Okay, I’m going to grab hold of the third rail of fiction publishing with this one and see how long I can hold on.
Myth: You can trust your fiction agent. Major myth, actually. And one I have tried to deal with in a number of ways in this book.
For some reason, the same person who will give a stranger all their money and the paperwork for that money will at the same time shout about a reader stealing a book online. I shake my head at that. That’s like complaining someone stole the mirror off your car while at the same time a moving van has backed up to your house and strangers are stealing everything you own. But, of course, theft in modern fiction publishing conversations is limited to the theft of the mirror and we just won’t notice how all the furniture is gone.
In some great comments under a recent post with Laura Resnick and C.E. Petit, the topic of how to check money you get from publishers came up, along with how much agents can help you with the money from publishers, and how much they can’t. You can read all the comments here.
The myth (the deeply held belief until smashed out of a fiction writer by hard knocks) is that once you will get an agent they will take care of you, and all your money, and make sure that you get all the money you are owed. Well, in theory, that’s the way it should work. Sadly, it doesn’t anymore, if it ever did.
Now fiction agents are far too busy to chase money, or check royalty statements for their clients to see if the math is correct, or even bother to send the money along to their clients. And keeping track of paperwork is just beyond them these days. For example, I had a top agency for seventeen years and sold a ton of books through them. However, two days ago I got a huge packet of royalty statements from one of my publishers through my former agent’s office. In the packet were royalty statements from two other writers (and not my pen names I’m afraid). My former agency couldn’t even sort out the royalty statements by name, let alone check them for accuracy. And five of my books that should have had statements in the pile didn’t. No telling where those statements went.
And last week my wife got a very large check from a former agent made out to the wrong name. It was her check, correct amount of money, just the wrong name on the check. That was just in the last week. Things like this are so common anymore as to not even cause a ripple. Wow, is that sad. I know agents should check these things, but alas those days are long gone.
In many Killing the Sacred Cows of Publishing chapters I have shouted about all the problems the agent system has these days, including handling money. That money chapter is here.
The bottom line of that chapter is to never let anyone, let alone an agent, get your money before you do, along with all the paperwork that comes along with that money. When you take that practice and place it in the real world, you see how fantastically stupid it is.
Let me ask you…In the real world of business, would you hire a stranger who has a business card with his name on it saying they are a stranger and do no more checking? Then would you give all your money and all the paperwork with the money to the stranger first, without seeing it? Of course you wouldn’t in the real world, but that’s exactly what fiction writers do and then wonder why there are problems.
Let me simply say, “Duh.”
But that said, I got a number of private letters after that first chapter on this topic asking me why I didn’t like the idea of agents handling a writer’s money. Seriously. So after that and the last discussion, I figured it was about time I grab the never-discussed third rail of fiction publishing. Here goes.
Do Fiction Agents Steal From Writers?
Of course. Some do, most do not. And people in agent’s offices like accountants and secretaries do also. Of course, so do some fiction publishers in other ways such as publishing without paying, but not anywhere near as often as agents. The biggest problem is the fiction agents and those working for them, and the system the fiction writers have set up with them, giving the agent and their people opportunity with all the money and paperwork first. (That can be changed easily at the contract stage, but the writer must stand up for themselves and most writers don’t because they are too afraid for some unknown reason. More in a moment on that.)
What fiction writers have done is give agents opportunity. Embezzlement is a crime of opportunity. Writers, by allowing agents to see their money and the paperwork first have given agents opportunity. Easy opportunity. And again, most agents do not take advantage of the flawed system and are very honest, but some do. Also some people who work for honest agents do, and the problem is you don’t know which ones.
My wife, in her very young adult days before me, had a bank employee steal money from her account because Kris and her first husband were disorganized and the employee of the bank knew that. This employee stole from a lot of accounts that didn’t bother to balance statements every month. It took the bank almost two years to catch the employee and pay the money back quietly. Opportunity is the key.
So let me outline clearly, for sake of helping fiction writers at least come aware of the problem areas, how a few agents take writer’s money. Sadly, I will only cover the main scams. And again, there are many honest agents, but how do you know if your agent is one or not? Best way to make sure is get your money and all the paperwork before they do. If they won’t give it to you, you better believe they have a monetary interest in not doing so, because by not doing so, they cause themselves extra work. And that just makes no business sense at all.
Scam #1: Domestic Royalty Statements.
Fiction writers sign contracts and usually know when they are due the different payments under that contract. But the contract also has royalty periods where a short time after the end of a certain period of time the author should get an accounting from the publisher of the numbers of books sold against the advance in that period of time. That paperwork, and any royalty check due, goes to the agent first. Writer has no clue other than knowing that a royalty statement is due. (If they remember from their contract, which the unorganized fiction writers usually won’t.)
So, the agent sometimes sends on the first royalty statement to the writer because there is usually no earned income in the first one. Usually the periods are short periods or have large reserves held against returns or both. Maybe the second statement is also sent along six months later if nothing is earned yet. By this point the book has been in print for about 18 months. The third statement has money with it. Great! But now we are talking two years out and the agent knows the author is disorganized and doesn’t care about all the paperwork, so the statement gets shredded and the money put into the agent’s account and no check is ever sent to the author.
Those of you with contracts with major publishers, first have you seen royalty statements at all through your agent and did those statements sort of just stop after #2? If so, I’d be asking for them real quick. (Oh, yeah, I can hear it now…“I trust my agent, they are my friend, they would never do that to me.” Well, how about someone you don’t know in the agency accounting department then? You know and trust that New York stranger who is having bill problems and a kid in an expensive school? If not, get your statements.)
Scam #2: Overseas Royalty Statements
Oh, this is a major one. I can’t begin to tell you how many times I have had agents tell me how hard it is to get overseas royalty statements. Yet those companies give you contracts with royalty periods in them, and tell you exactly in the contract when the statement is due. But alas, here comes the agent problem on this one. Since you, the fiction writer, are not dealing with the publisher directly as you can do these days, your royalty statement and any money with it FIRST goes to an agent in the country of the publisher. Who knows how many people touch it, but I can guarantee at least three or four complete strangers see your money and have some control over it before it is sent on, if it is sent on, to your New York agent.
And then the second level comes in. Your New York agent knows you are disorganized, know you don’t care about all that “business paperwork” so if money does make it to your agent, again the paperwork can just vanish, the money stays in the account, and guess what, the agent is making more of a profit. And the fiction writer will never, ever know. And, if by some chance, the fiction writer asks about those overseas statements, the agent says, “Oh, I’ll see what happened to that, but you know how hard it is to get royalty statements from overseas.” And that’s where the fiction writer drops it, moving on, never knowing there was money owed. And more money in six months. And so on.
Scam #3: You don’t Need to Sign That, I’ll Take Care of It.
Darn I wish I was kidding on this one, but I listened to some top fiction writers (whom I admire) go on about how they have given their agent power of attorney to sign those pesky overseas contracts. I got so upset at that stupidity, I had to lay down.
So, not only is the fiction writer giving a stranger all their money and the paperwork with that money, but they are giving the stranger the power to sign contracts. It was just about that point I knew I had to start talking about all this. Those writers thought that normal, and when I questioned them, their reasons were clear as long as trust was a major factor. Basically the reason for them was “It’s just easier and quicker.” The quicker part made me lay down for a second time.
But where this scam really hits home is with newer writers. Under international copyright rules, the contracts are always in the language of the author. But agents will tell young writers there is no need for them to see the contract because it is in German or French or whatever and they wouldn’t understand. The agent “will take care of it.” One agent who at the time was serving as the president of the agent’s association was pulling this scam on writers. More than likely still is.
So let me be clear. Under this scam, the author never sees the ORIGINAL contract. So if they do see a contract at all, it could be changed before it gets to them. Or more than likely they will never see a contract, or a royalty statement or anything. Of course, some money will be sent on to the author because the book is in print overseas. But a nice 10,000 Euro contract might get the author $4,000 and where does the rest of the money go? Nice little bonus for the agent with the stupid fiction writer client.
Okay, that’s enough. I had a few more, a couple concerning Hollywood money, option money, and other odd rights sales, but I won’t go on. You get the idea.
Do Publishers Steal From You?
Sure, but not very often. And more often in smaller publishers who are tight on cash flow.
For example, I had a small press company called Pulphouse and near the end we got tight on cash flow. Was I slow paying some writers? Sure. But I never took any writer’s money because I structured all but one of our series to never have royalties and thus they were not needed in the contracts. (Remember I was a writer first, publisher second.) And the only series we did with royalties I made sure the first printing was under the amount that would start triggering royalty money to authors. (I wasn’t stupid, I knew we were short on money and I didn’t want the temptation.) We paid one royalty check ever in all the years of Pulphouse. And I paid all writers kill fees who asked for them when we went down and I couldn’t get their work into print as promised.
And often a small publisher will steal copyright from a writer by publishing their work without payment. That happens a lot with cash-strapped smaller publishers.
However, in the big companies things sometimes do happen and it is often the employees buried in accounting that are the problems, or a general corporate policy that turns out to be theft and takes years to clear up with many lawyers and professional accountants involved. Writers in contracts are given the chance to audit their paperwork. If you decide you have to do that, hire a professional versed in your area of publishing to do it. Often there are no problems found, but every-so-often there are.
If you are smart you get your share of the money sent directly to you and copies of the paperwork with that money. However, if you send all your paperwork to an agent even if someone in a publishing house is ripping you off you might never know.
And by the way, in case you were wondering, fiction editors in major houses never get near the money at any time and will have no idea any of this even goes on.
So instead of worrying about some fan taking one of your stories online, here is what you should be doing to get all your money and protect your work.
SOLUTION
One… In all fiction contracts, including overseas, without exception, split payments with your agent. Your agent can get his share and a copy of the paperwork. You get your share and a copy of the paperwork. Do this at the contract stage with the publisher. And if your agent says it is just too hard to transfer money from overseas or gives you some other lame excuse, just remind your agent this is 2010 and it isn’t difficult or expensive anymore. Put the details in the contract.
Two... Check the paperwork to make sure the numbers add up each time and the amount you have been paid is correct. If there is a problem, talk to the accounting department in the publishing firm. Not your editor. Again, editors are not connected to the money in any way.
That’s it! Two simple steps to make sure you never get stolen from. Simple steps.
WARNING SIGNS OF PROBLEMS.
Here are some warning signs you are with an agent who wants to get more of your money than they are entitled to.
Warning #1: They will not split payments in your new contract and will give you all sorts of varied reasons. Understand, splitting payments allows them to do LESS work. If they will not split payments, I’d be going back and checking older contracts and statements with them, and I sure would fire them in a heartbeat.
Warning #2: They want you to sign a power of attorney so you don’t have to sign those pesky overseas contracts. RUN!!!!!!
Warning #3: They will not allow you to split payments with your overseas publisher. Ask them to explain clearly why not and have enough understanding of how the money can get sent directly to you so you can direct what needs to be in the contract to get your share of the money sent directly to you. If they still won’t do it, you may be in trouble.
Warning #4: You haven’t seen an overseas royalty statement on any book, or a domestic royalty statement on a book has suddenly stopped after #2 or #3. Start hounding for those statements. More than likely there is some money tucked somewhere that has been “misplaced” as agents say.
Warning #5: If you have a Hollywood option and you hear nothing about a renewal, don’t just figure the Hollywood connection didn’t renew. Check with the Hollywood connection, not your agent. Major money goes to agents from Hollywood on option renewals that fiction writers never seem to find out about.
Do agents steal your money? Yes. Most do not, but some do. Again, embezzlement is a crime of opportunity. Writers need to take the opportunity to embezzle out of agents’ hands. Agents are strangers to you, they have lives and bills in these tough times just as you do. If you are disorganized, don’t want to bothered, want them to take care of you, then you are doomed. You have given even honest agents an opportunity. Your agent won’t take care of you, but some of them will take care of your money of that there is no doubt. Don’t even give the many honest agents the opportunity.
Let me repeat one more time that there are two simple steps to solve this problem. Step one, split all payments in your future contracts with ANY PUBLISHER and step two, check your paperwork and make sure you get it all.
Okay, now I am letting go of the third rail and going on happy that at least I tried to wake up a few writers.
Get the money, get the paperwork before anyone else. And then check it. It’s only good business.
Don’t give anyone the chance to take your money. It really is that simple.
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Copyright 2010 Dean Wesley Smith
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Okay, I admit it, I don’t have an agent so any money you donate will go directly to me. And this is now part of my inventory in my bakery. (Confused on that, read the Killing the Sacred Cows of Publishing post about making money with writing.) I’m giving you this small slice as a sample. I’m giving you a taste, but not selling any of the pie.
If you feel this helped you in any way, toss a tip into the tip jar on the way out of the Magic Bakery.
If you can’t afford to donate, please feel free to pass this chapter along to others who might get some help from it.
And I would like to thank all the fine folks who have donated over this last year. Once this book is done, I will send you a copy. The donations and the comments both after the posts and privately are really keeping me going on this. Thanks!
Thanks, Dean