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And Now A Few Words From Sarah Hoyt’s Lawyer

* Cross posted from According to Hoyt — This gentleman is the person who got me my rights to my backlist (all but Baen and two of the mysteries) back. I’ll warn you he told me upfront he wasn’t “right” because he didn’t practice in NYC … but I had a feeling, and I liked his mind, which happens to be twisty, and I insisted. He still says it wasn’t him, it was the good bond paper. But I was there, I saw it. It was him.*

Greetings all, thanks to Sarah’s generosity, I have the opportunity to write a short post here on her blog about … well, I guess I better figure out what the post is about before the end of it.
I’m Robin Roberts and I’ve been practicing law for about 17 years now, first in California and then here in Colorado. My wife and I have a law practice in Denver. Intellectual property law was my original interest in getting into the legal field from my software development career.
Sarah has written often in this space about how the publishing business has been in so much turbulent change in recent years. We noted just a couple of weeks ago Kristine Rusch and Dean Smith’s short-lived Ella Distributing venture – for getting Indie published works into bookstores – which looked like a great idea just months ago but was subsumed by changes in the existing distribution systems. The reality is that the legal field has been undergoing similar chaotic changes in recent decades. I’d like to write about the kind of legal services that I think writers need and how to get those services at a reasonable price. First I want to talk about the areas of law that affect writers – especially indie published writers – and then I want to talk about the need for legal services to navigate those areas.
I have done a bunch of local seminars at various venues where I speak on Copyright Basics for Writers. About an hour and half where I cram in the basics of copyright law – the scope of copyright, the term of copyright (I want to do a short post on why you see authors lodging the copyright of their works in corporations e.g. Tom Clancy, Kevin J. Anderson), work for hire, fair use doctrine and infringement. But for this post, I just want to talk about licensing, which is what a traditionally published author does with his/her work and an indie author basically doesn’t.
Once a work exists in a tangible form, i.e., you’ve pounded out your work on that keyboard and have it saved to that hard drive or USB stick – manuscripts are just so 19th Century – you of course have a choice in how to proceed to publication. If you try indie publishing, the main hurdle in form of legal gobbledygook for you is the terms and conditions of the publishing channels you use – Smashwords, Kindle Direct Publishing and Nook Press. Recent changes in Nook Press got some coverage as Holly Lisle and others dissected the terms of Nook Press’ agreement. That resulted in some changes to those terms, but the reality is that most of the core issues there come from the clauses in those agreements on pricing. That’s really where the important issues arise in those channels – how you are allowed to price your work among the competing channels, the resulting royalties and the amount of control on pricing you surrender. Holly Lisle, on her blog, recently reacted negatively to some changes Nook Press tried to adopt but in reality the indie author still retains far more control of their work in those channels than the traditionally published author on pricing and royalties.
The traditional publishing route presents a far more complex legal hurdle – that of the publishing contract. But first, I want to make a short digression about agents.
Recently, I had a conversation with an aspiring author who was being courted by some name agencies, and I tried to explain to that author why the agency model has been breaking down in traditional publishing but in truth Dean Wesley Smith does a better job of explaining that here. The bottom line is that the agency model is not doing a good job of representing the author’s interests while fighting hard to protect the agencies’ interests. And one of those areas of conflict shows up with the publishing contract. Since your agent is representing many authors to each publishing house, their own interest is dominated by their relationship to that publishing house – not to an individual author. So that conflict of interest can result in an agent not looking out for the author’s interests in the terms of a contract. As another aside, many states’ ethical rules for lawyers won’t permit lawyers to have a percentage stake in a contract that they are representing a client regarding. Think about your opinion of lawyers’ ethics and consider what it means that often attorney’s ethical rules are too strict to allow them to do what “agents” do …
So that is where I recommend that a writer with a publishing contract in hand get that contract reviewed by a good attorney with an intellectual property law background. (Perhaps later Sarah will let me write my rant about the difference between “intellectual property law” and “entertainment law” – but for now, be wary of “entertainment law” practitioners). You want an attorney with some experience in Copyright law issues over and above an understanding of contract law principles because Copyright law includes some provisions that supersede common contract law principles. You want an attorney who is going to make sure you understand the contract you are considering – even if you don’t want to be “bothered” – so that you can make a rational business decision.
There are several important areas for an author to scrutinize on a traditional publishing contract. First, the issue of what exactly you are licensing to the publisher. This sounds obvious but it is a very complex question in modern publishing contracts. The industry has a lot of terms, which it pretends are all “standard” terms, but are not always so, to describe the various ways that the copyright of a work is sliced up. Copyright law provides several “exclusive rights” in a work and the first is the eponymous “Exclusive right to make copies”. And the publishing business divides that up into a score of variations upon “hardcover”, “trade paperback”, and “mass market paperback” and divides up the geography by country. So one can license the mass market paperback rights to a work for the United States, Canada, United Kingdom, Australia and New Zealand countries while the author retains the rights to all the rest. Many variations upon this exist and nothing is truly “standard”.
Also important, when reviewing a contract’s licensing clauses, is understanding what kind of derivative works rights you are transferring. In Copyright law, “derivative work” refers to things that are straight forward transformations of your work like translation to another language. But “derivative works” also refer to transformations to another media like audiobooks, video games, stage plays and screen plays. These rights are sometimes left to the author and sometimes they are transferred to the publisher who then owes the author some share of what the publisher receives. All is negotiable regardless of what an agent or a publisher tells you. Most of the time if an editor says that the contract terms are not negotiable it is more likely that they don’t understand their own contract in the first place.
The second issue of a traditional publishing contract review is how royalties are calculated. Intertwined with this issue is that of how the advance is credited to the author for those royalties. The issue of how publishers account for royalties and advances for multiple books – often in contradiction to their own contract terms – is fodder of a blog post of its own. The music business taught publishers a lot of dirty practices and poring through a publisher’s statement for an author’s titles can be an exercise equivalent to working for the NSA decrypting Russian transmissions. And in fact, there is an undercurrent in the business that publishers have been dishonest in reporting sales for some time. But the author should still clearly understand how royalties are being calculated, what terms like “reserves” mean and the exceptions for when an author will be paid little or no royalty on discounted or clearance books.
Third, an author really needs to understand how and when that author will get the rights returned to him, e.g., how to terminate the contract. Because sadly, too few people think about what happens when the publisher loses interest in a work, and yet the author thinks that there is still market value for it. Termination clauses in publishing contracts are very obtuse, and it is where the objective eye of the attorney is most useful. Because authors have a common practice of reading a contract for what happens when all goes well, and good attorneys read a contract for what happens when things go bad. You should understand how and when you are going to get the rights to the work back when you want to put your work out before your fans, and you want to exploit any market for sequels you think that the publisher is ignoring.
When I’m done reviewing a contract for a client, I either talk to the client about the contract and my concerns or I write a report to them in memo form, whichever they want. What I don’t do is simply say “You can’t sign this” or “You can sign this”. That’s not advice, that’s making their decision for them. A publishing contract is a business decision and the author has to consider the advantages and disadvantages of the contract in detail and make a rational business decision of their own.
The costs of a attorney to review a contract for you can seem daunting. Certainly, sometimes people focus on the hourly rates of attorneys without considering context. An agent is going to take his or her percentage of every dollar that the author’s work ever generates but an attorney is going to bill you for the time actually spent and no more. Because of their overhead, attorneys in such metropolitan areas as New York charge very high rates but there is a lot of competition for legal services in this country these days. Hourly rates in Denver for instance for good attorneys outside the white shoe firms range from $175 to $225 an hour. A review of a publishing contract plus the time spent by the attorney to explain it to you should not exceed more than an hour and a half to two hours billed time. Some attorneys will happily quote a flat fee for services if you are concerned with an indeterminate cost.
The reality is that the legal business is in a similar state of chaotic change regarding how legal services are priced, you have a lot of choices. I currently believe that the large, high overhead, “Biglaw” law firms are a thing of the past and are seeing their pricing models crumble. The future is for smaller, lower overhead and more nimble firms and individual practitioners. I’m pretty sure that you can find such attorneys in your community is you look around.
There are membership based legal services like “Pre Paid Legal” which offer various bundles of services for a monthly fee including supposedly “free” contract reviews. I’ve had some experience with such services and while I’ve seen a few people get good value from them, in general they are not good deals. You have no control over which attorney actually reviews a contract for you, no control over their actual experience and competence or understanding of the industry-specific issues presented and so very uneven quality of legal services. Such plans also purport to offer “discounted” rates for legal services beyond those in the scope of the “free” services, but in reality the attorneys that are on the referral panels for such plans would often discount their services to the same degree for any client that they valued.
Robin D. Roberts
http://www.robertsandroberts.net
email: robin@robertsandroberts.net

*If you guys want to ask questions come over to According to Hoyt. I’m posting this for those of you who don’t read there regularly, but this once won’t hurt you. Robin will be answering questions over there when he gets time.*

One Comment
  1. Samantha Hulatt aka SheBear #

    Thank you Ms. Sarah for inviting us to ask questions at According to Hoyt. But after reading Mr. Robert’s excellent advice, I must admit my head is spinning about with ramifications that I’m afraid I wouldn’t be able to ask a coherent one!

    June 9, 2013

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