Hollywood’s ethical mistake

Guest Column

An ethical malaise hangs over the entertainment business, and it’s posing a major challenge for those of us in the service business.

More than ever these days, the news contains allegations of abuses and criminal behavior by industry professionals. To name just a few, there’s the Los Angeles City Attorney’s lawsuit against PR firm Fleischman Hillard over fraudulent billing; the indictment of Franchise Pictures for fraudulent production budgets; and the indictment of Entertainment Industry Development Corporation head Cody Cluff for embezzling public funds.

What are the causes of these lapses in ethics?

One of them is surely the increased need and appetite for money in Hollywood. Another is the lack of loyalty and increased job insecurity: As studios and agencies continue to consolidate, the concept of being in the same job for life is not longer realistic.

Studios are owned by mega-companies, which are forced to pay less attention to individual productions and more to the bottom line of an entertainment division which may not even be its principal source of revenue.

Years of bad publicity for studio accounting practices have also caused stars to concentrate on demands for huge upfront salaries, which leaves less room for lesser people’s salaries and employment.

There are fewer and more expensive movies, and runaway production has resulted in fewer employment opportunities.

Historically, the scramble for money in Hollywood still left room for civilized relations between attorneys, agencies and the studios. You were dealing with the same individuals week after week, month after month, possibly year after year, and thus your greatest strength was mutual respect. If you lost credibility, your negotiating posture was substantially weakened.

Today, it’s increasingly rare to have relationships that last for years; thus there’s a greater temptation to “hit and run.”

Years ago, George Chasin, the head of the movie department of MCA Artists Ltd., which represented Charlton Heston, gave producers the option of accepting only one of two deals, more front money and less backend, or less front money and more backend. These deals never varied. Thus, the client was not subject to the variability of the last movie being successful or unsuccessful. Those days are gone.

Can you imagine an agent or a lawyer who is contacted by a new client who is dissatisfied by his prior representation, alerting the prior representation, in order to give the rep a chance to preserve the relationship? That used to happen. Those days are also gone.

Clients are actually so insecure that some agents ask for money under the table payable directly to them in addition to the 10% that was paid to the agency, so that the client will be assured of personal special representation.

I’ve heard of lawyers who, in return for the promise of topflight services will pocket monies for themselves under the table in addition to what was being paid to the firm.

Is there not a temptation for law firms to exaggerate work hours for billing purposes to achieve a revenue stream to pay everyone their expected participation, and keep the doors open?

These tempestuous waters are a breeding ground for sharks. Those of us who are in the service business have to learn how to swim deftly among sharks.

We have to represent the client’s best interest, but we also have to balance this with a professional and humane duty to remain honorable.

To pursue that course is not just self-serving because, after all, our most valuable asset is our reputation. If we lose that we lose the ability to represent our clients effectively.

There are always clients who, out of insecurity or anger, ask their representatives to kill and maim. Our challenge is to convince those clients that there is a correct alternative.

Weissman is a partner in the law firm of Weissman, Wolff, Bergman, Coleman, Grodin & Evall.

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