What’s in your agency agreement? You may not want to know.

USA Today Bestselling Author Alan Jacobson gives us a primer on what to avoid

Originally published in Suspense Magazine, January 2018

As writers, the last thing we want to think about are the legal repercussions of our agency and publishing contracts—or whether the words we put down on paper could invite a lawsuit. But writing is ultimately a business, and if we don’t treat it like one, we could find ourselves spending tens of thousands of dollars mounting a defense against a thirsty plaintiff and his or her legal counsel.

I’ve been writing full-time for 24 years, published a dozen novels and written 15. I’ve overcome a number of obstacles, navigated a lot of issues, heard stories from friends about their unfortunate experiences, and learned about others second-hand. There are many hidden landmines that can derail or delay your career; some are avoidable, while others are out of your control. This article will address those you can protect yourself against.

We understand that when we first receive a publishing contract there will be industry-speak language and terminology with which we’re not familiar. Some of us realize we had better educate ourselves before putting pen to paper, while others figure that none of it is negotiable anyway, and since our agent knows what needs to be modified and what doesn’t, if he’s signing off on it, we are inclined to accept the terms and scrawl our signature on the dotted line. Whether or not any of those assertions is smart is the subject of a future article. However, before we land that deal to have our manuscript transformed into a book, important pitfalls that many authors fail to recognize may lie—surprisingly—in our agency agreements.

Although we and our agents are on the same team, a contract is almost always signed setting forth the financial parameters of that relationship. Authors, particularly those just starting their careers, are ecstatic to have representation and might overlook the fine print in the agency agreement. Initially, this seemingly has no ill effects. But as in any business, contracts seemingly first become important when a problem arises; however, the time to realize that you have agreed to some egregious terms is not when it becomes an issue. Instead, look ahead and anticipate what could happen—and to do that, you must understand what you are agreeing to. Things that may seem innocuous may have important implications. An entertainment law attorney can help ensure that you understand the ramifications of all the terms and clauses that are contained in the contract.

What are some things you should look out for in an agency agreement? First, understand what you’re paying. The 15% commission is obvious, but there are agents who charge for expenses to copy your manuscript as well as for mailing or messenger services to deliver it to the publishers—as well as the cost of postage to send you your royalty statements and checks. A lot of this can be handled electronically nowadays, but still be aware of whether or not your agent charges you for certain items. During my career, I’ve had agents who do and those who don’t. Whether or not an agent reimburses himself for these overhead costs does not make him good or bad. However, if he does deduct these costs, it should be clearly spelled out in your agreement—and the fees should be reasonable…actual expenses incurred, with no profit built in. (And do you really need to spend $40 for overnight service when two- or three-day mail, with tracking, will suffice, at a fraction of the cost? Don’t be afraid to request the less expensive option.) Review any provision about expense reimbursement and consider whether written approval should be required for costs other than certain listed categories—or for any that exceed a certain dollar amount.

Another area of concern—which comes to light only after you’ve received a publishing offer—is an agent who is more concerned about her agency clause than she is about negotiating the nuances of your publishing contract. Some agents prefer their own agency clauses to be inserted into your publishing agreement rather than using the standard one supplied by the publisher. That’s fine if she’s trying to protect her interests—but if her substitute clause goes far beyond the normal agency agreement, in parameters and/or length, that’s a potential warning sign. Read it. Make sure it’s kosher—and make sure she’s devoted the same attention to the items in the contract that affect you.

Most importantly, watch out for clauses in your agency agreement that tie the agent to your work forever. These clauses are tricky because—as noted earlier—if you’re unfamiliar with the legalese being deployed, you don’t realize what you’re agreeing to. Following are some examples:

  • A clause that extends the royalty period beyond the termination of your agreement. This means that you still owe commission to the dismissed agent for a period of time after you show him the door. This window can be from a few months to a year and usually applies to any contacts the agent made while trying to sell the manuscript—so if he submitted it to half a dozen editors and four rejected it, and two never replied…if suddenly five months later your new agent follows up and convinces one of them to make an offer, and the now-defunct agency agreement had an “after termination” clause of six months, you would be on the hook for paying double commission. If you already have such a clause in your existing agreement and plan to find new representation, get a list of all editors to whom the agent sent your manuscript—before you terminate him.

From the agent’s perspective, such an after-termination clause is not unreasonable. It can be reasonable if it’s limited to the prospective buyers (editors) with whom the agent is in active negotiation at the end of the agreement (after the expiration of any notice period). In that case, your agreement should stipulate that the agent must submit a list of those parties shortly after the agreement ended, and it should be limited to any deals made within a few months thereafter. In addition, it would be best to restrict these parties to a particular editor or imprint, not the entire publishing house. The way the industry is currently constructed, one house may own dozens of imprints. Put it this way: you would not want all of Penguin Random House, with its 250 imprints, to be out of bounds for long.

  • A clause that gives the agent exclusive rights to represent your works for the term of copyright instead of the term of your agency agreement. This is similar to publishing contracts, which grant the publisher the rights to the novel for the “life of copyright”; in essence, absent a strong out of print clause (difficult to get in the eBook and print-on-demand era), that agent is forever and irrevocably tied to your works, enabling him or his agency (after he passes away) to collect royalties for decades after your

Counterpoint: a number of reputable agents take the position that if they make the initial sale to a book publisher, they should be entitled to handle all rights to that work in perpetuity. Other agents don’t care or would even prefer to be relieved of handling sub rights for an author who is not an ongoing client. In addition, in some cases it isn’t necessarily a bad thing for the author if an agent continues handling all rights, since it can be less confusing if one can turn to a single agent for foreign rights in all the different territories, at least if the original agent has a good foreign rights department. In other cases, this can be undesirable because the agent will likely give his current, active clients priority. And if you fired him in the first place, the relationship might be damaged and having to continue doing business is not always desirable…or smart.

In any case, know what you’re getting into. Consider whether it’s good, bad or somewhere in between for your type of books and the particular agent involved. Also, look at the big picture: if you don’t want to agree to this clause, but he’s a great agent—the kind you’ve spent a long time trying to secure—you may decide to live with it, understanding the potential long-term implications should the relationship sour.

  • As a corollary to the above, a contract that includes a phrase like “agency coupled with an interest” may be an easy one to miss—but you’ll want to strike it from your agreement. Such a clause theoretically gives that agent exclusive right to represent your works for, again, life of copyright. However, a literary agency relationship cannot be an “agency coupled with an interest”; the agent must have some ownership interest in the book in question, not just a commission arrangement, and including such a clause in the contract cannot make it so. The purpose behind such “agency coupled with an interest” clauses is to permit the agent to act for the author to sign agreements, etc. If you see such language, best to strike it.

In sum, be aware of what is contained in the agreement you sign with your agent. For the reasons stated above, it’s helpful to have an entertainment law attorney review it. They’re often short documents, so it should not be prohibitively expensive. Alternatively, if you’re a member of the Author’s Guild, they have counsel who will advise you on your agency and publishing contracts free of charge (Emerging Writer and Student membership levels excluded).

As in any article addressing legal matters written by a non-attorney (as indicated in my bio below), please be sure to confirm the above information and assertions with the legal counsel of your choice before making important decisions relative to your contract documents.

Alan Jacobson is most definitely not an attorney. As the USA Today bestselling author of the FBI profiler Karen Vail series and OPSIG Team Black novels, Jacobson has spent 20 years working with the FBI’s Behavioral Analysis unit, the US Marshals Service, DEA, ATF, SWAT, Scotland Yard, and the US military. Several of Jacobson’s award-winning books have been optioned by Hollywood. Oh, and James Patterson, Nelson DeMille, and Michael Connelly have called Vail one of the most compelling heroes in suspense fiction. Not too shabby. Follow Jacobson on Facebook (AlanJacobsonFans), Twitter (@JacobsonAlan), Instagram (alan.jacobson), and Goodreads (alan_jacobson).

DISCLAIMER: Any “advice” or information provided on this website is based on the author’s experience and knowledge, and is intended only as background and for purposes of general interest. It is NOT LEGAL ADVICE, and could be incorrect. If you have questions about this information, how it applies to your particular situation, or anything else of a legal nature, CONSULT AN ATTORNEY.