter is closed as expected in a certain amount of time then no further charges will be incurred. However, nothing is as ever cut and dried, as it appears to be. Sometimes things change, as we don’t live in a vacuum and therefore, the lawyer may have some contingencies drafted into his flat fee agreement. However, if you pay your attorney to do a certain task just for a flat fee and it takes him longer than he expected, then you have a binding contract and the lawyer will have to do the extra work without charging you any extra money.

Value Added Billing

Some Lawyers may charge what is called a value added fee for certain things. This scenario comes up in cases when you ask your lawyer for a contract that he has already written or some other task that you may need where he just has to do a minimum of work and possibly just push print on his computer. Since the attorney already has the contract or task already done and he has researched the issues so he doesn’t really have to do much work, he may bill you a flat rate that is based upon how much work he did initially to produce the document that you needed. But that fee is usually much less than what it would take for him to re-do the work again. This is helpful in the case of a single song publishing agreement or simple booking agreement since you don’t have to pay full price and yet you get the benefit of the work he had done beforehand for perhaps another client.

Contingency Fees

In some cases, plaintiff’s lawyers (litigation attorneys that file suit against other parties as a means of getting his client compensated) may charge contingency fees. This means that you will not have to pay the attorney unless he collects your money. The fees can range from 20% to even 50% depending on what your state allows for contingency fees, as well as what the amount of work that may be required for the successful handling of your case. Furthermore, many of these lawyers will advance the costs of suit for you. However, these lawyers won’t take your case and pay your upfront costs, etc., unless your case is an absolute slam-dunk. This means that they know that they will win; they know that the defendant can pay, and they know that they will make more money on the contingency fee than if they were to bill their hourly rate. If they think for even a minute that the case could end up being something that costs them more time than they could make by billing an hourly rate they’ll most likely not take the case on a percentage basis.

Also, even if you are not successful with your case and the lawyer doesn’t make any money, you will still be responsible for all court costs, costs of service of process, private investigator fees, court reporter fees, costs of transcripts, deposition costs, incidentals, etc. In many cases, you may be able to get the attorney to advance those costs which can be a great help but be advised that the attorney is not in the business of paying for other people’s problems so be prepared to have to pay these costs out of your own pocket and these fees can be hefty to say the least. In fact, even if your attorney is successful in prosecuting your case, the attorney is going to expect you to pay all of these ancillary costs out of your share of the percentage, which in some cases could leave you ending up with very little money even after you have gone through all of the headaches, hassles and the time expense of a trial. So you should be very careful about the contingency fee agreement. Consider the amount of money that you are trying to collect and balance that with how much the lawsuit will cost. However, there is also the fact that a large lawsuit can be very expensive if you have to pay all costs, legal fees, etc. up front and many people just can’t afford that so they elect to go with a contingency fee.

Also, you may want to change attorneys during a lawsuit. Usually, your first attorney will have some language in his retainer agreement that allows him to put a lien against any recovery that you may get to pay the attorney for the time that he put in the case before you retained another attorney. Also, in some cases, the attorney will expect to be paid his hourly rate for his time that he put in on the case before he was relieved. This could very well mean that you will end up owing that attorney a great deal of money.

You should also be advised that there are always two sides to every story and in some cases the best defense is an offense and therefore, the other side may file a counter-suit to either muddy up the water or they may feel that they can successfully prosecute their issues against you. One thing is for sure is that if you are counter-sued in your original case, your attorney will no longer wish to work on a contingency, as he will have to do twice as much work. He’ll have to successfully prosecute your case and at the same time successfully defend the counter-suit. So he will either have to renegotiate with you or ask to be relieved from representing the counter-suit or from representing you altogether. In some cases, he may still feel that you will be successful and will continue to work on a contingency basis but he will most likely have to charge you for his time spent defending the counter-suit against you.

If you are a Defendant in a case you will never get an Attorney to work on a contingency basis so don’t even ask, it just doesn’t work that way. You will have to pay your attorney up front and perhaps monthly after that or he will not represent you for very long.

Spec Deals

These types of deals are also known as speculation deals and usually mean to an experienced attorney I spec (sic) you won’t ever get paid. However, there are some Attorney’s out there that will shop a deal for you for a percentage of the advance or even a percentage of the entire deal. Since there are only so many record deals or publishing deal handed out by big enough companies to actually pay an advance or that make enough money to make it worth your attorney’s time, you aren’t likely to find one that will work on spec (sic). After all, if every Entertainment Lawyer worked on spec (sic) for all of his clients he’d go broke in the process. However, you may very well be able to find an attorney that thinks you are the hottest thing since sliced bread and he may be willing to put his time, money, expertise, and risk losing his hard earned contacts just to pitch you on spec (sic). If you can, then go for it! What do you have to lose?

Double Billing

This is something that every person in the entertainment field should definitely watch out for. As mentioned earlier, there are some entertainment lawyers that NEVER go to court, as they are purely transactional or negotiating lawyers with a solid knowledge of entertainment issues. If your attorney is one of these types of attorney’s, then he will have to work with another attorney to handle the litigation aspects of your case and each time that both of these attorneys meet, correspond or work on your case, you will have to pay them both their hourly rates unless you were lucky enough to get them to work on a contingency basis on a Plaintiff’s type suit. This means that if each of them charges $200 an hour, then you’ll be paying $400 an hour when they are working together. Furthermore, the litigation attorney may not be well versed in intellectual property issues or entertainment contract issues and the entertainment lawyer will not have much litigation experience, and therefore the litigation attorney AND the entertainment lawyer will have to spend extra time getting caught up to snuff with the issues of your case, thus costing you more time and money.

Another scenario where you can be charged almost double is when you hire a big firm and more than one attorney works on your case at one time, although this is not usually the case. Sometimes a junior associate will do most of the work on your file but when a deposition comes up or some other matter that the junior associate may not be able to handle, a senior associate or partner may come in to make sure the everything is handled correctly while the junior associate is still present and working on your case too. So be careful that you ask about this scenario and try to make sure that you don’t get billed for the senior partner’s time and well as the junior associates’ time. This can usually be avoided by simply asking about who will be working on your case and when and making sure that this situation will not arise.

Incidentals

Last but not least, some, if not most, Attorneys or firms charge for incidental expenses incurred on behalf of the client to help control overhead. They may charge $.25 to $.50 a page for copies made on their copy machine. They may bill for the charges incurred for long distance or overseas phone calls. They may bill for postage, file folders, file boxes, or other office supply charges. I have even seen bills from larger firms for $5.00 a page for faxes. So you may want to get a clear understanding with your Attorney as to what he or his firm may bill for incidentals up front. Remember, you can always negotiate with your Attorney or his firm and if they are not willing to concede what you are not willing to pay for, then you don’t have to hire them. But beware of these incidentals as they can add up quick!

Over-billing

Most lawyers are not going to do this, but there are some unscrupulous lawyers out there that are guilty of over-billing their clients or padding their bills. The only way to protect yourself from this practice is to make sure that you get a good referral for an attorney from someone you trust and that hopefully uses that attorney’s services often. If they have used that attorney before, they should have a very good idea as to what that attorney’s bills are like and how affordable he may be. Also make sure that you keep records of the time you spend with your Attorney either when you meet with him or when you are on the phone with him and if your time and his time are indeed different, then you may be being over-billed. Make sure to read your entire bill and know what you are being billed for in each instance. If you feel that you are being over-billed then you may want to check with another attorney or the Bar Association.

There are even some attorney’s that have their secretaries or paralegals do a considerable amount of work on your legal matter or case and then charge as if the attorney did it all. You can check this by looking at what type of work was done on your billing statement. If the Attorney is charging for stuff that you doubt that he has the time or the inclination to do, then he may be charging you his rate for his staff’s time. In many instance, the firm’s retainer agreement provides for billable rates for non-attorney’s time. So make sure that you ask about this issue up front.

Another way to check on whether you are being over-billed is if you have a good relationship with the person or company on the other side of your legal matter. For instance, if you are entering into a publishing agreement and you and your publisher have a good relationship, you may ask to refer to what his attorney has charged for certain services and compare that to the time spent by your attorney. If your publisher is billed .2 for a conversation between the two attorneys and you got billed .5 then that should put up a serious red flag.

No matter how they may bill, your lawyer should advise you of all costs associated with handling your matter and should have a retainer agreement setting forth all the terms and conditions of his representation. Be sure to ask your lawyer all the questions you can at your first visit so that you won’t be shocked when you get a bill for which you were not prepared. In some instances, he may not charge for the initial consultation. However, only personal injury lawyers advertise that there’s no charge for the initial consultation as they make their money for the most part off contingency fees once the case is over. So, ask the lawyer BEFORE you visit him if there is an initial charge for your first visit and remember, attorneys can’t make a living by just giving away their time.

Saving Legal Costs

Remember that you can save a good deal of money by being prepared when you talk to or see your attorney about any matter. Have all of your documents ready and try to stick to the facts of your case (what happened or is happening) and don’t go on about how it has made you feel, etc. Giving your Lawyer a bunch of emotional embellishment may make you feel better but it won’t have any affect or your legal matter or case but will end up costing you more money unless of course, you are actually suing for some type of emotional distress.

Another way to save costs for an attorney is to always ask the other side to have their attorney draft an agreement or whatever is needed and just have your attorney review it. You can also find copies of other agreements and make them specific for your needs and then have your attorney review it to make sure that you haven’t done something that could get you into trouble. However, I don’t advise trying to draft some extremely important document or agreement that may have serious consequences without the assistance of an experienced attorney.

Attorney Referrals

If you don’t know anyone that can refer you to an entertainment attorney or you can’t find one in your area, you can go to a library, a local law office, or a local courthouse and find the books called Martindale & Hubble. This company has attorneys pay to be listed in their books and on-line for this very purpose. The listings include where the attorney’s went to school, what type of practice they specialize in, their qualifications or certifications as well as other information. Also larger cities usually have Bar Associations that have referral services that can refer you to an attorney that practices in the area that you need. And the best way to find an attorney is to rely upon your friends or associates that may have had the need for a lawyer in the past.

Getting along with your attorney

You have to remember that your attorney, in order to make a living, must be able to service many different clients with many different types of problems. This usually means that your attorney is very, very busy and you can bet that the better your attorney is, then the busier he is going to be. The attorney may have hundreds of files open (pending issues or cases) at any given time and he is trying to attend to them all as quickly, efficiently and professionally as possible. Closing files is his absolute goal so that he can move on to other matters. But sometimes there aren’t enough hours in the day for him to get all of his work done. Furthermore, there may be other pressing matters that have to be filed with the court or that were first in line before you work can be done. Many attorneys work extremely long hours and they are often having to work weekends just so that they can catch up with their workload. In fact, I, and many of my attorney friends, preferred to work on Sundays as it was one of the few times that we could truly focus in on important tasks without being interrupted by clients stopping by or the constant influx of phone calls that are constantly taking up our time. So be prepared to be patient as the wheels of justice move slowly and each task takes a good deal of time if the attorney is going to be thorough.

When you first meet with your attorney, sit down and discuss how long it will take to handle your particular issue or case. Make sure that you tell your attorney what your expectations are and ask how he plans to meet those expectations, if they are not unreasonable and he can. If you have covered as much as you can and have reached an understanding about both of your roles, then you will be much less likely to have a misunderstanding. You want to make sure that your attorney communicates with you but he shouldn’t have to call you every day. Also, don’t call and bug him about your case unless it is warranted. Ask your attorney to send you courtesy copies of all of his correspondence in regards to your legal issue or case, as well as copies of everything in your file, if you don’t already have copies. If you keep a file that basically mirrors your attorney’s file and you keep it very well organized, then you will pretty much be able to tell what is going on with your case or issue at any given time and you will be less likely to have a problem with your attorney.

Finally, remember that attorneys are people too. They have feelings and are usually trying to do the best they can. Being courteous and polite, as well as patient, will go a long way toward making your experience in dealing with your attorney much more amicable and will insure that you get the best representation that you can.

In conclusion, you may never know when you might need an attorney until it’s too late. So don’t put yourself in a position to be taken advantage of just so that you can save yourself a little money. It’s better to be safe than to be sorry. Remember, if you don’t understand anything that you are getting into, then at least consult an attorney as they can save you a good deal future trouble and more importantly money in the end.

Chapter Two

Choosing a Business Structure

It’s not as simple as you might think…

No matter what you plan to do in the music business you are going to have to give some serious thought as to what type of business structure that you are going to operate under unless you plan to work for someone else or for another company that has already set up their business structure. But being self-employed is one of the big attractions of being in the music business and to that end, choosing a business structure can play such a huge role in how successful you may be as well as how problems that often arise can and will affect your business or even your personal life. There are lots of advantages and disadvantages, so give this plenty of thought and be very careful before you make your next move. Not taking the right steps could very well end up causing you to lose everything you own even though you seemingly haven’t done anything wrong.

There are only a few different types of business structures to choose from: sole proprietorships; partnerships (general, limited partnership and joint venture); corporations; Limited Liability Companies (L.L.C.) and Limited Liability Partnerships. There is also the Professional Corporation or Professional Limited Liability Company as well as the nonprofit or not-for-profit companies. Each type of business structure has its own advantages and disadvantages and this brief description is NOT intended to explain every single advantage or disadvantage, as there are so many different scenarios that could have an effect on your choice. However, you should be able to get enough information here to help you to decide what type of business structure