Friday, October 15, 2010

Interview With Jeff Mehalic Who is Talking about Negotiating Contracts

Let’s give a great big M & M welcome to Jeff Mehalic, my friend and go-to guy for anything legal in my stories (and personal life!!) Jeff is a practicing attorney with his own law firm in West Virginia and is well-versed in the intricate details of contract law. I’ve posed some very specific questions for him because I know there are a lot of you out there who will be getting contracts in the very near future and don’t yet have an agent to guide you through the confusing language of a literary contract.

So, let’s get right to it.

Me: Welcome, Jeff. Anything you want the people to know about you before we even get started?

Jeff: Liz, thank you for having me on Mysteries & Margaritas. Right now, I have a law practice in Charleston, West Virginia, and by the end of the year, I’ll be opening an office in New York.

In my practice, I negotiate on behalf of writers and authors, and also represent them in disputes and litigation arising from their contracts.

I also write a blog called West Virginia Business Litigation and have just started another one called The Write Lawyer, which may be of particular interest to your readers.
http://www.wvbusinesslitigationblog.com/


http://www.the writelawyer.com/


Let me add a disclaimer here. My answers are general in nature and should not be interpreted as legal advice for any particular situation. Any recommendations or advice necessarily depends on the specific facts.

Me:
Does an author really need someone to negotiate his or her contract in this day and age?

Jeff: There are two answers to your question. Can an author negotiate a contract without an agent or an attorney? Yes. Should an author negotiate a contract without an agent or an attorney? In most situations, no. I highly recommend that an author obtain an agent or an attorney. Most publishing contracts provide for a book to be published in a variety of formats, each of which comes with its own rights, and are simply too complicated for an unrepresented author to navigate. Add to that that the contract is drafted by the publisher and therefore is weighted in its favor, and an author really needs some professional assistance in his or her negotiations.

Me: What does it mean when the contract says the publisher holds all rights to foreign sales and TV and audio rights? Is this negotiable? Do we even want it to be negotiable?

Jeff: First of all, understand that publishers want to retain as many rights as possible because that provides them with the greatest number of opportunities to make money from their authors. Authors, on the other hand, want to retain their own rights where possible, so that they can negotiate with other entities, such as foreign publishers, movie studios, and production companies, and generate multiple revenue streams from the same work.

All of the rights that you mentioned are negotiable. That doesn’t mean that a publisher will agree to let an author keep them, but an author – or his or her representative – should absolutely try to retain as many rights as possible.


Me: Can you explain the option clause so even I can understand it?

Jeff: For anyone who doesn’t know, an option clause gives an author’s publisher the right to publish the author’s next work, subject to the negotiation of mutually-agreeable terms. Under the option, the publisher usually has a period of time within which it can exclusively review the work and make an offer – basically a right of first refusal. If the parties don’t reach an agreement or the publisher passes, the author is free to take the work elsewhere.

Me:
What happens when an author delivers a book (sold on proposal) that the editor finds unacceptable?

Jeff: First of all, it depends on the language in the contract. But typically, the editor will ask the author for changes in order to make the book acceptable. If the author can’t or won’t make the changes, he or she can refund the advance or risk being sued.

Me: What about if there is a really big conflict between the publisher and the author and the publisher threatens to pull out of the deal?

Jeff:
This is more complicated than it sounds. Even though the parties likely have a contract, it may contain language that restricts the author’s right to sue the publisher in such a situation. But in the absence of such language restricting the author’s rights, if the publisher reneges, the author can sue for damages resulting from the breach of contract.

Me:
Does a normal contract give away all rights to the characters in a series? In other words, if I decide to take my series someplace else when my contract is up, can I do it?

Jeff: Once again, it depends on the language in the contract (do you see a theme here?). Ordinarily, an author would not convey the rights to the character(s) beyond what was negotiated, whether for one book or ten books. This is where the option comes in. If the author and publisher cannot agree on a contract for the author’s next work involving the character(s), the author is free to shop the work elsewhere.

Me: I know every contract is different, but what is the medium advance for a debut author nowadays? How is this paid out – say in a three book deal?

Jeff: The size of the advance depends on a lot of factors, such as the genre, whether there is an auction – two or more publishers bidding against each other, whether the author has a platform, i.e., is a celebrity, politician, athlete, and whether the publisher sees potential for the story.

How the advance is paid for a hypothetical three-book deal is the product of negotiations, which to me really highlights the need for an author to have representation. But here are three examples, which are unrelated to the amount of the advance: a 50-50 split, where half of the advance is paid when the contract is signed, and the second half is paid on acceptance of the manuscript (in most cases, this is the author’s best choice); 40-40-20, where the publisher pays 40% of the advance when the contract is signed, the next 40% when the manuscript is accepted, and the remaining 20% when the book is published; and thirds, where the publisher pays one-third of the advance when the contract is signed, the next third when the manuscript is accepted, and the final third when the book is published.

Me: What if anything can a debut author expect to negotiate on his/her contract? What if anything is non-negotiable?

Jeff: There’s no such thing as non-negotiable in the sense that the author has no options. The author can always choose to walk away from the deal if the terms being offered are not acceptable to the author.

The chances are that a debut author trying to negotiate his or her own contract won’t know what is negotiable because the publisher will say “here’s your contract, take it or leave it.” An agent or attorney who deals with publishing contracts should know what is negotiable. By the way, if an author is going to hire an attorney, make sure it’s someone who is familiar with publishing contracts. You wouldn’t go to a tax lawyer for a medical malpractice case.

Me: Any important piece of advice for negotiating a contract without an agent?

Jeff: Don’t do it.

Thanks again for having me, and I will answer questions throughout the weekend as my time allows.

Okay, y’all. Here’s the perfect chance to pick Jeff’s brain without the hefty hourly fee. A lucky commenter will receive a copy of Janet Evanovich’s How I Write. Secrets of a Bestselling Author.

Somehow I ended up with two copies. So ask away.

30 comments:

Pamela Stone said...

Liz and Jeff. Great information. Does this also apply to the boiler plate Harlequin contract? From what I've heard, an author can have a few small things changed, but it's basically what it is.

Marilyn said...

Great info, Jeff. I appreciate the hard work you and Christine put into my recent contract. I only have a Ph.D.--don't know how they expect me to understand legalese!

I mentioned on the Book Cents forum about someone I ran into yesterday who told me his roommate had gotten caught up in one of those self-publishing scams. Horrible story with lots of money lost. Do authors have any recourse when they unwittingly get caught up in one of these schemes? Will the attorney general get involved? If you have any recommendations, I'll try to get the info to this guy.

I passed on your blog to other writers I know beyond the Book Cents tribe. I'm sure they will pass it on. You are going to help a lot of writers! Thanks!

Vicki Batman said...

Thank you, Liz and Jeff, for the information. Very helpful

Barbie Jo Mahoney said...

Hey, this is great!! There's always so much to look out for. And I swear, I'm so naive sometimes (getting in car with total stranger, remember??) had I been agentless, I could totally see myself just being thrilled to sell and HAVE a contract - I wouldn't even think to really inspect it.

I've even heard horror stories of authors who lose their name and have to reinvent their identity all because of a 'bad' contract. Yuck!

So Jeff, do you get involved in representing authors if they feel the publisher isn't holding up to their end of the contract? Or do you think just mentioning a lawyer would make the publisher fix the issues? (and liz..I'm totally pulling a question out of thin air here) Can that really happen?

ha! did I even make sense? I think it's happy hour....

Donnell said...

Good morning, Liz, Mr. Mehalic. You're right, Liz. You asked some specific questions I wanted to know. Bookmarked your blog, sir. Thanks for the information that I respect come with some heavy qualifiers. Thanks for being here with MM.

Lindsay said...

Morning Jeff, well, for me it's morning. Even though I have several contracts, e-pub and small press, I still have a question regarding contracts. In none of my contracts was there a release date and I've got one book hanging in limbo.Is it normal for a publisher not to have a pub date in the contract, thereby letting said publisher release the book at their leisure?
I'm also going to bookmark your blog.

Anita Clenney said...

Hi Jeff. Thank goodness for people like you and Christine, attorneys and agents who have our backs :)

Donna Cummings said...

This is really great information. There are such specific details to publishing contracts, which are going to be different from other types of contracts. It makes sense to have an attorney and/or agent who knows what those particulars are--as well as being expert in negotiations.

Thanks for sharing your expertise, Jeff!

Kari Lee Townsend said...

You rock Jeff! Thanks for the awesomoe info. Very helpful. I am in NYC and having a blast, but still had time to check the blog.

Cassy Pickard said...

Jeff: This is great. Thank so much for taking the time to join us at M&M. You add a critically important view on our crazy world. There is so much to consider given the complexity of the industry and the addition of new media into the mix. Thank goodness there are folks like you who are on top of this.

For those who are not as fortunate to have expert advise (Christine an Jeff), what are the main questions an author should ask? How do folks out there know whether they are receiving the best counsel or not?

Marian Pearson Stevens said...

Appreciate the straight forward information, Jeff! Very helpful.

petemorin said...

I cannot imagine the level of fear in the hearts of the publisher's representative when Jeff and Christine walk into the conference room. It must be paralyzing.

Jeffrey V. Mehalic said...

Here I am, finally.

First of all, my sincere thanks to Liz for interviewing me and giving me an opportunity to answer some questions about the mysterious world of publishing contracts.

I'll answer/respond to questions and comments individually so that I don't overlook anyone.

Jeffrey V. Mehalic said...

Pamela,

Thank you very much. My comments do apply to the standard Harlequin contract. An unrepresented author is very unlikely to obtain any meaningful changes, i.e., the ones an author really wants/needs, to a contract.

You're right, the contract is presented largely as what it is. The publisher figures -- and some will even admit it -- that if the (unrepresented) author is unwilling to sign, there is another unrepresented author just waiting for the opportunity.

Jeffrey V. Mehalic said...

Marilyn,

Thank you very much. I know that you and Christine are both pleased -- and relieved -- that your deal is finally done.

I read your post on the Book Cents loop, and I don't think there's anything the attorney general can do, because this sounds like the roommate entered into a very bad deal.

A lot of self-publishers are unscrupulous and prey on the desire of writers to become published, often at a cost that the writers don't fully understand.

If a contract conveys your rights to your work to a publisher on an irrevocable basis, such as what appears to have happened here, run, don't walk, away from that contract.

Thanks for talking up my blog. I really appreciate it.

Jeffrey V. Mehalic said...

Vicki,

Thanks for your interest. I appreciate it very much.

Jeffrey V. Mehalic said...

Barbie,

Thanks very much.

A lot of unrepresented writers are so excited at the prospect of being published that they don't think about the contract they're asked to sign, both because they don't think the publisher would try to take advantage of their inexperience and because contracts are often written in such dense language that they're difficult to understand.

I do represent authors whose publishers are not abiding by the terms of the contract, and the outcomes vary. Sometimes a publisher will change course once it realizes that a lawyer is or may become involved. Other times, you have to demonstrate to a publisher the error of its ways, hopefully without having to file suit.

Hope I'm not too late for happy hour!

Jeffrey V. Mehalic said...

Donnell,

Thanks for commenting. I agree that Liz asked some great questions.

Thanks also for following my blog. I appreciate it very much.

Jeffrey V. Mehalic said...

Lindsay,

Good to hear from you. The release date is a provision that should be negotiated and included in the contract so that the actual publication of the book is not open-ended, as yours appears to be.

Speaking generally, if the release date isn't specified, then when the book is published is solely within the publisher's control. Bear that in mind for future contracts.

I hope you enjoy the blog.
Thanks again.

Jeffrey V. Mehalic said...

Anita,

Thank you very much. It's a pleasure and a privilege to represent writers and authors.

Take care.

Jeffrey V. Mehalic said...

Donna,

Thanks for your comment. You're exactly right, publishing contracts do contain a lot of provision and words and phrases not found in other contracts.

While principles of contract law really don't change with the subject matter of the contract -- you still need, to put it broadly, offer, acceptance, consideration, and a meeting of the minds -- how the provisions that are unique to publishing are negotiated can and do spell the difference between a contract that is (to quote an agent I know) a win-win or one that is one step above indentured servitude.

Thanks again for your kind words.
Take care.

Lindsay said...

Jeff thank's for the response. And I will definitely bear in mind, in the future, getting a release date. At least month and year.

Jeffrey V. Mehalic said...

Kari,

Thanks very much. I'm glad you're having a great time in the Big Apple, and thanks for checking in.

Enjoy your weekend.

Jeffrey V. Mehalic said...

Cassy,

Thanks very much for your kind words and for having me on M&M. I'm having a great time.

I think your very question underscores why writers and authors need representation: how do you know what you don't know?

The reality is that most of us have had comparatively little experience in negotiating contracts, although all of us have signed many of them, whether to buy a house, a car, insurance, etc. (And I won't even get into employment or performance contracts that have non-compete and non-solicitation provisions. I write about those on the business litigation blog.)

So when you get into something as specialized as a publishing contract, with no experience and presumably no representation, you're at a tremendous disadvantage, which the publisher can and will exploit.

And while I'm tempted to say that any representation is better than no representation, I've seen situations where even that isn't true. So a writer can best protect him or herself by hiring an agent or lawyer who has experience and is knowledgeable and credible in negotiating with the publisher.

Thanks again.

Jeffrey V. Mehalic said...

Marian,

Thank you for your interest and kind comments.

Take care.

Jeffrey V. Mehalic said...

Pete,

Thank you very much for compliment. What I would like for a publisher to understand is that I'm going to get a fair deal for my client -- frankly, it should be fair to the publisher, too, because the author and publisher are in business together, and that I expect the publisher to hold up its end of the bargain, just as it expects (and demands) that the author do his or her part.

I am concerned that, because of economic pressures, an increasing number of publishers are ignoring contract provision that they negotiated and agreed to, but now regard as too burdensome. And the enforcement of the contract, while distinct from the negotiation its terms, is tied inextricably to what the contract does and does not provide.

Thanks again, and take care.

Jeffrey V. Mehalic said...

Lindsay,

Thank you very much. What you should have in your contract is a provision whereby the publisher agrees to publish your book within a specified period of time, such as 12-18 months from its acceptance of your manuscript.

The publisher probably won't agree to publish in a specific month and year -- unless you're an author who always releases a book at the same time every year, as some big-name authors do -- but it should have no problem agreeing to publish within a certain period of time, which protects your rights and ensures that your book is published.

Take care and good luck.

Lindsay said...

Jeff and Liz,
I've learned one very important point from this blog post and comments.
Get either an agent or contract lawyer, who specializes in and works with authors, before signing on the dotted line.
I was so anxious to sign my first contract I didn't think everything through and am paying the price now.
Thanks again Liz for inviting Jeff.

Liz Lipperman said...

And the winner of the Evanovich book is Lindsay Downs.

Congrats, Lindsay. I'll being it to Crime Bake.

Lindsay said...

Liz, now I don't know if I'm more excited about winning the book, going to my first Crime Bake or seeing you.
Tough choice.