Common wisdom is that few lawyers in BigLaw are sports or entertainment agents.
Common wisdom is also that lawyers’ charging hourly rates of $900 and up is expensive.
Turns out that may be changing.
After the jump, an interesting story where using a BigLaw lawyer as an agent is saving the client money.
BigLaw has done more than its share of laying the groundwork for the modern system, though, and a number of BigLaw firms have substantial sports practices. But those are usually either on the league side or the union, there just aren’t that many agents in BigLaw.
Weil Gotshal and Proskauer Rose are probably the two most-active major firms in sports and entertainment. Dewey & LeBoeuf is coming on, with the hire of Jeffrey Kessler from Weil a few years back.
But it was a story from the “literary” side that drew our attention.
New York Times bestselling author Daniel Silva realized he could save money by dumping his percentage-based-billing agent for Robert Barnett (Wisconsin BA ’68, Chicago JD ’71) of Williams & Connolly.
Deadline Hollywood has the story:
What’s driving all of this is the growing realization by authors that their next deal probably won’t be as good as their last. Dealmakers say publishers aren’t stepping up for auctions the way they once did, and nobody wants to overpay. Silva’s exit from ICM to Barnett is an interesting development that is creating a lot of discussion in publishing circles. Barnett charges by the hour—estimates are that clients in the range of $975 per—instead of the standard 15% that most major agencies and management firms charge. He’s a less expensive option: if Silva is getting $3 million per book, an agency would commission $450,000; Barnett’s hourly bill might be half that.
We’re surprised more people aren’t doing this. Contingency or commission based billing makes sense to us where there is either a risk of the deal not closing or the client can’t afford to fund the litigation up front, in which case the lawyer takes on the non-payment risk for the higher upside.
As the article notes, there’s also a psychological aspect to it, but we’re too rational for that: apparently, clients would rather have more money deducted from a check written by someone else than write a smaller check themselves – even if it is flat out costing them money.
At least in the literary field, Barnett seems to be carving out a nice little niche for himself
Charging hourly, Barnett has built a stellar client list comprised mostly of politicians that range from President Barack Obama to ex-President George W. Bush, Sarah Palin, Tony Blair, Bill and Hillary Clinton and Bob Woodward. Fiction hasn’t been a big part of his business, but he did sign James Patterson after he left WME, and last fall Barnett negotiated a 17-book deal with Hachette Book Group that covers the prolific author through 2012—six books per year. The commission on such a deal would have been enormous, and it’s likely that Patterson saved a lot of money.
It’s hard to feel sorry for him with a client list like that and a “quote” of $975/hr – but he may be leaving money on the table
Dealmakers said that Barnett’s hourly fee formula has a downside. He usually makes one deal for world rights, I’m told. When the deal’s done, he’s done. Agents said that if an author has a following in countries outside the U.S., it’s often more lucrative to make separate deals for each territories. If an author gets a $3 million advance for world rights, subsequent territorial sales made by that publisher are applied against that advance. Agents making separate deals come away with advances that go right to the author, less 20% commission, half of which goes to a foreign co-rep.
Clients who can pay full freight and look great in marketing materials? Expect BigLaw firms to clamor over this work.
