Monday, April 25, 2011

On Agency Agreements

Twitter-Q: What sorts of clauses should we watch for in the agent contract? Do authors ever have an attorney review before they sign?
I've been asked a variation of this question several times in recent days. I can trace the current anxiety surrounding this issue to a specific blog post from last week, this one from agent Kristen Nelson. I could have sworn that I'd written about this topic before, but I couldn't find in the blarchives, so here's my take:

I prefer to call the document in question an "Agency Agreement" rather than "contract" -- it is a contract, of course, but in my experience it is a much gentler, more genial, and much less confusing document than a publisher contract, and "agreement" more accurately fits the tone of the thing. Plus then it doesn't get confused with all the actual publishing contracts we will be negotiating on your behalf down the line. :-)

The agency agreements I've seen have been quite short and easy to understand. There should be nothing "gotcha" or secret about the terms set forth in the agreement. You should not need a team of lawyers or experts to parse the language, in fact, since the terms of the agreement are often so simple ("this is our commission" for example), they are often non-negotiable, so a lawyer would be a waste of your money. (That said, of course you may spend your money however you like... I'd just look at it before you start getting lawyered up.)

The agent you are signing with should make time to walk you through the agreement. If you feel totally freaked out by the complexity of the agreement, and are too scared to ask questions, or don't understand the answers... you might be signing with the wrong agent.

Here's are the big points an agency agreement should contain, and things to watch out for. NOTE: Some agencies have no agreements at all, it is all verbal/handshake. Some agencies will have more or less items, or have these worded in different ways, or in a different order, but these are in general items that should be covered either in your written agreement or in your conversation pre-"handshake" deal:

1. Scope of Representation: What is the agent repping? (books? short stories? magazine work? subrights? everything?) Is this a one year contract, or open-ended? I know that some agencies do a year at a time, and the contract renews (or doesn't) each year. Some do a book at a time, and the contract renews (or doesn't) when there is a new book. It is my experience, however, that many or most agents are "at-will" - in other words, we are your agent until such time as either party decides to part ways. Make sure you know what the agent is going to rep for you, and if this is a contract that has a specific term, or if it is open-ended.

2. Commission: How much the agent gets paid, and for what, and how the money will be distributed. Notes:

* Agents typically get 15% on regular book sales, and 20 or 25% on subrights that involve one or more co-agents (ie, Hollywood or foreign). I've heard of slight variations on this, but wildly different commission rates would set off major alarm bells for me.

* Money typically goes from the publisher to the agency, they take their commission out and forward your part to you. It is my understanding that legally, this has to happen within 2 weeks of the agency receiving the check. There may be exceptions to this arrangement, in which the publisher sends your portion of the monies directly -- for example, if you live in a foreign country, this might alleviate some of the bank fees. Doesn't really matter either way, but you need to know how you're going to get paid, and I would want this in the agreement.

* Expenses: If you request unusual services such as courier, overnight delivery, etc, you may have to pay for such expenses (I have never once had to charge expenses in this fashion, because my clients don't request unusual services. Regular postage, office supplies, etc, I pay for). In addition, you may have to pay for shipping of your own book overseas for foreign sales. This is normal. Any such charges should be well-explained to you, and documented/invoiced. NOT NORMAL: Requiring you to go out of pocket for special 3rd party editors or "consulting services" or similar. Major. Red. Flag.

* Agents typically get their commission for any book that they sell, for the lifetime of that publishing contract. When the book goes out of print and rights revert to you, 20 years from now or whatever, you've gotten a new agent and she sells the book to a publisher who re-prints it, the first agent should not get any % from that sale. Likewise, the new agent will not get any % from the first agent's sale. I have clients who sold their first book with another agent, or by themselves - I get no % from that. But if I sell that book to France, that is a new contract, and I get the %. Make sense?  However THIS is where the "in perpetuity" problem that K.N. talked about in her blog post comes in. Do make sure that the agency is only receiving commission for what they actually sell, not on the book in any permutation in perpetuity. UNLIKE K.N., I have never actually seen this wording in an agency agreement, but I have no doubt that it sometimes exists.

3. Termination:  This will set forth how either party can "break up". It will probably say something like, you must notify the other party in writing (or possibly by registered mail). Some agencies, you are able to move on effective immediately,  BUT any and all work subbed by the first agent will continue to be repped by that agent. So, you can get a new agent tomorrow - but if we get an offer because of work that I did and a submission that I made, I will negotiate that contract and your new agent will have nothing to do with it.

At other agencies, there may be 30, 60 or even 90 days built in here where the agent can tie up loose ends, withdraw books that are on submission, and during which you would be obliged not to get new representation. This is just an additional guarantee that the agent will be protected should you decide to go rogue after they've made a sale for you. Make sure you understand what is involved if you decide you need to part ways with your agent. You don't want to cause bad blood, or worse, get in a situation where two agents feel they have claim over your work. If the agent is asking for longer than 30 days "leeway", I'd ask to shorten it.

Annnnnd... that's pretty much it. Pretty straightforward stuff. Again, some agencies might have NO formal agreement, or more clauses in their formal agreements, but none of it should baffle you, and if it does, that is what asking questions is for. There are a lot bigger and scarier contracts in your publishing future, so you need to know that your agent will be able to translate for you if necessary. Sometimes an agent might use shorthand or throw around jargon that you don't know. And yeah, Google will help, but when it comes to something as important as your career, as my lawyer parents taught me: