Jeff Gandel is an experienced music and entertainment attorney with is own practice based in NYC. Jeff also founded a company called Royalty Recovery that helps artist collect on Royalties they are owed – a problem that is far too common.  Jeff’ specializes in intellectual property law including music, digital media, technology, videogames and movies. His clients include producers David Bendeth and Jason Nevins, artists Warren Haynes, Gov’t Mule, Jared Scharff, Scott Schreer and Serge Devant, music distributor The Orchard and many others. I caught up with Jeff recently to discuss some of the things he felt musicians should be aware of from his fifteen years of practicing law.

Musician Coaching:

Jeff, thanks for taking the time to speak today. Tell me, how did you get into the Music business?

JG:

I’ve been around this my whole life. When I was growing up, my grandparents owned a record distributor. I remember being three or four years old and running around their warehouse in stacks of records higher than the biggest buildings. My whole life, I’ve been around music and was lucky enough to find a way to have a career in it.

Musician Coaching:

I always remember you as a music attorney. What was your first legal job?

JG:

Tuff City (records) was the first legal job, but during law school, one of my good friends and I opened up a company called Gravity Hits, where we did merchandise and touring and booking and that side of it. That’s how I first got back into it during law school. And then I got out of law school and did it in house at Tuff City. I was there for a while, and while being in-house there I started my own practice, since it was a small indie label, and they didn’t need a full-time attorney. I had the benefit of being in-house and having a steady gig and a place to learn, but being able to get out and be an entrepreneur and build my own thing.

Musician Coaching:

What kind of practice have you had for the last 15 years? You’ve been really doing this in that kind of format on your own and taking clients. What kind of practice would you say you have? I know you represent a lot of labels, producers, music tech companies, etc. Do you have a specific area of focus?

JG:

It’s pretty general for the most part, though we focus primarily on the music industry. I’d say 90% of my clientele fits in some relationship to the music industry. I’ve represented a couple of movies, a couple of books etc. over the years. But generally, whether it’s technology, a website company or a delivery or tracking company or a band or musician or one of the corporate entities I represent, somehow they tie into the music world. A lot of them aren’t traditional, so I’m not a lawyer always representing the traditional band stuff you hear about. But everything for the most part ties back into music.

Musician Coaching:

When did Royalty Recovery come about, and tell me what the problem is that that’s a solution to.

JG:

Our industry has a volume problem. When I say volume, I mean the amount of information that goes through it. Because of the number of songs, artists and record labels out there, a lot of artists and writers and even smaller record labels are not properly accounted to. For the most part, it’s just because people change addresses, don’t sign contracts, etc. Most of it is not malicious. But then again, there are some people that have disputes over rights or are stealing rights. I continued to see the combination of these things for almost the first 10 years of my law practice, and represented a number of people within that, most notably the estate of a writer named Harry McClintock, who wrote a big song called “Big Rock Candy Mountain.” I worked with him within my law practice to make sure he was getting paid, particularly by the “Oh Brother Where art Thou?” movie. I worked with the estate to try to clean it up so they could get paid on that and a lot of other uses.

For a number of reasons, working with people that weren’t getting paid didn’t necessarily fit within the normal law practice model. So, almost seven years ago, I started a company called Royalty Recovery that works with any people in the industry who are not receiving their royalties. And some of it is as innocent as people don’t know that in the U.S. you collect your money directly from the record labels. It’s the same in Canada. Outside of the U.S. and Canada, you have to go to the local society to get your money. It can be something as simple as not having the knowledge or the tools to understand where your money is, or something as bad as, I’ve had clients whose parents were managing them and their parents are not passing through all the money. It runs the gamut of stuff. And we’ve been very successful. We’ve been in business about 7 years, and we’ve helped correct and recover over 2,000 royalty streams and copyrights. We’ve recovered several million dollars in unpaid royalties and have thankfully been successful in helping clients reclaim what is theirs.

Musician Coaching:

Are there things that artists doing things for themselves can do to ensure they don’t have slip ups with registering and paperwork that are preventing them from getting what is due to them? Are there common mistakes that you see musicians making?

JG:

I think it’s important to understand the structure of where money gets paid and who pays that money. I think that’s the biggest problem I run into with young artists: not understanding the place in the world all these different societies fall into. I’ll run through that quickly.

The first set of rights that falls within music, which is the one we all think about, is tied to sales. You sell a record and you get paid. If you sell it yourself on iTunes in the U.S., they send you the money and it’s all good and all taken care of. If you sell it in Canada, you get some of the money as an artist, but if you’re also the writer, that money is then taken and sent to a society, and as a writer you need to be signed up with the society to collect that money. And it’s the same in most of the rest of the world. If you sell a record in the UK, that money is then collected by a society, and if you’re not signed up with that society as a writer, you’re not getting that piece of the royalties. iTunes will send you the artist side, but you’re not going to get your full share if you’re both the writer and the artist.

The second category we look at is performance rights for the writers. Those are your typical Performance Rights Organizations (PROs) in the States. We have three, and we’re one of the only territories in the world that has more than one: BMI; SESAC; ASCAP. As a writer, you want to be signed up for that. What those societies do is that if there’s a public performance of your songs, they will collect a fee from that. If it falls within their parameters of collectible use, you’ll get the royalties on it. As a writer, you want to register all your songs, make sure all your songs are in the system correctly with your and their names spelled correctly. And if you get a performance, you want to keep your eye on that and try to understand where that fits into it. Particularly if you get on TV in the U.S., you need to have a cue sheet filed with the PRO by the company that is putting out the TV show or the movie to make sure that money is going to flow through. You also need to check that cue sheet to make sure it’s right. One of my clients – a company called Tunesat – fingerprints people’s music and tracks it through to make sure that every time it’s getting played, the client knows about it so they make sure they’re getting paid.

The second kind of performance is a much newer right here in the U.S., and some of your users that are European will know about this. Until recently, U.S. artists were not entitled to a similar performance royalty. In the last ten years, a company called SoundExchange opened up. What they do is for a performance of a song – the actual sound recording of a song – they monitor it in any place it’s performed digitally and pay a royalty for it. Any of your readers that are not signed up for SoundExchange, I highly recommend it, and it’s very easy. Just go to the website, sign up with your name and address and not too much more. They hold money going back a couple of years, so especially if you’ve had some performances, there may be some money there. If you’re European based or Canadian, you’re entitled to a much broader base of performance royalties outside the United States that most Americans are not entitled to. I speak with a lot of generalities, because some Americans can qualify and some can’t. But for the most part, the same royalty – which is a master performance royalty collected by societies in the UK and some other societies in Europe – is available to people outside the U.S. The nice thing about these societies is that there’s no cost to them. It’s really just about getting registered, and if there’s money there, they’ll get you paid. For most indie artists, there’s not a ton of money there or any money in a lot of these places, but considering it’s nothing more than filling out your name and address, I always tell my clients, “You never know where a paycheck will come from, even if it’s $20.”

Musician Coaching:

So, if you’re an artist that gets a TV show in Asia or Europe, would you register with the local PRO, or would you have your performance royalty organization chase after that? I was under the impression that if you register directly with a non-U.S. PRO, you’re going to be subject to taxes two different times.

JG:

As far as the tax issue, that’s definitely something musicians should talk to their accountants about. I can give you a structural answer to that though. The local PROs have reciprocal deals with all the foreign PROs. If you supply them with information, they will chase after them and ensure you get paid and do what they want to do. Truthfully, that’s extra income for them if they can drive it back to the U.S., so they are pretty aggressive about going after the foreign societies. The one detriment to having a local society – and I think it’s a very minimal detriment – is that it takes a little longer. Let’s say the show is in the UK. First it has to get processed through the UK society, which takes a few months, and then it has to go through the U.S. society. It takes a little time, but for the most part, very few artists are big enough that they’d want to have individual deals in different territories. If you’re a very large artist or are getting a huge number of uses in a particular territory, you might want to think about having a local society. But for the most part and for most artists it’s simpler and less confusing to have one direct society.

Musician Coaching:

Do you have any advice about how to choose a lawyer?

JG:

Depending on what you’re looking for in a lawyer you are looking for different things. I think the one general thing you want to look for is someone you trust. This is someone you’re going to want to rely on for advice and to help steer you, so you have to feel a connection and believe that what they’re saying to you and speaking about is in line with your view of the world and how you want to move forward. That said, I think it depends what you’re looking for. If you’re looking for a lawyer that can shop a deal and bring you to a label, then you want a lawyer that has some experience doing that. You want a lawyer that has some history doing that. If you are just looking for someone to look over your contract and make sure you’re covered, you don’t need to know as much about what bands they had and that kind of information. The best advice I can give is to ask friends and ask people and find someone you know they’ve worked with for a while. We can all refer you to a million clients. We all have people we trust and who can give you numbers. But it’s always good to have a personal connection to a lawyer. If you know someone that is already represented by a lawyer, that’s a good thing. It’s a personal thing, and as with many things in your life, and especially when you’re going to have someone manage your career and your life, sometimes you have to use a little bit of gut. It has to feel right.

Musician Coaching:

You’ve been in the business since the days you could hand somebody five or ten CDs, and that was a real gift rather than some annoying clutter. What are you seeing changing with artists deals and developing artists? Is there a general piece of advice you could give artists about the digital age related to common mistakes you see them making?

JG:

I don’t know that there is. Every artist has so much more of its own structure and own identity now. A lot of artists are very good at being artists. They may have people around them that can help them, but they could use a bigger structure. There’s the temptation to stay independent, because you can get your music out there. But I think for a lot of artists having a team that knows what they’re doing and has been doing it for a while can help them. And there’s a downside there, because you have to know what you’re getting and what you’re giving up, but most artists aren’t set up to be able to become superstars without an organization around them. It doesn’t have to be a record label, but for the time being, those are the structures that are set up to do it and have had success. The only advice I can give an artist is be well represented and have good people around you that can make good decisions, whether it’s a lawyer, a manager or someone from the inside. Make sure you have people around you that can help you see what you’re getting and what you’re giving up. Understand what is being put in front of you at all times.

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For more information on Jeff be sure to check out Royalty Recovery.