Agency reading fees (good or bad?)

Richard

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So far, posters have likened an agent reading fee to a car lot, a realtor or a gift store. But it really isn't any of these. A reading fee could be most closely likened to a lender/lendee relationship. A customer (the author) goes to a mortgage company, not a bank, but a mortgage broker (the agent) for a loan. The mortgage company charges an "application fee". This fee is NON-REFUNDABLE. This fee pays for the time that the mortgage company will spend to review the customer's credit history, collect data, and then shop the customer to a variety of banks and lending institutions, seeking the best deal for the customer. In return, the mortgage company gets paid a SECOND processing fee (closer to an agent commission.)

There's a fairly obvious difference, right there.
 

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Cathy C said:
So far, posters have likened an agent reading fee to a car lot, a realtor or a gift store. But it really isn't any of these. A reading fee could be most closely likened to a lender/lendee relationship.
That analogy doesn't hold up for me, because when you pay a fee to a mortgage broker, he has already agreed to work for you. When you pay a reading fee to a literary agent, you're paying him for considering whether to work for you. Big difference, IMO.

- Victoria
 

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victoriastrauss said:
That analogy doesn't hold up for me, because when you pay a fee to a mortgage broker, he has already agreed to work for you. When you pay a reading fee to a literary agent, you're paying him for considering whether to work for you. Big difference, IMO.

- Victoria

Nope. A mortgage broker has agreed to REVIEW your history. They do not promise to find you a deal. If nobody that they work with (such as "A" category or "B" category lenders) is willing to loan you money, they give back your file and wish you luck. Too bad, so sad. But no refunds. You then have to try to find a "C" lender, which are often the 15-45% "usary breaker" deals.
 

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Yes, but the mortgage broker is taking your file and looking it over, then looking at what companies he works with. He talks to lending institutions on your behalf. Which is what an agent does, AFTER he signs with a client. No agent promises you a deal either, but if they rep you, they show your work to other people.

If nobody buys your book, then the agent and the author may part ways. So I can kind of understand a retainer-type system, where the agent has already agreed to shop the ms, but NOT an upfront reading fee just for reading a query or a partial. Or even a full, since the request for those are usually minimal. I don't know too many agents that request more then a dozen fulls a month, unless the work they get is exceptional.

No one pays a real estate agent upfront to sell their house, do they? I honestly don't know, we bought out house private sale (which I will NEVER do again). The Real Estate agent doesn't make money until the house is sold, am I correct? I think this is a pretty good analogy then.
 

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Christine N said:
He talks to lending institutions on your behalf.

Not always. I did mortgage stuff for a long time. The customer's history will determine whether the file is shopped. Nobody will take the time to shop a deal that's unsalable. If a credit score is 450 (when the average is 680), the file is closed and a letter is sent to the customer with "sorry."

Christine N said:
So I can kind of understand a retainer-type system, where the agent has already agreed to shop the ms, but NOT an upfront reading fee just for reading a query or a partial.

Well, note that I said:


I'm not a fan of reading fees, because it DOES lead to abuse.

And

I suppose I wouldn't begrudge a quality, selling agent a little up front cash,

I STILL don't like the idea of a reading fee, but there should be some sort of middle ground. I don't know what it is, or I'd run the world... ;)

Christine N said:
No one pays a real estate agent upfront to sell their house, do they?

Depends entirely on the state. There are any number of Realtors who expect exactly that. Whether they call it a processing fee, or advance on commission, etc., if the law allows it, they'll do it. Especially in the high-dollar neighborhoods, like Aspen, where the agent will be spending out of pocket cash for flyers, color advertisements and scheduling open houses.

But, hey -- let's wander back away from the analogies, since we're getting pretty far afield. I just don't know if there's a solution to this problem. But I really do think it IS a problem. I think what's going to happen is that one of the big names is going to make the leap -- some HUGE agency, and start to charge fees, and the rest will follow suit. Sort of like how publisher advances have started to be split into thirds or fifths. When nobody screamed bloody murder, it became "standard practice" and is now non-negotiable in contracts from several big publishers.

As always, JMHO. :)
 

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While some of the analogies might be close, there's one thing that significantly separates them from agenting. Those others are regulated by law. Literary agenting is generally not regulated by law. Therefore, you don't have to worry so much about running into a fee scam in mortgaging and some other institutions. Many of those others are also licensed. Some are even tested before they can received a license. Neither of those occur within literary agenting yet which means it's too open and available for those with no knowledge or aptitude to hang up a shingle. Furthermore, there's virtually no real regulation of any scams within the agenting industry. The only convictions thus far have been mostly flukes as Victoria pointed out.
 

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I can understand the royalty splitting thing - it protects the publisher. I imagine they've gotten burned by authors more than once. Then they have to go after that author for the whole advance all at once, rather than just witholding that part until the terms of the contract are met. I don't understand a reading fee - this is the agent looking for clients; it's like someone asking me for a fee to search the want ads.

I'm not asking for a critique - I can understand paying a fee for that, but I know scammers use that a lot. I'm just asking you to see whether or not you can sell it.
 

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Cathy C said:
Nope. A mortgage broker has agreed to REVIEW your history. They do not promise to find you a deal. If nobody that they work with (such as "A" category or "B" category lenders) is willing to loan you money, they give back your file and wish you luck. Too bad, so sad. But no refunds. You then have to try to find a "C" lender, which are often the 15-45% "usary breaker" deals.
Actually, under RESPA it's not legal for a mortgage broker to charge a fee for anything other than third-party expenses—such as the fee charged by credit-reporting agencies for a credit report—unless the broker actually obtains an offer of credit for the customer. (If the customer rejects the credit offer, there's a loophole in RESPA that might allow charging the customer a fee.) That doesn't stop some of the smaller brokers from doing so, though.
 

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DaveKuzminski said:
Literary agenting is generally not regulated by law.


Y'know, this is something I really don't understand either. I mean, the lady who paints nails in the mall has to pass a test and be licensed, for heaven's sake! I would hate to see everything regulated, because you might lose a lot of good potential agents in the process. But there's a big whomping middle ground in there. Maybe one of the writer's organizations should consider a voluntary internal certification, like the paralegal associations have. It's not a requirement to take the certs for paralegals, but a lot of us take them anyway. It might be a way to show an employer (the author) that the potential employee (the agent) has the basic skills to handle the job. Just a random thought with no thoughts of how to implement it... :Shrug:
 

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"...like the paralegal associations have....It's not a requirement to take the certs for paralegals,"


Gee Andy, I guess the B.A. in English Lit or M.A. in Journalism doesn't count for much now days. Don't worry, I have the same problem. My undergraduate work doesn't count for much in Information Technology because everyone wants you to have a certification of some sort. Like four years in a CIS program isn't good enough. No, we have to have some third party booboo tell us we're qualified. Skip the six years I spent in college, and the two or so years of continuing education at one of America's finest universities. For $149.00 I can be certified as a database programmer.

Bah humbug!

Jon (BSCIS)
 

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SpookyWriter said:
"...like the paralegal associations have....It's not a requirement to take the certs for paralegals,"

Gee Andy, I guess the B.A. in English Lit or M.A. in Journalism doesn't count for much now days. Don't worry, I have the same problem. My undergraduate work doesn't count for much in Information Technology because everyone wants you to have a certification of some sort. Like four years in a CIS program isn't good enough. No, we have to have some third party booboo tell us we're qualified. Skip the six years I spent in college, and the two or so years of continuing education at one of America's finest universities. For $149.00 I can be certified as a database programmer.

Bah humbug!

Jon (BSCIS)

You misunderstand, Spooky. I mean it would be nice for an AUTHOR to have some way to ascertain that an AGENT has some qualifications. B.A.s and M.A.s don't mean much when it comes to whether the person is capable of selling someone else's book -- whether they have the contract background, and contacts in the publishing industry and knowledge OF the industry, etc. I doubt it's possible, and I don't even know if I'd want it to happen, but it would be nice for authors to have some ability to judge, short of hit and miss scrambling to see if the agent has sold something lately (and is even THAT any guarantee? Someone who has spent five years trying to sell ONE book that becomes the next Harry Potter is no less qualified than one who sells fifteen five figure deals.)
 

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Cathy,

Maybe I did mistake this concept for a papermill certification that anyone can get off the internet. I am starting to see some logic here and maybe there is the real possibility. But, who would administer such a program and what does it take to become certified as "Legit Agent"? Sales histories are readily available in a couple different locations and that information isn't too difficult to obtain.

What qualifications does it take to become a lawyer or a doctor, besides the academic portion? Yes, even real estate and insurance agents require a license to sell their products or work in their industries. No such beast exists with the publishing industry because ???? -- maybe because so few abuses occur that the states or federal government has no cause to require licenses?

Good idea, but again it is implementation that will not permit this concept from becoming reality.

Thanks,

Jon
 

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On top of determining qualifications, there's the added problems of accountability and enforcement when anyone proves to not be entitled to certification.
 

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Business model:

I think what Andy asked was for people with some business savvy to come up with an optimum solution that both the agents and writers would feel comfortable.

So far, no one has proposed a solution that would satisfy both the agents and writers requirements. Why? Maybe because the agent has a set of criteria they use to judge and value a manuscript, based on their personal opinions, and the merits of the work. The writer is more biased and proposes their work is saleable, but rely on the agent to determine if this is a valid assumption.

The point of conflict occurs when the agent is overwhelmed by solicited and unsolicited work and has to use their criteria to determine which is saleable and which is not. This process takes time and effort, along with a certain expense the agent assumes.

The agent reading process is marred by incomplete and inconsistent proposals from the writer.

The agent selection process is further inhibited by market demands and diminished products.

The agent acceptance process is contingent on their knowledge of the industry and personalities involved.

Upon acceptance, the agent must solicit market sources, which they believe, would inquire and secure the purchase of the product (manuscript, etc.).

The expenditure of time, effort, and financial resources are the agents risk until they secure a purchase and have a signed contract.

The writer is neither obligated nor inclined to accept the terms of any agreement in which the agent and publisher negotiated.

The writer has not born the risk of financial loss or incurred any expenses during the agent/publisher process and is free to void any such agent agreement upon written consent.

There is no business model that will ensure the agents expertise, expense, and troubles are rewarded should either the publisher or writer decide not to continue the pursuit of publishing the work.

The possible clearinghouse business model (which is used in many institutions) offers a better opportunity for agents and writers to coordinate the solicitation of works that will be proposed to publishers under a warrant of rights.

No such process exists today, and it is this plausible business model, which I believe, will benefit both writers and agents.

Jon
 
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Christine N. said:
I don't understand a reading fee - this is the agent looking for clients; it's like someone asking me for a fee to search the want ads.

Ahh, USA Today sells for 75 cents, The Austin American Statesman sells for $1.60 on Sunday when it has the big employment section in it--so in short you have paid a fee to read the want ads.

And the person putting the ad in paid as well.

Shawn
 

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Jon, you're writing as if agents had only one client at a time. But they have multiple clients, in all stages of selling and being paid, which means that even if a given client isn't making money at a given moment, another one will be.

Requesting and evaluating manuscripts and shopping them around is part of an agent's job. There's a word for the expense of doing one's job: overhead. Every business has it. Ideally, the agency will be generating a steady stream of income that will cover overhead and generate a profit. The agent may not be directly compensated by the particular writer whose manuscript he's currently reading, but he is compensated.

There's also no absolute correlation between product and value. If you're selling widgets, you make the same basic profit on every widget you sell, and if you want more profit, you have to sell more widgets. But with manuscripts, it's all about perceived value. One manuscript might get a $1,000 advance, and another might get a $500,000 advance. That kind of windfall makes up for a lot of free reading hours. Of course, that very unpredictability is what makes agenting a tough, risky job.

- Victoria
 

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I thought I'd take the holidays off from this, but there are several very thoughtful posts here. What I notice, though, is that there's a lot of conversation about what is right or wrong about a reading fee when it comes to agents, but nothing so far about what it might do for authors. Would it alleviate the long waits that writers complain about constantly? Would it get them the feedback they crave? One wonders.

Requesting and evaluating manuscripts and shopping them around is part of an agent's job. There's a word for the expense of doing one's job: overhead. Every business has it. Ideally, the agency will be generating a steady stream of income that will cover overhead and generate a profit. The agent may not be directly compensated by the particular writer whose manuscript he's currently reading, but he is compensated.
For me, overhead is the lights and my internet connection. It's photocopying and mailing statements to clients. My attorney gets paid by the hour and charges me to receive a fax. My accountant gets paid by the hour and charges me when his secretary mails me the very return he's getting paid by the hour to mail me. While I may very well have successful authors from whom I earn a good living, why should those authors be "paying" me to find other authors? Shouldn't my time be spent trying to sell the film rights or the movie rights or the foreign rights to their books? And, indeed, therein is why turnaround times are often so long. Because I spend most of my time on my current clients, their projects and their needs. Until there's a mechanism that allows agents to--yes, I'll say the dirty word--profit from reading all of the unsolicited material that comes our way, those turnaround times will remain long, the feedback will remain little to none, and authors will continue to feel like spinsters in Atlantic City, going from slot machine to slot machine, hoping that this one will be "the one."

When I just went and read that quote above again, I suddenly started to think of drug companies. After all, they have extensive R&D efforts to find new drugs. But how do they pay for that? With higher drug prices on the new drug. But agents can't control the price of the works they sell. Publishers do that. Imagine if I said to the publisher, "I need a $10,000 commission on this, because I only found one salable book this month, after sorting through several dozen." Would that fly?

So, the only way that an agent can fund the R&D effort is to take profit from existing works and put it into new ones. But if 90% of books do not earn out, where is that profit? There's a post above that makes the excellent point that most agents do not see additional commissions after the initial advance is fully paid out. So, yes, you can easily be earning just a few hundred dollars for dozens of hours of work.

Maybe the solution is for publishers to charge a reading fee or application fee to authors, then only publish the good books, and use the application fees to pay for the editors? Or perhaps agents should auction books not based on advances and royalties, but based on which publisher will pay the agent the largest finder's fee? Or maybe agents should just get paid by the hour by all authors? Certainly there are many books I've sold where my hourly wage is less than minimum when one factors in the time spent versus the advance and royalties. If authors are so confident that their book will sell for a lot of money, perhaps they should offer to pay by the hour or, say, by the month. Agents would still have the right to say no to a work, but if they said yes, they'd know what they were making and authors would know what they were paying. How about that?

Like I said, lots of thoughtful posts here, but so far, no solutions that I see (or have!).

Best,
Andy
 

Christine N.

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SRHowen said:
Ahh, USA Today sells for 75 cents, The Austin American Statesman sells for $1.60 on Sunday when it has the big employment section in it--so in short you have paid a fee to read the want ads.

And the person putting the ad in paid as well.

Shawn

No, I would equate this to paying for a copy of Writer's market. I guess it wasn't a great analogy. The want ads just tell me where the jobs are, they don't get me interviews. More like Writer's Market than an agency.

Plus, when I buy the paper, I can read other things.

Again, I can't afford to pay reading fees. I'm sorry. If agents started this practice across the board, well, I guess I just wouldn't be try to get an agent anymore. I'd just keep to publishers that accepted unagented stuff. And agents will just have to put up reading crap that people can afford to send. Maybe you'll get a client or two out of it, and maybe they'll miss a client or two because of it. But really, is that any different than it is now?

If I want to read CWIM, I go to the library and borrow theirs. I can also go to the library and use their newspaper.
 

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Christine N. said:
Again, I can't afford to pay reading fees. I'm sorry. If agents started this practice across the board, well, I guess I just wouldn't be try to get an agent anymore. I'd just keep to publishers that accepted unagented stuff.
This made me think of something. For most of the time during which reading fees were accepted, or at least not totally condemned--i.e., into the 1980's--you really did not need an agent to get a publisher's attention. So it would have been perfectly reasonable for a writer to make Christine's choice, and submit to publishers directly. Nowadays, you absolutely do need an agent to get a publisher's attention--or else you have to resign yourself to two-year waits or approach only smaller publishers. So if agents started charging reading fees now, it'd be far, far more punitive for authors than it was years ago, when agents were more of an option than a requirement for new writers.

- Victoria
 

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One common fallacy in all the suggestions for how agents and publishers should charge for subs is the fact that those suggestions all appear to place all the risk on author shoulders who are generally in the worst position for bearing any further burden of risk beyond mailing costs. I haven't seen any suggestions that suggest that if agents are allowed to charge fees that they'll agree to accept email subs as well as paper even if either is poorly formatted. I haven't seen any suggestions that authors will receive a higher royalty rate if they accept a fee for subbing and get accepted.

There's got to be some balance in the risks and costs. So far, I haven't seen anything that does so as effectively as the current system. I didn't say the current system was fair to everyone, but it is fairer than what I've seen suggested. Likewise, I haven't seen any suggestions for how a fee-based submission system would be policed in order to prevent fraud, whether accidental or deliberate.
 

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Just because we speak of 'what if'...

What if in a few years (or decades:) ) agents will be employed (on a freelance or permanent basis) by Publishers to perform the same role of selecting/placing new writers, but instead of a 15% of the writer's deal, they'll get a steady salary like any employee. Would that be more appealing to an agent?

I'm also surprised no one made any comparison between employment agents and literary agents. I believe an employment agent gets a nice pay from the employer/company where he makes a successful placement.

IMHO a writer should not pay any fees (reading or any other ones) untill his book finds a home with a publisher.
 

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Pencilone said:
I'm also surprised no one made any comparison between employment agents and literary agents. I believe an employment agent gets a nice pay from the employer/company where he makes a successful placement.

Employment agents I've encountered have two ways of getting paid.

Some are paid by the individual seeking employment. That's almost always a ripoff because most of them can't guarantee success and have little incentive to achieve it in order to extend the weekly fees from the job seekers.

Others are paid by employers to find appropriate candidates for jobs. Those appear to have more success, especially since the fee is sometimes structured so that they get paid only when they fill the job. There might be a small deposit at the front from the employer for some contracts, but only enough to sustain the search.
 

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victoriastrauss said:
Jon, you're writing as if agents had only one client at a time. But they have multiple clients, in all stages of selling and being paid, which means that even if a given client isn't making money at a given moment, another one will be.
Just some thoughts:

I posted some basic facts about the agent, author process for reviewing manuscripts. Obviously, there is much more to it than what I had included and Andy added some additional information. I don't dispute the fact that agents have more than one client making money. I don't see that there is an issue with existing clients, except when, as Andy pointed out, the agent spends their time, effort and money to secure new writers.

Background:

The whole process of securing new writers and selling their work does take time and costs the agent money. There is no guaranteed that the agent will find any saleable work on a given batch of manuscripts.

Let’s just say for example that there are 1,000 legitimate agents out there in writersland seeking and representing writers. Break down the agents into genre and which ones are accepting new clients. Further, break this down into how many of these agents have beta readers or assistants to read new materials. We are left with fewer agents who spend their time and effort to read solicited and unsolicited manuscripts.

Statement of Problem:

The common denominator is still resources to read the material coming into an agency. Whether it is the agent themselves or an assistant who pre-screens the work it doesn’t matter. The material must go through a vetting process to determine which manuscript is good enough to go the next step. The ones that don’t make the cut are notified, but that could take months because the resource to make that determination doesn’t have the luxury of spending enough time on each one to personalize the rejection or offer suggestions. So the writer will most likely receive a form rejection. Had the agency enough time and resources then they could possibly offer a quicker turn-around time and a more personalized explanation of why the work was not represented.

Resource Constraints:

The keyword in all this is resources to read the incoming material and filter out what might be saleable or not.

Inefficiencies:

Go back to the list of agencies that have the resources to prescreen incoming materials and you’ll find they have a fairly quick turn-around time. So instead of waiting months, the writer may get a response in a couple weeks to a month.

Possible solutions:

I think that a clearinghouse could be one plausible idea. The writer submits their work to the clearinghouse, which does have the resources to prescreen the work and determine which agency most likely be a good fit for the material. Mortgage brokers have a similar business model when they prescreen buyers and determine which financial institution would best serve the buyer, based on predefined criteria. The clearinghouse should be independent of agents and writers.

I’ll just leave it at this for the moment and let others come to plausible solutions.
 

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Jon, your analysis seems to assume that all manuscripts are read in their entirety. In fact, most are rejected at the query letter stage. Others are rejected on the basis of partials. I don't know if Andy has mentioned this at any point, but I'd bet that the number of partials he requests is a fairly small percentage of the queries he receives, and the number of fulls is a fraction of that. So it's not as if the poor overworked agent has to read every single manuscript that crosses his desk (this, by the way, is one of the fallacies of the reading fee scam, where it is a scam--that the agent gives equal consideration to all submissions). And before you say that agents should read everything they receive, the fact is that most of what's on submission isn't publishable, and as often as not, that's apparent from the query letter.

As for personalized rejections...I suspect that most literary agents would rather not say "because you can't write a coherent sentence." That's why they say "not for me" or "we're not taking new clients at this time" or "doesn't fit our list."

As for why a clearinghouse approach wouldn't work...the decision to represent a manuscript is based on objective factors like an agent's genre preference, but it's also a personal and subjective decision that only the agent can make. Also, this system would be extremely easy to abuse--I know of one questionable agency that's doing so right now. Submissions go through a clearinghouse that also happens to be an editing service, and anyone who isn't passed on to the agent gets a recommendation to edit.

- Victoria