Under-the-radar legal battle boosts lawyers, erodes agents – Capitol Weekly | Capitol Weekly
Lawyers could potentially play an even bigger role in business negotiations because of a recent series of legal skirmishes rooted in Hollywood deal making. The agents are not happy.
Here’s the background:
In a one-sentence edict, the California Supreme Court on June 30 declined to review an appeals court ruling that a non-lawyer agent who dealt with attorneys over proposed contracts and re-establishment agreements was practicing law without a license.
Should Attorneys Be Involved in Real Estate Deal Negotiations? Retail? A contractor agreement with subcontractors such as roofers and plumbers?
That decision of the 2nd District Court of Appeal upheld a previous court ruling in a case called Bacall vs Shumway.
In that case, a lawyer who was also an artist’s manager changed his status at the state bar to “inactive” without telling his client and continued to make deals. The client eventually found out and tried to terminate the agreement on the grounds of fraud, among other things.
While the dispute was rooted in the degree of involvement lawyers should or should not have in negotiations between performers’ agents and producers, it would develop into broader issues.
For example, should lawyers be involved in real estate deal negotiations? Retail? Contract of a professional athlete? An actor’s deal? A contractor agreement with subcontractors such as roofers and plumbers?
“Somebody might say it could have applications outside of the entertainment industry,” said James Fitzgerald, an Encino attorney who won the lawsuit on appeal.
“I’m sure there are people who will try to expand it to larger areas. I’m not sure how successful they are,” Fitzgerald said in a telephone interview. Fitzgerald warned that widespread changes to the way business is done in California are unlikely to be on the horizon.
Rick Siegal, a personal manager, doesn’t believe it.
“Now you’re going to have to use a lawyer for everything… It’s California law now that only lawyers can negotiate,” he said.
Siegal said the legal outcomes could lead to such absurdities as a client who is not a lawyer walks into a candy store to buy someone a candy and, by trying to get a discount on the candy, is guilty of exercising of the unlicensed law
“The legislature should take action to determine what activities should and should not be mandatory for attorneys to participate.” — Rick Siegal
If 400 extras are hired for a super colossal movie epic, then lawyers must be hired to oversee 400 employment contracts.
“Most likely, general contractors and architects will successfully complete a project sooner or later, but instead of receiving the balance due, (they) will sue, based on claims that by negotiating written contracts without a law license, if the homeowner representative of the electricians, landscape architects, pool construction engineers, plumbers and carpenters engaged in the illegal practice of law,” he argued in a friend of the court.
The California Supreme Court’s refusal to review the case means the 2nd The ruling of the district court remains in place
“There are numerous considerations” involved in a Supreme Court decision not to hear a case,” Fitzgerald noted, and the denial is not necessarily a matter of ground.
Given that they had no luck in the courts, could the losers in the legal battle now push for changes in state law that, in their view, would remedy the situation?
“I think anyone who saw this would say, ‘Wait a minute,'” Siegal said.
“The legislature should take action to determine what activities should and should not be mandatory for attorneys to participate.”