No Conflict, No Interest:

The Case For Ethics Reform In The Music Industry

Alexander C. Green Advanced Copyright: Music Law Professor K. J. Greene May 8, 2013

In 1992, the music industry was rocked by a case that presented the question as to whether or not it was proper, from an ethical standpoint, for an attorney to engage in dual representation of a record label and one of its artists, even in proceedings that were solely transactional. While the case settled, it proposed an intriguing series of questions and considerations, both for the ABAs Standing Committee On Ethics And Professional Responsibility and for legal professionals, musicians, and record label executives throughout the entertainment industry. Should dual representation in these circumstances be considered conduct so inherently objectionable that no artist may ever have the right to consent to dual representation? Could it ever be clearly in the artists best interest to do so? Would this exception swallow up the rule? Does it depend on the artist, or can an objective, bright-line standard be inferred from the public policy issues surrounding this question that must be applied to artists in any and every circumstance? Would a contention that the potential conflict of interest is overcome by the ability to serve the clients best interest through a lawyers executive network excuse liability in 2013?

Common representation amongst opponents does not make sense from an ethical perspective where the underlying purpose for which an attorney is hiredto protect a clientis undermined by the desperation of getting a deal done. Is it essentially improper, therefore, for an attorney to cross-represent two clients involved in the same matter: the attorney cannot fulfill his duty to represent either client with competence and, more importantly, diligence in zealous advocacy for the clients best interests. Despite the nature of the music industry as one where crossrepresentation is a frequent, common occurrence, this practice exists in fundamental violation of the ethical standards contained within the Model Rules of Professional Conduct, even where informed consent and waivers are procured.

 I. THE STATE OF THE MUSIC INDUSTRY

The entertainment business features an unconventional culture that is inherently conducive to ethical issues involving conflicts of interest.1 By nature, the entertainment industry functions around the creation and maintenance of relationships that straddle the line between personal and professional, networks of cross-collaboration and direct referrals, and who you know as a means to get your foot in the door in a saturated industry where few artists make it big while many never make it anywhere. It is highly competitive and revolves around individual entrepreneurialism, both on the part of artists and the part of those seeking to work with them.2 Consequently, the entertainment industry is particularly susceptible to situations where ethical obligations are tested and the boundaries of permissible conduct are pushed. Whereas in other industries or areas of law an attorney may be more strictly confined to a certain type of relationship with clients, attorneys in the music industry often act as facilitators for agreement and take on roles akin to managers or agents. Attorneys are often positioned to where they may even assume all of these roles, as representative, counselor, and attorney-in-fact.3 Herein, they represent clients in a vast array of matters including drafting and negotiating recording contracts, music publishing agreements, endorsement and sponsorship deals, touring and live performances, agreements among members of bands, licensing agreements, distribution agreements and agreements with agents and managers.4 Furthermore, the business tends to be dominated, at least within the corporate upper-echelon, by a small number of resilient power
1 2

See Kenneth J. Abdo & Jack P. Sahl, Entertainment Law Ethics: Part 1, 22 ENT. & SPORTS LAW, Fall 2004, at 3. Id. at 2. 3 2 Seeat Id. Kenneth 2. J. Abdo & Jack P. Sahl, Entertainment Law Ethics Part 2: Agents, Mangers And Lawyers, 22 ENT. & 3 See Kenneth J. Abdo & Jack P. Sahl, Entertainment Law Ethics Part 2: Agents, Mangers And Lawyers, 22 ENT. & SPORTS LAW, Winter 2005, at 2. 4 See Ashley Hollan, Music Lawyers Taking the Rap: The Musicalization of Legal Ethics, 4 U. DENV. SPORTS & ENT. L.J. 196, 196-97 (2008).

 brokers.5 Entertainment is a world where most of the big deals closed in recent years have been negotiated by a small clique of law firms that frequently represent both artists and the companies that market their musicoccasionally at the same time.6 The ability to create package deals is paramount and clientsboth artists and corporationsplace a premium on the music attorneys ability to unite his connections for success.7 As summarized by Creative Arts Agency President Ron Meyer, The only way to avoid the appearance of potential conflict[s] of interest in this business is to represent only one client. And then, of course, youd have no business and no clout and no one would care.8 While many throughout the industry shared Meyers view at the time, a landmark case in New York regarding conflicts of interest and professional responsibility would bring this industry and its conventionsincluding widespread acceptance of cross-representationinto the spotlight for good.

II. JOEL V. GRUBMAN

In September 1992, singer-songwriter Billy Joel filed a lawsuit in the New York State Supreme Court against Allen Grubman, Arthur Indursky, and their New York City law firm for fraud, breach of fiduciary duty, and breach of contract.9 The allegations stemmed from a fundamental conflict of interest claim involving GrubmanJoels attorney from 1980 to 1989and Frank

5 6

See Abdo, supra note 1, at 3. Chuck Philips, Joel Lawsuit an Alarm Bell for Music Industry, L.A. TIMES, Oct. 14, 1992, http://articles.latimes.com/1992-10-14/entertainment/ca-318_1_pop-music. 7 See Hollan, supra note 4, at 197. 8 See Janice Castro et al., The Ultimate Mogul, TIME, Apr. 19, 1993, http://www.time.com/time/magazine/article/0,9171,978284-1,00.html. 9 Joel v. Grubman, No. 26155/92.

 WeberJoels former brother-in-law and manager.10 The suit maintained that Grubman and his firm allowed Weber to dictate terms to the firm and in turn, curried favour with Weber to hold

Joel as a legal client.11 The pertinent claim here was the breach of fiduciary duty stemming from Grubmans alleged conflict of interest in representing both Joel and Sony Corporation of America, the record label that featured Joel on its roster. It has been suggested that Sonys decision to settle, moreover, was due to a fear that some of its other artists, who were also represented by Grubman, might bring similar suits.12 As explained by Leonard Marx, Joels attorney in the lawsuit, A judgment for Billy Joel will obviously raise serious questions regarding the validity of other artists contracts that Grubman has negotiated where he also represented the record company involved or one of their executives at the same time.13

This phenomenon of attorney cross-representation is nonetheless a common occurrence throughout the music industry.14 In the case of Allen Grubman, Joel and Weber were not the only clients with whom Grubman engaged in cross-representation: he had also represented both Madonna and her manager during negotiations with Time Warner.15 When Joel originally brought his suit against Grubman, many key players within the music business called this an alarm bell for the entire industry to clean up its act and presumably expected this to serve as a wake up call for attorneys and clients alike.16 However, the reality has been that many music industry leaders, and some of Joels fellow rock stars, viewed Grubmans flair for cross
10 11

See Henry J. Reske, Ballad of Billy The Plaintiff, 78 A.B.A. J. 38, December 1992, at 3. See id. 12 See Meg Cox, Billy Joel Suit Over Conflict May Spur Some Lawyers to Change Their Tune, WALL ST. J., Jan 13, 1993, at B5. 13 Philips, supra note 6. 14 See Joseph Leone & Sujit Patel, Music To My Lawyers Ears: Interpreting Model Rule 1.13 To Guide Entertainment Attorneys Through Conflicts of Interest, 24 GEO. J. LEGAL ETHICS 643, 651 (2011). 15 See Hollan, supra note 4, at 217. 16 See Philips, supra note 6.

representation as an attribute rather than an impediment during negotiations.17 Insiders maintain that basically, Grubmans clients are convinced that Grubmans long-standing relationships with the industrys most powerful executives actually help them to obtain the best deals possible.18

An attorneys ability to radiate practices that appeal to artists in such a way as to draw them to his or her counsel in the belief that it is the most advantageousor onlyway to secure this best deal possible does not circumvent the stringent ethical codes to which attorneys are held. While the music industry has become one entrenched in custom and routine practices, it is important to comprehend the rules that govern an attorneys ethical obligations in order to fully grasp the implications contained within a conflict of interest.

III. THE MODEL RULES OF PROFESSIONAL CONDUCT

For more than 90 years, the American Bar Association (ABA) has been a leader in legal ethics and professional responsibility by adopting a series of professional standards that serve to model regulatory law governing the legal profession.19 These standards apply to attorneys throughout the United States20 regardless of practice area. As applied here in particular, [t]here is nothing so different about the entertainment industry that clients are not entitled to the same high degree of integrity, loyalty, fiduciary responsibility, and openness with which any other attorney in any
17 18

Id. Id. 19 See MODEL RULES OF PROFL CONDUCT Preface. 20 Unless state rules of professional conduct govern.

 other context would be bound to provide a client.21 Therefore, these rules are not limited to

attorneys in trial practice or those focused on more traditionally adversarial matters; rather, these standards of professional conduct apply even to entertainment attorneys working to negotiate deals as brokers between record labels and the artists they sign. Attorneys who wish to perform services that mirror the functions of agents and managers are not somehow exempt from the ABAs standards; they are compelled, therefore, to practice within the applicable guidelines and restrictions governing all attorneys.22

Within the ABAs Model Rules of Professional Conduct (MRPC), Rule 1.7 governs conflicts of interest that arise with current clients and states the following:

(a) Except as provided in paragraph (b), a lawyer shall not represent a client if the representation involves a concurrent conflict of interest. A concurrent conflict of interest exists if: (1) the representation of one client will be directly adverse to another client; or (2) there is a significant risk that the representation of one or more clients will be materially limited by the lawyers responsibilities to another client, a former client or a third person or by a personal interest of the lawyer. (b) Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer may represent a client if: (1) the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client; (2) the representation is not prohibited by law; (3) the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal; and (4) each affected client gives informed consent, confirmed in writing.23

21

Joseph B. Anderson & Darrell D. Miller, Professional Responsibility 101: A Response to Conflicts in the Entertainment Industry? . . .Not! 11 ENT. & SPORTS LAW, Summer 1993, at 8. 22 See Abdo, supra note 3. 23 See MODEL RULES OF PROFL CONDUCT R. 1.7 (2012).

 Model Rule 1.7(a) guides attorneys through the process of initially identifying whether or not a

concurrent conflict of interest exists and centers on two distinct, but equally important, scenarios: one of direct adversity between two clients and another of material limitation regarding the attorneys representation of one client because of the attorneys responsibilities to another party. The caution against direct adversity means a lawyer may not act as an advocate in one matter against a person the lawyer represents in some other matter, even when the matters are wholly unrelated.24 As a result of an adversarial conflict of interest, a client may feel betrayed and the client-lawyer relationship will probably be damaged to the extent that the lawyers ability to represent the client effectively is likely to be impaired.25 As the commentary to Rule 1.7 explains, the client on whose behalf the adverse representation is undertaken reasonably may fear that the lawyer will pursue that clients case less effectively out of deference to the other client, i.e., that the representation may be materially limited by the lawyers interest in retaining the current client. Material limitation is defined as a significant risk that a lawyers ability to consider, recommend, or carry out an appropriate course of action for the client will be negatively affected by the lawyers responsibility to alternate clients,26 and this can create a conflict of interest even where no direct adverseness exists.27 Given that the lawyer is required to be impartial between commonly represented clients, cross-representation is improper where it is unlikely that impartiality can be maintained.28

24 25

See id. cmt. 6. See id. 26 See id. cmt. 8. 27 See id. 28 See id. cmt. 29.

 Loyalty and independent judgment are essential elements in the lawyers relationship to a client.29 However, one can surely imagine a situation where, for example, a lawyer who represents an artist is also working with other, similar artists or with a record label, representing parallel or perpendicular clients. In the case of two clients who are both artists, it is not far-

fetched to presume that there would be, at the very least, a significant risk of one client receiving less attention than another, perhaps where the lawyer is chiefly interested in their larger clients success, and almost certainly where the lawyers primary goal is mere retention. A lawyer connected to a label or a studio will not necessarily use this connection to promote that particular artist, but will reserve his heavy ammunition for his better-known artists.30 The alternate scenario is the classic case of a lawyer representing both record label and artist who gives deference to the label on account of superior buyer powerthe ability of labels to put the artist under pressurewhich also affects the labels sensitivity to changes in the price of signing a deal.31 In both of these examples, the crucial questions are as follows: what is the likelihood that a difference in interests between clients will eventuate and, if it does, will it either materially interfere with the lawyers independent professional judgment in considering alternatives or foreclose courses of action that reasonably should be pursued on behalf of not just one, but either client?32 Where a conflict of interest exists because of a lawyers relationship to multiple, parallel artist-clients or to both a record label and the artists with which it may deal, the question of difference in interests is quite simple. In both of these cases, each client party is looking for a foundational pair of similar services from a lawyer: the ability to obtain rights and the ability to avoid liability. Often the most sought-after right that parties are looking to obtain is the right to
29 30

See id. cmt. 1. Edwin McPherson, Conflicts in the Entertainment Industry?. . . Not!, 10 ENT. & SPORTS LAW, Winter 1993, at 5. 31 See Michael E. Porter, The Five Competitive Forces That Shape Strategy, HARV. BUS. REV., January 2008 (discussing the Bargaining Power of Buyers as one of four forces that shape strategy in the market). 32 See MODEL RULES OF PROFL CONDUCT, supra note 23, cmt. 8.

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receive the highest amount of money possible for the goods or services offered to the other party within the given transaction. When the distribution of finances is at the heart of how a particular deal is negotiated, the agreement will center on provisions where each dollar gained or retained by one side is an additional dollar lost by the other side sitting across the table and therefore, recording contracts are essentially premised on operating as zero-sum games.33

IV. THE DISTRIBUTIVE THEORY OF NEGOTIATION

A zero-sum game is a situation where one or more participants gain (loss) equals the loss (gain) of other participants.34 Either a gain or a loss for one must result in a converse gain or loss for one or more of the others.35 Where a lawyer is acting as an agent of negotiation for a client, the lawyer will use a distributive strategy of negotiation in a circumstance where wealth is essentially shifting from one party to another. In a recording contract, the negotiable portions of the agreementincluding exclusivity, music publishing, cross collaterization of cost and royalties, production deals, and free goods provisions36typically revolve around this distributive approach to negotiation. Herein, each side takes a position predicated on their concern for achieving maximum gain for their respective clients in terms of such interests as
33

While this speaks to an attorneys cross-representation of both a record label and its artist(s), a parallel can be drawn with the aforementioned example where an attorney engages in dual-representation of two or more artists; here, the distribution is instead of the attorneys time where each artist has an interest in obtaining the top possible billing and individual promotion in order to enhance his or her value and demand in the future. However, for purposes herein, the discussion of negotiation theory that follows will focus on cross-representation. 34 Business Dictionary, Zero Sum Game Definition, BUSINESSDICTIONARY.COM, http://www.businessdictionary.com/definition/zero-sum-game.html 35 See id. 36 See Allen S. Bergman, Anatomy Of A Record Deal: A Guide To Negotiating The Record Company Contract, ALAN S. BERGMAN AND ASSOCIATES, P.C., http://www.alanbergman.com/Anatomy%20of%20a%20Record%20Deal.pdf

 making money, maintaining flexibility, and being afforded guarantees about the other partys performance.

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So how does distributive negotiation relate to legal ethics and the conflict of interest provision in the Model Rules of Professional Conduct? On its face, the fact that the parties interest with respect to certain contract provisions, such as the duration of the contract, may be directly adverse37 illuminates the distributive nature of the recording contract bargaining process. Moreover, the commentary to Rule 1.7 explains clearly a lawyer may not represent multiple parties to a negotiation whose interests are fundamentally antagonistic to each other, but common representation is permissible where the clients are generally aligned in interest even though there is some difference in interest among them.38 While the commentary herein posits, a lawyer may seek to establish or adjust a relationship between clients on an amicable and mutually advantageous basis,39 the examples provided speak to the formation of businesses or financial reorganization where the attorney engaged in a concurrent conflict seeks to resolve potentially adverse interests by developing the parties mutual interests.40 It is more realistic to picture the attorney trying to make the deal work by compromising, to varying degrees, the interest of one client in favor of another.41

Because each party (either personally or through legal representation) is faced with the prospect of taking ground or giving ground in a recording contract negotiation, it would be fundamentally absurd to imagine a single attorney representing parties on both sides of the negotiating table
37 38

Abdo, supra note 1, at 4. MODEL RULES OF PROFL CONDUCT, supra note 23, cmt. 8. 39 Id. 40 Anderson, supra note 21, at 9. 41 Id.

 simultaneously. The record label is, of course, interested in getting the best talent for the least

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money.42 The artist is, alternately, hoping to find a strong vehicle for their talents through which they will be compensated as much as possible.43An attorney is required to act not in the reasonably fair interest of a client but in the best interest of a client. When the best interest of one client is fundamentally opposed to the best interest of another client, the attorney engaged in cross-representation could not therefore contend that the belief in his or her ability to provide competent and diligent representation to each affected client is reasonable.44 The very circumstance of representing opposing parties in a distributive negotiation, and the inherent conflict of interest therein, means that an attorney cannot possibly uphold the duty of competence and zealous advocacy required by the MRPC because of the impairment of a lawyers loyalty and independent judgment45a material limitationthat transforms a conflict of interest from something dangerous into something prohibited.

Beyond the breach of an attorneys ethical duty to represent zealously the clients best interests and to make the best deal possible for that client, the attorney also violates his or her ethical duty to maintain an undivided loyalty to the client.46 The relationship between an attorney and his or her client is that of a fiduciary, one founded upon trust or confidence reposed by one person in the integrity and fidelity of another.47 This a clear violation of the requirement that an attorney not allow any other interest or consideration to dilute his loyalty to his client.48 This issue of diluted loyalty can again come into play with damaging results when an attorney represents two
42 43

See id. See id. 44 See MODEL RULES OF PROFL CONDUCT R. 1.7(b)(1) (2012). 45 See MODEL RULES OF PROFL CONDUCT, supra note 23, cmt. 1. 46 See Anderson, supra note 21, at 9. 47 Croce v. Kurnit, 565 F.Supp. 884, 893 (1982). 48 Ishmael v. Millington, 241 Cal. App.2d 520, 526 (1966).

 competing artists because the attorney is precluded from assuming any relation that would

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prevent devotion of all his energies to one clients interests, even where the attorneys intentions and motives are honest.49

V. THE COST OF DOING BUSINESS PERSPECTIVE

Despite the myriad ways that conflicts of interest can harm artists, it has nonetheless been argued that overall, within the context of the music industry and its nature as an environment that encouragesif not demandsthese conflicts, clients are benefitted where cross-representation is involved.50 Attorneys in the music industry may provide a multitude of non-legal services: packaging deals through relationships, shopping talent and creative material, protecting a clients financial interests and advising on money matters, recommending individuals or businesses for assistance, and intentionally or unintentionally exercising a greater degree of control over the client than is customary in other law practices.51 In doing so, certain entertainment lawyers fit the textbook and practical definition of both agents and managers.52 It has been posited that because of the unique nature of practicing in the entertainment industry, the entertainment attorney should somehow be held to a less stringent ethical standard than that which applies to other attorneys,53 or those who have no real concept of the realities of this industry.54

49

See Anderson, supra note 21, at 9 Cf. C. W. Wolfram, Modern Legal Ethics, Hornbook Series, Student Edition (West 1986) (noting that the principle of undivided loyalty from attorney to client is a long-standing basic tenet of the relationship.) 50 See generally McPherson, supra note 30. 51 See Abdo, supra note 3, at 3. 52 Id. 53 See McPherson, supra note 30. 54 Id.

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Those who support cross-representation primarily point to the palpable benefits of a the ability to create package deals amongst one attorneys numerous clients, a formula that is apparently destined for success.55 Even where it is clear that a concurrent conflict of interest exists, this is purported to prove beneficial in negotiations where maintaining close relationships with key players in the industry leads to better results for clients.56 Admittedly, the benefits may become even clearer when one client is less powerful and less successful and is thereby motivated to pursue a working relationship with the attorney who is well endowed with big-name connections. Though he could opt to be represented by an attorney who is free from all potentialor actual conflicts, who would probably try a little harder and pay a little more attention to him,57 the artist may instead choose the first attorney, one who has the ability to put the artist in touch with his connections and package an entire record deal with just his own clients.58 Despite the aforementioned risks, this is seen as a good decision because the attorney may still be perceived as the best lawyer for that particular artists career.59

A secondary argumentcarried out by proponents of what is essentially a special ethical standard for entertainment attorneysquestions whether or not the landscape of entertainment transactions occurs between parties that are against one another: In an entertainment context is the entertainment attorney (who, unlike a litigator, is acting much less as legal counsel and much more as a negotiator) really representing an actor against a producer or a recording artist against a label? Is there really conflict of interest in representing both? I am not so sure. An entertainment attorney negotiated on behalf of an actor-client presumably aiming for the amount of money, percentage of profits, and the like, that the client wants. He or she is a deal maker.60
55 56

Id. See Hollan, supra note 4, at 197. 57 McPherson, supra note 30. 58 See id. 59 See id. 60 Id. at 5-6.

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While it is certainly true that a transactional entertainment attorney does not represent one client against another in the same way as a trial attorney would while litigating a dispute between two clients, the key lies not in defining against so much as in defining interest. As discussed above, a percentage of profits, for example, represents a finite number drawn from a limited pool: no matter how large the pool, both parties simply cannot each receive 55% of what it contains. Each client that is represented by the attorney in the deal has existing and potential interests that distinguish their needs and desires from those of the other parties involved.61 The attorney-as-dealmaker, again, is charged with advocating on behalf of each client so as to ensure that they are afforded the most optimal deal, not merely the deal that allows all parties to mutually maintain their attorneys cross-representation.

The notion that the attorney will generally only be brokering a deal and not influencing the actual transaction between clients falls short here as well.62 The record label, for example, may not pay the artist any more than the label feels that it can afford or any more than it feels the artist is worth in terms of record sales potential.63 Similarly, the artist is not going to accept less than he or she believes is a worthwhile sum for the services rendered.64 However, if this is truly a typical scenario that drives the reality of corporate music transactions within the industry, then why are attorneys ever hired in the first place, let alone as advocates for the protection of client interests?

61 62

See Anderson, supra note 21, at 10. See McPherson, supra note 30, at 6. 63 See id. 64 See id.

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Attorneys operate from a sophisticated basis from which to analyze and exploit opportunities65 and it is his or her experience and practice that give the attorney the contacts that are the very basis of a conflict of interest claim.66 Further, this experience that an attorney accumulates may provide a greater insight into a particular transaction in the context of a deal than an individual client possesses.67 Where an attorney is concerned, there exists a heightened level of professional responsibility in order to protect clients and to ensure that the transaction is guided by a standard series of ethical rules. The risk of malpractice suits and culpability for MRPC violations is not precluded by the potential financial gain in an industry rampant68 with conflicts of interest.69

VI. THE RAMIFICATIONS OF CROSS-REPRESENTATION

In addition to the fundamental failure to uphold a clients best interests, further ramifications of cross-representation can go beyond merely the loss of income or foregone business opportunities; where a common representation fails because of an inability to reconcile the clients adverse interests, the result can be additional cost, embarrassment and recrimination.70 What is more, this transpires in the face of the reality that any repercussions of attorney misconduct threaten further harm to the reputation of attorneys within the public eye generally and foster mistrust of those sworn to uphold the law.71 The attorney will also typically lose the ability to represent any of the clients involved in the cross-representation. Consequently, there
65

Kenneth J. Abdo, Agents, Mangers, And Lawyers: A Roadmap For The Entertainment Attorney, ENT. & SPORTS LAW, 3, 4 (1996). 66 See id. 67 See Abdo, supra note 65, at 4-5. 68 Philips, supra note 6. 69 See Hollan, supra note 4, at 218. 70 MODEL RULES OF PROFL CONDUCT, supra note 23, cmt. 29. 71 See Hollan, supra note 4, at 217.

 are some circumstances under which the risk of failure is so great that cross-representation is plainly impossible, including those where negotiation between the two parties is imminent or contemplated.72

17

Cross-representation also has an adverse effect on client-lawyer confidentiality and the attorneyclient privilege. Both of these fundamental rights are essentially nullified through crossrepresentation: the attorney-client privilege does not attach to one client as against the other and as to the duty of confidentiality, continued common representation will almost certainly be inadequate if one client asks the lawyer not to disclose to the other client information relevant to the common representation.73 The unnatural character of cross-representation causes complexities and hurdles that become virtually impossible to surmount. In the case of confidentiality, the lawyer has an equal duty of loyalty to each client, and each client has the right to be informed of anything bearing on the representation that might affect that clients interests and the right to expect that the lawyer will use that information to that clients benefit.74 The result is that clients end up being required to take on more of the burden of representation and assume greater responsibility for decisions than when each client is represented separately.75 Ultimately, this approach improperly shifts an attorneys affirmative ethical obligations to the client.76

Conflicts of interest consequences may become far more damaging for independent artists who operate with a more desperate need for both attention and connection. These artists often lack
72 73

See MODEL RULES OF PROFL CONDUCT, supra note 23, cmt. 29. Id. 74 MODEL RULES OF PROFL CONDUCT, supra note 23, cmt. 29. 75 See id. 76 See Anderson, supra note 21, at 9.

 legal knowledge, business savvy, or both, and become victims of their own intense desire to obtain a recording contract.77 Many entertainers who are new to the business are young and

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unsophisticated in legal matters and may not grasp the significance of seeking independent legal counsel, even when such a course is advised.78 For many of these artists, the prospect of engaging an attorney who is known to be utilizing cross-representation is appealing on its face. Couple this viewpoint with the notion that by using an attorney already employed by a record label, an inexperienced artist can increase cash-flow by foregoing the cost of hiring independent representation. Both time and money are of the essence when hiring counsel for an isolated representation.79 Admittedly, hiring individual counsel for each party, while appropriate, may extend and sharpen negotiations and make the entire process far more cumbersome and protected, perhaps prejudicing the entire deal.80 However, while attorneys are supposed to be engaged primarily to protect the legal interests of their clients,81 this becomes a secondary role when attorney services are sought out for the use of the attorneys connections (and conflicts). This perpetuates an industry-wide standard where studios and labels are able to dictate terms to all but the biggest artists and thereby obtain exceedingly broad ownership interests in the artists product than would be seen in any other industry.82

77

See Hollan, supra note 4, at 231 Cf. T. M. Murphy, Crossroads: Modern Contract Dissatisfaction as Applied to Songwriter and Recording Agreements, 35 J. MARSHALL L. REV. 795, 808 (2002). 78 See MODEL RULES OF PROFL CONDUCT, supra note 23, cmt. 29. 79 See Richard E. Flamm & J. B. Anderson, Conflict of Interest In Entertainment Law Practice, Revisited, 10 ENT. & SPORTS LAW, Spring 1996, at 5. 80 Abdo, supra note 65, at 6. 81 See id. at 3. 82 See Anderson, supra note 21, at 11.

 VII. WAIVERS & INFORMED CONSENT

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Returning to the MRPC, the rules seem to point to one key alternative to an attorneys outright inability to represent clients in a common scheme: informed consent and the procurement of a written waiver. In spite of a concurrent conflict of interest as previously defined above, an attorney may yet represent an affected client if he or she gives informed consent, confirmed in writing.83

Of note is the fact that while the attorney may be ethically permitted to proceed with representation wherein a conflict exists as long as her or she obtains the clients informed consent, the relevant conflict rules do not allow an attorney to satisfy his or her ethical duties in situations of multiple representation simply by obtaining a conflict waiver from the affected clients.84 The distinction here is between a clients mere willingness to waive the pertinent conflict and the clients consent after a full explanation of the implications therein, empowered to make an informed decision. Because conflict waivers are typically executed at the outset of representationbefore any actual conflict has arisenit is not entirely clear that a conflict waiver can be treated as the functional equivalent of informed consent.85 Therefore, a conflict waiver will not be taken as a stand alone guarantee that an attorney has fulfilled his or her ethical obligations or fiduciary duty to the client or clients involved absent an ongoing commitment to informing them of any conflicts as the representation proceeds.

83 84

See MODEL RULES OF PROFL CONDUCT, R. 1.7(b)(4). See MODEL RULES OF PROFL CONDUCT, supra note 23, cmt. 29. 85 See id.

 Essentially, each affected client must be made aware of the relevant circumstances and of the material and reasonably foreseeable ways that the conflict could have adverse effects on the

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interests of that client.86 The attorney is responsible for the clients cognizance of the conflict and what the conflict means in light of any forthcoming deals that are made.87 The information provided to clients must also include the implications of the common representation on the attorneys loyalty to each client, his or her inability to maintain confidences and the attorneyclient privilege, and the advantages and risks involved.88 The purpose of a writing is to impress upon clients the seriousness of the decision that the client is being asked to make and to help avoid disputes or ambiguities that might later occur in the absence of a writing.89

The authority that a written waiver contains, however, is predicated on the idea that the conflict is consentable in the first place.90 A nonconsentable conflict is one where the attorney involved cannot properly ask for such agreement or provide representation on the basis of the clients consent.91 The question of consentability is generally determined by considering whether or not the interests of the affected clients will be adequately represented if the clients are permitted to give their informed consent to a representation that is burdened by a conflict of interest.92 Conversely, then, a representation becomes prohibited if, in the circumstances, the lawyer cannot reasonably conclude that the lawyer will be able to provide competent and diligent representation.93 Competent representation is defined in Rule 1.1 as that which requires the legal knowledge, skill, thoroughness, and preparation that is reasonably necessary for the
86 87

See id., cmt. 18. See Anderson, supra note 21, at 8. 88 See MODEL RULES OF PROFL CONDUCT, supra note 23, cmt. 18. 89 See id., cmt. 20. 90 See id., cmt. 2. 91 See id., cmt. 14. 92 See id., cmt. 15. 93 See id.

 representation.94 Within the music industry specifically, the definition of competency may be expanded:

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Knowing the law isnt enough. In order to be a competent lawyer, you must understand the music business and what the record companies are looking for in order to effectively represent music industry clients. You must study the contract forms and know what you can and can't negotiate. You need to understand the music business and the current industry standards [...] you have to be familiar with the past and present recording artists [...] You have to be able to give your client honest feedback on his or her prospects of getting a record deal. The only way to be able to do that is to listen to music and be familiar with the vocalists who already have music deals.95 The competent attorney must also add diligence and promptness to his or her foundation of general duties owed to clients.96 While an attorney may satisfy the competency requirement through an accumulation of adequate knowledge and experience, the duty to represent a client diligently is impeded where an attorney represents conflicted clients. An attorney cannot pursue matters on behalf of his or her client in the face of opposition, obstruction, or personal inconvenience97 when the attorney is equally bound to the party opposed. Once again, it is unreasonable for an attorney to believe in his or her ability to act with diligence in a crossrepresentation, vindicating each clients every endeavour98 while clients sit across the same table from one another. The commitment and dedication to the clients interests and the need for zealous advocacy on the clients behalf99 are all handicapped in these circumstances. The only limitation the MRPC place on this duty centers on avoiding either the use of offensive tactics or the disrespectful treatment of other persons involved in the legal process.100

94 95

See id. Hollan, supra note 4, at 209-210 Cf. W. Henslee, Evolving Role of the Lawyer in the Representation of Talent in the Music Business, in S. Burr & W. Henslee, Entertainment Law: Cases and Materials on Film, Television and Music 691, 695 (2004). 96 See MODEL RULES OF PROFL CONDUCT R. 1.3 (2012). 97 See id., cmt. 1. 98 See id. 99 See id. 100 See id.

 The preceding discussion highlighted the nature of a clients informed consent to concurrent

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conflicts of interest, or those that exist at the outset of representation. When a conflict arises after representation has begun, however, the attorney must typically withdraw from the representation unless the attorney has already obtained informed consent.101 If this later conflict involves multiple clients, the attorneys ability to represent any of these clients hinges on both the attorneys ability to comply with the duties owed to the former client and the attorneys capacity to represent the remaining client or clients with competence and diligence given the attorneys duties to the former client.102 The conflicted attorney again runs into trouble when bringing a new client into a situation where there is already a fiduciary relationship owed to a current client. For example, if an attorney working for a record label decided to take on a very successful artist who recently decided to switch counsel, this could pose problems for the record label. The attorney understands the inner workings of the corporation, spoken through the confidentiality of an attorney-client relationship, and allows the artist a significant advantage in its dealings with the record label because the attorney would now owe a duty to disclose to the artist information advantageous to the artists interests as they pertain to deal-making. If the label were to pursue a contract with this artist, they would be at a disadvantage from the start simply because the attorney they have been employing for years has decided to also represent the party on the opposite side of the bargaining table. This situation ignores the size of each client and instead, acknowledges that even a corporate client can be harmed by the emergence of a new conflict of interest. Regardless of specific circumstances, advance consent cannot be effective if the circumstances that materialize in the future and the conflict that arises therein are such as would

101 102

See id., cmt. 4. See id.

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make the conflict nonconsentable.103 The notion of a nonconsentable conflict, be it concurrently or in the future, again hinges on whether or not the attorneys belief in his or her ability to provide competent and diligent representation to all clients affected is reasonable.104 In cases where parties involved in adverse transactional matters are commonly represented, this belief cannot be reasonable. Absent an attorneys reasonable belief in his or her ability to provide competent and diligent representation to each affected client, informed consent, confirmed in writing, is not exclusively sufficient because Model Rule 1.7(b) requires both of these elements to be satisfied in order for an attorney to maintain representation where a concurrent conflict of interest is involved.105

VIII. A PROPOSAL FOR REFORM

An objective standard is applied to determine whether or not a conflict of interest violates the MRPC: this examines the reasonable belief of the attorney in question. An attorney whose loyalty is divided between opposing clients cannot advocate zealously for his or her clients. Moreover, the attorney-client relationship therein cannot operate in a character of trust and confidence through integrity and fidelity. Finances and decisions about the clients rights cannot be negotiated with the clients best interest at the forefront of the agreement. While the music industry may be unique, it is not above reproach; nor can it carve out for itself a subjective standard of ethical guidelines tailored to its incestuous nature.
103 104

See id., cmt. 22. See id., cmt. 15. 105 See MODEL RULES OF PROFL CONDUCT R. 1.7(b) (2012).

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Today, the digitization of music and its distribution channels are rapidly changing the landscape of record deals and how and where labels are becoming involved in them. As early as 2007, English alternative rock band Radiohead released In Rainbows as a self-distributed album through the bands own website, without a record label or a distribution partner.106 The big twist was that customers were allowed to pay whatever they wanted, provided with complete consumer choice about whether or not to even pay at all.107 Within just the first month following the records release, about 40% of customer paid for the album, netting the band nearly $3 million.108 Perhaps more importantly, Radiohead was also able to license the album to a record labelTBD Records/ATO Records Groupfor physical distribution via CD. In response, one A&R executive at a major label in Europe declared: If the best band in the world doesnt want a part of us, I'm not sure whats left for this business.109 Because of the possibility that even multi-platinum artists locked in to the most lucrative record deals can end up with less than 30% of overall sales revenue, the 2000s have seen a significant shift of power and influence within the industry.110 Since then, companies like Kickstarter111 have emerged to provide bands even more opportunities to crowd-source the funding for their music production and their tours, giving even more freedom to artists of all sizes.

For the attorney eager and willing to test the limits of ethically permissible practice, the motivation that propels them towards doing whatever it takes to get their artist clients and their
106

See Josh Tyrangiel, Radiohead Says: Pay What You Want, TIME ENTERTAINMENT, Oct. 1, 2007, http://www.time.com/time/arts/article/0,8599,1666973,00.html 107 See id. 108 See WIRED, David Byrne and Thom Yorke on the Real Value of Music, WIRED, Dec. 18, 2007, http://www.wired.com/entertainment/music/magazine/16-01/ff_yorke?currentPage=all 109 Supra, note 106. 110 See id. 111 See generally Kickstarter, Discover Projects: Music, KICKSTARTER, INC., http://www.kickstarter.com/discover/categories/music?ref=home_spotlight

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corporate clients working together should no longer remain now, 20 years removed from Joel v. Grubman. In a who you know at the label industry, ethical shortcuts and questionable morality are permissible at best; in one where artists rights become the new normal, no coherent evaluation of attorney loyalties can point to the successful continuation of cross-representation as it has existed up until now. As artists become more independent from the need to involve record labels in the album production process through digital distribution possibilities and the viability of crowd-sourced funding, attorneys too need to value the interests of the artist and become a part of the progressive movement towards new levels of artist liberty.