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WHAT ENTERTAINMENT LAWYERS CHARGE – How much should fees be for music attorney services?

 

By Joey Scavuzzo

 

If you’re in the market for an entertainment attorney in the music business… Congratulations! You’re on the rise, finally getting paid for your craft and need someone in your corner looking out for your best interests. Few make it this far, but mo’ money, mo’ problems, right?

 

Anyone can find an attorney today. Google exists. But the bigger questions loom: what are the payment options, what should you expect to pay and is it reasonable? The barriers to this knowledge are high so let’s tear them down and empower you with all the information you need.

 

What are music attorney fee payment options?

 

According to California Legal Forms – Transaction Guide, Matthew Bender, a leading publisher of legal analysis and research information, explains that entertainment attorney fees are typically paid in one of four ways:

 

  1. A retainer
  2. An hourly rate
  3. A combination of an hourly rate and a percentage of your gross compensation
  4. Contingency fees based on gross income.

 

What should you expect to pay for a music attorney?

 

When it comes to an hourly rate, Donald S. Passman, author of All You Need to Know About the Music Business, Eighth Edition, states, “Most lawyers in the music business don’t charge on just an hourly basis. For the ones that do, the rates are from $150 per hour for new lawyers, up to $600 or more for biggies[1].”

 

Since many entertainment clients can’t afford to retain an attorney on an hourly basis, they and their attorney instead often agree to a contingency fee arrangement.

 

Kenneth Abdo, a partner at the firm Fox Rothschild LLP along with Jack Saul, a professor of law at University of Akron, note in their article Entertainment Law Ethics, “A customary contingent fee ranges from 5% to 10% of the defined gross compensation of the client and rarely exceeds 10%. The exact percentage depends, in part, on the client’s record for commercial or critical success and the likelihood that the lawyer’s efforts will be successful. For example, it is reasonable with a superstar to take a lower percentage of the gross compensation and with a new or “baby act” to insist on 10%. Successfully shopping a new artist to a recording contract with a small, local, independent record company is a situation in which a lawyer might charge 10% of the artist’s gross compensation.[2]”

 

This is further supported by LAW AND BUSINESS OF THE ENTERTAINMENT INDUSTRIES, Fifth Edition, by Donald E. Biederman, et. al. (the prevailing text used in law schools), stating,  “A customary contingency fee ranges from 5% to 10% of the defined compensation earned by the client and rarely exceeds 10%[3].” But that doesn’t mean it can’t. There is no case law or precedent defining a specific ceiling. For example, it is common for contingency lawyers in personal injury cases to take 33.33% and employment lawyers to take 40% of the total amount recovered. [4]

 

And this leads us to our final section…

 

Is your attorney’s fee percentage reasonable?

 

According to the American Bar Association’s Model Rules of Professional Conduct (MRPC), the ethical code governing attorneys, Rule 1.5(a)(1)-(8) states the attorney can consider the following criteria in determining a reasonable fee: “the time and labor required, the novelty and difficulty of the questions involved, the skill requisite to perform the legal service properly, the fee customarily charged in the locality for similar legal services; the amount involved and the results obtained;, the experience, reputation, and the ability of the lawyer performing the services required; and whether the fee is fixed or contingent.[5]” In fact, some lawyers may require a retainer or deposit payment in addition to a percentage of the deal.[6]

 

What that says is that music attorneys have a lot of flexibility and protection when it comes to charging their fees. Simply put, an attorney with years of experience and a proven track record can, legally and ethically, charge higher rates.

So, when hiring a music attorney, you want a specialist, someone experienced with music contracts. They will understand the nuances of any deal. And you should want a professional who regularly deals with agents, managers, producers, and record companies. Like entertainment attorney Gordon Firemark says, “Their relationships with executives… can mean the difference between an average deal or a favorable one.[7]” But you should expect to pay a premium for this expertise.

 

 

[1] Donald Passman: All You Need to Know About the Music Business; https://books.google.com/books?id=smbiogvIt9AC&pg=PA50&dq=charge+on+just+an+hourly+basis&hl=en&ppis=_c&sa=X&ved=2ahUKEwi5p8G2_cfoAhUdJzQIHYCLCbYQ6AEwAXoECAIQAg#v=onepage&q=charge%20on%20just%20an%20hourly%20basis&f=false

[2] Kenneth Abdo & Jack Saul, “Entertainment Law Ethics” https://law.marquette.edu/assets/sports-law/Entertainment%20Law%20Ethics%20%28Abdo%20%26%20Sahl%29-C1.pdf

[3] Donald Biederman: Law and Business of the Entertainment Industries: Fifth Edition (2001) https://books.google.com/books?id=hKguqdfT3eMC&pg=PA18&dq=the+defined+compensation+earned+by+the+client&hl=en&ppis=_c&sa=X&ved=2ahUKEwjOrqH7_MfoAhV2GjQIHc3zBvwQ6AEwAHoECAYQAg#v=onepage&q=the%20defined%20compensation%20earned%20by%20the%20client&f=false

[4] Hutchinson and Stoy, “Everything You Need to Know About Contingency Fee and No Win, No Fee Lawyers https://www.warriorsforjustice.com/everything-need-know-contingency-fee-no-win-no-fee-lawyers/

[5] American Bar Association; Model Rules of Professional Conduct: Rule 1.5, https://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/rule_1_5_fees/

[6] Wallace Collins, “How do you know When you need an Entertainment Lawyer?” 2015. https://www.digitalmusicnews.com/2015/05/13/how-do-you-know-when-you-need-an-entertainment-lawyer/

[7] Gordon Firemark, “Assembling a Winning Team: The Entertainment Lawyer,” 2004. https://firemark.com/2004/05/24/assembling-a-winning-team-the-entertainment-lawyer/

This Is What Entertainment Lawyers Cost

Prospective artists who are signed (or soon to be signed) with a recording agreement, as well as producers and songwriters who produce and write songs for these artists, often ask “how much do entertainment lawyers cost?” Unfortunately, when they ask around, they usually get different answers. Why? It’s because there really is no universal, exact sum. It’s the same way with questions like “how much should a producer charge for a song?” or “how much should an artist being signed to a major label receive as an advance?” The amount depends on many factors.

Thankfully, understanding what entertainment lawyers cost is not as complicated as many people may think. There are four to five different types of fee structures. Let’s take a closer look at entertainment lawyers’ compensation structures — and how they earn their fees.

What Entertainment Lawyers Cost: Price Ranges and Structures

No two entertainment lawyers are alike. They have different backgrounds and levels of experience. What’s more, the scope of work they need to perform for the artist or producer varies considerably. Because of this, no two entertainment lawyers’ pricing structures are quite alike.

Helen Yu, an experienced Los Angeles entertainment attorney, puts it this way: “Different lawyers charge in different ways, often depending on the kind of matter involved.” For starters, she explains, many will charge percentage-based fees as a “base rate” or “an hourly rate” with a deposit retainer up front, or sometimes a combination of percentage and reduced hourly rate.

If the lawyer will take the risk of not getting paid on a straight percentage, these rates are assessed as a percentage of client earnings and are generally on par with other entertainment-support professionals, including agents and managers.

Entertainment attorneys’ base percentage rates range anywhere from 5 % to 15%, depending on the stature of the client; amount of annual earnings by the artist or producer; scope of the work being performed; and experience. Another key factor is the client’s annual income. For example, usually at $2 million dollars or more of earnings each year, the percentage rate can go down to the lowest tier, and vice versa. If a producer is making $15K or less for a producer advance, for example, that would normally range somewhere between 10% to 15% (but usually not higher than 15%). Generally, clients just getting into the business may pay above the 10% rate (which is the average percentage). Once the artist or producer starts earning $2 million or more per year, the percentage rates go down. For example, 5% on artists like Ariana Grande, Beyonce, and Imagine Dragons, who are the highest tier of their craft, would be a fair and reasonable percentage rate. Also, percentage rates tend to be commensurate with experience; some seasoned or highly specialized entertainment law professionals may command higher percentages than others.

Beyond the Base Percentage Rate

That’s only part of the pricing story, though. Depending on the complexity of the work, many entertainment attorneys charge a blended hourly rate (retainer reduced hourly rate plus a percentage).    

“In some cases, it’s possible to arrange a reduced hourly fee as an advance against a percentage,” says Gordon Firemark, who wrote a recent article on entertainment lawyer compensation.

Flat Fees for One-Off Transactions

Entertainment lawyers working on one-off transactions for new clients could also agree to charge flat fees rather than hourly or percentage rates. This may occur when the artist’s or producer’s earnings are not enough to cover the attorney’s percentage-based fee. For example, if a producer is being paid a $7,500 producer advance, an attorney charging a 10% percentage-based attorney fee will get $750. But the lawyer may spend 5 to 10 hours on the agreement (between short forms, long forms, confirming splits, etc). The average hourly rate for experienced attorneys in Los Angeles and New York is $550 per hour. Clearly the percentage-based fee of $750 wouldn’t come close to covering costs. So the entertainment attorney may agree to charge a flat fee for the deal calculated as a multiple of the lawyer’s hourly rate, based on his or her expectation of the time needed to complete the work.

Aspiring artists and producers who are not interested in building a team and continuing to work with their entertainment lawyer after the completion of a one-off transaction may find the flat-fee works for them. However, should related follow-up legal work be required in the future, that client can’t expect the same lawyer to work on it again because neither party had any expectation that the relationship would continue.

Experience Affects Entertainment Attorney Fees and Pricing

Attorney experience also affects pricing structures, although the extent of that is up for debate.

What we can say with certainty is that attorneys licensed in major entertainment markets — in particular, Los Angeles and New York — typically are the most skilled and experienced, as those markets are critical to the entertainment industry. When it comes to music, the total number of entertainment lawyers licensed in Nashville and Atlanta is smaller than the total number licensed in, say, California.

How to Find the Right Entertainment Lawyer at the Right Price

What should you ask immediately after “what do entertainment lawyers cost?” That’s easy: “how do I find the right entertainment lawyer at the right price?”

“The future success of a new artist or performer at times is closely tied to finding ‘the right entertainment lawyer,’” Helen Yu of Yu Leseberg recently noted. “Our firm only wants to work with those artists and producers who want to put themselves first and invest in themselves.” This means that savvy artists understand that having the right attorney as a member of their team helps them earn big bucks. Selecting inexperienced attorneys at bargain-basement pricing too often ends up harming the artist. The artist-attorney relationship is critical: If you find the right lawyer, stick with him or her, as you will probably never run across that opportunity again.   

Helen Yu has been critical to the success of Los Angeles natives, YG, DJ Mustard and Ty Dolla $ign, Black Eyed Peas and many others. She believes artists should evaluate high-quality legal professionals based on:

  • Years of experience, preferably in your creative niche
  • A deep and unquestioned knowledge of industry customs and norms
  • Relationships with executives and lawyers at record labels, publishing companies, film studios, etc.
  • Positive referrals — it’s always nice to work with entertainment lawyers whose reputation precedes them

As Helen Yu of Yu Leseberg says, “There is nothing more important in building a successful career than putting yourself first. Don’t cheap out on you. The bottom line is, you owe it to yourself to work with an attorney you have total confidence in, regardless of his or her pricing structure. Remember, lawyers charge what they’re worth, and your creative career is too important to entrust to any but the very best.”