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About Sharon Toerek

Sharon Toerek is Principal of Toerek Law, where she focuses her national law practice on helping firms in the advertising, marketing and creative services industries protect and monetize their intellectual capital, and manage the legal implications of their marketing and advertising work. Sharon provides proactive, strategic counsel to communications, marketing, advertising and creative agencies on legal and business issues they face continually in their work. Sharon is the Publisher of the marketing industry legal blog Legal + Creative (www.legalandcreative.com). Find Sharon on Twitter and LinkedIn.

The 5 Things Every Marketing Agency Should Look for in the Client’s Contract

Your marketing agency just got a great new piece of business. Terrific news! The creative team is full of energy and ideas, the account service folks are ready to roll, and billings will start climbing soon. After there’s a contract signed, of course. Soon enough, there’s an email with your client’s standard (and very lengthy) “Professional Services Agreement” in your inbox with a request to sign before the work is approved. What now? First, avoid assuming that the client’s document represents a done deal. It can feel overwhelming to be on the receiving end of a legal document that neither the agency nor its legal advisor drafted. What kind of language should you expect, and what does an unreasonable provision look like? Where the client is an enterprise-sized company with a large in-house legal team or, even worse, a procurement department, managing the contract process, the contract review and negotiation seem more time consuming than completing the actual marketing work. It helps to know which issues to look for in a presented contract, especially those that could be legal or financial minefields for the agency. Here are 5 things every marketing agency principal should look for in the client’s contract form: Intellectual Property Provisions – Clients will expect to own the intellectual property in the work the agency creates for them, and their contract form will likely include language that provides for this, with the default provision that the client own rights to the work as soon as it is created. It’s certainly fair for the client to expect to own the IP (unless the parties have agreed to some sort of licensing arrangement), but only once the agency is paid for its work. Negotiate language that conditions [...]

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False Advertising: What Is It, and How Does Our Agency Avoid It?

True or false? Anyone involved in the advertising process can be held liable under most regulations and statutes that govern false advertising. Oh. so. true. The advertiser, the Agency, and anyone else involved who knowingly, or sometimes negligently, fails to follow the rules, is on the hook. In addition to traditional and digital advertising, when you think about the current state of influencer marketing, and the tangled web of risks around each brand and #ad campaign, it’s easier to visualize the vulnerability of agencies when it comes to implementing these tactics. False claims and advertising can lead to financial, legal, and brand loyalty and reputation issues. It can also completely disrupt your Agency’s relationship with a valued client. But what exactly are the rules around false advertising and where do they come into play? Understanding False Advertising False advertising involves the stating of untrue claims about the performance, reliability, functions and features of whatever product or service is being promoted. This not only applies to the way a product works, but also includes its origin and the way it is manufactured. It isn’t just outright lying in advertising that gets you in trouble with regulators, but also making claims or omissions that could mislead regulators, competitors or consumers. Actual False Claims: Stating information that is clearly false and incorrect. Misleading Claims: Messages that allude to or imply incorrect information that can mislead the buying audience. Unsubstantiated Claims: The presentation of information that can’t be verified, including that of competition. Four Ways Your Agency Can Get Into Trouble 1. No substantiation of claims Do not make any claims about the product or service that you or your client cannot verify. Sources such as product research, consumer [...]

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Can You Keep A Secret? Nondisclosure Agreements in the Agency-Client Relationship

Creative agencies such as marketing firms, website developers, and advertising and design groups can often be reluctant to approach the issues of confidentiality and intellectual property rights ownership with prospective business clients. Those who set agency policies may feel that asking for a nondisclosure agreement (NDA) is too off-putting during business development discussions – as if bringing up such matters might sully the burgeoning trust that is being established in the working relationship and create an uncomfortable tension. Others feel that such agreements aren’t actually enforceable (yes, they are), or that a prospective client will always refuse to sign them (some will sign, some won’t). While some of these concerns are well founded, there are good reasons why creative agencies should still pursue a nondisclosure agreement. Let’s take a look at three of those reasons, below. Three Reasons Your Agency Should Utilize a Nondisclosure Agreement First, a nondisclosure agreement sends the professional message that the Agency respects the confidentiality of all parties involved. Integrity always makes a company shine brighter, don’t you think? How can an NDA protect everyone? Simply make the confidentiality provisions mutual so that both the client and the Agency are protected. In this way, the Agency’s client feels valued and is also subconsciously reminded that he or she is working in a private relationship. Secondly, an NDA offers a convenient opportunity to address rights ownership issues in writing prior to a pitch, proposal, or a new business discussion. Many agencies worry about protecting their intellectual property during the new business process as well. A mutual nondisclosure agreement can include helpful language about the Agency’s rights to the concepts and work it discloses, prior to actual engagement by the client. Thirdly, a [...]

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The 5 Most Common Legal Mistakes in Agency New Business – and How to Fix Them

The agency new business process is, for most agencies, exciting and stressful at the same time. While your team is focused on the thrill of a potential “win,” and what that could mean for the agency’s fortunes, it’s probably equally under stress about meeting deadlines, putting forth your best efforts for the prospect, and keeping other clients happy too. Jody Sutter of Sutter Company and I recently addressed the challenges of new business and negotiations in a web clinic for agencies organized by Filament: “Don’t Leave Money on the Table – Negotiating Client Contracts From a Position of Strength.” While you’re navigating this process at warp speed, it’s easy to make an oversight or misstep that could cause bad legal consequences or financial loss for the agency. Don’t let this happen – be aware of the most common legal mistakes agencies make during their new business efforts, and how to fix (or avoid) them. 5 Legal Mistakes In Agency New Business and How to Fix Them Mistake #1: You don’t protect the Agency’s intellectual property during a pitch or discovery session, or in your proposal. Fix It: Sometimes it’s a valid business decision to allow the Client to own IP in pitch materials, spec creative or proposals – either because the Agency negotiated payment for it, or because it’s a required “ticket” to participate in the opportunity. But make it an intentional decision. Unless you’ve agreed with a prospective Client that it will own the Agency’s pre-engagement IP, use a Nondisclosure Agreement that protects the Agency’s ownership position. Absent that, at a minimum include IP ownership clauses in your proposal and pitch assets, and use copyright ownership notices on these materials and any spec creative [...]

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The 5 Best Ways Agencies Can Save Money on Legal Fees This Year

As a lawyer who advises ad and marketing professionals, I’m regularly reminded by clients that excessive legal fees are not a fun way to spend marketing dollars. This is understandable, and to me it’s also a somewhat welcome point of view. If that sounds like an unusual perspective coming from “legal,” hear me out: it is always less costly in the long run to have a proactive approach to the legal matters that regularly arise in the business of marketing. Making a smart investment up-front in some solid legal infrastructure saves your agency the important commodities of time and money later. So, what are some of these “smart investments” that allow agencies to save on pricey legal fees? Have a Model Agency-Client Contract in Place – Note the use of the term “model,” which is a deliberate choice over the more popular term “form.” This is because while I am decidedly “anti-form,” your agency likely has (I last I hope it has) some consistent business practices that apply to every client, such as intellectual property ownership, payment milestones, and liability limitation. Your clients are not commodities, and neither is the work you do for them, so I advise against approaching your dealings with them with a fill-in-the-blanks form. Instead, save time by having model contract terms and conditions developed one time, and modify or customize them client-by-client, or by project, as you have the need. It’s also my experience that the absence of model contract language makes it more likely that the agency will just skip the step altogether and start the work with no contract – one of the easiest ways an agency can cost itself extra money on excessive legal fees if the [...]

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