Bad Agency Agreements vs Bad Agents

At a conference presentation recently, I was asked to weigh in on the question of things to look out for in agency contracts, particularly for authors who have never been agented before and don’t know what to expect. The question was raised by a member of the audience who shared some horror stories about things like agents stealing money from clients and lying to clients about work submitted to editors.

It can be extremely hard to vet agents before you sign with them. It’s always advisable to talk to their clients and, of course, have a publishing lawyer take a look before you sign on the dotted line.

However, there really are two aspects to the “bad agent” question: one is about whether there are red flags in the agency contract itself that could become problematic down the line; and, the other is about bad, often criminal, practices an agent might engage in regardless of what their contract says.

Because they can both raise legal issues, people often confuse the two. Worrisome clauses in agency contracts (like, say, an agent claiming copyright in your work) are a very different legal scenario from an agent engaging in criminal conduct like fraud or theft of a client’s money. Either way, a writer may be exposed to financial or professional risks, but, even a squeaky clean, by-the-book type contract won’t protect an author from an agent who engages in criminal conduct or who, say, hires a financial officer who steals money from clients—as was the case with the Donadio & Olson scandal a few years back.

The point I’m trying to make is that even vetting an agent, and their contract, thoroughly won’t necessarily protect you from criminal conduct down the line, but that’s the same with any contract you sign so it shouldn’t deter you from doing due diligence and hiring an agent with a good reputation. And criminal conduct is the rare exception rather than the rule in the literary agent space.

The more common complaints about agents are that they take too long to read things or send work out on submission; that they are not sufficiently transparent in their communications with clients; or that their contracts are too aggressive about what you can do with a project they have worked on with you after you leave the agency.

Those are examples of issues that are generally covered in the contract itself as augmented by the general law of agency. Agents generally are required to communicate effectively and timely, and be sufficiently transparent about their work for you. They generally are not permitted to put their financial interests in conflict with your own, but if they are working on commission (they usually are), they don’t make any money unless you do—and then they take a percentage—so that’s usually not a major legal issue with literary agents.

On termination of the agency agreement, most agents’ contracts (and general trade usage which is often incorporated into contracts) is that the agent retains its ongoing commission for all the deals they have brokered. Some agency agreements also say that if you sell a piece they worked on, or submitted, within [x] months of terminating the relationship, they still get their  percentage on those deals. Those clauses should be read carefully and understood before signing with an agent. There’s nothing inherently wrong with them, but a clause that says the agency takes their percentage WHENEVER you sell the piece and isn’t time limited to say, sales within 6-12 months of terminating the agency agreement, may be problematic for a writer.

Likewise, a contract where the agent claims copyright ownership in your work is generally a red flag. The agent should ideally only have a right to their commission on deals made, not to any form of ownership in your work.

For a quick guide on what typically appears in an agency agreement, I’ve written about that before here. But it’s important to bear in mind that if an agent acts illegally, that’s not generally something a contract would prevent. So if you’re concerned about fraud and theft, those issues won’t appear in the contract because they’re illegal whatever your contract says!

As usual, nothing in this column is intended as formal legal or business advice and anyone who is considering a new agent contract should consult an attorney and make whatever inquiries possible to vet the agent (e.g. chatting to the agent’s other clients etc.)

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