Contracts vs. Reality

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Art by Frank Sandoval

SHOW LINKS

WILL’S KICKSTARTER

SMALL BUSINESS INFORMATION

I LIVED ON BUTTERFLY HILL

THE MAPS OF MEMORY: RETURN TO BUTTERFLY HILL

CLIENT DESIGNER MOUSE MEME

Now that you’ve gotten your gig and are ready to get to work, how do you navigate the tricky world of contracts and keep yourself and your art protected? This week, Jake Parker, Lee White, and Will Terry discuss the basics of contracts for illustrators, and tell you all about what to watch for when you sign the dotted line.

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INTRO

Will talked about launching a Kickstarter last week -- the Kickstarter campaign is now over and has been funded! Here’s the link to preorder the book:

WILL’S KICKSTARTER

BASICS AND ANECDOTES

Lee got an email from a Chinese advertising agency that wanted to use illustrations from a book he illustrated a while ago -- he checked his contract and passed the info on to Jake and Will for a second opinion, and realized that this could be a great Podcast prompt.

A lot of the time, publishers and artists split extra money and revenue from these kinds of licensing deals. Lee’s agent had the foresight to remove that line item from the contract, so he was able to license the image.

There are basically six things in a contract:

  1. Who -- who is involved?

  2. What -- what are the details of the project -- amount of illustrations, where will they be shown?

  3. When -- when will the project be due?

  4. How much -- what will the project pay?

  5. Ownership -- who owns the work and who has the rights.

  6. Details -- miscellaneous things like arbitration for when things go wrong, and so forth.

You want to answer as many of these questions in the contract at the start -- the questions will come up eventually, it is better to answer them right at the beginning. Don’t look the other way and sign it.

Will worked on a collection of short stories that got cancelled when he had already done some sketches and work on the project. He had already sent the sketches in. The designer had to tell him that the project was yet to be even greenlit.

You should always have a contract before working with someone, even your friends. Lee was working on a story and was struggling, so he contacted a writer friend whom he had worked with before. There was no agreement on the details of the project -- she took a lot more ownership of the project and there was no discussion on credit and a lot of other important details. Lee wanted to split the project away from her and lawyers got involved -- the project died and Lee ended all contact with his writer friend. Lee now refuses to even discuss his stories in crit groups. A good contract would have saved the project and his friendship.

Contracts are not an issue of trust or anything like that, you just need one to be on the same page.

Even if your contract is just emails back and forth, it is a record that still counts. Contracts are better but any kind of paper trail is worthwhile.

Will had an issue with a small board game company -- they had a lot of nice titles out on their website. He offered a quote that was too high so the project fell through, but he did some test images before the project fell through and offered to include the cost in the total if the project was made. When the project was cancelled, Will brought up the test fee, and the company said they didn’t remember discussing it. When he brought the email back to her attention, they sent the check within 10 days. It was still awkward but the issue was resolved.

Lee had an art director speak for his Portfolio Class about contracts, who was in charge of development at Nickelodeon. He had contacted some kids who had made an animated short, and brought them in for a pilot. The kids lawyered up like crazy, because they didn’t know what they were doing -- they created a super complex and in-depth contract for Nickelodeon, who just decided not to bother with all the complexity and trouble and moved to a different pilot.

Jake has heard that Disney makes sure that they own every iteration of everything an intellectual property could be. If people try to battle, Disney moves on. It’s good to outline what percentage of your work is available and figure it all out.

Sometimes it is good to just suck it up and take a bad position if the project will open a lot of doors for you. You can also use an agent to negotiate for you, as they know a lot more about this sort of thing and can try and get the best price for you. Know what is on your contracts but also feel free to hire someone to fight for you.

SIX STEPS TO PROOFING YOUR CONTRACTS

Who: This is pretty basic. Lee wouldn’t work for a cigarette company, that’s basically the only thing you really need to pay attention to here.

Jake does everything via his LLC, which provides tax benefits and liability benefits -- it keeps the business entity separate from his personal funds, so the business could go bankrupt or get sued, and he wouldn’t personally get sued. He only goes outside of the LLC if he is hired as a temporary employee. It’s an easy process to get one.

SMALL BUSINESS INFORMATION

There’s psychological benefits in starting an LLC -- you feel more professional, and people treat you as more professional, which makes you act more professionally, which raises your pay.

We gave up the studio space! (Ed Note: I miss it a lot!) But we’re mostly an online company now and we all work remotely, so that’s nice too.

What: The details of the project. What are you being hired for? What are the drawings, how big, what types, etc.

I LIVED ON BUTTERFLY HILL

Lee did a book project that he loved so much and had time for that he threw in 25 additional free illustrations. It did really well. All of a sudden there was a second book -- same contract, 22 illustrations, but the first book had 53 illustrations. He had to do some awkward negotiations to talk about whether he could be paid to do more illustrations or if they only wanted the original amount. It ended up making Lee feel unprofessional because of how awkward it was.

THE MAPS OF MEMORY: RETURN TO BUTTERFLY HILL

Jake once did a cover and got round after round of notes, to the point where it was unrecognizable from the initial piece. The actual cover was completely different from Jake’s work, even though he did everything they wanted him to do. His cover didn’t get used but he still got paid for his work because he did all the work and it was in his contract. It’s a bummer because the pay is fair but the project won’t lead to more work.

Will worked for a pharmaceutical company -- they wanted a children’s book for kids who get rheumatoid arthritis. It was about a medication that would be like a superhero in their body. There were two designers who were working on it and the owner of the company. Both designers went on vacation and a lot of balls were dropped, Will never got a complete layout. He was micromanaged.

CLIENT DESIGNER MOUSE MEME

At the end, they snuck in two more pieces of art. They were extra pieces of art that were not in the contract. Will talked to his agent about it. The owner of the company talked to Will and basically told him he had to finish the project in a really rude manner. Will’s agent just suggested he take the paycheck and get in and get out.

Project Creep is a huge thing to look out for. Projects can just snowball if you’re not careful. Keep your optimism up when you ask for a new contract for further work! Project creep and revisions can blend together -- sometimes they need to have contracts and sometimes they don’t. You can stave off revisions by keeping communication clear throughout your process, by showing them your pencils and your roughs. A revision is a small change, but major changes should be accounted for in your contract. If you could have satisfied them in the original contract then it is a revision, if the scope changes then it is a major change.

Lee sometimes considers offering billing by the hour after two revisions. As you get more experienced you learn how to avoid problems. Will’s technique is to recognize that you mostly work with one person, who works with a committee. Will sends the art director super rough sketches right off the bat -- he tells them not to be scared about how rough the sketches are, but that they are purely for concept. This helps him get the main elements down really early in the process so that he doesn’t have to do many revisions. The sketches are not for the committee, just the art director.

Do you push back on revisions? If you do, be reasonable and offer compromises and your specific reasoning. If you present your work differently and ask better questions you can avoid revisions. When you ask a lot of questions, you look smarter. Being incredibly honest can be really helpful. The publishing industry is so small that you hear about the jerks really quickly, and they tend to be smaller clients.

How: How will be you paid? It’s typically broken up into 3 or 2 payments -- when you start, when you send sketches, and when you are done. Sometimes part of the payment is released after publication, which could take a long time. There are also royalty structures involved. The nice thing is that you have money coming in from somewhere eventually, but if you are not good with money that can be a big deal.

You never want to wait to talk about payment at the end of a project. If the project creeps, get incremental payments. There is never a harder time to get a payment than after the work is turned in.

Net royalties vs List royalties: If you get 10% per book sold, is it $1 for every $10 book sold? Net royalties mean you only get a percentage of the net profit of the book, so they deduct all the costs and give you a percentage of the profit left over. With creative accounting, they can really make this number small. It can turn a dollar royalty to a penny. Can you just ask for gross percentage? Sometimes you can’t, especially if you don’t have a huge name yet. Most publishers go by net percentage, only the big publishers still go by list.

Your royalty percentage goes down based on other factors as well -- book clubs, book fairs, and the like will drop your percentage significantly. 

Who: Who has ownership and rights to the work created?

Do not do work for hire unless you have a really good reason -- work for hire is when the company buys all rights and the copyright from you. You are not attached to the work in any way. It’s short term money. There is a point where it is worth it depending on price. There might be other factors, like it could get you in contact with people that you want to work with, or it gives you exposure that you wouldn’t be able to get otherwise. Maybe it boosts your craft in a way that is unique.

The one line item you need to be careful about is that they can reuse your image as much as they want without paying you. You get exposure but not pay.

Sometimes you just need the money. The downside is that if clients can do WFH, they will -- and permissiveness brings the whole industry down. Lee and David Hohn have a price list method that scales a lot all the way to owning the rights for a lot of money.

It’s good to do things that are good for the illustrator community, but it’s not good to shame the up and comers. We’ve all done really weird and not great art when we started.

First Right of Refusal: If you do book one of a series, they need to contact you first for book two if they want to do a second one. This goes for publishers too -- if you do a project and then you want to do a sequel, the publisher will get first right of refusal to see if they want to publish it before you take it somewhere else. This just means that you have a publisher who wants to invest in you, don’t be too spooked by it.

LINKS

Svslearn.com

Jake Parker: mrjakeparker.com. Instagram: @jakeparker, Youtube: JakeParker44

Will Terry: willterry.com. Instagram: @willterryart, Youtube: WillTerryArt

Lee White: leewhiteillustration.com. Instagram: @leewhiteillo 

Alex Sugg: alexsugg.com

Aaron Painter: painterdraws.com. Instagram: @painterdraws

Daniel Tu: danieltu.co.

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