Are Agents Underpaid?

A fascinating discussion began today on Twitter (as of this writing, it’s still going on–check it out under the #agentpay hashtag), kicked off by agent Colleen Lindsay, who asked, “How would publishing change if agenting moved from commission-based payment to billable hours?” 

Those in favor pointed out that agents’ job descriptions have expanded over the past couple of decades, and that they must now do much more for the same 15% they earned twenty years ago. They also get no payment at all for a good portion of what they do on a regular basis–reading queries and manuscripts, editing, submitting books that never sell. In a highly competitive environment, with shrinking advances (at the midlist level, anyway) and cautious publishers, it’s getting harder and harder to make a living.

Those against raised the specter of abuse (there are several questionable agents in Writer Beware’s files who soak their clients for billable hours while doing little or nothing to place manuscripts with reputable publishers), the loss of agents’ entrepreneurial edge if they got paid no matter what (the fact that the agent profits only when the writer does is at the heart of the traditional author-agent relationship); and, of course, the possibility that only wealthy writers could afford to have agents. Several lawyers participating in the discussion also pointed out that keeping timesheets for billing is a soul-sucking timesink that no one in their right mind would want to undertake.

For authors who at this point are feeling their blood pressure rising, I should point out that this is a hypothetical discussion; none of the participating agents are advocating an immediate switch. Colleen’s question does, however, highlight an important issue: agents’ job descriptions really have expanded over the past twenty years, while their commission percentage has remained the same. Just as writers are now routinely expected to take an active role in promoting their books (two decades ago, self-promotion was still very much optional), many agents now feel obliged to take an active role in promoting their writers. Selling books is also much more work than it used to be, especially in the hyper-competitive and risk-averse environment produced by the recent economic downturn. I also think that the droves of laid-off editors who’ve transitioned to agenting–not just recently but during the height of the publisher consolidation frenzy in the 1990’s–have contributed to the problem, with more agents than ever vying for the time of fewer editors than ever.

So it’s not surprising that some agents feel they are underpaid. In my opinion, though, billing hours is not the way to go. It’s too open to abuse. It shuts too many writers out of the picture. It also might have a backlash effect–if only well-heeled writers could afford agents, there would be less need for agents, putting a lot of agents out of business. (Which might in turn limit publishers’ choices. Could that spell the end of big publishers’ agented-submissions-only policies?) Compromise measures–charging commission until the first sale and billable hours thereafter, flat per-project fees, fees charged for adjunct services such as editing, even reading fees–create the same concerns. Would agents select clients on the basis of their ability to pay? Would they drop clients who took a long time between books and didn’t use enough billable services? As for reading and editing fees, that battle was fought years ago. Most agents’ trade groups prohibit them for members.

So what’s the answer, for agents and others who think the current system should change? A commission hike is the most obvious solution. During the 1980s and 1990s, US agents raised their commissions from 10% to 15%; it seems to me that an increase to 20% could be undertaken with relatively minimal pain on all sides. This would acknowledge the ways in which agenting has changed and expanded, but wouldn’t unfairly burden writers.

Another idea might be for agents to sell their expertise. Branches of an agency could be established for fee-based editing, marketing, publicity, packaging, consulting to self-publishers, and the like. These services wouldn’t be sold to clients, however–that would be a conflict of interest (if an agent can make money from a service s/he is urging you to buy, how can you be sure that buying it is really to your benefit?) and could easily be misused. The agency would need to erect an impenetrable wall between the agenting and the fee-charging sides of its business–for instance, no client would ever be sold editing services, and no one who bought editing services would be eligible to become a client. This would be made clear on the agency’s website and in its literature.

Agents can also become publishers. Of course, that’s even more fraught with ambiguity than selling editing or marketing services. If an agent can publish a client’s book herself, how driven will she be to sell the book to another publisher? If an agent is selling a client’s book to himself, how can he adequately represent both parties’ interests? (See the blogs of authors Stacia Kane and Courtney Milan for a more detailed examination of these potential conflicts of interest.) There are very good reasons why the AAR and the ALAA prohibit members from representing both buyer and seller in the same transaction (the AAA allows it, but only if the client is first informed in writing). Again, to ensure ethical practice, there would need to be an impenetrable wall between the agency and the publisher. 

All of these things are already happening. A number of established US agents charge 20%. There are agencies with editing and consulting businesses; there are even agencies that own or co-own publishers. In coming years, I think this blurring of lines will become commonplace, as authors, agents, and publishers all struggle to survive in the digital age. As agencies expand their capabilities, it’s essential that they consider the importance of ethical practice, and take the time and trouble to establish rules and customs that ensure that their clients are protected, and their potential clients are fairly dealt with.

(One last thing. I’d love a lively discussion of these issues, but I don’t want this post to become a forum for anti-agent hostility. Please don’t comment if all you want to do is rant about how greedy, elitist, capricious, undeserving, etc. agents are.)

115 Comments

  1. I really like the sliding scale idea. New authors are more work than current ones, and I for one would be willing to pay a higher percentage for the first couple of deals and then as I got established and the agent is doing less work, it could be lowered. I think that is perfectly fair.

    A reading fee I would not pay simply because I can't. I don't have the cash to spare.

  2. What if agents offered the other services as per-project or per-hour services? Instead of volunteering them, I mean. Offer reading manuscripts and representation of intellectual property as fee-based upon the sale of the piece and the other services could be ordered as the author wished. Would it be difficult for potential writers to swallow?

    I suppose the legal ramifications could be sophisticated as with everything like this, opportunity for one entity to take advantage of another is present.

    Agents are intended to fill the role of the friendly liason for the disconnected writer, guiding us through the pitfalls of the publishing process. Often, these ancillary services are offered in order to fulfill that vision of their services.

    A 5% hike comes out of the author's pocketbook, but since the agent placed the intellectual property with a willing buyer, it is deserved, is it not? Authors tend to dismiss the idea that their work needs PR help and insider connections. Often they are not aware of the competition they face and that this completely subjective endeavor they are undertaking is fragile and mystical.

  3. That "5%" increase hitting the writer is actually a 33% raise for the agent. Why should agents get a raise when everyone else is taking cuts?

    And as to writers not realizing that their books actually get marketed after a publisher buys them . . . Eh.

    And again with the fees. If an agent is making money charging for whatever "services", that agent is not making money from commission. Hence, agent has LESS incentive to sell.

    Yes, I'm being a broken record, I suppose. But to me the solution still seems to be obvious. If an agent wants more money, *sell more* and/or *get higher advances*. That's what agents do, right? Get the best deals for their authors?

    And if publishers are going to insist on agents being their slush readers, that should come out of the publishers' pockets, not the writers'. (Will that be easy? No. Is that what agents get paid for–to make more money for their authors and thereby for themselves? Yes.)

    I know some people will ask, hey if someone wants to pay 20%, what's the problem? And normally I agree wholeheartedly with the sentiment To Each Her Own. But in this case IF that starts to happen (as was pointed out in previous comments) it will eventually happen to everyone with an agent. Just like with the 10% to 15% hike.

    Sorry if I sound strident. I just haven't seen any rational justification yet, even though I've asked a few times.

  4. @Deborah

    I agree. Yes, agents may be making less money. But so is everyone else. The fact that agents have to do more work is neither here nor there: farmers do more work during hard times, just like everyone. In fact, a case could be made that writer's are working harder now than ever before. As publishers have been reducing promotion, writer's have become expected to promote beyond book signings. Now we are expected to blog, twitter, facebook, and whatever other social media activity is going on. This is not only time consuming, it is artistically draining; the more I write on a blog, the less I will be able to write on the manuscript. Yes, this may now be part of my job now, but that begs the question: what is an agent or a publisher doing for me?

    As for reading fees, forget it. Artists are gouged enough. If I need an editor, I'll hire one. If an agent is looking at me as a prospective client, it is up to them to assess and promote my work to publishers, not to get paid up front with nothing on offer.

    One thing is clear: as publishers and agents scramble about for bigger pieces of a shrinking pie, the artists and readers are getting annoyed with them. Readers don't care who's logo is on the spine. Writer's don't care about assistance-which-isn't. As self-publishing and ebook markets grow, we all may just decide that we don't need agents or publishers at all.

  5. In the current economic environment businesses everywhere are forcing their vendors to cut their rates.

    Agents are vendors to writers. Writers are not employees of agents.

    Agent commission rates should be half what they are now and new writers should pay no more than 5%.

  6. Don't charge by the hour, raise the commissions to 18 or 20 percent. Reading fees, billable hours – anything that means the writer has to pay up front means that people like me will simply choose not to publish at all. Much as I'd rather not do it, self-publishing and print-on-demand are viable options.

    An agent can have 20% of what he sells for me or he can have have 0% of nothing because I won't hire him.

    Let's keep the relationship symbiotic rather than turn it completely lopsided.

  7. "There are far too many investors in the publication/production of a book unwilling to accept the investment other parties make – assuming their involvement is the critical effort that makes a book happen."

    This. Yes. I will not say word-one against agents, particularly mine. But how does it happen that every time this industry "changes" (and that happens continually), the party that is asked to accept an ever-diminishing slice of the pay is the author?

  8. For a really interesting take on how the agent's role has expanded, and why agents currently bring much more value to the author-agent relationship than in the past, see this post by agent Jason Allen Ashlock of Movable Type Literary Group.

  9. What would your employer tell you if you ask him a 33% pay increase?

    Agents getting 5% more is a 33% increase in pay, should they not get the same answer your employer would give you?

    Why would any sane writer give up 5% of their earnings? Would you also be happy to pay 5% more income tax? Would that be cool?

    Agents need to work harder if they want to make more money instead of chasing easy money.

    if you happen to get an 20k advance you would get 17k for yourself and the agent 3k(based on 15% commission.)

    Now with a 20% in the same situation you would get 16k and the agent 4k.

    This while both of you worked harder, the agent get an 1k increase you a 1k less. Does this make any sense? Can you run a business like this?

  10. Victoria,

    I read Mr. Ashlock's post. By the time I was done, my head was spinning at his characterization of agents as the new superheroes.

    Even granting that some of his points were indeed good ones, it came down to agents taking over many fuctions that publishers used to do in house. Therefore (surely the last thing he would have wished) all it did was reinforce my opinion that agents should be getting more money from publishers, not from writers.

  11. My word verification was "stoker" – is Blogger asking me to add more fuel to the fire?

    The idea of an agent diversifying and offering other services is an interesting one, but the conflict of interest issues seem very hard to avoid. Having two businesses under one roof and not letting them share any clients seems pretty difficult.

    On the other hand, combine the number of people choosing to self-publish with a large number of laid-off publishing industry professionals who are striking out on their own, and it sounds to me like there may be a nascent market for good book doctors waiting to take off. Perhaps some of the agents might be better off making a complete switch to providing paid author services aimed at improving their books without any representation. That would leave fewer agents fighting over a smaller pie of representation money, and fill what could be shaping up to be a real need if we see more authors skipping normal commercial publishing.

  12. Anonymous, an elephant in the middle of the room is something that's obvious and yet no one is talking about it–exactly as if there were a huge smelly pachyderm in the middle of the room and yet everyone kept pretending it wasn't there.

    Jennifer wrote: "New authors are more work than current ones,"

    Like most generalizations, that's only true in theory, not in practice. Yes, if an agent decides to take on an aspiring writer whose work isn't ready and become that person's editor and writing teacher, yep, that's a LOT of work. (And since most agents don't know how to write or edit, it's also a dead end for both agent and aspiring writer.) However, established writers are a LOT of work in a LOT of different scenarios.

    The single most common scenario being that an established writers sales figures sag and she's dumped by her publisher, either mid-contract or at the end of the contract. This is a common scenario, it happens to a lot of wrietrs (especially these days)–and it can require a lot of work and commitment for the agent to help the writer repair and start rebuilding her career with sales elsewhere.

    Unfortunately, it's a much too common scenario that agents instead just abandon a client at that point. But for an agent willing to actually do their job, this can easily be as much work as helping a new writer secure a first contract.

  13. I know that I would not pay a 5% increase (30% increase) to my agency, despite the fact that I like them and think they do a decent job.

    From my perspective, agents are overpaid and have the opportunity to make oodles of money for very little work.

    My agency makes 15% commission off my books IN PERPETUITY. They probably spent a total of 20-30 hours (tops) selling/negotiating my contract. They also take 15% of my international royalties despite the fact that they did not sell or negotiate any foreign contracts. They claim their right to do so on the dubious basis that the publisher's global rights are part of my contract that they negotiated and thus they're entitled to everything that stems from that (even if it's a concession). I feel like they're vastly overpaid relative to the actual value they provide, but perhaps I'll feel differently if/when I sell another project.

    Pay by the hour?!? I'd be happy to. I'd much rather pay someone a fixed fee to do their job than to pay someone thousands (or more!) of dollars in perpetuity. If I was an agent, I'd much rather collect a percentage in perpetuity as that gives me the opportunity for a "home run" client/property that makes my bottom line forever. If my agency raised their commission to 20%, I'd stop using an agent, sell my work myself, and hire an attorney to negotiate the contract. For what my agents currently do, 15% is too much as is.

  14. US literary agents' typical commission rose 50% over the last 2 decades, from 10% to 15%. Whatever happened to 12.5%? The AAR originally tried to limit commissions to a maximum of 10% but had to abandon that rule on legal advice regarding the anti-trust laws Anna Petrakis referred to.

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