The Need For A Lawyer In Film Production
© John J. Tormey III, Esq. All Rights Reserved.
This article is not intended to, and does not constitute, legal advice with respect to your particular situation and fact pattern. Do secure counsel promptly, if you see any legal issue looming on the horizon which may affect your career or your rights. What applies in one context, may not apply to the next one. Make sure that you seek individualized legal advice as to any important matter pertaining to your career or your rights generally.
Does the film producer really need a lawyer? A lawyer's own bias notwithstanding, which might naturally indicate "yes" 100% of the time - the forthright answer is, "it depends". A number of producers these days are themselves lawyers, and so, often can take care of themselves. But the producers to worry about, are the ones who act as if they are lawyers - but without a license or legal experience to back it up. Filmmaking is an industry wherein these days, unfortunately, "bluff" and "bluster" sometimes serve as substitutes for actual knowledge and experience. But "bluffing" documents and production procedures will never escape the trained eye. For this reason alone, I suppose, the job function of production counsel is still secure.
I also suppose that there will always be a few lucky filmmakers who, throughout the entire production process, fly under the proverbial radar. They will seemingly avoid pitfalls and liabilities like flying bats (are reputed to) avoid people's hair. By way of analogy, one of my best friends hasn't had any health insurance for years, and he is still in good shape and economically afloat - this week, anyway. Taken in the aggregate, some people will always be luckier than others, and some people will always be more inclined than others to roll the dice.
But it is all too simplistic and pedestrian to tell oneself that "I'll avoid the need for lawyers if I simply stay out of trouble and be careful". An entertainment lawyer, especially in the realm of film (or other) production, can be a real constructive asset to a producer, as well as the producer's personally-selected inoculation against potential liabilities. If the producer's film lawyer has been through the process of film production previously, that lawyer has already learned many of the harsh lessons regularly dished out by the commercial world and the film business.
The film lawyer can therefore spare the producer many of those pitfalls. How? By clear thinking, careful planning, and - this is the absolute key - skilled, thoughtful and complete documentation of all production and related activity. The film lawyer should not be thought of as simply the cowboy or cowgirl wearing the proverbial "black hat". Sure, the lawyer may sometimes be the one who says "no". But the film lawyer can be a positive force in the production as well.
The lawyer can, in the course of legal representation, assist the producer as an effective business consultant, too. If that film lawyer has been involved with scores of productions, then the producer who hires that film lawyer benefits from that very cache of experience. Yes, it sometimes may be difficult to stretch the film budget to allow for counsel, but professional filmmakers tend to view the legal cost expenditure to be a fixed, predictable, and necessary one - akin to the fixed obligation of rent for the production office, or the cost of film for the cameras. While some lawyers may price themselves out of the price range of the average independent film producer, others do not.
Enough generalities. For what specific tasks must a film producer retain a lawyer?:
1. INCORPORATION, OR FORMATION OF AN "LLC": To paraphrase Michael Douglas, this issue usually constitutes the "wake-up call", telling the producer that it is time. If the producer doesn't properly create, file, and maintain a corporate or other appropriate entity through which to conduct business, and if the producer doesn't thereafter make every effort to keep that entity bullet-proof - then the producer is potentially shooting himself/herself in the foot. Without the shield against liability that an entity can provide, the producer's personal assets (like house, car, bank account) are at risk and, in a worst-case scenario, could ultimately be seized to satisfy the debts and liabilities of the producer's business.
Like it or not, film is a speculative business, and the statistical majority of films can fail economically - even at the San Fernando Valley studio level. It is insane to run a business out of one's own personal bank account. Besides, it looks unprofessional, a real concern if the producer wants to attract talent, bankers, and distributors at any point in the future.
The choices of where and how to file an entity are often driven by situation-specific variables, including tax concerns sometimes. The producer should let a lawyer do it and do it correctly. Entity-creation is affordable. Good lawyers don't look at incorporating a client as a profit-center anyway, because of the obvious potential for new business that an entity-creation brings. While the producer should be aware that under U.S. law a client can fire his/her lawyer at any time at all, many lawyers who do the entity-creation work get asked to do further work for that same client - especially if they bill the first job reasonably.
I wouldn't recommend self-incorporation by a non-lawyer - any more than I would tell a producer-client what actors to hire in a film - or any more than I would tell a D.P.-client what lens to use on a specific shot. As will be true on a production set, everybody has their own job to do. And I believe that as soon as the producer lets a competent film lawyer do his or her job, things will start to gel for the production in ways that couldn't even be originally foreseen by the producer.
2. SOLICITING INVESTMENT: This issue also often constitutes a wake-up call of sorts. Let's say that the producer wants to make a picture with other people's money. (No, not an unusual scenario). The producer will likely start soliciting funds from so-called "passive" investors in any number of possible ways, and may actually start collecting some monies as a result.
If the producer is not a lawyer, then the producer should not even think of "trying this at home". Like it or not, the producer will thereby be selling securities to people. If the producer promises investors some pie-in-the-sky results in the context of this inherently speculative business called film, and then collects money on the basis of that representation; believe me, the producer will have even more grave problems than conscience to deal with.
Screwing up a solicitation for film (or any other) investment can have severe and federally-mandated consequences. No matter how great the script is, it's never worth monetary fines and jail time (not to mention, the unspooling of the unfinished picture if and when the producer gets nailed). All the while, it is shocking to see how many ersatz film producers in the real world try to float their own "investment prospectus" (complete with boastful anticipated multipliers of the box office figures of "E.T." and "Jurassic Park" combined). They draft these monstrosities with their own sheer creativity and imagination, but usually with no legal counsel. I'm sure that some think of themselves as "visionaries" while writing the prospectus. The bench and bar may tend to think of them, instead, as prospective 'Defendants'.
3. DEALING WITH THE GUILDS: Let's assume that the producer has decided that the production entity will need to be a signatory to collective bargaining agreements of unions such as Screen Actors Guild (SAG), the Directors Guild (DGA), and/or the Writers Guild (WGA). This is a subject matter area that some producers can handle themselves, particularly producers with experience. But if the producer can afford it, the producer should consult with a lawyer prior to making even any initial contact with the guilds. The producer should certainly consult with a lawyer prior to issuing any writings to the guilds, or signing any of their documents. Failure to plan out these guild issues with counsel ahead of time, could lead to problems and expenses that sometimes make it cost-prohibitive to thereafter continue with the production.
4. CONTRACTUAL AFFAIRS GENERALLY: A production's agreements should all be in writing, and not saved until the last minute. It will be more expensive to bring counsel in late in the day - sort of like booking an airline flight a few days before the planned travel. A producer should remember that a plaintiff suing for breach of a bungled contract might not only seek money for damages, but could also seek the equitable relief of an injunction (translation: "Judge, stop this production... stop this film").
A producer does not want to suffer a back claim for talent compensation, or a disgruntled location landlord, or state child labor authorities - threatening to enjoin or shut the production down for reasons that could have been easily avoided by careful planning, drafting, research, and communication. The production's agreements should be drafted with care, and should be customized to encompass the special characteristics of the production.
I have seen non-lawyer producers try to do their own legal drafting. As mentioned above, some few are lucky, and remain under the proverbial radar. But consider this: if the producer sells or options the project, one of the first things that the distributor or buyer will want to see is the "chain of title" and production file, complete with all signed agreements. The production's insurance carrier may also want to see these same documents. So might the guilds, too.
Therefore, for a producer to try to "fake it" oneself is simply to put many problems off for another day, as well as create an air of amateurism to the production file. It will be less expensive for the producer to attack all of these issues earlier as opposed to later. And the likelihood is that any self-respecting lawyer is going to have to re-draft substantial parts (if not all) of the producer's self-drafted production file, once he or she sees what the non-lawyer producer has done to it on his or her own - and that translates into wasted expense. I would no sooner want my chiropractor to draft and negotiate his own contracts, than I would put myself on his table and try to crunch through my own backbone adjustments. Furthermore, I wouldn't do half of the chiropractic adjustment myself, and then call the chiropractor into the examining room to finish what I had started. (I use the chiropractic motif only to spare you the cliche old saw of "performing surgery on oneself").
There are many other reasons for retaining a film lawyer, and space won't allow all of them. But the above-listed ones are the big ones.
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