Thursday, February 26, 2015

HOLAwave: An Actor Inquires – Getting A Manager, An Agent, And/Or An Attorney... Do I Need All Three?

[HOLAwave represents a series of guest blogs by industry insiders giving informative and educational tidbits for the Latino performer. They can range from acting and auditioning advice, tech tips, legal advice, marketing, producing tips, and so on. Get caught up in the wave– the HOLAwave.]


An Actor Inquires is a section devoted to actors and the questions they have about the business and legal aspects of the film and theatre industry. In a nod to Stanislavski and his book, An Actor Prepares, these blog posts are meant to prepare you about the other equally important areas of the acting profession. A talented actor who knows his or her craft AND the business is a force to be reckoned with. If you have questions for future postings, please e-mail them here.

What can an agent, a manager and an attorney do for me? And do I need all three?

In legalese, an agent is someone authorized to act on behalf of someone else (the “principal”). In theatre, television and film, an agent’s main job is to procure employment for his or her clients as a representative who negotiates deals on their behalf in hopes of finding them work. Many states regulate the activities of agencies, either as part of their state’s employment agencies regulations, in general, or under rules specific to the entertainment industry. The regulations typically require the agent to register and obtain a license and post a surety bond. These laws also restrict the fees that the agent can charge to his or her client. In New York, Article 11 of the General Business Law contains special rules applicable to a “theatrical employment agency.” In California, Section 1700.4 of the Labor Code (aka The California Talent Agency Act) defines what a “talent agent” is. 

Agents are mainly active in negotiating their clients’ talent agreements for theatrical, online, network, syndicated, commercial, pay cable, local television, studio, independent studio and alternative media productions. Agents tend to specialize in specific types of productions or markets so a performer who appears in Broadway theatre may have one agent for that work and another agent (often but not always at the same agency) for voiceover work. The largest agencies have offices in New York and Los Angeles with satellite offices in Chicago, London, Miami, Nashville, etc. The United Talent Agency (UTA), Gersh Agency, William Morris Endeavor (WME), ICM Partners and Creative Artists Agency (CAA) are among the most powerful and they represent talent in all areas from performers to athletes, directors, writers, producers, scenic designers and other creative personnel. Some performers prefer smaller agencies since they can get a more individualized approach (especially if the client is lesser-known). Due to their size, smaller agencies offer more comprehensive services and tend to cover all types of productions and markets for their clients. Overall, an agent can work for a client on a short-term basis or on a per-project basis; contracts generally run one to three years. Typically, the agent receives the client’s paychecks, deducts a commission of 10-20% of all income, including fees, royalties and profit participation (note that the state’s labor commissioner may approve up to 20% but Guild franchise agreements usually limit the commission to 10%) and then pays the client the balance. Agencies representing guild members must be franchised by the specific talent guild and must obey the guild’s agency rules. Established agencies are members of the Association of Talent Agents (ATA) and the ATA negotiates the agency regulation agreements with guilds like SAG-AFTRA, the AEA, the WGA and the DGA.

If the client finds work on their own, the agent is still entitled to a commission, under the terms of most agency agreements. Sometimes you’ll hear the term “packaging the project”– this is when an agency works closely with a producer, actively helping them to sell the project to a distributor and supplying many of its own clients to the cast and staff. For this work, the agency receives 5% or more of the project’s revenues. Fortunately, the agency usually does not deduct commissions from the client’s individual income when they package a project. Finally, an agency frequently negotiates the basic terms and conditions of every agreement and then the agency’s attorney or the talent’s individual attorney handle the details and draft a written agreement.

Unlike an agent, a manager is not required to be licensed or bonded by the state of New York or California. He or she also don’t have to be franchised by the guilds. In essence anyone can be a manager, which is why many celebrities hire their best friend or close relative to be their manager. As a result, there is no real limit to what commission a manager may ask for as long as the client is willing to pay. Traditionally, the manager’s role was to provide day-to-day and long-term career advice while being the middle person with the client’s other representatives. But the lines blur between what an agent does and what a manager does. Legally, a manager is not permitted to deal with the solicitation and procurement of their clients’ employment unless they become a licensed “talent agent”. However, managers have been known to blur this line repeatedly.

There are two types of managers: the business manager and the personal manager. The business manager helps the client oversee the day-to-day financial aspects of their business life. A business manager typically receive all incoming checks, keep the checkbook, make sure that the taxes are paid correctly and on time, deal with banks, negotiate and purchase property, pay the bills, keep track of receipts for tax preparation and work with the accountant to prepare taxes. As compensation, a business manager may charge a flat monthly fee or a commission of 5% of the client’s income.

The personal manager is the person one usually associates with a talent manager. The personal manager is the one who is directly responsible for helping the talent on their career path. Note how little distinction there is between the manager and the agent; the personal manager is supposed to build a CAREER and an agent is supposed to get JOBS. The law recognizes that there are overlaps with what an agent does and what a manager does. However, in personal-management contracts, there are usually clauses that insist that a manager is not qualified to act as an agent and that she or he will not help the client find work. Instead, the personal manager offers advice and guidance. So why get a manager if you already have an agent? In the real world, a good personal manager sells access to powerful movers and shakers and provides personal attention that is valuable to the talent’s growth. Also, where an agent is likely to represent 50 clients or so, a personal manager handles only 5 or 10, maybe even just one. A personal manager is intimately involved in the client’s life, helping the client make career decisions– from how he or she looks to the company he or she keeps to the roles they should accept or reject. All the while, introducing the client to people who can make a difference. As compensation, the personal manager’s fee ranges from 15% to 25% of ALL of the client’s entertainment income. But there is no limit and some shady managers have been known to take up to 50% of a client’s income.

The four main jobs of the attorney are to help a client obtain representation, negotiate and document the deals, protect the client with respect to legal aspects of a deal and to “solve problems”. Instead of a fee percentage, attorneys are usually paid for their hours. However, they can also be paid a flat rate, profit points and a combination of ways. Some clients are good dealmakers in their own right and only need to consult the attorney to plan the terms. These types of clients remain in contact with the attorney in case problems crop up during negotiation. Some clients are very hands-off and may also ask the lawyer to be the dealmaker instead, freeing up the client to attend to other matters, while the lawyer does the work. Usually, a lawyer may draft an agreement from notes on a napkin between the client and another party or the lawyer may draft an entire agreement from information gathered over time. A lawyer may also be asked to simply review a contract drafted by the other party.

Many times a lawyer may refer talent to a top agent or manager for representation if they feel the talent has promise but they try not to do this often to avoid conflicts of interest. Lawyers are also available to advise talent on business ventures they are curious about or if they have legal problems within or without the entertainment industry. Industry problems that an attorney solves include breached contracts, rights clearances and finance issues (for example, an agreed-upon payment not making it according to schedule). Other issues that a performer may need a lawyer to address are issues related to employment practices, copyright, criminal matters, possible instances of libel or slander and personal injuries. Lawyers are also hired by clients to be like an “attack dog,” writing cease-and-desist letters or making the veiled threat at a meeting. While agents and managers can also be aggressive, it doesn’t carry the same heft as it does from a lawyer because they are in the best position to initiate litigation. In each of these situations, the talent can control the amount of work done by the lawyer by limiting the scope of representation or the hours. Hourly fees may range from $200/hour to $400/hour. They may also bill on a fixed-fee or flat fee basis ranging from $5,000 to $25,000.

Do I need all three?
While all talent at various points in their career will need and hire an agent, a manager and an attorney, it’s not always necessary (or affordable) to have all three at the same time. That team of three is usually the province of the top 10% of moneyed talent. And since all talent aspires to make it to the top, having a good team is a surefire way to get there and stay there.  

Practically speaking, most talent tends to have either an agent or a manager and only hire an attorney when they have a specific legal matter to attend to. Sometimes they have one playing the roles of the others (for as much as they can legally overlap); some agents and managers have legal training, certifications and experiences while some attorneys can, like an agent or a manager, help talent with representation, business and career advice and setting up meetings with key executives. Talent will do well to think of a long-term plan on how to put together his or her team of attorney, agent and manager. 

In the immediate future, to truly know whether one needs all three at THIS point in their career, the talent needs to know what one is really looking for and what the talent has to offer. Truth be told, as much as the talent wants an agent and a manager, if one is not at a point in his or her career where he or she can afford the commission, it’s unlikely he or she will have an agent or a manager. And while an attorney can help talent find representation, the attorney will also want to vet the talent to make sure they can deliver (and can pay for the attorney’s time as well).

For most talent, the first step to building their team is to get one of the three in their corner. It’s not always clear who should be the first to get since there are pros and cons to each. For example, a manager is probably easier to get than an agent or an attorney since the manager does not have to be licensed and the manager can be a good friend or relative the talent trusts. But the manager might not have the credibility, skills, experience or connections that an agent or an attorney have. Also a manager’s fees might end up being more costly than an agent’s or an attorney’s in the long run. On the other hand, getting an agent from a well-respected agency is a good sign that your career has legs and a good agent can open doors for you in a way that an attorney or a manager can’t or won’t. Their commission is capped off and only payable if the talent makes money so they have a strong incentive to help you get work. However, they are extremely busy and might be catering to the career of the hotshot in their stable (who might not be you) and you would be left on your own to procure work. And to add insult to injury, under most agency contracts, you would likely still have to pay them even if they didn’t help you find work. Finally, an agent and a manager might be compromised by their self-interest to get paid and so push the talent to take whatever job pays even if it’s not best for their long-term career. Unlike agents and managers, an attorney provides services and advice in a mostly neutral manner (provided that their firm doesn’t also represent a studio or production company negotiating with the talent) and has a fiduciary duty to look out for the client and advocate for them to the utmost. Also, their specialized knowledge of the industry, its dealmakers and their contracts along with their mastery of the relevant legal issues could be extremely helpful beyond what an agent and a manager offer.

Danny Jiminian is an attorney who specializes in Entertainment Law, Intellectual Property, Business Law and Nonprofits and practices out of New York. For a free consultation, reach him at his website.

Matter included here or in linked websites may not be current. It is advisable to consult with a competent professional before relying on any written commentary. No attorney client relationship is established by the viewing, use, or communication in any manner through this web site. Nothing on this blog or blog posting is official legal advice; it's just information and opinion. If you want to, you can visit my professional website and hire me by clicking here.

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