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"Many of my clients are former adversaries. When I’m in litigation, it’s not personal for me. I fight hard, but I think I fight fair, and opponents respect the results I get."
MAKING A CASE FOR MUSIC
An exclusive HITS dialogue with Larry Stein by Marc Pollack
High-profile Hollywood lawyer Stanton (Larry) Stein is making a serious move into music. Over the past few months, Stein has handled the litigation end of Incubus’ recently settled spat with Sony, represented Michelle Branch in her dispute with Maverick and guided Weezer in its successful action against Mosaic Media’s Atlas/Third Rail. In the latter, the California Labor Board denied the management company a piece of Weezer’s future earnings after the band’s split.

He also famously represented Jeff Kwatinetz and partner Mike Green in their suit against Sandy Gallin, which resulted in the pair forming The Firm.

Stein is a senior partner and head of the Entertainment Litigation Department of Alschuler Grossman Stein & Kahan LLP, a 100-lawyer, L.A.-based firm founded in 1952. He is the attorney artists contact when they want to litigate an existing a contract—and don’t care whose feathers get ruffled. He is the man behind the "vertical integration" suit filed on behalf of X-Files star David Duchovny. It charged the show’s producer and Fox Filmed Entertainment with cheating the actor out of profits by selling the show at bargain prices to its own broadcast and cable outlets.

Stein’s clientele now includes writers, directors, producers, actors and musicians. He has recently expanded his practice to include entertainment guilds, talent agencies and personal and business management companies—everyone, in fact, except for HITS’ own witness for the defense, Marc Pollack "Luster."

It seems like you’re now making a push to get involved into the music business.
I’ve been in it for a long time. I once represented Yoko Ono, Madonna, Elton John, Olivia Newton-John, Toni Braxton and Ice Cube. I’ve been in the music business since the ’70s, but in the last few years, I’ve experienced an increased emphasis on film and television. My practice was maybe 10% music, 90% film, TV and other entertainment-related areas. But now, we’ve hired Yakub Hazzard and Mark Passin. Yacub was with Russ Frackman and Mitchell Silberberg for a number of years, and Mark was with Don Engel for about 20 years. Both are now partners here. They join Michael Plonsker and Lawrence Hinkle, who have always dabbled in music.

Why expand into the music industry at this time?
There’s been a lot of interest in the music area. A number of music companies are changing their accounting systems. There’s been a lot of focus from [California State Senator] Kevin Murray. There’s now action that pertains to music and the seven-year rule, and there has been this consolidation in the entire entertainment industry, which makes it impractical to limit your practice. Film, TV and music are all interconnected. And with the issues brought on by the Internet, which I’ve been very involved in, it’s a natural expansion of our emphasis.

It seems that a lot of the cases that you’re involved with are atypical, like Weezer vs. Mosaic or Michelle Branch vs. Maverick.
I don’t like repeating myself. I like using the law in creative ways. I like pushing the envelope. Those are the cases I enjoy, and we seem to be ahead of the curve. Regarding vertical integration, we were the first in the TV area to recognize, when Disney bought ABC and tried to negotiate a license fee for Home Improvement, that Disney Television might not negotiate a deal that would be very favorable to our profit participants. So, we brought that, which led us to Alan Alda’s case on M*A*S*H and finally David Duchovny’s case on The X-Files. We look for developing areas of the law where we can expand beyond where the case law is necessarily going.

In the Michelle Branch vs. Maverick case, you filed with the Labor Commission citing that Maverick was procuring work for Michelle. Has this type of action ever been taken against a record label?
As far as I know, this was the first time it’s ever been done against a label.

That had the potential of bringing down the way the music industry does business.
Not bringing it down. It doesn’t excite me to bring the music industry down. It is satisfying when you’re not only representing a client, but the case that you bring causes a change in conduct that corrects a wrong. Sure, I hope that by litigation I shine light on certain practices. Like the accounting practice or the seven-year rule, that will cause changes in public policy.

If the Branch action went to court and if it won, it could have opened the door for numerous other artists to do the same.
That’s probably true.

So, you’ve challenged the business as we know it.
Even though there’s often an adversarial relationship between artist and label, there is also something symbiotic between the music companies and the artists or the producers. You have to recognize it’s the same thing in film and television. You don’t necessarily want to throw the baby out with the bathwater. You have to be aware of the economics. Sometimes, the business model has to be changed; other times, you have to force a studio, a network or a record company to change their business model slightly. But you don’t want to destroy it. You want to change it in a way that everybody involved in the process can benefit.

How important is it to cultivate relationships with players in the music business?
My practice very much comes from clients that I’ve represented who are happy with the results and then recommend me to others. Probably 25% of my practice comes from people who were against me, and, although I beat them, said next time they would like me on their side. I did some work recently for the William Morris Agency. I defeated a temporary restraining order to a preliminary injunction against an agent that left to go to another agency, and the next major case that came along, they called me and I got involved with that. Many of my clients are former adversaries. When I’m in litigation, it’s not personal for me. I fight hard, but I think I fight fair, and opponents respect the results I get.

Some personal issues are often brought up in the cases you handle, though.
There are personal issues you obviously have to deal with. But many lawyers increase the animosity in litigation by personalizing it between themselves and other counsel, or a principal on the other side. I don’t. I do what’s necessary to accomplish my goal. But you won’t see me in the media, making negative or derogatory comments about my opponent.

You’ve often been called highly aggressive.
For someone who litigates, that’s a positive. I’m aggressive in my legal proceedings. I’m not aggressive on a personal basis, most of the time…unless I’m pushed. When I’m pushed, I push back. But I would rather do it without animosity, if possible.

Do you find it strange that in the music business, lawyers play both sides more often than not?
They do that in film and TV as well, and I’ve never thought it made sense. It doesn’t feel right to me; I don’t want to be put in a position of arguing both sides of the issue at the same time, because I have clients on either side of the table. I’ve never done it, but I know that many firms do. I’ve been asked to do it on behalf of studios, networks and record companies and I’ve always refused to. The closest I’ve ever come is sometimes representing independent producers. It’s a very common practice in the entertainment industry. However, I’ve been the first one to bring actions against lawyers who have represented both sides in transactions. I think it’s a conflict and I’m the first one to point out those conflicts. I’m very aware of ethical obligations. I’m trying to walk a straight line.

Let’s talk about the seven-year rule for a second. So far, it has only been a renegotiating tool and never tested in court..
I don’t know whether it’s the artists who haven’t followed through or the labels who haven’t wanted it to come to fruition. There are a great many uncertainties. First of all, the record industry has a special dispensation because of the exception to the rule, where they have the right to sue the artist for undelivered albums. I don’t think record companies want to take that to fruition because there’s a good deal of uncertainty in how you determine the amount of damages and whether it’s appropriate. Most of the time, disputes get resolved because there’s an economic relationship and a solution to whatever the disputes are that allow the person to stay with the label. If there comes a case where the artist really doesn’t want to be with the label and there is no economic solution, then you might see a case go all the way through.

Many people would like to see what would happen.
I don’t know of any challenges to the seven-year rule that have gone the distance. But that has to do with the volatile nature of the music industry. All of us who litigate feel that way, assuming it’s in our client’s best interests. What I would like to happen and what may be in my client’s best interest are two different things. If I’m doing a vertical-integration case and a studio offers my client something that my client wants to take, I may prefer that the client turn it down and go to trial. But that’s not my decision; it’s the client’s. And the same thing in the Seven-Year Rule: it’s a client’s career you’re dealing with. I would love to see some of these cases go the distance. Whenever I bring a case, I believe there is validity in it. I believe, if I have the opportunity to try it, I’d be successful. But I also have to acquiesce to what the talent, their manager, their agent or other representatives tell the client is in their best interest. So I never put my goal of trying the seven-year rule ahead of what’s best for my client.

One thing these recent seven-year cases have brought to light is the somewhat strange accounting practices of the labels and the difficulties artists have in conducting accurate audits.
And that’s a good thing. You see how some of these labels are at least professing to simplify their accounting procedures. I don’t know if that’s as much motivated by the seven-year litigation or the public exposure from Senator Murray’s hearings. But there is an awareness that changes are necessary.

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