Ideally, publishers—like librarians—should see themselves as guardians of the culture, but, well . . . 🤷
Ready for a legal breakdown of the literary agent model?
Me: Why make all those people angry?
Also me: But this is what I’m thinking about.
Along the way, I’ll offer a personal publishing horror story and advice to writers considering traditional publishing.
So here goes. (Warning: I think the rebel in me is coming out.)
Primordial Times
I’ll start with 1982—the ancient days of landlines, manuscript boxes, and postage stamps. 1982 was also the year I decided that I wanted to be a writer, so that was when I started watching the publishing industry and trying to understand it.
In those days, writers hammered out their manuscripts on a typewriter. When we finished, we took the stack of paper to a photocopy shop, placed a photocopy of the manuscript into a manuscript box with a cover letter and SASE (a self-addressed stamped envelope for a reply), and mailed it to a publisher.
Agents were a thing in the 1980s, but you did not need one to send your manuscript to a publisher. Publishers had what was called a slush pile: the pile of “unsolicited” manuscripts that authors sent to them. The publishers hired eager beavers with newly minted English degrees to read through the slush pile and pick out good books. Many successful books were published this way. The eager beavers who proved able to select good manuscripts were eventually promoted to acquisitions editors.
In the words of P.G. Wodehouse, sending a manuscript to New York was like dropping a feather into the Grand Canyon and waiting for the echo. I joked that my desire to be a writer was a curse: I had been put on earth this time around to learn patience, and the gods played a practical joke on a soul without patience by making me want to be a writer.
The Numbers Tell the Story
In 1982, approximately 47,000 titles were published in the U.S.
By 1996, the number was up to 63,689.
By 2010, after the digital and self-publishing revolutions were underway, close to 3 million books were published, 316,480 by traditional publishers, and 2,776,260 in the “rapidly growing non-traditional sector.”
By 2025, more than 4 million books with ISBNs were published in the U.S. Of those, 3,529,980 were “non-traditional sector” print and e-books.
Agents as Outsourced Slush Readers
As the number of books submitted to publishers exploded and slush piles became unmanageable, editors figured out it was more economical to use agents as outsourced slush readers. Forcing authors to go through agents reduces the number of manuscripts in the slush pile and (in theory) increases the quality of the pile.
In other words, agents are doing essential work for the publisher (acting as outsourced slush readers) while being paid by the author. Unlike slush readers in the old days, an agent hoping for a career will obviously not be happy working year after year, decade after decade, for entry-level wages. So they work on commission. After an agent sells a book, the agent takes 15% of everything the author earns for the book over the book’s entire lifetime.
So the publisher gets an out-sourced slush reader that it doesn’t have to pay. And what does the author get from the agent? The author gets access to the publisher. (Agents claim authors get more. We’ll see about that.)
Keep in mind that access to the publisher is the agent’s only clout and power, and it is conferred by the publishing house.
An agent can add months or even years to the time it takes a book to reach publication. Slowing writers down also helps reduce the size of the metaphorical slush pile. “We all edit,” one agent says. Whether the agent can tell you how to improve your book depends on your skill level and the agent’s skill level. It also depends on why the agent is asking for revisions. If a few weeks ago the agent’s editor friend told her that she is looking for horror stories, and the agent tells you, “You should play up the horror element,” that advice may or may not be the right advice for your book. You may even find yourself going through revision loops. It’s also possible to revise the life out of a book.
The Emergence of the “Big Five”
Between the late 1980s and 2013, publishers consolidated into the “Big Five.” The consolidation era began when News Corp acquired Harper & Row and William Collins. Time and Warner merged in the late 1980s, laying the groundwork for what is now the Hachette Book Group. In 2013, Penguin and Random House combined operations. Smaller independent publishers were swallowed up by larger publishers.
This is where things get dicey in the world of agenting.
Because there are only a handful of major publishers while there are literally millions of eager aspiring writers with manuscripts in hand, with rare exceptions, the agent needs the publishers more than it needs any individual writer.
The rare exceptions are big-name best-selling authors whose books float their agency and often the publishing house as well. (More on the bestseller model in another essay.) So an agent needs a mega-selling author more than it needs any individual publishing house, but generally writers are fungible. In fact, the entire power balance in the publishing industry is explained by the fact that there are so many writers at the gates.
The structure of the industry—agents derive their clout and power from the publisher’s “agented books only” policy and the future earnings of most agents depend on maintaining good relationships with editors—creates several pitfalls.
Pitfall #1: Incentive Misalignment
In some ways the agent’s incentives are aligned with the author’s. For example, because the agent collects a percentage of the author’s earnings, both the agent and the author have an incentive to secure a large advance. (The advance is money the publisher pays up front against future royalties.)
The size of the advance has an added importance to the agent. It helps the agent attract new authors. Most agents, after placing a manuscript with a publisher, announce the sale on Publishers Marketplace. The announcement includes the acquiring editor’s name and the size of the advance. These are the only publicly available metrics. Obviously, writers look for agents with good sales track records with good publishing houses. Therefore, some of the benefit the agent derives from the sale comes downstream.
There are also places where an agent’s interests and an author’s interests may diverge. For example, other terms in the contract may be just as important to the writer as the size of the advance. A restrictive options clause may prevent a writer from publishing another book for years and therefore throw a wrench into the author’s career. The agent, on the other hand, can continue selling books for other authors.
When an agent negotiating the contract benefits from the contract, and the agent’s interests and the client’s interests are not aligned, the result is called an incentive misalignment. At times, an incentive misalignment can grow into an actual conflict of interest.
Now I will illustrate incentive misalignment and conflict of interest with a real-life publishing horror story.
A True, Hair-Raising Story
Not long after my book, The Girl from the Tarpaper School, was published by Abrams, an editor from one of the Big Five publishers contacted me and asked if I would write a fictionalized version of Barbara Johns’s story for children. She offered me a $15,000 advance.
The Girl from the Tarpaper School was the first published book about Barbara Johns, a 16-year-old high school student who arguably should have been credited with starting the modern civil rights movement. The book at the time was attracting positive critical attention. The Girl from the Tarpaper School showcased about 50 never-before-published images, many of which I personally uncovered during research trips through Virginia. The only photographs of Barbara Johns as a child in existence were in my book.
I was not daunted by the request to write a children’s story. My first published book was a children’s novel, and I’ve ghostwritten for the Boxcar Children series and the Jake Maddox series. I also knew more details about Barbara Johns’s personal life than I put into The Girl from the Tarpaper School.
Because of all this, and because of the low word count of the story the editor wanted, I figured I could write the story in about 3 weeks, which meant earning $5,000 per week. This was more than 10 years ago, so when accounting for inflation, you can see why I viewed it as a good offer.
My contract with Abrams had a non-compete clause that prevented me from writing and publishing a competing nonfiction book about Barbara Johns. My contract, however, allowed fiction.
I called my editor at Abrams to see how he felt about me writing a fictionalized children’s version of Barbara Johns’s story. I assured him that it would be fiction only and I would not allow the publisher to use any of the images I collected for The Girl from the Tarpaper School.
He didn’t like it, but he said he understood.
I wrote back to the Big Five editor and told her that I would accept the offer on two conditions:
(1) No part of the book could be nonfiction and I would have final approval over what was published (this was to prevent the editor from sneaking in nonfiction and therefore putting me in violation of my non-compete clause with Abrams).
(2) No photographs or images could be used from The Girl from the Tarpaper School.
This was the right thing to do, even though my contract with Abrams didn’t forbid it, because much of the value of The Girl from the Tarpaper School was the images.
The editor wrote back, agreeing to the terms. She also said, “We want the story quickly to meet our publication schedule. Can you write it in 3 months?”
Three months meant the book would be due in June. I told her that I could meet that deadline.
A few weeks later, she wrote to tell me that the contracts department was backed up, so I wouldn’t have a contract until July. However, she promised that there would be a contract, and asked again if I could write the book for a June deadline.
Are your internal alarm bells ringing?
Mine were, too. However, I agreed to write the book before the contract could be issued and signed. You see, there is a legal doctrine called promissory estoppel, or detrimental reliance. If person A makes a promise, and person B reasonably relies on the promise to his or her detriment, it is as if there is a written contract. The agreement is enforceable. Here is the example I use when explaining promissory estoppel. If someone says, “If you paint my house, I will give you $1,000” and, in reasonable reliance on the promise, you paint the house, the person cannot wiggle out of paying by saying, “We never signed a contract.” Fair is fair.
Of course, the reason we have doctrines like promissory estoppel is because people try to pull that crap. To rephrase a quotation from James Madison, if people were angels, we would not need laws.
Aside: Promissory estoppel is one of my favorite legal concepts, and it has come in handy more than once. Perhaps I should write a series called “legal concepts everyone should understand.”
So I wrote the story and sent it to the editor in June. She read it and wrote back: “Very good.”
Aside: You know it’s important to make sure all this stuff is in writing, right? If something important happens on the phone, confirm what was said in a follow-up email.
I’ll bet you can guess what happened next. The contract arrived in July and required a nonfiction “Afterword” and 10 photographs.
I emailed the editor and told her that the contract was unacceptable. She wrote back and dropped the hammer: “Well then,” she wrote, “I guess we are not going to do the book.”
I believe she was counting on me (1) craving publication and giving in, or (2) wanting the $15,000 and giving in, or (3) cutting my losses and going away.
This was a reasonable calculation on her part. I suspect most authors would have chosen one of the above. The ethical author would have slinked away into the night, forgoing the $15,000 in order not to violate the non-compete clause with another publisher.
I did none of the above. Instead, I wrote a letter to the legal department, explained what happened, and demanded $15,000 to compensate me for the work I did in reliance on the promise. I included the emails confirming the terms of our agreement.
In the letter, I also pointed out that because we never signed a contract, the law allowed me to seek an equitable remedy in the jurisdiction where the injury occurred, which would be the place of my residence. I was then living in San Francisco. In other words, I could sue them in a court in San Francisco.
If you are a big New York corporation being accused of taking advantage of an author, the last place you want to face a jury would be San Francisco. Also, I could ride the subway to file my claim. They’d have to travel to California to answer.
I mailed the letter special delivery to the legal department, signature required.
Before dropping the letter in the mail, I hesitated. I was pretty sure that playing legal hardball meant writing off one of the Big Five publishers for future work. However, a lawyer I know who regularly sues publishing houses assured me that there is no corporate memory. In a few years, he said, the issue would be forgotten. That individual editor would remember, but because there was never a signed contract, no announcements, and no ISBN, and because there is little communication between divisions, the incident would eventually fade from memory.
About an hour after my letter was delivered, a company lawyer called and asked for a few days to investigate the situation.
She called back the following day and told me that the publishing house would send me a check for $15,000 to compensate me for the time I spent writing the book.
So I collected $15,000 and the book was never published.
What Would an Agent Have Done?
Would the agent have advised me not to write the book without a contract to avoid problems?
Or would the agent have known about promissory estoppel and advised me to go ahead and write the book because, if I did work in reasonable reliance on a promise, I would have a claim to the money?
Most importantly: Would the agent have been willing to risk a legal showdown with a major publisher over a 15% commission on a $15,000 sale? Keep in mind that the agent in that situation would have much more to lose than the writer because the agent can’t wait for the incident to fade from corporate memory. An agent must keep the doors open so that she can submit manuscripts tomorrow.
Would the agent, therefore, have tried to smooth things over to avoid a legal confrontation?
Before we can speculate about what an agent might do—or what an agent should do—we need to consider (1) the role of the agent and (2) the meaning of “unauthorized practice of law.”
Pitfall #2: The Agent as “Mediator”
In the words of Laura McGrath, professor of English at Temple University and the author of Middlemen: Literary Agents and the Making of American Fiction, “agents serve as mediators” between the authors and publishers.
A “mediator” is not the same as an “advocate.”
A mediator is an “impartial party” who “guides the communication” between “conflicting parties.” They “settle a dispute or create agreement when there is conflict.”
An advocate, on the other hand, takes the side of one party against the other. Lawyers are advocates for their clients.
Reedsy, a website that helps authors find agents, similarly describes “mediation” as a primary part of the literary agent’s job so you don’t “hurt your working relationship with an editor by talking brass tacks.”
Nathan Bransford, a prominent literary agent, confirms that agents “serve as mediators between author and publisher in case any disputes arise.”
Given that three reliable sources—all of whom communicate for a living—used the same word, we can assume that this was not an inadvertent slip.
Agents see themselves as mediators and publishers see them as mediators.
It seems obvious to me that an agent representing one party in a negotiation cannot also be a neutral third party whose task is to create agreement where there is conflict. This is particularly true when the agent needs to maintain a good relationship with the publishing house more than the agent needs a writer who commands $15,000 advances.
The perception (which isn’t wrong) is that publishers and authors need mediators because they have an adversarial relationship. My horror story illustrates the adversarial nature of the relationship. The editor wanted a me-too book tagging onto the success of The Girl from the Tarpaper School. She wanted to use the images I had uncovered, so I had to be the author. Someone else would have been simply using my research and my conclusions.
The Publisher and Author Have Both Aligned Interests and an Adversarial Relationship
When two parties negotiate and enter an agreement or contract, two things are happening.
(1) Their interests are aligned because they both desire what the contract will offer.
(2) Their interests are also adversarial, which is the reason you need a contract. A contract protects the interests of both parties.
The interests are aligned because both the publisher and author want the book published. Both hope to make money. Both hope that the book will attract positive critical attention and win prizes.
Their interests are also adversarial.
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- The author would like a large advance. The publisher prefers to pay a smaller advance.
- The author wants to get paid sooner. The publisher would prefer to hold the money longer.
- Publishers generally want what is called an options clause, which states that the publisher has first crack at the author’s next book. This is understandable. If the book is successful, the publisher wants to cash in. However, the publisher generally doesn’t want to see the next book until after the book under contract is published, and that could take 2 years or more, which means the writer’s career is on hold. Restrictive options clauses benefit the publisher and hurt the writer.
I had a publisher once take 5 years from the time my book was submitted until the time it was published. A draconian options clause would have put my writing career on hold for 5+ years. (Notice that the agent would have been unaffected by the clause. The agent could keep selling books for other authors.)
Publishers require authors who want to submit manuscripts to have agents because it benefits the publisher. They would not do it otherwise.
It’s easy to see what the publisher gains. The publisher gets a slush reader it doesn’t have to pay and a “mediator” who must stay on the good side of the publisher.
I suspect many (or perhaps most) agents would have been uncomfortable with my response to the Big Five editor who tried to pull a fast one. An agent might not have wanted me to run off to the legal department and tattle on the editor while presenting a compelling legal claim to a payment of $15,000 and threatening a New York corporation with a San Francisco jury.
It seems to me that the ethical thing for an agent to do in that situation would be to hand all the communication over to the author and step aside. The author needs a lawyer.
And now, on to the next structural pitfall.
Pitfall #3: Unauthorized Practice of Law
Unauthorized practice of law occurs when a nonlawyer offers legal advice. Every state prohibits nonlawyers from practicing law.
Real estate agents and Hollywood agents, among others, are often nonlawyers who negotiate contracts on behalf of clients—but these professions are regulated, and there are limits to what the agents are permitted to do. For example, there is a history of state bar associations suing real estate boards when agents cross the line into the practice of law by drafting legal terms.
It is difficult to find precise definitions of “the practice of law” and hence “unauthorized practice of law” because much depends on the individual facts. However, I would assume most courts agree in general with the pronouncement of California courts that the practice of law includes offering “legal advice” and “legal instrument and contract preparation.” There is also general agreement that advising a person about his or her legal rights and applying legal principles to a person’s particular circumstances constitutes the practice of law.
What this means is that literary agents who go beyond simply negotiating the size of the advance or offering general business advice, and do things like negotiate the wording of reversion clauses and indemnification clauses, or offer legal advice, are crossing the line into the practice of law. An agent can say, “Here is how the publisher is likely to respond to your demand.” But an agent who says, “This is how a court would interpret this clause, so this is what the clause means” is on shaky grounds.
Now let’s go back to the Barbara Johns bait-and-switch pulled by the Big Five editor.
Once the situation arose where I had to decide whether to write the book based on promises but without a contract, any advice at all that an agent would offer would very likely be unauthorized practice of law because the agent would be advising me about my legal rights.
If the agent did know about promissory estoppel and told me that I was safe writing the book because I could collect the money, that agent would be offering legal advice and “interpreting legal consequences.” Similarly, if the agent advised me not to write the book without a contract, the agent would be offering legal advice.
So it doesn’t matter what the agent would do. Any advice would be unauthorized practice of law.
And what if the agent believed that her duty as a “mediator” meant she should smooth things over and prevent a blowup? Any steps the agent might take that would subtly or quietly benefit the publishing house at the expense of the writer would be both unauthorized practice of law and a breach of fiduciary duty. (Presumably even in the hazy, unregulated world of literary agenting, an agent owes a duty to protect the interests of the client, and therefore, taking steps to protect the publisher if the author has a valid legal claim would violate that duty.)
Consider also what would have happened in my situation if all the communications had been filtered through an agent. In my experience, agents do not forward emails from editors. They “filter” what the editor has said. It’s very likely, then, that the only written evidence of the promise would be from the editor to the agent. The author would have only the agent’s word. Should the author wish to pursue a legal remedy, the agent would have to turn over the emails to the author. If the promises were made on the phone to the agent, the agent would then have to serve as a witness.
See how complicated this becomes? An agent probably doesn’t want to act as a witness against the publishing house, so filtering all communication through an agent helps insulate the editor.
See how this gives editors an additional reason for requiring agents. They not only get the free services of a slush reader—they also get a “mediator” who is dependent for his or her job on access to the publisher and is likely to smooth things over in the publisher’s favor.
I will not attribute evil motives to (most) editors. They are busy and requiring authors to go through agents make their job manageable, so they require that authors have agents.
And now, one more pitfall.
Pitfall #4: Handling Funds
Publishers generally send the entire royalty check to the agent. The agent deposits the money, then sends the author’s share to the author.
Lawyers also handle money for their clients, but the legal profession (unlike literary agenting) is highly regulated. Nonetheless, every month, shockingly large numbers of lawyers are disbarred for mishandling or mingling client funds.
If you think people who call themselves literary agents—an unregulated profession that has no entry requirements—are less likely to mishandle or mingle funds than a person who studied for, and passed, an exam on how to handle client funds, well, I have a bridge to sell you.
Author Kristine Kathryn Rusch suggests that the publisher write two checks: one to the agent and one to the author. You can expect publishers to resist because it is extra work for them, but it’s something you should be able to insist on.
What About Literary Agents Who Are Also Lawyers?
This doesn’t solve the problem. Lawyers are only permitted to practice in states in which they hold licenses. Most publishers are in New York—but not all publishers are in New York. My promissory estoppel claim against the Big Five editor fell under California’s jurisdiction. A lawyer who was authorized to practice in New York, but not in California, who tried to advise me on my promissory estoppel claim would be engaging in unauthorized practice of law.
Moreover, having a literary agent who is also a lawyer would not resolve the incentive misalignment problem or the potential conflicts of interest. In fact, someone trained as a lawyer would be expected to understand the pitfalls and steer clear of them, and it is not possible to steer clear of structural conflicts. Nobody can be both an advocate and a mediator at the same time.
Is There a Remedy?
One remedy would be for literary agents, like real estate agents and Hollywood agents, to be regulated, but I can’t see that happening because I can’t see book authors getting organized enough to have any weight to throw around. Moreover, agency law varies from state to state. Hollywood writers and agents are concentrated in California, a state likely to take steps to protect artists from corporate interests. Book authors and literary agents are spread out geographically.
Another remedy, equally unlikely, is for major publishers to have a come-to-Jesus moment and realize the situation is unfair to authors. The publishers created the Powerful Agent Syndrome, so publishers can dethrone the agent. All they have to do is hire their own slush readers and pay the slush reader commissions on each manuscript they acquire. (I understand, of course, that the slush reader would need a more dignified job title.) The publisher can pay the author less to balance out the payment to the agent. It all works out because, as matters stand, an agented author pays the agent.
My Advice to Authors Who Want a Traditional Publishing Contract
The system is what it is. If you are an aspiring author with a manuscript in hand, you have two options: (1) Build your own platform so that publishers will come to you or (2) find an agent.
However, now that you have read this blog post, if you select option #2, I hope that you will enter the relationship with your eyes wide open.
To begin with, learn to read your own contracts. It isn’t rocket science. If a literary agent with an English degree can do it, so can you. The only thing you really need an agent for is access. If you can write a book, you can do the rest.
Here’s a radical idea: Writing a good book is harder than editing a good book. It’s harder than acquiring a good book. It’s also harder than selling a good book. The writer may be the most poorly paid of the three and the one often treated like a beggar, but you—the author—are the most skilled and the most essential.
Don’t undersell yourself.
I will conclude by quoting the great bard:
“Let every eye negotiate for itself and trust no agent.”
—William Shakespeare, Much Ado About Nothing, Act 2, Scene 1