Home » Agents » Agents in Conflict with Clients – Issues and Responses

Agents in Conflict with Clients – Issues and Responses

26 July 2011

Passive Guy has blogged before about conflicts of interest when an agent becomes a publisher for its clients, as many agencies are doing in response to the financial squeeze in Big Publishing and the flight of authors to indieworld.

Thanks to a tip from Jeanne, PG learned the Bookends LLC agency has taken a similar step and announced it yesterday. Passive Guy will note that, prior to drinking indie Kool-Aid, he had a positive attitude toward Bookends as an agency based largely on their blog. Here are some excerpts from the announcement:

One of the things I’ve always said is that there is no universal way to be a great agent. Each client is an individual and each career needs to be approached differently. I feel the same about self-epublishing. In looking at what we could offer our clients, there wasn’t one universal path that would fit every client and every need. So after much talk and consideration, BookEnds is taking a variety of approaches to self-epublishing in the hope that we can continue to provide the best opportunities for our clients.

. . . .

We have clients who are working closely with us on their self-published books and using us as agents. For the work we are doing with them we are getting paid a 15% commission. In most of these cases we have worked with the clients on the books prior to the decision to self-epublish and are now continuing that work. The clients cover the costs of conversion, the cover, editing (if necessary), etc., and we manage all the books once they are ready to be loaded to the sites. We also provide revisions and edits for those books that might not have been published before. What this all means is that we work with the clients to market the books, upload them to the retail sites, and we’re constantly talking to the clients about how we can leverage their self-epublished books to spark sales on their “traditionally published” books as well as build sales on the self-epublished books.

And last, we have Beyond the Page Publishing, a company we’ve built with a new and separate epublishing team to work with those clients who have a real interest in self-epublishing, but don’t have the desire, inclination, or time to manage the publishing process. In other words, these clients want to test the self-epublishing market, but want the support that a publisher provides. With Beyond the Page, the author submits a manuscript and the publisher provides editorial services, manages the cover design, converts the files, and uploads the books to all sites. In addition, marketing and product management support is provided throughout the process. This could mean updating files to match changes in the author’s career, price changes, book teaser changes, or general marketing changes to, again, help push the titles the author is publishing traditionally.

What interested PG even more was a deluge of comments (well over 100 as he writes this) to the blog post. Many commenters were vehement in their opposition. PG has to give grudging admiration to the agency for keeping their comments open to one and all. Here are a few excerpts from the comments:

What services do you provide for e-publishing that can’t be achieved by someone better suited for the job?
Marketing – I guarantee your online marketing skills aren’t as good as a college student fresh out of class and that kid would cost a fraction of what you are charging.
Editing – There are people on craigslist that have English degrees from NYU that will edit my book in half the time for cot a fraction of what you are charging.
E publishing Web sites- Those Web sites pretty much explain themselves. Anybody could be proficient at understand what is needed from them in less than two hours. That’s free.

Sooooo what I’m saying is, If an author decides to E publish why in the world would we need agents?
. . . .

I’m okay with options one and two.

I think number three is a terrible conflict of interest. An extraordinary conflict of interest. I think that’s the sort of conflict of interest that would lead me to fire an agent–even an agent who had been otherwise wonderful.

I do not believe it is possible to be both an agent and a publisher at the same time. Who on earth do I go to if I don’t like what you’re doing? This is deeply wrong, in my opinion. You cannot publish your clients and serve as their agent. This is both self-dealing (which is problematic) and it creates a situation where your clients can no longer freely communicate with you about the entirety of the publishing process.

There are some hybrid processes that make me feel queasy; but this isn’t even hybrid. It’s a full-blown publishing company with separate acquisitions, cover art, and so forth. You’re exercising editorial control. You’re creating the entire package. You’re setting yourself up as a publisher, and doing so from a position of power with authors who are used to being able to rely on you for advice.

Sorry; this says to me that you are putting your bottom line before your clients.

This is deeply, deeply unethical.

. . . .

Of course BookEnds is putting their bottom line first: they are a business, not a service. They are just like everyone else, trying to put food on the table during a crappy economy. You can’t expect them not to change their strategy when the publishing world is going through such drastic changes. Any agency who doesn’t adapt and offer services to independent authors is going to go down with the ship.

I would want an agent who would help me sell the most books, either through traditional or indie publishing. Yes, more money for me means more money for them and there is nothing unethical about that.

. . . .

The agent’s job is to advocate for the client in sales to and negotiations with publishers. If the agent is also the publisher, there is no one representing the client’s interests. No one.

Worse, there is no motivation to do the fundamental work of an agent. Representing a book to publishers is a venture that carries no guarantee of income. An agent can send a ms out, talk it up, and push it, but if it doesn’t sell, you’re out of luck. Why bother with all that work and angst when books can instead be shunted into the agency’s own publishing program, thus guaranteeing that the agency, er publisher, er you, will make least a little money? Why bother sending a book to Avon or Berkley, when the agent can tell the author that MyLittlePublishingHouse has decided to “buy” it?

The conflict of interest in agents-as-publishers is huge. Clients can no longer be certain whether the advice they get is about what was best for them or what is most convenient/profitable for the agency/publisher. Who would authors talk to about a funky publishing schedule? Who would they go to if the “publisher” suddenly changes the contract or stiffs them on promotion or royalties, or screws up my book somehow? And how would they ever know their agent put his or her best effort into trying to sell it somewhere else first?

Who represents *the author*?

Again, the clear answer: No one.

So, yes, I’m with Courtney. If I were a client, I’d fire you immediately, no matter what you’d done for me in the past. Because you’re no longer an agent. You’re a publisher.

Link to the rest at Bookends

In the interest of legal education for writers, a conflict of interest doesn’t mean someone in the middle of the conflict must, under each and every circumstance, be disqualified from representing an author.

Conflicts of interest sometimes arise between lawyers and their clients. Depending upon the nature of the conflict, in some cases the attorney must withdraw from representation. In other cases, the attorney may continue representation if he/she takes very careful steps and makes extensive disclosures of the nature of the conflict, etc., etc., etc.

By legal definition, if the attorney takes such steps and the client, being fully informed, consents to ongoing representation, such representation is ethical.

In the real world, 99 times out of 100, it’s easier for the attorney to withdraw, refund all fees and take any other steps necessary to make certain the client is not harmed rather than continue with the representation even if it is legally permissible.

PG does believe agents should be held to high standards regarding conflicts of interest, but, in all fairness, doesn’t believe they need be as high as for attorneys. (PG isn’t aware of any instance in which an agent’s missteps lead to an author being sent to the electric chair, for example.)

High ethical standards do mean the agent needs to be cautious and meticulous in disclosures of conflicts when dealing with any client in a conflict situation. PG has laid out some steps agents may want to consider to work through an agent/publisher conflict.

To respond to a couple of comments to the Bookends announcement, however, if an author has never been a client of the Bookends agency, PG sees no conflict in Bookends pitching their epublishing thing to the author. The potential for conflict arises when an agent has established an agent/principal relationship, which is based upon an author’s trust. If no such relationship exists, Bookends epublishing is no different than any other publisher.

Legitimate questions concerning the cost of the epublisher’s services and its qualifications for providing those services should be asked, but PG would recommend any author consider those cost/benefit issues for any publisher, including Big Publishing.

UPDATE – The volume of comments continues on the Bookends web site. Passive Guy recognized several regular visitors to this blog who acquitted themselves well.

PG just tried to post a comment on the site, but doesn’t know if it will appear. Here’s what he wrote:

What a business launch.

I started receiving emails yesterday and woke up to more this morning.

I’ll try not to repeat very much of what has already been said in many different ways and have a blog entry of my own on this subject that will appear shortly.

It appears Bookends was blindsided by the conflict of interest issue. The issue was not addressed in your announcement nor on the website for your new publishing venture.

As well as you may perform for your clients in your core business as literary agents, to not anticipate questions about conflict of interest when you become a publisher betrays a misunderstanding of a fundamental role of an agent.

Agency is an ancient concept. Since biblical times and continuing through the traditions of English common law to the present, an agent has had the obligation to always act in the best interests of his/her principal. For a literary agent, the principal is, of course, the author.

One of the core value propositions an agent offers an author is the commitment by the agent to take the author’s side in dealings with publishers.

Even when there are nice people on both sides, author/publisher relationships are inherently adversarial. If an author grants a publisher a particular subsidiary right, the publisher will make more money from that right and the author (probably) less, etc., etc. There’s nothing evil about this. It’s simply a fact of commercial life.

The agent is supposed to be on the author’s side in this relationship. An author is supposed to be able to trust that the agent will give the author unbiased counsel for the best interest of the author. Agents encourage authors to give such trust to them.

An agent must not abuse that trust in any way. Even the appearance of abuse is wrong.

If an agent (not just literary, any agent) has a conflict of interest – including a financial interest in a transaction that may be contrary to the principal’s best interest – a faithful agent must fully disclose the conflict of interest, advise the author to obtain independent advice concerning the conflict, and take whatever steps are necessary to protect the author’s interest in the face of the conflict.

One of an agent’s obligations is to anticipate conflicts of interest with a principal and take steps before the conflict arises to avoid it where possible.

I am an attorney and an attorney’s obligation to a client is governed by the same fundamental principles as agent/principal relationships. One of the well-established bases for clients suing attorneys is for an undisclosed or improperly-handled conflict of interest.

While recognizing that literary agent/client relations are dissimilar to attorney/client relations in many ways, I believe understanding something about how attorneys are obligated to deal with conflict situations may help literary agents anticipate such conflicts and take reasonable steps to avoid them or remediate them if not avoided.

The vitriol contained in some comments here is an indication of how sensitive many clients and prospective clients are to the conflict of interest issues inherent in a literary agent also acting as a publisher. These conflicts are real and substantive and can’t be waved off by saying, “We would never do something like that,” or “We’re always concerned about our clients’ welfare.”

Bookends is not the first agency to set up a publishing operation for existing and new clients. I have no doubt that some agent/publishers will be sued by their clients in the future and agent/publishers will be at a great disadvantage in those suits because of credible allegations of conflict of interest.

I no longer practice law, so this is not a pitch for anyone to hire me.

I am not in the habit of doing link spam, but if you go to my blog, The Passive Voice – http://www.thepassivevoice.com/ and search for conflict of interest, you will see several posts discussing this issue. Some of these posts describe ways that literary agents have or can either avoid or properly mitigate conflict of interest issues.

UPDATE: Since it doesn’t look like PG’s comment is going to poke its wet little nose out on the Bookends site, he’s glad he clipped it and posted it here.

Given that Passive Guy’s prose style is seldom equaled and never surpassed, he can only conclude some people never like to be reminded they might be sued while making money.

Agents

24 Comments to “Agents in Conflict with Clients – Issues and Responses”

  1. The one defense I would make for bookends is they have continued go dialog instead of getting angry and shutting down.

    • Silver – That is a plus for them, although they didn’t let my comment through. It seems to me the general tone of the comments we see has become lower-key after about 7:00 this morning.

  2. Thank you for looking at this issue. I was really interested in your take on it.

    What I have found most distressing, is their refusal, after many direct requests, to answer one simple question: How do you plan to promote our books? What exactly does my 15% buy me? Since the writer pays for pretty much everything, it is starting to look like all they do is upload and take cash.

    The life of an ebook is indefinite. That is a long darned time. Too long to make any mistakes. I hope people proceed with caution on this one.

    I’m sure Bookends is among the first of many more agent/publisher businesses to come. I think we will start seeing a flood soon as agents try to find a way to survive in this new era of self-pubbing writers.

  3. Thank you for posting your comment here since it never made it to the Bookends blog. I was very bothered by Bookends’ announcement and your post makes things more clear.

    Like Jeanne Miller, above, I was appalled at the way Bookends kept dancing around the question of a.) what they can offer a writer that the writer doesn’t already have and b.) how they will market books and c.) how much this will cost an author. They deflected the questions over and over.

    I know that Bookends is run by very smart women who used to be book packagers back in the day. They know exactly what they are doing. Since they are not clueless, they must be deliberately out to dupe writers.

    Sad. I used to have respect for them.

    • I think what very well may have happened, is that the agents were drawing on their own history as a model. They are accustomed to “taking care” of the authors. The authors have entrusted their writing and financial futures to them to a large degree. They became trusted friends who were always on the side of the author. The buffer that protects the writer from the publishing companies.

      Because of this, I honestly don’t think they expected to be questioned much, if at all, and certainly not with the level of scrutiny they are getting. I don’t think they had answers ready because they didn’t realize how educated writers are on self publishing.

      You can bet they are having lots of company meetings today to come up with some answers.

      • Jeanne – I and others have commented on the infantilization of authors by agents and publishers. Some, but not all agents encourage dependency on the part of authors and discourage authors from digging into the business details of their books.

        For someone who wants to be taken care of, this may be satisfying so long as the agents and publishers are making good decisions in good faith. However, during times of great upheaval, such as the present, the agent may not be the best advisor, although wanting to maintain that role.

  4. Jeanne and Margaret – I’m pleased my comments were of assistance.

    I was surprised that the Bookends announcement and explanation lacked the foresight to address obvious issues authors would question and their flat-footed response when questions arrived.

    One thought that crossed my mind is they’re so accustomed to dealing with importuning authors sending queries that they don’t have well-developed customer service and internet promotional instincts. Since I don’t know them personally, that may be unfair, but I can’t think of another new product intro that has been so thoroughly bungled.

    If authors are hiring them for their e-marketing skill . . . .

  5. What worries me is how many authors are going to think this is an ABSOLUTELY FANTASTIC idea, and will gladly fork over that 15% to be working with Bookends, as if that will somehow guarantee success with their ebooks. This seems predatory to me.

    • Sariah – The 15% deal is option B. If you go with option C and have them handle your self-pubbing, you’re looking at a 50/50 split after expenses for three years.

  6. Hmm. I thought maybe I missed your quote on Bookends. I really enjoy that agent’s blog. I think the roll out of the services were a bit off. I think it’s like any service that writers might use — investigate and consider whether it’s worth your money. On any given day I could pay out thousands to people providing services to edit, market and heck even write my book.

    • Stacy – I also have enjoyed the agent’s blog of Bookends long before today. I agree that anyone entering into a serious business relationship should conduct a thorough investigation before committing money, energy, etc.

  7. Wow. I have to say I’m a little dissappointed with everyone’s extreme reactions, not to mention all the jumping to conclusions both here and on the BookEnds site.

    Just because your comment wasn’t posted, the only conclusion was they didn’t like to be reminded of the possibility of being sued? Really? I won’t pretend that it’s not a very real posibility your comment was blocked by them, but not because of that conclusion. I have a feeling that BookEnds, as a business, has considered the possibility of litigation. I could be entirely wrong though.

    Or the commentors note above about Bookends refusing to answer “one simple question” about marketing their books. I don’t believe there is a simple asnwer to this question. First of all, unless you’re an existing client, they have no idea what your book is about. Second, I would hope that my Mystery novel is marketed different from your Fantasy, or another authors Paranormal Romance. Additionally, why would any business announce their marketing strategy, in any detail, to the mass public so that a competitor can copy it.

    Since I do not work at BookEnd, nor at any agency or publishing type company, it is possible that the commentor is correct and there is no real plan; however, since the agency does seem to have made it in business for some length of time, I can only conclude that they are at a basic level compitent business women and they more than likely thought through the service they decided to offer.

    As an aspiring author, I know there are no guarantees in the publishing world, and it is extremely unlikely that in any deal, that everyone will be satisfied. For me though, the bottom line is that it’s up to me as the President and CEO of myself that I do my due diligence when entering into any partnership.

    If you do not like the way the agency is run, then do not submit your work to them. If you think you can do it all just as well or better, and for cheaper. Do it. Quit bitching and moaning. Do it. Put your money where your mouth is. For all I know you could be right, but until you prove it yourself, not by pointing out others like Hawking, Konrath, etc. you’re only blowing smoke. After all J.K. Rowling made a mint with her books. So did Stephanie Myers, but there are thousands more authors who haven’t.

    • Thanks for your first comment, Chris.

      For a little context, I contribute snark from time to time and mentioning that my comment included a prediction that some agent/publishers were setting themselves up for litigation was a snarky remark concerning a serious issue. I have no idea why my post on Bookends was not published and, quite frankly, I don’t care much that it wasn’t. It’s the Bookends blog and they are absolutely free to control its content. However, one of the reasons I posted my comment here is because it contained information and argument I had not seen on Bookends or most other places where discussion of agent/publishers takes place. People who read anything I write are free to regard it, disregard it or give the information whatever credence they desire.

      For a little more context, I and many other lawyers who have examined the agent as publisher issue see conflicts of interest of a deep and potentially insoluble nature and have discussed these in extensive length. One of the things I try to do on this blog is point out potential problems in the contractual relationships authors undertake with publishers and agents.

      I am not the only one who sees significant issues for authors in the “new normal” contracts some publishers and agents are offering or insisting upon. I recently blogged about C.E. Pettit, a long-time publishing and intellectual property attorney, who made a persuasive case that standard ebook royalty provisions mandated by one large publisher and closely copied by other large publishers may be a violation of antitrust laws.

      You properly place the obligation to conduct due diligence when entering into any partnership upon yourself. One of the principal things I try to do around here is provide authors with adequate information so they are able to perform better due diligence on the contracts publishers and agents may ask them to sign. Many authors have shared deep regrets at having signed one or more terrible publishing contracts. As discussed here, authors who signed agency contracts with questionable clauses have either commenced or are planning litigation against the estate of that agent, who is now dead. Since you’re a first-time commenter, you may not have had the opportunity to read any of my “How to Read a Book Contract” posts. I try to make these useful due diligence resources for authors.

      As far as Bookends is concerned, I mentioned I was generally an admirer of the agency through its blog posts before yesterday and today. As far as I know, they seem to be excellent agents. Many of their clients attest to the quality of their agency services.

      However, I know enough about doing business online to judge their introduction of a publishing arm as a disaster. Their reputation has taken a severe hit over the last couple of days because of the manner in which they conducted the introduction and responded to the criticisms posted to their blog. Perhaps their publishing arm will provide a valuable service that many authors will use. Perhaps they will take steps to disclose and mitigate conflict of interest issues when they enter into publishing agreements with authors who use them as agents.

      I hope so, but am not encouraged by what I’ve seen so far.

      Speaking generally about agents who have become publishers for their clients and not about Bookends in particular, it is my impression that they do not want to know and understand the nature and potential severity of their conflict of interest issues. A lot of people wave off conflicts. Having litigated some conflict of interest cases on behalf of legal clients in a former life, I can attest that it’s not a hypothetical problem. When a former client comes to believe someone they trusted has abused their trust, that client wants blood. If a court finds a material conflict of interest and betrayal of trust, that court will deliver some blood to the person who was wronged.

      • Apologies are due you sir. I do apologize. I actually read your comment as snark initially, and even laughed out loud. Then I got caught up in all the other comments, here and on the BookEnds site, and let myself get carried away with the same hot headedness I pointed out in others.

        Just for the record I thought your entire post above was very well balanced and informative. Wile I don’t agree with everything you said, I can certainly agree that there are trying times ahead, and they’re bound to include some serious litigation.

        Cheers,
        Chris.

  8. I’m a Bookends Client, in fact, I am writing four
    different mystery series with them, and I have no
    problem with the thought of working with them as
    a publisher for any e books I may want to write in
    the future. Why? Every contract is different and
    when I work with them in an ebook publishing
    endeavor the contract will not be as my agent
    but as my publisher and I will adjust my expectations
    accordingly. Besides, without Bookends, I’d have
    no career. Quite simply, I trust them no matter
    how our business relationship shifts and changes
    with the industry.

    • Jenn – I’m pleased to hear that Bookends has earned and maintained your trust and that you’re a satisfied client.

  9. I have to say that while I was a little squeamish with what some of the other agencies are doing (a lot of them don’t seem to have plans that are well thought out from what I’ve seen of what they’ve posted), this agency’s model really bothers me.

    A lot of writers are discouraged from self-publishing, because they don’t have the cover art, formatting, or editing know-how, and I wonder how many agents do–those that don’t subcontract the work out. I’m also concerned, because many agents are so busy that a no response equals no policy is fairly common. If agents are unable to send off form rejections (or have an automated message set up so a writer knows their query reached them), then how are they going to have time to run a publishing business on the side?

    I understand that in any business, trust is important (and writers too often forget we are small business whether we like it or not, and that we need to act as such and think long term), but we’re all only human and some definite guidelines should be set up to help agents stay on the ethical side of the line as well as helping newer writers know what’s considered good form or bad form.

    And it’s the newer writers I’m worried about. The ones that want their books published so much that they are willing to do anything to get there. A lot of writers I’ve come across think having the agency label will add legitimacy to a self-published book, but I don’t think they realize that an average reader generally has no idea who the publisher is and has never heard of these agencies before.

    What interested me most (besides Bookends not really answering questions to a degree that gave insight into what their process would be like) were the people who didn’t like people speaking up and asking questions. E-books basically last forever, and that’s a long time to be stuck in a bad deal.

    • Danyelle – Good points, particularly about how those who asked questions were attacked for doing so.

  10. Did I read that right? The writer forks over all the costs of editing, cover art, etc, and the agency then uploads it and collects 15%? For doing what, exactly? Really????

    Hmmm….let me think about that for a minute.

    No.

    • To be fair to Bookends, I don’t think they really laid out the costs and services of their various business offerings with much specificity.

  11. The cold part of me realizes that every writer who signs up with one of these deals is taking themselves a little further out of the game, losing more control, and ultimately will become less competitive.

    The bigger part of me (ah, I hate you, Positive Self) believes you’d be better off hiring an unemployed bookstore clerk to run your writing business. At least a bookstore clerk, at some point, actually sold a book to a reader.

    But I understand the ego tug of “Wow, I HAVE AN AGENT!” And plenty will happily pay dearly to have an agent. Even the agent is a disguised publisher. Or just some clown with a computer who knows how to upload a digital file.

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