Literary Agents: Top Ten Ways to Make or Break that Relationship AFTER you Sign, Number 9: Miscellaneous Stupidities Part 1

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Literary Agents: Top Ten Ways to Make or Break that Relationship AFTER you Sign, Number 9: Miscellaneous Stupidities Part 1 (firing an agent improperly, division of royalties, divided loyalties, having a big mouth, etc.)

This is not my usual day to post, but it’s a fifth Thursday and the calendar is open, so here I am. While we know here at MW that the first step to getting a book published is writing and finishing and polishing the dang thing, it never hurts to consider the next step, in this case, how to keep an agent when you get one. And there are sooo many reasons / ways a writer (and sometimes an agent) can screw that up. (See TOP TEN list at bottom)

I have been in this business for 20+ years, and have had two agents, at five different agencies. I’ve seen (sometimes made) almost every mistake possible, but I am always on the lookout for more potential blunders, and always trying to avoid making more gaffes myself. But it’s like walking through a cow pasture—you have to be very careful where you step.

Today, let’s take dividing royalties, AKA, division of royalties. The usual way a commercially published writer is paid by one of the New York City major publishers is not simple, and not all agents do it the same way. The most common way with which I am familiar (though there are always other methods) is this: 1.) the agent sells the book to the publisher, 2.) an agreement is reached in principle, with amounts, distributions of monies and other major things ironed out, 3.) the publisher sends the contract to the agent, and 4.) they haggle over rights and wording in the boilerplate (the common legal language used for literary contracts.) This may take weeks. Seriously. I’ve known it to take months, usually when a publisher changes wording in his boilerplate. The writer signs, and months crawl by.

In my experience it is usually six weeks to three months before the first installment of money gets to the agent. Not to the writer. The agent handles distribution of monies. It is the same in sports, stage, etc. that the agent (sometimes this person is called a manager) disburses the moneys to the writer.

At the end of the year, the agent sends the writer a 1099. Sometimes it is for the full amount before the agents takes his standard 15%, sometimes after. You need to know and understand how they do it so you can make sure you are paying taxes only on your portion! If you can’t figure it out, ask.

Currently I am receiving royalties and contracts from two agents at four differently agencies. Each agency does things differently. I am also receiving divided royalties from one publisher on older titles. Yeah, I finally got to the subject of this post: Divided Royalties. I’ll talk a bit about this on another segment of the TOP TEN, but here’s the final result of a story I’ll share later. PLEASE NOTE: This tale is RARE! VERY RARE! This is the ONLY time I have heard of it happening! Do not panic!  :)

The first agency with which I signed was one of the top ten in the country in the 1940s, 50s, and 60s. It had a stellar reputation. But many years (and many hands-changing later) the agency stopped disbursing moneys and started keeping it all. ALL.

Seeing the chum in the water, and the circling sharks, my agent left the agency and notified me of the problems. At the time I found out about this, I was on the national board of Mystery Writers of America, and in that capacity I had clout—enough to ask the right questions of the right people and bluff my way though.

First step was to get over being angry. A writer MUST NOT negotiate while angry. NEVER! I have a dreadful temper. Frankly, this temper was the hardest part of the problem for me.

Second step was to contact the legal department of my publisher via email and tell them what was going on. I asked them to call me. They did, and they agreed that I had a problem. However, their contract was with the AGENCY, to pay me through them, as is standard practice. They had to have the agency’s signed permission to divide the royalties.

Third step—the publisher sent me division of royalties papers that permitted divided royalties, meaning that the publisher would cut two checks, one to me for my 85%, one to the agency for their 15%. This is called Division of Royalties, and publishers HATE to do it. It is more paperwork and trouble and hassle for them. Don’t expect publishers to do it this way for you unless there are really bad legal problems. They really hate it. (But they worked with me, and are still working with me on this problem of my royalties.)

I now had to deal with the problem agency. Fourth step, I had papers but the agency was not accepting regular mail, registered mail, phone calls, or anything else. So I bluffed. Well, sorta. I called and left messages everywhere they might possibly hear about it. My message was simple. “If you don’t accept and sign the division of royalties papers and send them back to me via registered mail by (date 2 weeks from now) I will go to the board of Mystery Writers of America and lodge a formal complaint. I will go to the National Writers Union, the Writers Guild of America, Romance Writers of America, Science Fiction and Fantasy Writers of America and every other organization that I know and will start a firestorm of problems that you will never recover from. I will blog about this problem, email every writer I know about this problem, and make your life a living a hell. Not a threat. A statement of fact.” The agency (now out of business) signed the division of royalty statement.

Next week, more stories!

  1. The agent as Negotiator
  2. The Agent as Bad Cop to your Good Cop
  3. The Agent at Cons
  4. The Agent as Friend (when that is possible)
  5. When to Send Prezzies: (cards or gifts and what works and what doesn’t)
  6. When to Expect Your Agent to Drop Everything and Return Your Call/Email
  7. When the Agent Says No (to a new project after you have signed with and worked with him/her for a while)
  8. Know When to Say Goodbye: (when your agent has more problems than you do: Alzheimer’s, health issues, mental issues, drug abuse, bringing in the next {but flakey or dishonest} generation to run the family biz, refusing to pay royalties, lawsuits, and lots of other crazy stuff)
  9. Miscellaneous Stupidities (firing an agent improperly, division of royalties, divided loyalties, having a big mouth, etc.)
  10. Keep the Agent in the Loop (and the times I failed at this) Part One, and Part Two

Faith
www.faithhunter.net
https://www.facebook.com/official.faith.hunter

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27 comments to Literary Agents: Top Ten Ways to Make or Break that Relationship AFTER you Sign, Number 9: Miscellaneous Stupidities Part 1

  • Thanks for stepping in today, Faith, and thanks for this series. I often say that I wish I could just write and not worry about any of the business stuff. Invariably, the things I love most about this career are on the creative side; the stuff I hate most are tied up with the business end. But I am a businessman as well as a writer — nature of the beast — and all who want to write professionally have to know how to cope with these issues. All this by way of saying that you’re doing a great service to all by sharing these stories.

  • Faith> So, killed off any literary agencies in any of your books? That sounds horrible! I’m glad the publisher worked with you. My first thought would have been to call a lawyer–I’m sure that eventually happened with some authors. It sounds like a total nightmare. I’m glad your agent wasn’t the problem, even if the agency was. I admit thanks to things like Writer Beware and MW industry posts, I’m getting hyper aware of scams and stuff. I think the majority of people in the business–in all sides of the business–are decent folks, or at least good at their jobs and honest about their work–but those that scam, etc. make it so hard for the rest of us. I admit that I’m troubled by some agencies and agents starting publishing companies or “helping authors self publish.” I don’t know enough about it now to make any real judgements, but an agent with a publishing company seems a bit problematic and sketchy–it seems like a conflict of interest. But maybe I’m wrong.

    Anyway, great story. Your handling of the situation was so cool. (Sounded a bit like some climactic action movie hero speech where Dirty Harry talks the villain down by scaring him!)

  • I’m truly curious by what legal basis this agency thought they could do this. How could they not realize this would bite them in the butt? Myself, I probably would have threatened legal action as well – though the public/reputation hits sounds like it could be a useful weapon in this case as well.

    Still, it’s stories like this that make the unpublished among us take a second look at the industry… and question whether it really is a good idea to go the traditional route. I still plan to, of course, if I can muster a sufficient amount of skill to write well enough – but it is stuff like the unreliability of agents that self-pub cheerleaders will harp on to make their point. And, well… when the agency holds all the cards, with regard to receiving the money and disburssing it… how is an author to know one way or another what’s happened? An agency relationship, as is evident from your previous posts, is one of trust, first and foremost. Reading a story like this it’s easy to see where that trust can be mistakenly misplaced, or abused… but for those who are new to the industry, who don’t have a lot of connections or relationships, knowing who to trust and when, or even if to trust can seem pretty daunting. Especially if this sort of abuse of trust can happen at agencies of even the best reputations…

  • This is staggering, Faith. And scary. I THINK this is rare though, right? I’d hate to scare our readers away from agents. Most are perfectly reputable while what you are detailing here is, as Stephen suggests, criminal behavior. I’m amazed there wasn’t criminal prosecution. Or was there?

  • Razziecat

    This makes me think it would be a good idea to have an attorney with experience in this area of law. I don’t intend any disrespect toward agents, it just seems that a good lawyer would be useful if problems like this crop up, especially since, as you pointed out, the publisher’s legal dept was obligated to represent the publisher, not the writer. So, any thoughts on this?

  • David, I too would rather write than do *anything* on the business side. But it behooves us to remain hyper aware of the business side because *things always change*. :)

    Pea Emily, (and others who mentioned getting a lawyer). That did happen with the agency’s other clients, eventually, and the matter stayed tied up in the the court system for *years*. The writers got almost nothing and the lawyers got all the money.

    If you can handle problems under the table with proposed action that would hurt them (not threats, which are illegal) then always go that way, but be prepared to carry them out. In my case, I sent a copy of the letter that would go out to the organizatons along with my *request* that the agency sign the papers.

    More answers in a bit. Must take care of writing business.

  • Pea, I forgot to mention that, except for the climax of demands, this took place over many months. It was a lot less like Dirty Harry and more like a spider with a web. It took time to build up the necessary strands of action. I spent months writing letters to them and keeping records of how I was trying to contact them so that if they sued me, I’d have proof.

    As to agents and e-publishing, there are at least two ways to look at this and it is still evolving. I’d like someone else to take this subject on.

  • Stephen, there was no legal basis. They just deposited the checks and didn’t mail out the money to the writers. I’ll tell more of this story as we go on with the TOP TEN. It really was fascinating.

    AJ and others: As to not using an agent? I would NEVER sign a contract without one. I still use the agent who signed me with that agency and he helped me all the way through this thing. He eventually took part in (led) the writers’ lawsuit against the agency, putting his writers’ needs above his own needs and above his own financial expectations.

    In fact, I’d trust an agent any day over a lawyer simply because they are familiar with the boilerplate used by every publisher and are likely to spot a change in it. And there are fewer ethical literary lawyers in practice, while there are more ethical agents. Also, there are many more small and medium sized presses and their contracts might tend to be problematic, something an experienced agent would spot.

    And, yes, AJ, the story is rare. *Very* rare. More a *it happend once so beware* kind of thing. There was no official prosecution, but the lawsuit took place in NY state, and ended up in bankruptcy court. Despite the rariey of this happening any time soon, I think we’d be foolish not to share what we know and allow others to learn from our lessons.

    What I took away from it all, was be careful what you sign. Go with an ethical agent. Ask questions. LOTS of questions. Don’t be afraid to negotiate. And … uh … go with an ethical agent. (It bore saying twice.) I’ve been lucky in that department. Both of my agents are, and have always been, totally ethical and have put my needs above their own.

  • Thanks Faith. For the record, I totally agree that these things are worth sharing. Fore warned is fore armed and all that.

  • mudepoz

    I don’t know. I can guarantee I TRUST my Intellectual Property Attorney more than I trust anyone else on the planet. Hey, he makes sure I get up in the morning for work and makes me breakfast. What kind of agent would do that for me? By the way, his firm (thus the Tall Dude) does a lot of work for various writers. I will say off the top, it’s 300-500 dollars an hour to go through a large firm.

    The rest of this I have no clue. My dogs have an agent, and they just cut me a check a few weeks after they do whatever they need. I know zap about this aspect and it’s intriguing and really scary.

  • Thanks for the insights, and for sharing your story, Faith. There’s no understanding some people; sometimes all you can do is be firm and stand up for yourself. However, I like what you said about not doing it MAD.

  • Great series of posts, Faith. Thanks for sharing these with us.

  • AJ — just knowing that you don’t have to sit still and take it is helpful. Whether you go it alone with bravado and demands or use an attorney, there are options.

    Mud, I forgot you are married to one! Okay, I now know one ethical intellectual property atty I’d call upon if needed. The problem with that, however, is the cost. Most of the writers in the mess were owed only a few thousand. Not enough to take on the legal process alone. And even when they got together as a group and went to war, it was so expensive that they might as well not have bothered.

    Edmund, Lyn, it was an interesting experience. I’m glad I got out before it reached the *go to court* phase.

  • Wow. Stunning story. Thanks for clarifying the frequency in the comments.

    –NGD

  • Okay… so… question: given that it’s expensive to utilize Legal counsel to pursue someone who decides to go sour and take all your money with them, and given that there’s a very small but non-zero risk of this actually occurring…

    Wouldn’t it be prudent, rather than having the money go from publisher to an agent, instead to have it come to the Author directly, the author pay an Accountant (who is much cheaper than an attorney, and would allow the author not to have to worry about all that business-accountanty stuff), and have the accountant cut regular checks to the Agency? It just seems… I dunno… I’d feel a little better about knowing I was getting paid correctly if I was a little higher on the food chain. And since, in theory at least, an agent would work for me, not the other way around, it seems backwards to have the agent paying me after taking their cut rather than me paying the agent their due. It sort of seems like the relationship is working the wrong way.

    I’m sure that wouldn’t fly well with most agents – since they’re used to doing things the other way – but it seems to me it would correct for things like this. Paying the accountant doesn’t seem like it would hurt too bad, and might be a fair bit of insurance to pay for peace of mind.

  • NGDave, the moral of this story is trust. You have to be able to trust your agent and the agency involved. Any time an agency changes hands there could be problems.

    As to frequency: Note my para from above >>The first agency with which I signed was one of the top ten in the country in the 1940s, 50s, and 60s. It had a stellar reputation. But many years (and many hands-changing later) the agency stopped disbursing moneys …

    From the comments, I clearly needed to spell it out the rariety better, but I thought I had with this para. And I’m supposed to be a writer. So I went back and added an underlined note to that effect. Sigh…

  • Stephen, Remember, you want to *build a relationship* with an agent. You *want* this relationship. It is important! You don’t start off an agent relationship with an insult any more than you would ask a first date, “How do I know you won’t cheat in me in ten years?”

    Trust is the name of the game. For that matter, a publisher could fold and not pay you royalties or moneys owed. You could have nasty divorce and a spouse could take everything. You could be hit by a car. Life is a gamble. All of life is a gamble. So is writing.

    And — Just a guess here, but I’d think any agent would pass on a client who wanted it done that way. It goes back to the *standard way of doing business*, and agent-pays-client is standard for literary, film, acting, sports, everything.

    That is another reason why conferences are important. That face-to-face with a prospective agent is vital. Meeting them. Seeing the look in their eyes. talking to them,. Listening to them on panels. Meeting writers and saying, “Have you ever heard of such and so agent / agency?”

    As to accountants, that is a waste too. If you read your contracts, and keep a running list of what is owed you, and your agent gets 15%, then the math is pretty simple and straighforward. All a CPA would do is calculate 15% and say, “Yep, that’s what you got. Now pay me.”

    Y’all, the purpose of this story wasn’t to make everyone run around in a panic, but to see that even for rare cases of evil-doing there are always resources and ways to make things work. And if there aren’t, then you can cut your losses and walk away.

  • First, let me clarify that the roll of the accountant isn’t just to tell you what 15% of such-and-such amount is (anyone should be able to calculate that), but to take care of all the relevant documents as well. Because instead of getting a 1099 from your agent… you’re going to have to be sending 1099s to your agent in this model.

    As to Agents potentially not being excited about this idea? Yes, I said as much, that Agents would look askance at this. But that’s the thing: Trust is an issue… And when the industry and market are undergoing such huge cosmic shifts as we speak, and when there are self-e-publishing cheerleaders out there cheering on the death of the old, traditional publishers and decrying the publisher/agent model and warning neophyte writers not to trust agents or publishers… well… that’s a lot of noise that clouds the issue of trust. When the system is designed backwards like this, just because of ages of industry inertia, it adds one more reason for new writers to look skeptically at the old way of doing business, and one more reason to eschew it for the new hotness that is self-e-pubbing.

    Obviously having an agent is pretty key for navigating the world of publishing contracts and negotiations. But the more new young writers see less need to even want to navigate that world in the first place, the more they’re just not going to… and the less new business agencies will have.

    I’m actively wondering aloud, I guess, if a voluntary switch to a different model might not be just in an author’s best interest – but in the agency’s best interest, as well, as a way to counteract the criticism of the anti-traditional-publishing crowd and preserve the viability of the traditional model. Because if those critics are right in their long-term predictions, and the old model goes away, what to agents do then? Do they become entirely obsolete?

    I, for myself, don’t think those critics are entirely right. But I do entertain the possibility that they might be partially correct in some of their predictions. And if they are even partially correct… well… that still throws the whole traditional model into question, as to how we as new and as-yet unpublished writers ought to navigate it. If agents are able to proactively return some of the trust writers must invest in them, that could go a long way to solidifying those relationships in the future, and could potentially avert some of the negative consequences of a talent-flight away from the old model and toward this new self-e-pubbing model.

  • Which is all to say: I’m wondering this aloud, brainstorming, but not actively advocating it.

    The point being that even if this sort of event is a very rare occurrence, , that it’s even happened at all adds fuel to the fire for the publishing apocalpyse cheerleaders. This is just thinking: “Well, there’s statistically rare but powerfully anecdotal evedince those guys can point to… now, how to you avert that criticism in the future?”

  • pepperthorn

    I agree with Stephen. While situations like Faith’s may be rare, her’s isn’t the first story I’ve heard about an agent / agency stealing from or otherwise screwing over their authors. If an agent isn’t willing to set it up so that I get my money straight from the publisher (which is in my best interests) then how can I trust them to look out for my interests in other areas?

  • Stephen, I agree that the business is changing rapidly. However, my feeling is that agents, editors, and pubs will (and already are) dealing with the changes in a interesting and smart ways. I think the publishing business will survive and be stronger for the changes. Just my humble opinion, but only time will tell. (Gosh, I’m full of trite sayings today!)

    As to panick-y types who will look at *any* situation and run screaming into the hills, shouting about the sky falling, well, I guess I gave them ammo for their stupidity. I think the only way to avoid that is to close down this site or keep all the posts lollipops and moonbeams. And frankly, IMHO, keeping things out in the open is far better for the majority. ‘Nuff said.

  • Pepper, you’d do better to self publish then. Really. You have to work within the current business model or stay out of it. There isn’t a viable alternative.

    Also, the agent doesn’t set this up — the contract with the publishers are set up this way. Pubs do NOT want to deal with writers and with cutting two checks and agents WILL NOT set it up the way you want. Again — this is the business model unless you self pub.

  • Oh, my. Thanks for the post, Faith. Sorry for the late reply, since I was the one who asked last week. (it’s Canada Day, whee!)

    I actually thought that by “divided royalties” you meant for collaborative work between two authors, which is why I asked.

    I don’t see this post as warning anyone away from agents. If anything, it just reaffirms doing homework/researching agents before signing (such as by checking the Predators & Editors site). These days, a lot more agents are out there on the Internet (the Twitterverse especially) and it sounds like times have really changed since you went through this. :)

  • Laura, I wondered when you would chime in! Actually, this all took place within the last 5 years. :) The court case (bankruptcy case) is just wrapping up.

    As to dividing royalties between two writers, that is handled by the agent, who simply gets a check from a pub, takes out his 15% and then cuts two checks. Been there done that, and it was easy-peasy.

  • Oh, good to know. Still, even if it’s recent it’s not something to warn me off. It just tells me to be smart about things when signing, and keep good records thereafter.

  • Laura — excellent! You GOT it! (claps hands) In any (and I mean ANY!) business endeavor there must be risk, trust, and oversight. the literary business is no different.

  • Last comment before I close comments — this incident is VERY RARE! It is the ONLY one I have heard of like it in 20+ years. Because this subject matter has the potential to run out of control, I am closing comments now.