Prestigious literary agency caught embezzling $3.4 million from clients :-(

[Tabris]

So this story broke yesterday, but I haven't seen it here. Donadio & Olson revealed that their accountant or bookkeeper embezzled $3.4 million from clients, and they've known about it since last Fall but didn't bother to tell their current clients who may have been affected.

And they're still soliciting new clients, just to give you a warm fuzzy inside.

https://kriswrites.com/2018/05/30/business-musings-an-agent-nightmare-revealed/

KKR's recommendation is to fire your agent if you have one. Whether or not you fire your agent, she has a really good breakdown of what happened and how it happened, plus advice for how to manage your career.

[koji]

It's terrifying, for sure. But the recommendation of not having an agent... I just don't see how that is possible unless you want to self-publish or go with a small publisher. Editors at the larger houses rarely have open submission periods for authors without agents... so, sure, in theory "fire your agent" but then what?

[Munley]

Yikes! 

Thanks for posting this, Tabris.

[blackhat]

Okay. I read the horrifying story and it just confirmed a lot of my experiences with motion picture agencies (of which I'm a little familiar) and underlined my negative beliefs about literary  agencies. BUT can someone explain to me how I can get to major publishers with a project without an agent when the publishers themselves refuse to look at unrepresented projects? Damned if you don't and damned if you do. Yeah, you can go Indie and monitor everything but you still can't get in the bookstores, have to risk your own money, hire a fleet of people to help you and have no time whatsoever to write the next book. The entire dynamic has to change fundamentally. I don't know if that means writers band together into their own writing companies, or what but the current system is broken.

[kwill79]

I think this is exactly why sites like QueryTracker are so useful and helpful! The more writers discuss agents out in the open, the more it will hold them accountable. There are rats in every industry, and I suppose I shouldn't be surprised that publishing isn't exempt. As in all things, it seems that we must do our research and ultimately try to be responsible for understanding contracts, etc (easier said than done, I'm sure!). Truly shocking and sad though

[Waterfall]

The legendary Chicago judge Abner Mikva described the beginning of his political life, new to law school in 1948 and walking into a campaign office of Adlai Stevenson. When he volunteered to work the campaign, the ward boss behind the desk pulled the cigar out of his mouth and said, "Who sent you?"

Mikva was taken aback. "Nobody sent me."

The cigar went back in, teeth clenched, discussion over. "We don't want nobody that nobody sent."

And that's the primary role of the agent in the overcrowded marketplace—to be the somebody who sent us. I think of them more nearly as talent scouts than business managers or literary partners, deciding who might get invited to training camp instead of just being a walk-on. Editors don't want nobody that nobody sent.

[koji]

From what I understand, the current system is set up because:

1) publishers don't like having to cut multiple checks, and when paying an agent, they can release a payment for all of the authors on that agent's list as opposed checks for each author.
2) agents did not like the delay (or complete lack of payment) when checks were sent directly to authors.

So, it is pretty standard to have the check go to the agent first and then to the author from there.

[Tabris]

You can do that. The publishers are already cutting checks for hundreds of agents/agencies, so your check being split shouldn't be an issue.

At this point, I wouldn't want to trust an agent with my money, and you know the agent doesn't want to trust you with theirs. Out of all the possible points to negotiate on a contract, this one seems like it should be a shoo-in for the publisher to handle. It doesn't cost them anything; they already have someone doing it; they can get your good will with pretty much zero effort. From the agent's perspective, you'd think it would help because they'd have one less thing to do. If the agent balks at that, I'd really, REALLY wonder why.

[blackhat]

Oh I don't think it's just one bad apple. Call me negative, but I think within agencies it is bushels of bad apples. The bigger and more successful the agency, the more likely the apple will go bad. Just too many moving parts and each of them awash with cash. Writers are easy targets since the payments are often slow and can become so complicated (regions, subsidiary rights, foreign rights, film rights, translations, audio versions, etc.) and a writer's attention is often on their next project.

Negotiating for split payments from publishers sounds like a minimum starting point. We need to ask a LOT more questions of our agents. It sounds like the agents need to ask a lot more questions of their financial people as well.

[Falthor]

Caught this story as Chuck Palahniuk broke the story.  heartbreaking, and you think the guy who wrote "fight club" is basically broke currently because of this whole situation and it brings you to tears.

[Munley]

Caught this story as Chuck Palahniuk broke the story.  heartbreaking, and you think the guy who wrote "fight club" is basically broke currently because of this whole situation and it brings you to tears.

This is heartbreaking, especially when you read Chuck Palahniuk's web page listing all the awful excuses given for his dwindling income over time, while there were big sales of things related to his book, as well as the book itself. The money had to be going somewhere, since it wasn't going to the author.

http://chuckpalahniuk.net/news/the-big-secret-why-behind-everything-so-far