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.