The Lawyer/Business Person Dichotomy

             "You are not a businessman."

            " And you  are not a lawyer."

            This was the substance of a spirited "discussion" I had with a client a couple of weeks ago.  The exchange  has stayed with me because I think it illustrates an important and often-overlooked distinction.

            I wish I was more of a businessman.  I think all solo lawyers are by definition entrepreneurial but after three decades of doing this, I know that I lack a number of the fundamentals of business acumen.  However, I am confident that I make up for that deficit by being analytical, by being able to evaluate risk and most of all by being aware of what needs to be done to protect the client.

            There is the rub.  Not all clients want to be protected.  A lawyer (at least the ones who do their job) often gets caught between trying to advise the client to do the prudent thing and the client's other strategic goals.  If you read enough advertising and marketing materials, you will see those ads by lawyers who boast that they excel at "bet‑the-company" litigation.  This always strikes me as foolish.  Only in the most dire of circumstances would a businessperson ever decide that it is worth it to "bet the company".  I have tried to make one of my mission statements :(there, that's a business term isn't it?) that I "help people find solutions to complex problems".  That really is the challenge where law and business intersect. In other words, a lawyer should help to advance a client’s goals while at the same time protecting the client’s interests. Sometimes that means trying to protect the client against themselves.

            This can play out in many ways.  In transactional work, it could mean knowing approximately how much you can ask for without blowing a deal.  In litigation it is much more complex.  Any lawyer will tell you that settlement is always preferable to risking a trial; there are too many variables.  Sometimes there's a lot of posturing, like an expensive game of chicken.  We like to think that the world is a rational place.  The older I get,  the more I realize that this is a fallacy.  In the end, there's going to be a constant struggle between the particular kind of mindset it takes to succeed in business and analytical lawyerly risk evaluation.  This is not a bad dichotomy, it keeps us all employed.  Sometimes though,  it is startling to realize that it is in fact a very real dichotomy and one that can often cause tension in lawyer-client relationships.

Curb v. Tim McGraw Round One

I have slowly been trying to write a short book about some of the common disputes that arise in the music business. I had just begun work on the chapter concerning recording agreements and I thought to my self, "this topic has been done to death. What else is there to write about?" Then came the news two weeks ago about Tim McGraw's preliminary victory over Curb Records in the Davidson County Chancery Court.

This case has all of the necessary elements of a legal drama – high-powered artist battles even higher-powered label over arcane language in a recording agreement first entered into in 1992.

As I understand it, Curb first sued McGraw claiming that he had not delivered the required number of albums under the agreement, even though he in fact had delivered what he considered to be the final album under the agreement in 2010 (and Curb even released a single from the recordings).McGraw has counterclaimed alleging that Curb's actions (including multiple releases of greatest hits albums) are "a naked attempt to create a perpetual recording contract, forcing Tim McGraw into a repressive environment of infinite duration …".

I am assuming that the hearing held on November 30 concerned Curb's attempt to enforce the injunctive relief provisions of its agreement and to keep McGraw from recording for another label during the course of the litigation. I have reviewed McGraw's answer and counterclaim and have to say that it is one of the most eloquent pleadings I have ever encountered. (here's a link:www.tennessean.com/assets/pdf/DN174765524.PDF). It literally reads like a novel where you follow McGraw's career from 1992 through 2010 as well as a textbook analysis of how the delivery process and recording restrictions in a recording agreement can be manipulated.

I don't know how this will play out but if it goes further it will provide fascinating insight into some of the more esoteric provisions of recording agreements, often ignored during negotiations. It may also show us how some these overlooked provisions might come back to bite both parties.

Protection Against Copyright Trolls

This comes from the Learn Something New Every Day Department. I was surfing the internet reading other attorney’s blogs and came across an article by David Kravets on wired.com:

The $105 fix that Could Protect You from Copyright Troll Lawsuits

I have known about patent trolls for years; they are people who exploit small similarities in inventions, or technical violations of the patent law for profit through litigation. Tbey serve no useful purpose to society. I never heard anything about copyright trolls. Apparently, there is a new cottage industry in acquiring copyrighted material, registering it, then suing websites that have reposted it. I am not talking about sites that promote or engage in copyright infringement, but rather sites that include user comments and interactions (such as blogs).

All of these sites are protected by the Digital Millennium Copyright Act, which, through its “takedown agent” provision, allows a safe harbor for those who repost user generated content (such as Facebook, YouTube, etc.). What I did not realize until I read this article, is that in order to qualify for this safe harbor protection, the site has to register its takedown agent with the Copyright Office. The fee for the service is $105.

As the article points out, the traditional defenses in copyright infringement, such as fair use, remain viable, but the appointment of the takedown agent is a virtual bar to a suit proceeding in the first place.

So, if you are running any kind of blog or website that accepts third party content, or if you intend to quote liberally from third parties on your blog, I suggest you investigate the registration provisions of the DMCA. It could be the best $105 you ever spent.

A Day in The Life

I have been listening lately to a lot of my fellow attorneys rant about the death of the music business lately. It is manifestly true that I no longer see the same kind of deals coming from record companies and publishing companies. But I keep feeling that I am, in fact, busy doing entertainment law work. Therefore, as a kind of practice management exercise (or maybe it was just therapy) one day, earlier this week, I kept a list of all the items that I worked on from morning till I broke for lunch.

Here’s what I came up with:

1. A telephone call with a client regarding advising his independent label on publishing and distribution issues.

2. Wrote a letter for a publisher client to someone who owed them money.

3. Wrote a letter for a client regarding a theatrical production he was involved with.

4. Wrote a letter to a client regarding several disputes regarding his Christian music project.

5. Responded to an e-mail from a client regarding a problem with their UK distribution deal.

6. Reviewed a re-draft of a Chinese licensing agreement.

7. Wrote a formal notice letter for a client to their publisher who is in breach of contract.

8. Reviewed a royalty statement for a producer client and forwarded it to him with his royalty check (clients love to receive checks).

9. Wrote a letter to SoundExchange to ascertain if certain Letters of Direction were in place.

10. Drafted an Amendment to a License with an independent record company.

11. Corresponded with opposing counsel on a litigation matter (regarding a band’s leaving member).

12. Corresponded with a client regarding a copyright infringement litigation matter.

Thus, not only did I end up having a very productive morning, I was pleased to note that all of the matters were squarely entertainment related. Plus, there was a global reach extending from Nashville to London to Hong Kong. Perhaps this is anecdotal evidence of the health of the entertainment business, even while the traditional music business suffers through its difficult current transformation.