June 01, 2006 | License

Choosing a Licensing Lawyer

5 min

For better or worse every Licensee or Licensor needs an attorney. It is not always when problems arise. Using an attorney at the early stages of a venture is the best way to insure you do not have to use a lawyer later on. We all know the virtues of preventive medicine, well preventive law is just as important.

No one likes to spend money on lawyers.  Who can blame them, after spending hundreds or thousands of dollars you leave the lawyer with an ear full of advice or a few sheets of paper.  However, not seeking a knowledgeable attorney is the classic case of penny wise and pound foolish.

A problem which arises for those in the licensing business is how to find an attorney knowledgeable in the field. It is not a very common specialty. Going to your regular real estate, personal injury or divorce lawyer will generally not produce the type of legal work which you need and are paying for.  Licensing law is an interdisciplinary practice. A licensing lawyer needs to know about contracts, copyright, trademark, a little bit of tax, rights of privacy and publicity.  Equally if not more important than having a knowledge of the law is understanding the ‘business".  The most brilliant lawyer, if they are unaware of the customs of trade and practices in the licensing world, will be of little assistance and the help they would provide will be very limited.  Having access to good form is a wonderful starting point; however, you need to know how to fill in the blanks. You need to know what clauses are important when you’re representing the licensee or the licensor.  You need to know what royalties, advance or quantity are reasonable.

How do you find a “licensing attorney”?  First, ask your regular attorney if he or she is familiar with anybody with expertise in the field.  Any competent, confident licensing lawyer will be happy to work with your regular attorney.  It is only an insecure lawyer who is afraid to collaborate with another lawyer. Second, is a recommendation from another licensee or licensor in your field.  Third, look up those attorneys who write in the trade publications.  Fourth, see who is speaking at the trade shows. 

More often than not, the referrals you receive will be for “out of town” lawyers.  In this age of e-mail, cheap long distance and faxes, doing business with a lawyer outside your city is not really difficult. The personal touch in having face-to-face meetings with your attorney is certainly preferable to phone calls; however, should distance not be a major detriment to receiving quality representation.

A good licensing lawyer is a specialist and, as with specialists in any field, they charge more than generalists.  If you are in a small town and you find a licensing lawyer in a larger city, they will charge substantially more than your local attorney.  Most lawyers charge on an hourly basis for typical negotiations, contract review or document drafting.  Some lawyers will offer fixed fees for certain types of work (i.e. contract drafting and matters in which the attorney can clearly identify at the beginning how long it will take him or her to complete the matter).  Expect to pay most lawyers an up front retainer fee.  You will find that most experienced licensing lawyers charge between $300- $450 an hour. The more experienced lawyers charge more per hour but generally take less time than the less experienced attorney to complete a task. Therefore, in the end, a higher hourly rate will not necessarily mean paying a higher total bill.  Remember, lawyers bill for their time, that means they charge for phone calls as well as drafting documents, conducting research, negotiating, etc.  You should feel free to ask an attorney how much they think a matter will cost, set up a budget with the attorney and ask to be advised if and when they are approaching that budget.  

[Many people ask and hope that their attorneys will take the case on a contingency fee. A contingency fee is where the attorney does not charge their hourly rate rather they take a percent (usually about a third) of the recovery. Remember that the attorney is looking at each case in the businesslike manner and has to evaluate all the circumstances in order to ascertain whether or not it makes financial sense for them to take a case on a contingency fee basis. Only a very foolish lawyer would take a contingency fee on a case in which there are  issues as to liability or a question as to whether if they win the defendant can pay the judgment (otherwise it is a piece of paper suited for wallpaper or toilet paper).  Since they will have to wait for their fees, and the payment of the fee is not certain, they will want to ensure that their contingency fee will be substantially higher than they would have made on an hourly basis. If these three criteria come together then some attorneys will consider taking a case on contingency fee on the matter. If these three elements do not lineup you really should not expect an attorney to take the matter on anything but an hourly basis.]

Also, do not feel shy about asking the attorney about his or her qualifications.  Ask how many matters in this field they have handled and for how long.  Also, ask for the names of some of their other clients.  (However, an attorney may not want to give out client names as there are certain ethical problems attorneys have in regard to disclosing clients’ names unless those clients have agreed in advance that the attorney may use their names in such a manner.)

Using a lawyer who is knowledgeable in the licensing field is a very important element in any business plan. Using an attorney in a preventive matter in the long run will save you thousands of dollars and protect your interests.   

Joshua Kaufman, Esq.  is a partner in the Venable law firm, (202.344.8538 - www.jjkaufman.com) based in Washington, D.C. and is chair of their Copyright and Licensing Practice Group  His clients are located throughout the United States. He is a law professor, columnist and regular speaker on copyright, licensing and e-commerce issues.