Attorney-client privilege

Music lawyers' clout growing ever more powerful

Unlike in the TV and film industries, attorneys in the music business frequently wield more power and have more influence.

Not because these barristers are necessarily better at their trade than their film counterparts, but because the role of agents in the music business is limited to booking tours. As a result, music attorneys often wear two hats: the agent’s and the lawyer’s.

In fact, many music attorneys get paid a percentage of a client’s deal or incomes, rather than an hourly rate, a trend that has grown significantly over the past 10 years as the stakes in the business have increased.

Such an arrangement also creates a de facto partnership between the lawyer and his client that can spur the two sides to work closely to grow a client’s career and concentrate on long-term issues.

Once only called upon by artists to negotiate recording pacts with record companies, music attorneys these days are orchestrating collaborations and creating new avenues in which their client’s skills can be utilized, such as online or in multimedia. Many attorneys consider themselves to be proactive with a client’s career rather than reactive, as in getting them out of an ugly recording pact or renegotiating an existing one.

“We try to be more career-oriented than deal-oriented,” says attorney Fred Goldring, who with partner Ken Hertz has worked to establish Hansen, Jacobsen, Teller & Hoberman as a significant force in the business. “We try to work with our clients to create opportunities rather than waiting for the phone to ring.”

Goldring and Hertz are among the handful of the town’s dealmakers whose clients have given them a long leash to seek out potential pacts and who are taking advantage of the larger role the ’90s music business attorney has been able to play in the industry.

This newfound influence comes from a shift from where the role of the artist manager was greater, particularly in the ’70s, and where such a rep might handle all aspects of a client’s career and rely on the lawyer only to close a recording deal that the manager set in motion.

While the manager still has an influential role and plays a significant part in the advancement of a client’s career, attorneys also are bringing companies and artists together, such as in corporate sponsorship pacts or helping recording artists establish film or TV production companies with major studios or networks.

“A good music business lawyer deals straighforwardly with his clients and has solid relationships that the lawyer uses to serve the best interests of the client,” says Jay Cooper, one of the town’s most respected attorneys. “While we (tap) those relationships to get the best deals, we also know what’s going on in the business and in town.”

But some record execs blame the more ubiquitous legal eagles for the escalating costs of talent — baby-band recording pacts are at an all-time high — by pitting the shrinking pool of labels against one another when vying for the next big thing that the attorneys represent.

Attorneys are quick to note, however, that deals can only be made with willing buyers and point out record execs often act like lemmings when chasing the hot act of the moment, which can cause deal terms to escalate.

And some execs whine that it’s not all recording deals and career development.

Some music business attorneys still are known for more frequently traversing that slippery slope known as conflict of interest, than for being defenders of their client’s best interests.

It is not unusual for one powerhouse attorney to represent a record label’s major artists, while also repping that label’s top execs or even handling litigation matters for it.

Attorney Don Passman, a veteran attorney and author of several how-to books about the music business, came under fire from industry insiders several years ago when he negotiated Janet Jackson’s $35 million recording contract with Virgin Records.

Passman, who heads the music practice of Gang, Tyre, Ramer & Brown, also counts Ken Berry, then-chief of EMI’s Virgin Music Group, as his client. Berry since has been elevated to CEO of EMI Recorded Music.

Few doubt the relationship with Berry resulted in Jackson getting a better deal than she could have obtained elsewhere (she was pursued by several labels), but the link raised some industry eyebrows nonetheless.

The firm of Grubman, Indursky, Schindler may be East Coast-based, but its influence is palpable 2,000 miles to the west. It is perhaps the most feared legal powerhouse in the industry, boasting most of the industry’s CEOs as clients as well as many top name artists.

For example, Grubman reps Sony Music chairman Thomas Mottola, as well as many of the artists signed to recording deals in the conglom.

Just as a handful of TV and film attorneys have reputations for repping many sides of a deal, the small community of the music business makes the propensity for conflicts perhaps even greater.

While waivers may be signed, or clients informed of the potential conflict, clients often choose to work with a lawyer who also reps the label’s prexy because they think it will result in a better deal. After all, if the lawyer knows the prexy, he also knows how much he’ll pay or the current state of the label’s finances.

“Artists who think they’ll get a better record deal because the lawyer also handles other matters for the label is mistaken,” Cooper says. “The business still operates on the law of supply-and-demand. A sought-after act placed with the right label will get the best (pact) possible.”

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