Music business and the law: When an artist should reach out to a lawyer
By Sarah Legg

For many musicians, making music is a way to vent frustrations, maintain a creative outlet and express oneself artistically. For the lucky performers, other people start to notice the musician’s talent, and what was once a mere hobby has the potential to become a full-time job.

When all is said and done, one must be protected as both an artist and businessperson in the dog-eat-dog world of the music biz. In comes a person that most dread working with: a lawyer.

Steve Gordon, an entertainment attorney based out of New York City and author of The Future of the Music Business, has some words of advice for up-and-coming artists. He has an extensive background in entertainment law including a decade with Sony Music, teaching at City University of New York’s graduate program, working with clients such as Microsoft, writing various published articles and speaking at numerous engagements on various entertainment topics.

When asked at what point a band should actually seek out a lawyer, Gordon says it’s most important when dealing with written agreements or contracts.

“The time to get a lawyer is after you find an initial deal with a manager, producer or production company—or in the old days, a label,” Gordon says. “Since labels are signing fewer and fewer artists these days, unless they already have a track record of success, they’re less likely [to get signed].

“At that point, when the contracts are on the table, you should get a lawyer,” Gordon continues. “You shouldn’t sign anything without having someone knowledgeable review it because it’s very dangerous to sign contracts, especially with a long-term contract where a manager or a production company can tie you up for a long term and not have to do anything.”

Not having a lawyer read a contract before signing it could make or break the artist. Gordon uses the example of pop-R&B group TLC.

“I love the Behind the Music of TLC and Pebbles. She had an agreement with [TLC] that as a manager, she would be paid when they recouped. Which meant, ultimately, that when they sold the first million records, they were in debt because the record company paid Pebbles what they paid the band,” Gordon explains. “Because of their contract, that money was recoupable from their loyalties. They were actually losing money for every record sold just because of one sentence in their agreement with the manager.”

When a band or artist finally hires a lawyer, it’s important to choose the right kind. Gordon says that the lawyer must be knowledgeable about the music business.

“You bring [the contract] to someone knowledgeable about the music business for two reasons: they can check to see whether the terms are fair and standard within the industry, and they check for stuff that should be there but isn’t there,” Gordon says.

“For instance, in a management agreement, production costs should not be subject to the manager’s 15 to 20 percent commission. [If they were], the artist, if given $1 million to make a record, the manager will get $200,000, but the artist will be $200,000 in debt because the money was supposed to go to production.

He’s got $200,000 in his pocket whereas the artist owes the record company that money because the money goes into the production, not the artist,” he continues. “You’ve got to know what’s missing in the management contract. It may look fair to somebody who doesn’t know how the business works but to a trained music attorney, they can spot things that should be there but aren’t. Like [in the production scenario], a clause that should say ‘but gross revenues should not include the following…’”

Think you’re ready to hire a lawyer, but not sure how to get in touch with one? In most cases, a manager or production company will be the one to make initial contact with the lawyer. In an instance where the artists themselves are making contact, they should keep a few things in mind.

“Lawyers do not want to get unsolicited phone calls,” Gordon admits. “You should introduce yourself via email with a who, what, why and when with a link to your website so the lawyer, before he/she talks to you feels like he/she’s about to talk to a real person and can evaluate on his own the kind of music and seriousness of an artist.

“That’s really something that most people don’t do right. The way to approach a lawyer is to introduce them to your music and who you are through written correspondence. Email is the easiest.”

When taking the plunge, a lawyer can clarify the fine line between sink or swim in the music business. Gordon warns that working with contracts can be one of the riskiest procedures in the industry.

“Even one sentence can result in bankruptcy instead of fortune,” he says.

For more information on Steve Gordon and his practice, visit www.stevegordonlaw.com.