Are Agents Underpaid?

Posted by Victoria Strauss for Writer Beware

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.)

7 Responses

  1. Mishell Baker

    Perhaps it’s easy for an as-yet-unagented writer to say this, but I would have no problem with a general shift from 15-20%. Those who don’t believe that an agent is worth 20% can feel free to try selling their own work, dealing with contracts, etc., just as many writers who find the 15% offensive are already doing. I suppose a writer who does a writer’s job plus an agent’s job does deserve to get paid a little more, because, well, they’re doing two jobs. However, I already have two jobs and really don’t want to take on a third, even if it would mean more money for me.

    Along the same line of logic, I find it is less frustrating if you stop thinking of the agent as “taking away” a percentage of your earning, but rather that the publisher is paying both you and your agent with one big lump check and the agent is helpfully separating out your portion. :-)

  2. EMoon

    Not in favor of billable hours, especially for any optional-to-agent activities such as attendance at conventions and award ceremonies. How much of a agent’s time at a convention could be billed to each client–and how much is the agent’s own self-promotion, seeking new talent? It all gets very fuzzy, and fuzzy is the enemy of fairness and even honesty.

    A lawyer’s client can to some extent control billable hours by not seeking legal assistance on matters where the client feels it’s not necessary–(and not getting into whether this is wise or foolish in any situation)–but an agency contract prevents a writer from negotiating on his/her own behalf even if offered terms are acceptable. And agents may choose to engage in activities that the agent believes will benefit clients, without the client’s express permission–for example, if an agent chooses to attend a book fair, should that expense to the agent be billed to clients? And if so, how distributed? If the agent attends a movie premier of a movie made from a client’s book, are those hours charged to the client…was that actually a service to the client, or a promotion of the agent?

    Authors, in general, are not overpaid either…and cannot budget if they cannot calculate how much their agent will cost them. At least, with a straight commission on sales, the writer knows what the agent’s cut will be. If the agent is billing hours on activities the writer did not request (even if the agent thinks them worth doing) then the writer is not only shorter of money but unable to predict what this month’s billable hours will come to.

    Continued commission hikes (since there’s no reason to expect agents to stop at 20% if they decide they’re still underpaid and want more) will eventually make agents unprofitable for nearly all writers (for the same reason uncontrolled billable hours might) unless agents markedly increase writers’ incomes. I know that my agent has in fact increased my income more than enough to cover the increased commission…but I also know that’s not true of all clients, or (very definitely) all agents. At some price point (which I can’t define, even for myself, let alone other writers) any agent may become unprofitable for a writer–at some higher point, having an agent will itself become unprofitable. (The same is true in reverse, of course: a writer may become permanently unprofitable for an agent, at which point agents have in fact dropped writers.)

    Larger commissions or hourly billing bear most heavily on writers who are earning less, often exactly that new talent that agents want to find and bring to publication, and which has the potential to produce large income later. These writers can least afford continued cuts in their writing income and least afford uncertainty. Granted that early-career development of a writer does very likely take more time-per-unit of income than one more advanced in a career, that’s a necessary investment if the writer is to reach full earning potential for the agent.

    It may be (as hinted at in the article) that there are simply too many agents at the moment, and the available pie is sliced into too many pieces, with many agents having a sliver too small to live on (just like writers…) I don’t know–I do know that some agents are doing very well through their choice of clients…which has been the traditional way for agents to succeed. I suspect that many people let go from publishing houses think setting up as an agent is the obvious thing to do–they have the contacts with old colleagues, they know the business. But regardless of their ability, if the market is saturated many will not meet their own expectations. Whether those who feel themselves underpaid are actually underpaid–in terms of their value to their clients–is something for agent and client to consider together.

  3. P.Humphrey

    U began writing in the 1980s when agents got 10%. In the mid 1990s some began charging 15% which is now considered standard. But Hollywood agents still charge only 10% and are happy to get it. In my opinion, the proliferation of agents began when they upped the commission. If they needed more money (they blamed inflation) why didn’t they get more from publishers? The truth is authors are the ones underpaid – 99% can’t make a living. Agents could always deduct office expenses from their income but authors went from a typewriter, paper and postage to needing ever-changing computers, Internet, firewalls, and websites, and must do their own promotion. And some agents sell books to small presses which pay next to nothing. Let’s face it: if authors didn’t write, there’d be no books and no agents either. “If you can’t stand the heat…”

  4. Kristan

    In this day and age, I think everyone is being asked to do more for less. Agents, authors, editors, booksellers, etc. And I agree that billable hours is probably not the solution. There probably needs to be something more systemic than that. WHAT, I don’t know, haha. I’m just a lowly aspiring writer with opinions. :P

  5. Wally Anderson

    “Which might in turn limit publishers’ choices. Could that spell the end of big publishers’ agented-submissions-only policies?)”

    Maybe that’s the real problem. In our chosen field of fiction, and agent is just about mandatory. Of all the publishers of SF/Fantasy out there, how many actually will allow you to send in a complete manuscript without an agent? Two.

    Agents have a monopoly and they know it. Related to this is the “no simultaneous submissions” rule. If the publishers, and agents, actually had to compete with each other because they knew that if they didn’t act someone else might, things would be better all around, and probably also allow for more money in the long run.

  6. Alex

    Agents need more money because they chose to do more work? Now some suggest to go from 15 to 20%.

    Writers, the ones making the product, who already earn little need to take a 5% pay cut so an agent can make more? Do that really make any sense?

    These agents complaining about having to do more work are actually doing the work publishers used to do, so they have no reason to look at writers for more money.

  7. Jim Stewart

    I think Strauss is right in saying that agents who think they’re not getting paid enough for the work they do should just charge a greater percentage.

    What would be even better than a collaborative agreed-upon hike from 15% to 20% would be where different agents charged different fees for different services. Some might try to make it at 12% and others would charge 25%. Writers could decide what they were willing to pay.

    In a situation like this what would probably happen is that some agents would focus on diving into the slush pile in hopes of pulling out a few stars. These would probably charge a high percentage, 20 or more, at least for first novels. Meanwhile others who wanted to acquire already published novelists would compete to offer less. I would imagine that even 10% of Stephenie Meyer’s business would be well worth competing for.

    Agents could even say they would charge a very high percentage on a first sale, and then reduce their fee for second and future sales if the author promised to stay with them. Any of these and other possible models seem like they could make it more worthwhile to wallow through slush without ripping off desperate and unpublished authors.