Agents in Conflict with Authors
There is a Facebook page entitled, Everywhere I look, I see Justin Bieber.
Everywhere Passive Guy looks these days, he sees literary agents putting themselves into an inescapable conflict of interest position with their author clients.
Publishers Lunch had an item today about a British literary agency:
Following the announcement of agent Ed Victor’s publishing venture Bedford Square Books, Curtis Brown UK managing director Jonathan Lloyd admits that his agency is well down the path of formulating their own strategy for republishing their clients’ out-of-print works. “We are right behind him, but with a rather larger list,” Lloyd tells The Bookseller.
Meanwhile, Victor told us that while he is “having a lot of fun, going back to my roots” as a publisher, “first and foremost I’m an agent…. My day job is being a literary agent and taking care of my clients.” At the same time, Victor believes that republication by his Bedford Square Books line will not only bring his clients royalties, but will also revitalize translation licenses and film and TV interest in those same works.
His 50/50 split with authors is based on his company actively promoting the works in his line . . .
. . . .
As for the potential clash with the UK’s agents association, the AAA, Victor reiterates that he didn’t know in advance his publishing plans would create a potential conflict with their rules. “I think they’re going to have to revise this,” he said, but “if I have a choice between Bedford Square Books and the AAA, I will choose Bedford Square.”
Commenting on agencies launching publishing arms, Bloomsbury executive Evan Schnittman suggests that “even if you’re dealing with reverted rights, the tricky part is that there can be a perception issue that there might be a conflict of interest. If an agent is now a publisher, can they effectively represent their author and say ‘this is the best route’ when it is their own solution?”
Link to the rest at Publishers Lunch (may be behind a paywall)
“There can be a perception issue that there might be a conflict of interest.”
This is not perception, this is reality. You can’t have a “day job . . . being a literary agent and taking care of my clients” and be their publisher. As a publisher, your interests are not the same as the author’s interests. When an agent purportedly acting on the author’s behalf signs a contract with the author making the agent the author’s publisher, IT IS A CONFLICT OF INTEREST. No doubt about it. It’s not even a gray area.
Since the rise of agents to positions of prominence over the last 40-50 years, the fundamental proposition was and is that the agent is on the author’s side. Little author can never adequately stand up to big publisher, but the agent knows how to do that and will battle for the author’s rights, protecting the author from being screwed.
In many fields, these kind of representations and the trust and reliance they are calculated to create lead to the rise of a fiduciary relationship. Attorneys have fiduciary obligations to act in the best interests of their clients. Doctors have fiduciary obligations to act in the best interests of their patients. Accountants have a fiduciary obligation to act in the best interest of their clients, etc., etc., etc. These are not rare or exotic rules nor are they limited to British and US legal traditions. You can find examples of agency relationships in the Bible.
As a foundational proposition of agency law, an agent (literary or otherwise) has a fundamental obligation to act in the best interests of his/her principal. Always. Everywhere.
As one of dozens of examples, here’s a link to a Virginia statute that sets forth the obligations of an agent acting for a person under a power of attorney – http://bit.ly/jFOg1R
I haven’t researched cases where literary agents are sued by authors, but the Bylaws of the Association of Author’s Representatives include the following as part of a description of a “qualified literary agent”: “An agent who shall conduct his or her business in such manner as to be in compliance with an agent’s legal and fiduciary duties to the agent’s clients. . .”
If a literary agent has a fiduciary duty to an author, that agent cannot act against the author’s interests in any way and must take careful steps to avoid any conflict between the author’s interests and the agent’s interests. If such a conflict arises, the agent must always inform the principal and, probably, withdraw from the agency relationship.
For illustration, if an attorney who has represented a client in business matters decides to enter into an agreement to become a business partner of that client, he/she will have to insist that the client obtain independent counsel to advise them on the partnership agreement. If the attorney doesn’t do this, in any jurisdiction with which I am familiar, it would take about ten minutes for a judge to nullify the contract if the client had any complaint about its terms.
The Fiction Desk raises a very simple question:
How can an author hope for unbiased, independent advice from an agent who stands to make a great deal more money from one publishing route than from another?
Link to the rest at The Fiction Desk
Kristine Kathryn Rusch has written another of her superb essays on the state of publishing that discusses agents becoming partners with their clients.
Excerpts:
So let’s discuss agents, because that too is important.
Once upon a time, I had an agent. Hell, I’ve had a lot of agents. And I needed them.
Every writer did.
In the days before the internet, before the ubiquity of e-mail, before instant messaging and Skype, agents had a purpose. Writers hired agents for their connections. Agents got books in the door with a reluctant publisher. Agents found partner agents overseas. Agents got into Hollywood studios.
. . . .
I am trying to save writers whose work I love. The only way to do that is to get them to realize that they have moved to a hostile and unforgiving world, one that is willing—no, eager—to take advantage of them.
The agents that they once trusted now answer to their agencies instead of to the writer. Those agencies are trying to steal a percentage of the writer’s copyrights.
Link to the rest at Kristine Kathryn Rusch
Wasn’t it Kris who pointed out that anyone who’s dared to go against these agents in the past has either given up because the agencies’ pockets are deeper, or has been paid off to keep their mouth shut? That’s the real world, right?
The main difference I can see is that there is a mushrooming situation here because of the plethora of backlist, and all the potential owners of those rights clamouring to get a piece of the action — whether on “agents’” terms or not. If enough were to go to so-called “agents,” and get screwed, the class action suit could be interesting. OTOH, if people are suddenly making money who had no expectation of ever seeing a dime from these works, ever again, that’s a bit of a disincentive where filing a lawsuit is concerned.
LP – I’ll blog about how to be an obnoxious litigant tomorrow.
Also, I don’t know how deep the agencies’ pockets really are. If they are organized as partnerships, all the partners draw down the cash balance pretty low by the end of the year. Again, I’m making assumptions about how these organizations are run, but professional partnerships don’t typically have the kind of cash in the organization that business corporations do.
That was unclear writing: by “potential owners of those rights,” I meant “owners of those rights clamouring to get a piece of the potential action.” :s
In the financial industry, there’s also a similar conflict of interest when asset management companies (buy-side) offer their own investment vehicles – i.e. private equity/venture capital/hedge funds, etc. (sell-side).
The way they get around it is by full disclosure precedents, separation of church of state rules(rules requiring the buy and sell sides to be separated by a wall and locked door – ridiculous because of the interaction between the producers and managers (many times the same people), etc.
It seems to me that there are always ways to get around conflict of interest situations and like the last commenter LP correctly pointed out – if no one complains then there is no c-o-i – to which I say to these agents, “yeah, and if a tree falls in a forest and no one’s around, it doesn’t make a noise, right?”
My point: Policing agents is like policing drug pushers in this way – as long as the demand is there (read: ignorant/naive/stupid writers) you can never eradicate the problem from policing alone.
Your blog and others like Dean Wesley Smith’s, Kristine Rusch’s, Joe Konrath’s etc. are the best way to stem this tide of unscrupulous behavior.
Keep up the good work!
Gerard – I absolutely agree there are ways to avoid conflict of interest issues for asset managers, lawyers and literary agents. If you follow the formula carefully, you don’t get tagged for COI.
From everything I’ve read and heard, however, the agencies are not even beginning to follow any sort of credible formula. Once you’re in a fiduciary relationship like an agent is with an author, you don’t get out of conflicts with a throwaway clause advising the author to hire independent counsel. It’s far too easy for the agent to characterize the clause as legal mumbo jumbo when the author asks her about it.
Attorneys trying to properly resolve conflict of interest issues for business transactions between attorney and client will make certain the client obtains independent counsel and has at least one private meeting with independent counsel before signing anything.
[...] I’ve discussed previously, there is an absolute, definite, can’t-get-away-from-it conflict of interest between acting [...]
[...] they’re getting into the publishing business–which I and others (and others and more) think is a huge conflict of interest–this recent post by Passive Guy on how agents can avoid [...]
Ed Victor’s claim that he wasn’t aware that his publishing plans would create a potential conflict with the UK agents association’s rules is incredible, onsidering that the potential for conflict of interest is so obvious.
The Membership clause in the AAA Constitution and Code of Practice says in part: “An agency or agent who is also employed by publishers or purchasing principals, other than for selling rights, shall not be eligible for membership.”
Creating your own publishing house to do what the Association clearly prohibits is even more reprehensible.
Victor is defecating on the Constitution and he underscores his contempt for it by his statements. It’s a dark day for literary agents. The big question is, will the AAA have the guts to stick by their principles or will they quietly wipe the muck off their faces and play ball! Film at eleven.
Tony – Organization constitutions and bylaws are all well and good if they track with what people are already doing and don’t cost anyone any money.
When the money part changes, we see whether principles are more important than cash or not.
[...] Agents in Conflict with Authors [...]
The question is: Will Eoin Colfer walk away from Ed Victor? Eoin must be the biggest earning writer in Ed Victor’s stable.
JB – Good question. I wonder if any of the agencies running the in-house publishing play seriously considered the possibility that it might cost them some clients.