Music Attorneys-Make Them Your Friends

Musicians across the country dream of becoming the next Pearl Jam, Itzhak Perlman or Puff Daddy. The way to achieve that kind of stardom in the music industry is by refining one's talents through practice, time and devotion to the craft. Artists lucky enough to possess the unique quality that will give them a shot being successful in the music industry inevitably realize that there is more to the business than just talent and that lawyers are indispensable to achieving their goals and protecting their creative rights.

Artists trying to break in to the music industry will quickly learn that record companies often will not listen to any of their material if it is not recommended by an agent, another artist or a lawyer. As a result lawyers have emerged as dealmakers to record and music publishing companies, bringing to their clients valued relationships and knowledge. Assuming that a recording contract is offered to an artist, an attorney becomes an irreplaceable asset in negotiating the deal points. An attorney properly doing his or her job should seek the most favorable terms possible for a client by trying to maximize the cash advance and the percentage of royalties (in industry parlance, "points," since the basis of those royalties varies depending on the business structure of the particular label and the territory in which sales are effected) that artist will receive and the amount of rights he or she will retain.

One of the most basic services attorneys may offer to a new artist or band is the registration of copyrights for the music and lyrics that their clients create. The most commonly used registration forms are the PA and SR forms, which are provided by the United States Copyright Office. The PA form is used for registering the copyright in newly created work consisting of either the actual music or any accompanying lyrics, or both. The SR form is used for registering sound recordings (as distinct from the underlying work-for example, the music or lyrics-itself). Almost all of the registration forms can be downloaded by going to the homepage of the Copyright Office.

Attorneys may also offer help in licensing an artist's musical work. Licensing is the process whereby permission is obtained for the use of a copyright owner's protected work. (Although the artist or band members are oftentimes the initial owners of the copyrights, a co-publishing deal will transfer ownership and vest in the music publisher the right to register those copyrights in their own name.) The chief source of income with respect to copyrights is the so-called mechanical license issued to record companies for the manufacture and distribution of records. In addition to income from record sales and touring, licensing of copyrights for film (especially with respect to soundtrack record sales) and television use has recently emerged as a tremendous source of revenue for artists who write their own material.

Some attorneys may also help their clients with the process of affiliating with performance societies such as the American Society of Composers, Authors, and Publishers ( ASCAP ), Broadcast Music, Inc. ( BMI ) or ( SESAC ). Affiliation with any one of these organizations will facilitate the proper monitoring of, and payment for, the public performance of an artist's creative work. Artists may also look to their attorneys for guidance throughout the process of joining unions, such as the American Federation of Television and Radio ( AFTRA ) for vocalists, the Screen Actors Guild ( SAG ) for musical artists who are also actors, the American Guild for Variety Artists ( AGVA ) for nightclub, cabaret, theater and other live entertainers and the American Federation of Musicians ( AF of M ) for instrumentalists. In most cases, joining a union assures that an artist receives no less than union scale in their early days of anonymity.

Besides registering and otherwise maximizing legal protection for the copyrights in music, attorneys may also help artists to obtain trademark protection for their professional names through the United States Patent and Trademark Office. The professional name becomes the one asset with which the public most associates a solo artist or band and is as valuable as the name of a company or a product identified closely with that company. Clearing the trademark in a professional name helps to ensure not only that an artist is not held liable for money damages for riding-inadvertently, or not-the coattails of goodwill or equity built up in a name by another performer or establishment, but also that no one else can legitimately claim an association with that name, thereby diluting its integrity and quality. Trademark protection is imperative considering the fact that an act's name may after that act has become popular have the potential to move millions of copies of an album.

The expertise of entertainment attorneys is also needed in the less obvious areas of taxation, partnership and corporate law. For example, attorneys may advise their clients about tax issues concerning domicile, touring and sponsorship. Specifically, the attorney's expertise may be invaluable in scenarios where an artist has been living abroad for some time and may need to minimize the taxes he or she may be required to pay either to the authorities in his or her country of citizenship or in the foreign jurisdiction in which they conduct business. Special attention must be paid to the formation of bands since they are legal entities no matter how informal the business relationship between the members may be. If a band splits up, dissolves or substitutes its members, legal issues inevitably arise with the regard to the ownership of assets such as the professional name and the music written and performed by band members. With foresight and an attorney's advice, an artist can choose to operate as a corporation or, in some cases, as a partnership. Band members would be well advised to address the issue of legal formation early on in their relationship, when they are in an optimistic and cooperative mood, not later on when success or failure may sour expectations and everyone may be less willing to act reasonably. Unpleasant emotional and legal battles can be avoided with just a little smart planning.

Hopefully, by now the reader realizes the important role an entertainment lawyer can play both early on and in the later years of an artist's or musician's career arc. Finding and hiring a good entertainment lawyer poses another set of considerations. In brief, other artists, personal managers, club owners and booking agents, or just about anyone else with substantial experience in the entertainment business, are reliable sources for referrals. Other good sources are professional directories, state bar associations and unions or other trade associations (such as the aforementioned ASCAP, BMI, SESAC, AFTRA/SAG and AF of M organizations). With respect to fees, many attorneys will seek an advance of a portion or all of their fees, commonly referred to as a retainer, for the work they expect to do for their clients. The determination of actual fees may be based on an hourly rate or contingent on a particular outcome. The contingent arrangement is most often found where the attorney is shopping a deal for his or her client. Hourly fees may range from $150 to $500 depending on the attorney's level of expertise and number of years of practice. Contingent compensation, in which the attorney is paid on the basis of a percentage of actual or expected earnings, may range from 5% to 15% depending on the type and scope of services being rendered. If an attorney is used strictly for legal matters on an ongoing basis, such as negotiating and drafting contracts, the contingent compensation may be closer to 5%. If an attorney also acts as a personal manager (which is often the role into which he or she is thrusted until the artist consummates a more formal agreement with a professional manager), the percentage may increase closer to 15%, or sometimes even as high as 25% depending on the nature of the relationship.

It should now be clear that an attorney's services can run the gamut. The attorney could simply provide ongoing general legal counsel or assist with copyright and trademark protection, as well as tax and partnership advice, and provide personal management services. A good entertainment lawyer is an essential member of the team of professionals that should be used by anyone who is seriously pursuing a career in the music industry.

This article was written by DeWayne A. Powell, Esq., with the assistance of Maria C. Miles. Mr. Powell is an attorney in private practice. For more information, please contact Mr. Powell at (212) 368-2327 or send e-mail to him at [email protected].