How to deal: negotiating a better contract

An edited transcript of an NASW Workshop, held in February, 2004, in Seattle, Washington

Organizer: Kathryn Brown

Panelists: Kraig Baker, Partner, Davis Wright Tremaine LLP Erik Sherman, Chair, Contracts Committee, American Society of Journalists and Authors

Special Thanks to Alan Kelly, Owner, Verbatim Instant Transcripts, for generating this complimentary transcript for NASW

Outline: Nine Questions Tackled During NASW's 2004 Contracts Workshop

  1. Describe the contract process from the publishing perspective. How do lawyers and business-people hammer out these contracts?
  2. Do publishers expect to make — or are they making now — big money off additional rights?
  3. Should writers keep an eye out for particular contract clauses or language?
  4. What can writers do with boilerplate contracts? Are there negotiating tactics to use or better contract language to suggest?
  5. What is the editor's role? When working with an editor, how do you find out what's possible for contract changes?
  6. We talked about Work Made For Hire Contracts, All Rights Contracts, insurance clauses. Let's clarify: Are there other particular clauses writers should watch out for?
  7. If you alter a contract and initial the changes, or add language at the bottom, are those changes legally binding? Is it better to ask for an amended contract, rather than amending it yourself?
  8. How are contracts evolving? Are publishers increasingly pushing for certain kinds of changes to contracts — or is it more haphazard than that?
  9. Is any contract language particularly productive or good to have? For instance, is it effective to stipulate payment within 30 days?

Kathryn Brown: This workshop is the outcome of an NASW membership survey we did last fall, asking how we could help freelancers better deal with contract issues. As you know, contracts are changing. They're evolving, taking advantage of new media, new rights, new consolidation. And a lot of freelancers are trying to figure out how to navigate this changing landscape. What can be negotiated? What can't? How do you negotiate it? Many members replied to our survey, saying they could really use this kind of information — and a workshop would really be helpful. So that's how we got here.

I'd like to tell you a bit about what we're going to discuss and then introduce our speakers. One thing we want to convey today is the publishing perspective. What are contracts designed to do? How are they made? How are they written? How can they be negotiated? Then we'll move on to a little actual contract language and then there'll be plenty of time at the end for Q&A so people can ask questions about different situations.

With me today is Mr. Kraig Baker, a partner at Davis, White, Tremaine, LLP. His clients include CNN, the BBC, the Seattle Times, Simon & Schuster and many others. He helps clients draft and negotiate publishing and consulting agreements. Erik Sherman, to the left, is chair of the Contracts Committee for the American Society of Journalists and Authors. ASJA is the premier organization for freelance writers in the U.S. Their contracts committee does great work vetting contracts for members and helping them work through some of these very issues.

Question 1: Kraig, could you start by describing the contract process from the publishing perspective? How do lawyers and businesspeople hammer out these contracts?

Kraig Baker: Somebody calls me and says we need a contract. And then you go steal from somewhere else. That's the short answer — but that's more or less the process. Normally what happens is that somebody says to a decision maker at the company, "We think we need a contract for this. We need something written down." At which point they either have something that they pull from a form book or something like that or they'll call their lawyers. Interestingly enough, the lawyer that they are consulting may or may not be somebody who's an expert on publishing issues. You may get a document that started as a software licensing agreement. You may get a document that started as a joint marketing agreement. You may get a document that comes from a lot of places. Sometimes you're getting — I'm guessing at this point — 7 to 9 page freelance agreements that are so outrageous for what it is...but the reason why you're getting those is because at this point, everybody says "Get me a document that covers every single one of our risks." So you know that's the document that gets churned out. Then the process of working through it depends on how much ownership is there and will differ in terms of every entity. Some entities have the businessperson managing the process and really thinking about [whether it is a negotiable document]. Some people want to take a very aggressive position, with the idea that if they have to negotiate it 20% of the time, they still come out ahead. Other folks say, "Well, let's come up with a balance document that I don't have to think about, that most people will sign, that I don't have to negotiate." So part of it is coming up from a business perspective deciding that the tactics that that person wants, or that entity wants to take with their negotiations with their freelancers and their writers.

Erik Sherman: One thing I've noticed, in discussion with publishers and with writers and looking at documents, is that it seems that these documents come into play after somebody's already made a business decision, set up a relationship with another company, or planning to deliver content online. A lot of times these [contracts] are last minute, where they have boxed themselves into a corner through their own business tactics and they now have to find a way to keep themselves from being flooded.

Kraig Baker: That's absolutely right. [A company] produces its magazine or newspaper, and then decides it wants to syndicate the content somewhere. It makes a [representation] in its syndication agreement or content distribution agreement that the company owns all the rights.

An indemnification is something that you want to try and avoid, because it's one thing if you have to make up for your own errors — but if you have to pay somebody else's costs, too, that never makes the folks who are looking at the bottom line very happy. So a lot of times you get into this great relationship, you sign a letter of intent, you may even have signed the agreement — and suddenly realize that you haven't cleared all your rights. So suddenly, you have to go back hat-in-hand, trying to clear all your rights, so that you can actually deliver what you've promised to deliver.

Question 2: Do these publishers expect to make, or are they making now, money off these additional rights? There's a big debate about whether there's money to be made — or are they hedging their bets that they might make money in the future?

Erik Sherman: I think that depends on the venue. When Miramax started Talk Magazine they said, "We think of this as a synergy play, we're going to get all rights to these magazine articles because half of 'em we're going to turn into movies, so we want to make sure we have all these film rights." So you've got some folks, particularly in the consolidated media industry, who are looking at things and saying, "Well, gee I see this as leverage for creating something that's going to make a lot of money." In terms of flat syndication redistribution, usually you're only going to make money if you're the New York Times or you have a package, such as these online content distribution agreements where one content provider is providing content to another content provider. Often there's not much money. Sometimes it's just a barter trade, sometimes you're getting advertising, sometimes you're pushing your brand out there. I don't know that it's huge money, but it's not necessarily money you want to leave on the table as a writer.

Kraig Baker: It can actually work out to a fair amount. There's one well-known technology magazine that had to take a look at how much money was coming in from syndications because they had to find a new way of dealing with payments to writers. That's because the staff was so small, they could no longer keep track of "all right, for this one, for this article that just sold over there, we now can give 50% of this money to that person," etc. They were years behind where they were supposed to be. They finally caught up, and they realized that on a 50-50 split the articles were bringing in about 20% of the fees they were paying the writers. So they ended up paying the writers an extra ten percent on the article fees to sort of cover syndication after the fact and saying "Look, we really sat down and figured it out, and it really works out to this, and if we do it this way we can keep giving you a share because we don't have to have one editor locked up for six weeks trying to figure out how much we owe you." The point is there is money coming in on these things, how much is relative. To a publisher, that may not be a lot; to a writer, it may be a significant increase in your income. That's why you have to go after this.

Question 3: Should writers keep an eye out for particular contract clauses or language?

Erik Sherman: Anytime you see "work made for hire," that means they not only own the rights but they legally become the author of the document. You could argue how much of a real impact that had on writers, but it is kind of galling to be told that you no longer are the author. Sometimes, if writers complain about "work made for hire," [publishers] will come back with an all-rights document, which comes out to about the same thing. But you want to make sure that you have the right to do things with your material after [the publisher] runs it — and ideally that if [the publisher] is going to do something with it, you're getting a split of the money.

Kraig Baker: A "work made for hire" agreement basically means that you're giving away the copyright. It's like you hire an ad agency, and they design a poster for you. Then they deliver the poster. They get paid, and you, the advertiser, get ownership of the document. Work made for hire is very aggressive in this area — but it's not, for instance, on the software side, on the web developer's side, and this is where you're seeing some of this consolidation synergy stuff. You're seeing a lot of these terms bleed across into spheres that never had to deal with these things before.

Normally what you'll see publishers look for is an "all-rights" document, which means they'd like to try and own everything but they sort of recognize that they can't — so what they're really trying to do is say: "We both own it, and because you can license me everything that you own, or every right that you have as an owner of a document, I am owner of a work. So even though you're not transferring the copyright, and you still own the copyright, you're essentially giving me the same rights that you have. And then you know if I'm really aggressive, what I want is an 'exclusive right,' which means that I'm pulling some of those rights away from you."

Question 4: What can writers do? Say you get a contract that calls for all rights in all media and throughout the universe for a millennium — is there a negotiating tactic that you could take or language to use?

Erik Sherman: The best first thing to do is say, "I'd like to see your first North American Serial Rights Contract, please."Because many, many of these publishers have other contracts in the drawer they could send you. They just don't want to send them to you. The editors are told to send this one first. Just say, "That's nice, I know about this." Or you can even do this negotiating upfront. Before you agree to take the assignment, you can say, "By the way I'll need, I really want, your First North American Serial Rights Contract. Please don't send me the 'work for hire' contract." Just get that out of the way immediately.

Kraig Baker: If you want to be successful, your first tactic should be whatever tactic keeps the publisher's lawyer out of it. Because as soon as [the lawyer gets involved], you're going to get yourself mired in a long discussion, and one that's going to be unpleasant. From a practical standpoint, I am always a very happy user of the "notwithstanding" clause. The folks who are negotiating with you will have orders from their legal department, or from somebody up higher, who doesn't have to deal with the writer who's upset — and they're going to be on orders that "I can't change the document."

So go in with the idea that you have these three rights you want to protect (not rights within the bundle rights), or these three issues you need to make sure that you get protected, and then what you do is you add to their contract a notwithstanding clause. What this clause means is "Yeah, yeah, yeah, we said all that over here, but even though, there are these set of exceptions here." So what you're doing basically is saying, "Yeah, there are all these rights here, but notwithstanding what you just said there, actually what the reality is, [is] this bundle of rights down here." So we say, "notwithstanding the foregoing that I gave you all of these bundle of rights, these rights are all going to revert to me in a year — or you don't have the right to use this for, in any film deal, or you don't have the rights to use this, outside of North America" or you know, whatever it is that you're trying to reserve.

But I think the critical aspect to this is to go in knowing what you're asking for and saying I know the things that are value to me. Because everybody, each writer, is going to have different values, you know. Is control of my work what's of value to me? Is it money? Is it ancillary rights, because I think I've got something that's going to turn into something beyond just syndication? You know, in thinking about sort of what it is, you know where your values are going to be critical to negotiating a mutually satisfactory contract without the pain of the lawyer.

Erik Sherman: Sometimes a publisher will go through and you'll see something that sounds like First North American Serial Rights and a few clauses down they take the rest of them, OK, it happens, so do not get fooled. It's also always good to say "I just want to underscore this," because quite often there's another contract, or quite often they know you're going to cut, you're going to scratch out all rights.

Kraig Baker: Sometimes the company is Disney, for instance, and the contract comes from the film folks.

Erik Sherman: And to be fair, in the film industry they have an entirely different history of contracts: Freelance writers sell all, they regularly sell all rights and they get some licensed back to them. So it's just a completely different business, but this is why you have to read through an entire contract. Do not be fooled by section heads that say Rights, because inevitably there'll be also a clause saying that the heads have no inherent meaning.

NASW Audience Member: You were just talking about different writers wanting different things. I want to know, Erik, if you could address the question of how important it is for writers to demand the same thing, be on the same page.

Erik Sherman: No. Strike that from your mind. This is a business, and what you need from your business is going to be different from what I need from my business. There are a lot of things that will be common, such as the need to make money off of ancillary rights. If money is being made, I want a cut of it, and I'm sure you do, too. There may be some amount of control over the way my work appears that I want. You know I don't want somebody to be able to totally rewrite it, have it say something absolutely the opposite of what it said and have my name tied to it.

But what is most important is for all writers to speak up to the publishers and ask what they want. Don't go around sheepishly. You don't need to. You wouldn't do that if you were interviewing someone would you?...[I]f you didn't get an answer what would you do? You'd ask it again, right? What you need to do is learn to bring that same approach to your business dealing.

Kathryn Brown: I think some freelances fear that the market is such that if one writer says, "Well, I won't work under these terms," ten other writers will.

Kraig Baker: Yeah, but there's a difference between demanding and negotiating. Every publisher knows that questions are going to come up or he's going to expect that you're going to mark up a contract. Now, you may not get everything that you asked for, and they may say, "We're the New York Times and you know if we're going to give you a byline, then you're going to take all the rest of the terms that we're going to give you." Then you have to decide how important the byline of the New York Times is. But you know everybody is expecting this and particularly as you sort of move up the food chain with more sophisticated publishers, I mean you know they're all expecting that. Whether or not you get it is a different question. But I would be appalled if a publisher sort of pulled [a contract] because you asked for [terms].

Erik Sherman: There are some that get their nose in a snit if you — even think of doing something. Walk away from it. OK. I can think of a major news weekly that, within the last couple of years, had to move from a work made for hire contract to a contract with non-exclusive rights. That's because the editors were hearing from so many writers, who said, "I'm not going to do it," that they went to the lawyers and said, "We can't do business — you've got to change this."

And the law — and I actually personally sat down with the lawyer and we were talking over this stuff. The lawyer said "My hands are tied, the business people have gone off and said that we can sell this, that, and the other thing — and we have not only said that we are contractually locked into it, we can't get out of that." So you know there's give and take. They lost things they wanted. They wanted all rights; they no longer get all rights.

Question 5: What is the role of the editor? A lot of editors feel like they're sort of hamstrung, being the person who's on the front line trying to deal with the frustrated writer. When working with an editor, how do you find out what's possible and what's not possible?

Kraig Baker: Recognize that the editor often is going to be sensitive to your concerns in a way that the business types and the legal types are not. What happens is that somebody in the legal, business, or sales department makes a judgment about how they're going to do things and then people have to implement that. Many editors are ex-writers and have predispositions toward your interests. So if you can get those people to work with you, then they will become advocates for you to the legal department. At the end of the day every legal department is serving the business clients, and their job is to manage the risk for the company. Good in-house legal counsel are going to say we want to make our clients happy, meaning the folks who are the non-lawyers in the company and trying to get the editors to feel less hamstrung. So if you can turn [editors] into your advocates, then you're going to be in great shape.

Erik Sherman: You also can just ask them, "What changes are you allowed to make?" And take into account how long the editor has been there. I ran into a case recently where a writer who came to the ASJA Contracts Committee was presented with a Work Made For Hire Contract or an All Rights Contract from a well-known publication. The editor had said "There is no other contract available and this is what I've been told to send out." But I was able to turn around and say, "Well, the editor is new because there are other contracts available. There is a very good contract available that you can get for asking." The editor didn't know, so this is why you also have to network. You have to talk to other writers, check with our Committee — and it's not just for members of ASJA; we will do contracts for everyone. But you have to, because a lot of times the editors aren't going to [know] what's available.

Kraig Baker: That's also a negotiating ploy, too: "I don't have the power to negotiate this." You have to decide how critical it is. Sometimes that's true. I would suggest you try and get a read on where the bodies are buried — it is amazing how quirky some of the companies' choices about where they're going to draw the line in the sand. And you can't say "Well, gee, I got this with this publisher, so therefore I ought to get it with this other publisher."

Just like you have different interests, the publishers have different interests. Some of them have been commanded to protect synergy rights, based on their consolidation. Others have been burned in the past because they didn't do their due diligence on fact checking and so they have these really egregious insurance clauses expecting you to go out and get insurance for errors and omissions on what you're providing. So you need to figure out where the bodies are buried so that you can figure out whether it's true when somebody says, "I'm sorry, this is a line that we've drawn that we can't modify." Then you know and decide whether you want to proceed or not.

Question 6: We talked about Work Made For Hire Contracts, All Rights Contracts, insurance clauses. Let's clarify: Are there other particular clauses or contract language writers should keep an eye out for and not simply agree to sign on the dotted line?

Erik Sherman: Indemnification is the big one.

Kraig Baker: Yes, [indemnification] is a certain set of circumstances that basically says "If I, the publisher, gets sued by a third party (normally they are third party indemnities), I bear that risk. Maybe I'll break the contract and maybe I don't pay you, but you know I'm not going to [ask you, the writer, to pay for the lawsuit fees and damages]."

Kraig Baker: The publisher often asks for the indemnity, but this goes vice versa. I mean you may be asking for an indemnity back from the publisher. You may or may not get it, but it's fair to ask back for an indemnity that says "Look, if you edit my story incorrectly so that I incur a liability because you blew the editing process — if I told you things were cleared in North America and then you distributed it overseas and you get sued or I get sued for defamation because somebody's got different defamation laws — you know you're going to protect me from that." Indemnity really is a concept that says, "If I'm not at fault, and you're at fault and somebody sues one of us, you're going to reimburse us, or reimburse the clean-hands party."

Erik Sherman: To be fair, how many times have you seen a publisher sue a writer or invoke an indemnification clause? Never. But it's a big risk if it does go wrong, that's the thing.

NASW Member: I think some of us worry not that we screw up and get sued, but what if we don't — what if it's a nuisance judgment and the lawyers cost even a few thousand dollars?

Erik Sherman: You can't take indemnification just by itself though, because quite often there is a set of warranties that you as the writer are making. You're saying I warranty that I'm not stealing this from somebody else, I'm not going to libel, I'm not going to cause you problems with anyone else's personal rights, etc. It's really important in that case to include a "to the author's knowledge" sentence to the contract can narrow the warranties to something reasonable where you're really warranteeing your professional behavior — reasonable professional behavior, and if the indemnification is against breaches of your warranty then you're in pretty good shape,

NASW Audience Member: I just want to add an editor's perspective. I'm a contributing editor for Scientific American now, but I used to be a staff editor until October. And when we added an indemnification clause to our contract asking the writers to warrant that they had not made up the article, made up the quotes, misrepresented, we got a lot of resistance from writers to signing that at all. And that seemed like, "Well, we're not asking you to indemnify against anything; we're just saying you take responsibility, if you knowingly did these horrible things."

Erik Sherman: You have to understand that a lot of writers look at contracts as something scary and that over the last four or five years, they've been taught to avoid certain things like the plague. Indemnification clause, period. If they see indemnification, these types of writers will go off the deep end, because they don't understand, they're not reading the language.

NASW Member: You've got to understand what it is you're indemnifying yourself of or for, because sometimes a publisher has a right to protect itself from the people who go out and fabricate stories from whole cloth.

Erik Sherman: Absolutely.

NASW Audience Member: There was a committee on insurance for freelancers, and one of the observations was that one thing you can do is make sure that your contract doesn't put you in a really horrible position in terms of indemnification clause. That was just a very cheap way of avoiding buying liability insurance — just make sure you haven't exposed yourself via contracts.

Erik Sherman: That's no guarantee. Lack of an indemnification clause doesn't prevent somebody from suing you.

Kraig Baker: Right. To clarify, there are two differences. There are warranties — a promise, that this story I'm going to give you is my original work, non-infringing, not defamatory, not obscene, etc. That's just a promise. On the other hand, an indemnification is an affirmative obligation to repay someone. Indemnification means a promise to repay somebody for their out-of-pocket costs.

NASW Audience Member: So I just signed one, I negotiated one recently where the indemnification referred to warrantees. That's all it is?

Kraig Baker: Well, I could also sue you for breach of contract for my first party losses. Indemnifications are usually for third party losses. So maybe I've got an ongoing relationship with you, so that you're going to do twelve articles over the next year and a half for me. And the second article ends up being defamatory, the first article wasn't really the quality that I wanted...and so I decided that I wanted to look for a way to break the contract. So now I say, "You know, I'm not asking you to indemnify, but you broke your promises so now I'm going to terminate the contract."

Question 7: Is it legally binding to alter a contract and initial the changes or add language at the bottom? Or is it better to ask for an amended contract, rather than amending it yourself?

Kraig Baker: Write it in, and it doesn't really matter whether you put it in the end, whether you make it an addendum whether you do it, I mean there's nothing magic in the way you write contracts, too.

Erik Sherman: If you're getting a letter or a contract that is saying, "If you try to alter this at all, the contract is null and void" — and if you're further getting the sense that they don't want to negotiate — walk away. All right, the best defense against bad deals is to walk away from them. Sure, you'll be walking away from some money, but you're going to be walking away from an even bigger headache. Just don't do business with people who do this sort of stuff.

Kraig Baker: You know, even if you go skiing and it says on your lift ticket that "we're not responsible for anything," if they don't put pads around the ski lift poles and you hit an unpadded ski pole, this [disclaimer] on the bottom of your ticket doesn't mean necessarily that they get out. People do these things essentially so that they can minimize the number of people who will make a claim against them. They're putting this on the contract so that you won't try and do this. I would every time send it back because if they want to do the deal with you, what they'll do is they'll come back and say by the way we just can't do that. But if they really want to do it, they'll go ahead and make your changes or they'll make some changes.

NASW Audience Member: The reality check: anywhere I've ever worked as an editor, if the writer wrote in, crossed out, initialed, whatever, it immediately was bounced to the Editor-in-Chief--so don't assume your editor is going to be able to negotiate, because most of us don't have the power.

Kraig Baker: Certainly, absolutely right. The whole idea of having the contract is managing my total risk as publisher, so if I've got people making deals willy-nilly, I don't have the whole sort of context of the company and who we are at heart. So then that's going to be a problem, and you may choose to bounce it up to the Editor-in-Chief, to the legal department, to all those people.

NASW Audience Member: It really can sour the relationship. At some publications, if you have to get the Editor-in-Chief involved for a 1,200 word news story, it's just not going to go over well. My advice is ask for more money up front and be willing to give away things like Internet rights. It's easier to ask for more money and then you're more likely to get another assignment next time.

Kraig Baker: I think that's an instructive point: there are solutions for almost every one of these.

Erik Sherman: If somebody comes in and starts offering me four or five dollars a word for an article and says they want all rights, chances are very good that I'll do it. Because it's business, OK. We're not talking about advanced moral philosophy here. If I'm going to make more money and if I'm especially going to make way more money selling all rights, I might very well consider that. You have to be realistic.

Erik Sherman: I've worked for a number of big publications and it never seemed to have done me harm to negotiate a contract. At Newsweek, there is something called the Erik Sherman contract, because I negotiated a version of the contract that I could live with. And you know the lawyer, the in-house lawyer was trying all the things like, "Well, you know this is getting to the point that it's not even worth my time anymore," and I said, "Look, I, about this next clause," and we just went through. Yeah, it gives away more than I'd like to but it doesn't give away everything. I get enough money for it, and anytime they do a piece they call down the legal department. They send over one of those contracts and they write it out and they send it to me.

The point is that big companies do this sort of thing, they really do, they have different versions of contracts. They can negotiate quite often and there are so many publishers out there. You know you always hear "There are so many writers, I can't cause problems, there's so many writers taking my place." No. There are not so many writers who write as well as you, who can cover what you cover and who know what you know. There is a reason publishers want to do business with you. And you have more power in the relationship than you realize.

Kraig Baker: A core point: Everybody has to get comfortable with their own allocation of risk, and figuring out again what your priorities are in the contract and whether it's money, whether it's rights, whether it's notice or control. The other thing you have to identify is what are real risks and what are ephemeral risks...If you can sort of step away and consider, "Is this a real risk that I'm trying to protect myself against or is this a risk that I think philosophically I ought not to have but is probably not going to happen?"

Question 9: How are contracts evolving? Are publishers increasingly pushing for certain kinds of changes to contracts or is it more haphazard than that?

Kraig Baker: Contracts are by nature reactive, law tends to be reactive. After the Tasini Decision at the Supreme Court, all of the publishers suddenly were just petrified and came back with these really over-the-top kind of agreements like those from the software industry. I actually saw a freelance publishing agreement that had the "no reverse engineering" clause.

NASW Audience Member: Smaller publishers don't have legal departments. They've got outside counsel, and it costs money every time you have to get advice from the outside lawyer. So just keep that in mind when you're negotiating a contract — a publisher that's smaller wouldn't have in-house counsel and they would rather do anything than to re-negotiate that contract.

NASW Audience Member: The Freelance Committee has talked about using some of the money that comes to NASW to possibly hire counsel on an occasional basis to deal with some thorny contractual issues. To get a quick legal answer.

Kraig Baker: I think that that's fantastic. Actually, Washington Newspaper Publishers Association in Oregon and Newspaper Publishers Association are both coalitions of small newspapers in Washington/Oregon, and they have hired us. So we get towns, [not just] newspapers, I've never heard of in Eastern Oregon and things like that who said, "Gee, I've got this story and I need somebody to take a look at it to see whether we've got defamation issues with it," and we bill a newspaper publishers association. It's part of the dues or something like that, so basically we're sort of the hotline for them. We answer questions in consultation, and it seems to work very well. We've got eight or ten attorneys and you call one person first, and if that person is not available, you bounce down till you get to somebody who happens to be at their desk at the time that the call comes in.

Erik Sherman: You're not going to find that you need a lawyer every time. You need a lawyer to explain this term and that. As you look at it more, you're going to learn more and be able to understand better in the future. But there are going to be times when you're going to say, "I need help," so if you had something like that, that would be great.

Kraig Baker: The value of having a lawyer is that they will come up with the creative alternative that's consistent from a legal standpoint.

Erik Sherman: One thing of value about a lawyer: I've seen writers decide they're going to add language to a contract. Now, there are some things you can get away with, like "to the author's knowledge," in terms of warranties. But I remember hearing from one writer who decided that speed is of the essence. In terms of a contract, it's a really bad thing to have — or "time is of the essence."

Kraig Baker: "Time is of the essence." Erik Sherman: "Time" is better. It's not a good thing from your point of view to have in there. She didn't know what she was doing, she put it in, so you want to be very careful about deciding what language will get you what you need.

NASW Audience Member: A question. Another freelance writer said she had ten years as a freelancer and signed very few contracts, just getting paid. If you're not promised anything, maybe you've preserved your rights, instead of giving them away. Is that nuts?

Erik Sherman: If there is no signed contract, "Tasini v. New York Times" is the ruling law — and that means they by default only get First North American Serial Rights and can't do anything else with the piece. If you're worried about proof for getting paid, if there's email or some documentation back and forth that they were expecting you to write something and they were going to pay you "x" amount, I would say you've got something in your favor there.

Kraig Baker: You've got the published article too. You can make a contract through performance, not just through execution of the contract. Copyright law says that the author of a copyrighted work owns everything that's not expressly granted to someone else. Now, you know there are other risks that you're not foreclosing by not having a contract. It's sort of your word against theirs about what exactly the rights were that were expressed. What happens is the court will fill in terms of the contract, if the contract doesn't exist.

Question 9: Is any contract language particularly productive or good to have? For instance, some contracts stipulate that I get paid within thirty days at which point interest begins accruing, is that really effective language?

Kraig Baker: If you're going to demand that, and you know so. Everybody should get QuickBooks, because everybody wants an invoice now, particularly anybody who's a larger entity because they need to track all that.

NASW Audience Member: What happens if you don't get paid and the individual uses your work, and continues to use your work?

Erik Sherman: That's partly about learning how to collect money effectively, which isn't necessarily a contractual issue. You should always go off and register the copyright, once every three months, gather up everything you've done, it costs all of $30, there is a form you can fill out, you can put in multiple stories, as one collection of stuff, send it in, register your copyright, because that is a very big stick.

Kraig Baker: From a practical standpoint, if you're not getting any result from the editor who was supposed to pay you, send a letter to their legal department and include the contract or include these sort of things because this is exactly the kind of thing that might not ever make it to the legal department.

Erik Sherman: I would say one step first: talk to the accounts payable people — because you may very well find out the editor didn't get around to filing the paperwork, keeps forgetting to do it, and is too embarrassed to say something. Talk to the accounts payable people, and they will go up and say, "Where is this?" and suddenly the editor will shake loose.

NASW Audience Member: I had a contract with a NIH group. They decided they had to have contracts. The only contract they had was for government contractors, so it was a 25-page contract in which I said I would do less than a million dollars worth of business a year and would not be involved in needle exchange programs.

Kraig Baker: You should look at that because the government — unless they essentially give you back the copyright automatically — gets the copyright of something done. So most government contracts will have a clause that says "We are not taking any rights in [conjunction] with these federal access regulations." It's a pretty standard clause that gets dropped into these things.

Erik Sherman: Or they may they may specifically say we are taking rights.

NASW Audience Member: I thought all government work is in the public domain.

Kraig Baker: If the government itself creates something, it's in the public domain. But a private entity is different. If you write something to the government, for instance, you don't automatically lose your copyright to the entire work. Who owns it? It depends on the contract.

Kraig Baker: People were very concerned about losing copyright for things that they were creating for government contractors. So the government came up with these Federal Administrative Regulation and Defense Federal Administrative Regulations. If you go to the AMA web site, there's a clause that lists all of these things that say, "We're doing business with the government, but we're not taking your copyright, because of these regulations, etc."

NASW Audience Member: Is it legal to share contracts?

Kraig Baker: Legally, the terms of a deal are confidential usually, it's part of a confidentiality clause. If there's no confidentiality clause, the presumption would be that it's non-confidential. The practicality is that everybody shares contracts. Kraig Baker: Part of it is how you would set it up. I mean, if NASW was going to set up a resource web site that says "here are contracts that you can download," you may get some cease and desist letters. Erik Sherman: ASJA was thinking of putting up a database like that for its members, and we talked about it, and we finally said we can't do it. You know it's not legally possible. ASJA has lots of contracts that we've taken a look at, but we don't republish them or offer them to members or non-members.

NASW Audience Member: No, but you could say "27% of the contracts that you've seen have a clause concerning xx, or 75% of them don't have xx, or whatever." Erik Sherman: There's lots of places you could go to find examples of clauses. Kraig Baker: There are form books--you can go to Amazon and find form books on negotiating a publishing contract.

NASW Audience Member: Have any of you used "ideal contract" examples?

Erik Sherman: No. We're not lawyers, and we're not looking to offer legal advice to somebody. The problem with general forms is that your needs may differ and you need to have a lawyer take a look at it and come up with something.

Kraig Baker: Somebody over here mentioned doing an analysis and "here are four or five different clauses from a contract with fall back terms and here are variations." That's going to end up being more productive for you because you're not likely to be the originator of the contract.

NASW Audience Member: From the perspective of the scared freelancer: I've made those calls and geared up for a fight. And out of four times, once I lost — and once they said, "well, we'll make the change you want, but we can't pay you as much," so I said, "never mind, I'll take the money." But two times, I got myself ready for this fight, and they said "sure, fine," they made the change. So I just want to throw another pitch out there to people that you may be expecting a fight and not even get one.

Erik Sherman: Right. A lot of times you won't, because [publishers] know that a lot of writers aren't going to go for it, and they already have their fallback positions.

Kraig Baker: Right. You negotiate hundreds of these things, and you get so that you know where the bodies are, you know what your wiggle room is, you know what your priorities are.

Erik Sherman: I have one thing to say: It's not personal, it's business. The biggest problem writers make is that they take it as some sort of a personal attack. It's not. It's business--and if you treat it as business and negotiate, you have what you can fall back on, and they have where they can fall back on. Nobody's going to be perfectly satisfied. And if the terms don't match what you need, walk away.

Kathryn Brown heads EndPoint Creative, LLC, a specialty communications company in Alexandria, Va., that works with science, medical, and technology organizations.

The National Association of Science Writers, Inc. (“NASW”) supports practical measures meant to help freelancers build and sustain a thriving business, from compensation surveys that offer a historical look at the field to tip sheets on matters like how to approach contract negotiation. In offering these educational resources to support our members, and in all our activities, NASW is committed to compliance with all applicable antitrust laws. NASW members are reminded that they must exercise their independent business judgment in pricing their services or products, dealing with their customers and suppliers, and choosing the markets in which they will compete. Federal laws stipulate that members may NOT agree with other NASW members or writers on prices or terms or on any other matter which is inconsistent with exercising their independent business judgment in pricing their services or products, dealing with their customers and suppliers, and choosing the markets in which they will compete. NASW members are always free to accept any assignment at any rate they choose. For further information, please see our Antitrust Policy, available here.

August 31, 2004

Advertise with NASW