Artwork donated by Pati Nagle.

The Freelancer’s Survival Guide: Negotiation Part Five

Kristine Kathryn Rusch

This little sequence on negotiation has really caught your attention, even though I’m posting in the middle of the holiday season.  Thanks, everyone, for the e-mails, the donations, and the comments.  I’m also seeing a lot of blogging and tweeting on this topic in response to the posts, which I appreciate.

The more we share our experiences, the  more we help each other.

If you haven’t read the previous four posts on negotiation, you can find links to them here. Before you go any farther in this post, please make sure you’ve read the section on employees.  Part one deals with real employees—the kind who need a W-2—and you really should read that, even if you think you’ll never hire an employee.

But part two deals with people I call “workers,” people you hire to do a specific job for you.  And you must read that section before you read this post.  Everything I write from here on assumes you’ve read that previous post.

In the past four negotiation posts, I’ve talked about the things you need to know about yourself and your business in order to negotiate anything from a weekend gig to a long-term contract.  I’ve mentioned managers, agents, and lawyers in passing—people whom you can hire to negotiate for you—but I’ve pretty much skipped over what they do in favor of having you do it yourself.

In fact, if you read deeply in the Guide, you’ll see me recommend time and time again that you should do most of this stuff, from the financial to negotiation yourself.

Yet I have a book agent and quite often I bring him into a book deal for the express purpose of negotiation.  He negotiates the deal for me.

Does that make me a hypocrite? Am I telling you to do what I say, not what I do?

No.  Just this week—which is, for those of you reading this late, the week between Christmas and New Years, I negotiated a contract all by my lonesome.  It was a short e-rights contract for a novella that a publisher wanted to include in an anthology.  The contract was purposely short and very vague (see last week’s post on why someone would want to do that), and I made it less vague. But I still left in points a hard negotiator would have changed.

Why? Because, in this case—and this case only—it was in my best interest to keep that contract simple.  Normally, I would have negotiated that little contract bloody. But I saw a greater benefit in keeping the contract loose on both sides than I did in pinning everything down.

Also this week, I’ve read a contract of Dean’s, giving him some feedback (which he really didn’t need because he’s so good at this stuff) and helped him design an agreement for another project he’s working on.

And that doesn’t count the several approaches I’ve had from people who want something—a free story (no), a guest appearance (maybe), or some other thing that will require negotiation.

Normally I handle so many negotiations that I barely pay attention to how many.  I’m used to it now. These past ten days have been relatively slow in the negotiation department.

Finally, this week, I’m reading—slowly—a book contract for one of my pen names.  The contract is with a brand-new company for me, and is the fourth iteration of the agreement.  We’ve been negotiating since the first of November, or I should say, my agent has been doing so, while keeping me informed.

The day before Christmas, he e-mailed me the latest iteration, with all of his e-mails and the company’s responses, so that I could see what had been done so far.  I’m reading this version over the holidays, with the idea that there will be one, maybe two, maybe three more iterations before we’re done.

My agent is a good negotiator, a man with a law degree who has a fondness for contract law, and for publishing contracts in particular.  He’s good and sharp and catches things I might miss (or might not care as much about as I should).  But in all of the contracts that he’s negotiated for me so far, I’ve added language, cut language, or asked for things he never even considered.  I’m very, very hands-on, even though he’s the one interacting with the company.

I’m walking all sorts of negotiating lines in what is a relatively slow week, from negotiating contracts myself to making agreements by e-mail to making some verbal agreements to hiring someone to do the negotiations for me.  And that’s normal in a small business.  Negotiation is, as I’ve said before, part of everyday life.  You need to get used to it.

The trick is to know when to do the negotiation yourself and when to hire someone.  Once you hire someone to negotiate for you, you must manage that negotiator properly.

First, let’s discuss knowing when to hire someone.  I discussed this briefly in Negotiation Part Two, when talking about a torch singer who was asked to play a local club.  I showed the torch singer’s various considerations as she negotiated her fee and her performance time at that club.

As to whether or not she should hire someone to negotiate for her, I said this:

At her level of the career, it would be foolish for her to hire a manager to do the negotiating for her.  Better that she learn how to do it on her own than sacrifice $15 to $20 of that much needed $100 for someone to speak for her—when she wouldn’t get much out of that deal anyway.

Many of the considerations for hiring a negotiator are present in that short paragraph.  Let’s look at them.

1) What can a negotiator bring to the table? That’s always the first question you should ask.  Sometimes all the negotiator brings is a calm disinterested voice.  And in some cases, that calm, disinterested voice is worth every penny you spend on it.  A person who is not emotionally involved should—and let me emphasize should—see things a bit more clearly and hear what the other party has to say, without bias.

This calm disinterest is often why many organizations hire arbitrators to help negotiate contracts between say, a union and a company.  The arbitrator will not negotiate for either side, but will facilitate negotiations.  In these instances, each side has its own negotiator and the negotiator works through an arbitrator, to keep things as calm and above-board as possible.

Generally speaking, you as a freelancer don’t need that high level of expertise.  But you do need to figure out what you need.  If a calm voice is all that’s necessary, then you might not need a professional negotiator at all.

Let me stop one more time here and say this, a professional negotiator has a different name in different businesses.  Lawyers can be professional negotiators.  Most people in publishing rely on agents.  People in Hollywood have tiers of negotiators from agents to managers to lawyers.  Singers often have managers.  But even  your accountant can and will negotiate for you with the IRS, if need be. So negotiators come with all sorts of professional labels. For the purpose of this section, I will call them negotiators.  (But for the purpose of the Guide, they fall into the category of “worker”—someone you hire to do a job for you.  The job, in this instance, is to negotiate something for you.)

What else can the negotiator bring to the table? Expertise.  It might take the negotiator five minutes to negotiate a contract that you’ll struggle over for days, simply because the negotiator is more familiar with the language of that contract than you are.

A negotiator can also bring clout.  Some negotiators—agents and managers in particular—have a reputation all their own, over and above yours.  That reputation should augment the negotiation in a good way.  In other words, if you’re a beginner like that torch singer, a high-powered manager might—might—get you more money just because he’s on board. He might be able to get you into meetings with prospective clients that you wouldn’t otherwise get.

A negotiator also has the ability to say things you can’t. That might sound silly until you think about it.  I would love to tell a publisher that he should pay me more because I’m pretty or famous or a damned fine writer, but it sounds better when my representative says it.  Right now, as a woman who has worked in this field for twenty years and has many accolades as well as an excellent track record, I’m a lot more comfortable doing this part for myself.  But even now, I don’t say, “I’m a bestselling, award-winning writer.  You should pay me more.”  I’m a lot more subtle than that.  But I do make sure that the party I’m negotiating with has the facts before she begins bargaining with me, so that when I get to my way of dealing with this, which is, “It’s not standard practice for me to accept a fee that low or this particular term in a contract,” she knows I’m coming from a position of strength.

Early on, you might have to hire that strength.  Or someone willing to make that statement for you.

There is a downside to everything a negotiator can bring to the table.  Right now, I’m only discussing the upside.  But you’ll have to factor it all in, including the screw-up factor which is this:

The more people you bring into a negotiation, the more likely it is to go wrong.

A long chain of negotiators (often seen in Hollywood—the lawyer talks to the manager who talks to the agent [or doesn’t, as the case may be]) can turn a negotiation into one ugly game of telephone.

And in the end, the only person who’ll suffer for it is you.

But I get ahead of myself.

In answering the what does the negotiator bring to the table question, you have to be realistic.  Often, a negotiator adds nothing to a negotiation.  If you’re savvy about your own business, you probably have all the skills you need to negotiate, and bringing someone else in just muddies the waters.  In the case of our torch singer, a negotiator wouldn’t bring anything to the table except calm, which wasn’t worth the fee the torch singer would have to pay for that calm.

So, before hiring a negotiator for a particular job, make sure the negotiator adds value. So many people have someone negotiate just because that person is on the payroll or that’s what they have this particular worker for, without thinking about whether or not the negotiator is even appropriate to the circumstance.

Think before you act.  And think twice before you hire someone.  Or maybe three or four times.

2. In this instance, make sure the negotiator is worth his fee. Again, you’re looking at value, but you’re looking at it from a slightly different perspective.  If you look at the case of our torch singer, you’ll remember she really needed the money from that gig to pay her rent.  Taking ten to twenty-five percent of the fee away to pay a manager at that point would have been financially devastating for her.

It’s better for her to do the negotiation herself and keep the money than it is to bring in a third party.

This is a two-pronged decision, by the way.  I have a rule of thumb for my business.  Under a certain dollar amount, I generally handle the negotiations myself.  Over that amount, I consider bringing in my agent.  I don’t always do so.

But it’s only a rule of thumb.  Remember last week’s section on contract negotiation: if there’s something I really, really, really want in that negotiation, something that’s so important that I’ll walk if I don’t get it, I’m more likely to bring in the third party to negotiate for me.  Partly this is so that I won’t tip my hand.  Partly, it’s to keep emotions out of the way, and partly, it’s because I’m a pessimist.  In that particular instance, I expect to walk away.  I don’t want to be the one to tell the company that we can’t come to an agreement.  I want my representative to do that—because that falls into the category of something I would rather have someone else say for me than saying it myself.

When you’re considering the fee, you have to look at the value the negotiator will bring.  I once had a writer friend tell me he was “training” his accountant to work with someone in the arts.  In other words, my friend was paying someone who brought no value to the table and who, in fact, was costing my friend not just money but time as well. The accountant had no expertise in the area that my friend needed and therefore was making a boatload of money that my friend could have easily kept for himself.

In the case of our torch singer, the manager wouldn’t have gotten her any more money.  He probably wouldn’t have gotten a better deal.  He would simply have finalized the negotiation and taken anywhere from ten to twenty-five percent to do so.  If she hired a manager in that instance, she was throwing her money away.

Let’s look briefly at the flipside: my book contract.  My agent has put in a lot of work negotiating boilerplate and other points to the contract.  A great deal of my time over the past two months would have gone to minutia that I would have negotiated as well, but I didn’t have to.  It’s been worth the fee.

However, I am reviewing that work right now, and will add my own opinions shortly.  But in value, which I’m equating with service in exchange for money, I’m getting my money’s worth.

The tricky thing is that each negotiation is different.  Even my rule of thumb doesn’t always work—which is why I look at it as a rule of thumb instead of something hard and fast.

In short, I bring in a negotiator only when I need one.  I don’t use a negotiator just because I happen to have one at the ready.  I use one only when necessary.

Here’s the other side of negotiating: so much can go wrong.  You will make mistakes, as I’ve said before.  But it’s better for you to make the mistake than your negotiator.

Because if you’re truly hands-off in negotiation, you might not know about the mistake until the negotiation is over and you’ve signed the contract.  And that, my friends, is not your negotiator’s fault.  It’s your fault.

Let me quote a comment left as we started into this topic, lo those many weeks ago.  I know many of you don’t go back and read the comments section, so I’ll reprint most of it here.  It’s from Randy Tatano, who works as a freelance broadcast news reporter, mostly for NBC.

He wrote:

Well, on the topic of hiring someone to negotiate, a news anchor I know hired an agent to negotiate her next contract. Her agent took such a hard line that management called her bluff and she ended up out of work. She had absolutely no desire to leave but apparently didn’t convey that well enough to her agent.

On the other side I was trying to hire an anchor once and the agent was so incredibly obnoxious I moved on to someone else. I was trying to negotiate and meet the guy in the middle but he wanted to play hardball.

What surprised me about these instances is that both anchors were extremely likable people, yet hired agents who were so difficult to deal with. And, as you pointed out so well Kris, anyone who negotiates for you needs to know exactly how you feel.

He’s right.  Too often a negotiator, who thinks he’s acting in your best interest, can really cause damage to you and your business.  Whose fault is that? Not the negotiator.  It’s yours.  You might have hired the wrong person, brought the negotiator into a situation he had no business being a part of, or failed to communicate what you really wanted from that negotiator.

Next week, I’ll look at a few more negotiator horror stories and then tell you how to handle your negotiator, should you feel you need to hire one.

But remember this week’s lesson: Just because you can hire a negotiator doesn’t mean you should.

I knew that negotiation would be a tough topic.  I really didn’t expect it to go into extra innings.  But here we are, about to embark on a sixth part in the negotiation sections.  Ah, well, you’ve come with me this far.

Thanks for the great response to this section.  And thanks for the donations. Remember, I’ll send an e-book copy of the Guide to anyone who has donated to help me write this thing. Right now, it looks like I won’t be finished for at least nine more weeks.  I’ll end up spending a year on this project after all.

Happy New Year, everyone!

“Freelancer Writer’s Survival Guide: Negotiation Part Five” copyright 2009 by Kristine Kathryn Rusch.

…on “Diving” and Hollywood potential. Please check it out here:

http://pyrsf.blogspot.com/2009/12/diving-into-wreck-like-watching-science.html

I spent most of November reading Lisa Kleypas books (see below).  I didn’t list most of them. While I enjoyed them, I felt I should only include the ones that really blew me away.  I think I read eight to ten of her novels, though, as well as some really dry research books.  I didn’t have a lot of time for short fiction and what I did read was curiously flat. I read an entire anthology of mystery fiction that had adequate stories—no bad ones and no good ones.  I kept reading, thinking someone had to write a superb story, but no one did.  It was one of the odder reading experiences I’ve ever had.

So this short list doesn’t really reflect how much I read in November.  But it does show you what I enjoyed.

November, 2009

Canellos, Peter S., The Last Lion: The Fall and Rise of Ted Kennedy, Kindle Edition, 2009.  I started reading this when Kennedy died, and couldn’t put it down.  (I’d've been done sooner except that I only read it outside of the house, on the Kindle).  I knew the history of the Kennedy family, of course, but had never read anything specifically about Ted.  Fascinating, complex human being.  The book is a bit thin in places like most biographies that cover long-lived people.  But it covers all the important stuff.  Worth reading, no matter what your political persuasion.

Ellison, Harlan, “How Interesting: A Tiny Man,” Realms of Fantasy, February, 2010.  It’s an event whenever Harlan publishes a short story. Which is both good and bad.  It’s good, because Harlan’s stories are spectacular.  It’s sad because for the past decade or so, there simply have not been enough of them.

This is a marvelous piece, written with great verve and passion. Harlan takes on society (and Anne Coulter) with devastating results.  The story’s short, but memorable.  Worth every single moment of your time.

Kleypas, Lisa, The Devil in Winter, Avon 2006.  I bought this book when it came out, but I didn’t read it.  In fact, I didn’t read a lot of historical romance for a few years, partly because I was being cranky.  But I grabbed a Kleypas novel at the store (see below) and went on a Kleypas binge, reading all that I had but hadn’t read, and buying out our local used bookstore, as well as few volumes on Kindle.  In fact, I could’ve named November Lisa Kleypas month.

The Devil in Winter is part of her Wallflowers’ books, about a group of women in Regency England who were wallflowers at the various social gatherings.  Of course, they all end up happily married at the end of each book.

While most in the series are good, The Devil in Winter is wonderful.  It hits on one of those stories that I love—the unredeemable protagonist who must be redeemed.  Kleypas manages this storyline, a staple of romance, as if no one had ever done it before.  I couldn’t put this novel down.  In fact, Dean had to take it away from me one night so that I would get some sleep.  An excellent romance novel.

Kleypas, Lisa, Tempt Me at Twilight, St. Martins Press, 2009. This is the book that started the binge for me.  I was waiting for Dean in the grocery store, picked up the book, read the back cover copy and got hooked.

The setting is unique—a London hotel in 1852.  The hero is the hotel owner, and the heroine an intellectual woman who babbles a bit too much. Throw in an escaped ferret, and you have a charming, charming romance novel.  Yes, there are other family members, two of whom had already had their romances by the time this story opens (neither of which is as interesting as this one), and another sister whom I really want to read about as she is the owner of that escaped ferret.

Several years ago now, Kleypas wrote one of my all-time favorite romances, Suddenly You. When she hits on all cylinders, she’s one of the best working.  As she is in Tempt Me at Twilight.

Silverberg, Robert, Other Spaces, Other Times: A Life Spent in the Future, Nonstop Press, 2009.  I spent much of the past year reading autobiographies of science fiction writers.  Bob’s is the most recent, and in some ways the most revealing and the most reticent.

Bob didn’t look back on his life. Instead, he compiled the autobiographical essays he wrote throughout his fifty-plus year (so far) career and put them in chronological order.  The result is fascinating.  Sometimes the essays cover current events. Sometimes they look back.  You can see his thinking on various aspects of the field, writing, genre, and life evolving as he grew older.

It’s revealing because of the honesty of the chronological essays. It’s reticent because it almost never talks about his personal life—his marriages, his parents.  Which was fine with me.  I was much more interested in the public Silverberg than the private one. (Some of that is me; I got very uncomfortable reading some of the private things in Frederik Pohl’s autobiography.  It’s all well and good to read about that stuff about someone you don’t know.  But when it’s someone you’ve known for years, it feels a bit like peeping in keyholes.)

I can’t praise this book enough. It’s one of the best I’ve read all year.  And it’s lovely, as well, with many of his book covers reprinted inside, as well as photos of friends and family.

Finally got Scribd working, so that those of you who have e-readers that aren’t Kindles can download The Recovery Man’s Bargain.  As a reminder, this is a stand-alone novella in the Retrieval Artist universe. The story happens at the same time as the novel The Recovery Man.

You can download The Recovery’s Bargain to read on computer or e-reader on Scribd at:

http://www.scribd.com/doc/24507494/Recovery-Man-s-Bargain

And you can order the Kindle edition here.

There are other electronic editions of my stories on Fictionwise and Kindle.  I’ll be adding more weekly from here on out.  Watch this space for more announcements.

Artwork donated by Pati Nagle.

The Freelancer’s Survival Guide: Negotiation Part Four

Kristine Kathryn Rusch

Last week, as I posted notification of the new Freelancer’s Guide Section on one of my writer e-mail lists, another writer asked for help with a business ethics question.  Turned out her question wasn’t about ethics at all. It was about a contractual relationship, a relationship defined by the contract. The answer to her question was in that contract, and negated the ethical dilemma entirely.

What was fascinating to me—and a bit appalling—was how many people answered her question as she posed it, without first wondering if she had some sort of document or contract in place.  These people answered very firmly about their opinion of the ethics of the situation, when they didn’t understand the situation at all.

They put me in mind of those old Holiday Inn Express commercials, in which some person steps up, gives authoritative advice that’s often wrong, and then is asked if they’re an expert on the situation.  “Nope,” they would say, “but I did stay at a Holiday Inn Express last night.”

(I always wondered why the Holiday Inn Express people wanted us to stay in a place that proudly knocked off a few IQ points each time someone slept there.  But hey, what do I know?)

I was rather stunned by the discussion on the list, since everyone on the list is a bright and educated person.  But only one person (besides me) out of at least a dozen respondents even considered the contract, which makes me worry.  These are folks who are supposed to know their freelance business, and they all made rookie mistakes that would have hurt them terribly if that “ethical” question had been theirs.  The person who asked the question thought she had gone to a knowledgeable group—and it should have been—but instead she got a cross-section of America.

Most people in this country believe that business and financial matters are better dealt with by someone else, someone who is not them.  Eventually that willful ignorance catches up with everyone—and not in a pretty way.

I’ll deal with the “someone elses” next week.  This week, I’m going to, in very vague terms, tell you the things to consider in negotiating your contract.

Before I do, I want you to do two things. If you haven’t read last week’s post, read it now.  And I want you to remember that I am not a lawyer and I am not giving legal advice.  I’m tell you how I think the average person should think about contracts, but I’m not guaranteeing results nor am I saying that I’m always right.  Essentially, I’m trying to give you a few tools so that you can go out and learn this stuff yourself.

And, if you’ll note, I’ve often used that disclaimer or a similar one in the financial and legal sections of the Guide.  Because I’m protecting myself here.

Some people believe that Guides like this are an implied contract.  If these people follow what they believe is my advice and the result bites them in the ass, then their first response would be to sue me. My disclaimer, here and in the other sections, is there not for those people but for any attorney that they might hire.  Essentially I’m putting the world on notice that I am not qualified to give bona fide legal advice.  You’re taking my advice at your own peril.

Got it?

In other words, I just did a quasi-legal document—a disclaimer—to protect me in a worst-case scenario.  I’ve done it before, not just in the Guide, but also in teaching situations.  If you want an expert on contracts and contract law, take classes from real attorneys.  Read books written by real attorneys.  Go to websites hosted by—you guessed it—real attorneys.

But I’m giving a layman’s guide to negotiation, trying to give you some broad strokes and ways to think about negotiating which is (I know) something  most of you have done your very best to avoid up until now.

And that’s your first mistake.

Because contracts are negotiable.  In fact, most anyone who offers a contract expects negotiation.  And not just any negotiation, but informed and intelligent negotiation.

I’ve known many writers who’ve signed horrendous contracts because the writer didn’t understand that the contract should be negotiated.  The writers were afraid that if they tried to negotiate, the other party would take the contract away from them, and they’d lose the deal.  So they signed.

After they signed, all of those writers had two experiences with the contract. First, the editor for the publishing house made a veiled reference to the contract, telling the writer that they “didn’t get the best deal.” That’s editor-speak for “Oh, crap, at some point you’re going to hate me, even though it’ll be your fault.”

Secondly, years later, those writers complained and complained and complained about being screwed.  Sadly, they never realized that they had volunteered for the screwing by failing to negotiate.

So when faced with a contract, expect to negotiate. That expectation will take some of the anxiety away from the whole contract experience.  You know—and the person you’re dealing with knows—that you both are going to discuss terms before you both sign the document.

Believe me, it’s a relief to the other party when you do negotiate.  Everyone wants the best possible deal in a negotiation. But if you want to work with that person or deal with that person again, you want the best possible deal that will result in other deals in the future.

When you sign a bad contract without negotiating, the other party thinks that you’re naïve or really inexperienced.  They hope, after you both sign, that you’re just plain stupid. Because if you’re stupid, you’ll never wise up and you will continue to work together.  If you’re naïve or inexperienced, at some point you’ll catch a clue, and rather than blaming yourself for failing to negotiate, you’ll probably blame them for “giving” you a “bad contract.”

Which means that the working relationship won’t last past that moment.

People who are really worried about the future relationship will stop you just before you sign an unnegotiated contract and tell you to change a few things in the contract.  Those things will be to your benefit.  What’s happening here is that the person you’re negotiating against has just hit you with a cluestick.  That person—who is your adversary in the negotiation—knows it’s to his best interest to have a long-term relationship with you, and is trying to protect that relationship, since you don’t know enough to do it yourself.

As I write these words, I realize that a bunch of you who are reading this section have just realized that once upon a time, you were hit with that very cluestick.  And most of you never caught the clue.  You just thought the other person was being nice when really that person was protecting their business interests.  If that person screwed you too badly—and early stage contracts are always balanced heavily toward the person issuing the contract—then that person knows you’d never work with them again.

If you’ve been hit with this particular cluestick and only just now realized it, get thee to books on contracts and negotiations and develop some backbone.  Seriously.  Because the only person you’re hurting is yourself.

Not everyone you negotiate with will take care of you in a negotiation. In a one-time negotiation, where you know you don’t want to or never will work with the other person again, the contract can be hideously one-sided.  I watched Dean be utterly ruthless in such situations, to the point where I have to leave the room (that damn politeness again) because I really want to tell the other person that they’re being screwed.

Dean is a much harder businessman than I am in these situations.  He figures if the person he’s negotiating against is utterly clueless, then he’ll get what he wants at their expense.  I once asked him why he’s willing to do that.  His answer? “They came to me.”

And in each case that I observed, the other person had come to him. They initiated the relationship, they brought the product/service/idea to him, and expected him to pay them for it.  The fact that they did not negotiate in that situation wasn’t his problem.  It was theirs.

As an aside, lest you think the man is heartless, let me tell you that he never approaches someone and demands that they do business with him.  And I’ve watched him over the years pay out much more money than he ever should to keep people in their homes, help with medical bills, and make sure they get fed.

But if someone tries to do business with him and initiates the relationship expecting to be paid, he will be ruthless. He expects the other person to be the same. If they’re not, that’s not his responsibility.

I’m not that person.  But I’ve let him be that person as my proxy.  More on this next week.

So, now you’ve decided to negotiate. But how do you do it?

Let’s go back to our tips from Negotiation Part One.  They are:

1. Know What You Want.

2. Ask.

3. Be Prepared to Walk Away.

4. Stay Calm.

5. Never Reveal Your Entire Hand.

6. Don’t Flip-Flop.

Those tips all apply to long-term negotiation as well as short-term negotiation.

But here are some things that make negotiations over a contract different from any other kind of negotiation.

1. The contract will bind you for a certain period of time. That might be one week; it might be ten years with the possibility of renewal.

When you negotiate, that time limit needs to be first and foremost in your mind.  You need to understand all the implications of it—good and bad.

Let me give you two examples.  Dean, who is a great negotiator, didn’t trust my experience back in 1990 or so.  I knew rental agreements and the pitfalls therein.  He signed an agreement for Pulphouse Publishing for a long-term lease (five years, I believe), thinking it protected him by keeping the rent at a low, low price.

I had seen too many cases where long-term rental  had hurt the business in question.  I got my start in real estate in 1979, when the rental market became quite competitive.  Rental places offered long-term leases, but no real deals.  By 1981, as the recession deepened, many places forfeited their leases, and the rental companies lowered their rates for commercial properties. Sometimes they gave months away for free just for signing up.  The companies that signed the agreement in 1979 paid five times what a company did in 1981.

That was part of my argument to Dean. He said he could live with that risk.  But the other part of my argument was we might go out of business, and if we did, we would still be on the hook for that five-year lease.  At the time, our business was going gangbusters. He did not believe that we would be gone within two years.

We were.  And we were stuck with that lease. Fortunately for us, the landlord never fixed up the property and a friend got injured because of his negligence. That allowed Dean to negotiate a settlement, negating the rental agreement.  But he wouldn’t have had to do that  if he had negotiated the term of the agreement down to a year or so, renewable on the same terms.

Who was right in this instance? Neither of us, really. Because had the business remained successful, then Dean’s gamble would have paid off.  Commercial real estate rental rates in Eugene, Oregon climbed in that five-year period, and if we had to renew every year, we ran the risk of having our rent hiked dramatically.

The time limit on a contract can benefit you and it can hurt you.  What looks like a good deal now might be a bad deal in the future.

It’s up to you to imagine all the scenarios outlined in that contract, and decide if you can live with them ten, twenty, fifty years from  now.

I deal with this a lot with writer friends.  At various points in the career, writers can be short of money. Early on, writers are often broke, and that’s when they sign bad contacts—particularly with Hollywood.

“Small Hollywood money” as one of my ex-agents called it can run anywhere from $10,000 to $150,000.  Those figures sound like a lot to most people, but to the suits in Hollywood, that’s pocket change.  I’ve had friends get “mediocre” Hollywood deals that ran from $200,000 to $700,000.  And of course, the “good” deals go higher than that.

The key to Hollywood deals isn’t the money.  It’s the terms of the contract.  Often those $50,000 contracts have some nasty, nasty clauses. Clauses that say no matter what, the 50K is all the writer will ever get. (There are other nasty clauses not relevant here, but man, could I tell you stories…)

I’ve known a lot of writers who are really, really broke who need that $50,000 desperately.  And before they sign that contract, I ask them this question, “Will you be happy twenty years from now after that project you got paid 50K for has become a blockbuster movie?  Everyone else on the project will have made millions and will continue to make millions.  You will have 50K that probably disappeared within the first two years you had it.  If you can live with that scenario, then sign the contract.”

Because, folks, the worst case scenario in a contract like that is success.  Most people step back, think about it, and decide to negotiate—trying to get some fees from later parts of that pie.  But I have known a handful who either gambled that the 50K was all the project would ever make or who needed the money so badly that they knew, even twenty years hence, that they could live with the decision.

All of those factors influence negotiation.

You need a lot of imagination when faced with a contract.  You have to imagine the worst-case and best-case scenarios for you. And you need to know how you’ll feel about them for the duration of that contract.

In other words, you need to know yourself very, very well.

In most instances, I could walk away from that 50K no matter how desperate I was, because I know I’d be angry about it (with myself) twenty years from now.  But in a circumstance that’s life or death—paying for a surgery, for example—I’d accept that 50K in a heartbeat, and deal with the consequences later.

It’s all very fluid.

What you need to figure is where you’re at now, where you hope to be in the future, and what impact the decisions you make today will have on that future.

Because once you sign the contract, it’s binding. And if you think negotiation is hard at this stage, imagine doing it—as Dean did—after the contract was signed and agreed to and your circumstances changed for the worse.  Then the negotiation is really, really, really hard—and might even take you to court.  If you do go to court, and you have a valid contract signed by both parties, then you’ll lose the case, guaranteed.

Negotiate up front when it’s expected and it’s relatively easy.

2. Focus on what you want.  When you enter into a contractual negotiation, know what you want and protect it.  Don’t get sidelined by other things.

For example, I want control over my work.  I will walk away from contracts that take the control away from me—unless I’m asked to work in someone else’s universe, like Star Trek or Star Wars.  In those cases, I know that I’m entering a world that someone else controls, and I’ll forfeit rights that I’ll fight to the death for over my original work.

I’ve walked away from very lucrative contracts because I would lose control over my original work.  I’ve accepted financially small contracts that have given me a lot of creative control.  Control of my own work matters the most to me.

Other writers want publication more than anything.  I watched a writer sign one of the worst contracts I’d ever seen because he was desperate to be published. When told how bad the contract was, he claimed he knew, but didn’t care. Publication was the only thing that mattered to him.

Know what you want out of that agreement. Know how far you will go to protect what you want as you negotiate that agreement.  Make sure you protect what you want throughout the term (time limit) of the agreement.

Everything else in the agreement is gravy, then.

3. Make sure you have a way to terminate the contract.  Often the termination clause benefits whoever drew up the contract.  I’ve seen rental agreements in which the landlord can terminate the agreement with 24 hours  notice, while the renter had to give six months notice. (Those agreements were so egregious that the State of Wisconsin stepped in and mandated a 30 day termination in all rental agreements, but each state is different.)

I’ve seen publishing contracts where the publisher can easily cancel the contract but the writer has to jump through so many hoops to cancel it that it would take months to even try.

Make sure the termination clause is clear and equitable. By equitable I mean that it’s either very hard for both sides to terminate or very easy for both sides to terminate.  But it shouldn’t be easy for one side and hard for the other.

4. Money.  Most people mistakenly think that contracts are all about money. But remember what I said last week. Contracts are about control.

So…

5. Make sure you know how you’ll get paid or how you will make the payments.

That sounds so elementary, but it’s not.  Many contracts may promise a lot of money, but if you read the fine print, you’ll realize that certain payments will get made if and only if other conditions are met.  Some of those conditions might be extremely unlikely to ever occur.

For example, Hollywood contracts often promise to pay a percentage of “net profits.”  But anyone peripherally attached to Hollywood knows that “net profits” never happen.  Creative bookkeeping will make certain that even the highest earning films make no net profit, although they’ll have a gross profit.  (And if you don’t understand the difference between those terms, go back to the sections on finances.)

So the contract promising to pay x% of net profit really promises nothing.

Publishing has its own accounting tricks which I could spend the next several weeks enumerating for you, everything from basket accounting to high discount rates.

Yet there are reasons to sign such contracts and often those reasons have more to do with what you want than what you’ll get paid.  You might get other clauses in the contract that will make you feel better about dodgy payment practices.

6. Control As Much of the Contract As Possible.  Remember that’s what you and the other party are negotiating—who controls what.  Try to keep as much of that control in your court as you possibly can.  But realize where you stand and who you’re negotiating with.  For example, if you’re negotiating a contract to sell your work to the movies, realize that you don’t have the deep pockets to make the film yourself. You will have to relinquish some control in those areas so that the film will get made.  Just like they’ll have to reimburse you for your property if they really, really want it. (And want to control it.)

7. Once you both sign, negotiation is over.  It’s your signature on that document.  That means you agreed to the terms therein.  You agreed.  The time to change the terms is before you sign.  If you complain afterwards, you won’t get any sympathy from me or anyone else who understands contracts.  Because understanding that document is your responsibility and you must understand it before you sign it.

Even more important, you must know you can live with the contract’s terms for the duration of that contract, be it six months or sixty years.

If you sign it, you’re responsible for every word in it.  You’ve made your bed, as my mother used to say—and the contract is proof of that.

I’m at my usual stopping word limit, and I could go on and on and on forever.  Contracts are exceedingly complicated.  But, in short, here are some of the basics of contract negotiation (covered above):

1. Expect to Negotiate A Contract.

2. Imagine How the Terms of the Contract Will Impact You Over the Lifetime of the Contract.

3. Focus on What You Want.

4. Make Sure You Have An Equitable Way to Terminate The Contract.

5. Make Sure You Know How You’ll Get Paid or How You Will Make Payments.

6. Control As Much of the Contract As Possible.

7. Once You Both Sign, Negotiation Is Over.

Good contracts, bad contracts, beautifully negotiated contracts, unnegotiated contracts—ultimately what happens with those is all up to you.

Expect no help with contracts.  Learn it all yourself.  I’ll deal with this aspect more next week, but remember this: You are responsible for your own career—the good and the bad.  Just you.  And that responsibility extends to the agreement you make, and the contracts you sign.

I have made one agreement with you folks.  If you donate to the Freelancer’s Guide, you will get the e-version of the book when I’m done with the Guide.

Thanks for the comments, the forwards, the blog posts, and the e-mails. I value all your responses a great deal.

“Freelancer Writer’s Survival Guide: Negotiation Part Four” copyright 2009 by Kristine Kathryn Rusch.