This is a series of posts delving into the gory details of what it takes to produce an independent film. Covering the entire process — from development to fundraising, production, distribution, online strategies and beyond — they will be written in real time, from first hand experience, as I go through the process of producing a feature-length documentary.
You can read the last post, ‘DEFINING ROLES’ here.
GETTING YOUR DUCKS IN A ROW: LEGAL & PAPERWORK
This three-part post will consist of a step-by-step plan to get you ready to start further development and pre-production on your film.
Today I am posting about production development, specifically, about the legal issues and paperwork you should have as you start development. This is a phase called ‘production development’, and for a producer, it is almost as important as the creative development process.
A note that this is all information I’ve gleaned from various sources- including the internet, several lawyers, and my colleagues. Most important is for you to do your homework, and MOST important: Consult a lawyer.
The first goal of the production development phase is to be sure you are all set from a legal standpoint to start fundraising. This phase, of course, would be happening concurrently or perhaps slightly after the creative development phase, as there is no point in creating the paperwork for a film with no story.
Thus, step one, of course, is to obtain the services of a lawyer. Ideally, the lawyer will be open to working pro-bono until you have your first round of funding in, but if not, pay for one. It is worth it – at this stage – and will save you headaches later on.
An LLC for your film, through which you can take money and pay money out, and locking in the core production partners in an operating agreement (which will elucidate who is primarily responsible for what, and who is contributing what- this can include intellectual property such as a script or an idea, money, time).
An LLC will also provide you with an EIN (Employee Identification Number) and allow you to track your expenses for the IRS.
Please note that there are potential issues with an LLC if you intend to crowdsource some of your funds. It is too complicated to try to explain here, but be sure to mention this potential fundraising strategy to your lawyer, and she can look into it for you.
Contracts or deal memos for your existing partners, elucidating deal points and revenue share, as well as intended title in credits. This includes the core team of people and any peripheral people you have milling around the idea – including yourself!
If you do not have time to create these contracts or deal memos, and your partners are chomping at the bit to start hustling, either tell them they have to wait, or BE SURE to — at the very least– write out the deal points in the interim. It also helps acknowledge at this point what they have brought to the film thus far, as well as to set expectations for what you hope they will bring to the film in the future.
Below are some examples of some deal points you may or may not want to include, that I have come up with. Please remember that I am not a lawyer, and it is a WAY better idea to consult your lawyer than just to copy these. I, for one, am consulting mine.
In the meantime, these are some things you can look into offering.
Commission: X% of monies raised
It is important to note that – in most cases – this should not include a percentage of in-kind donations or services that do not result in cash in your bank account. This is because it will be impossible, for instance, to pay off X% of a free camera rig valued at $20,000 if you have $0 in the bank.
Equity: X points in film (thereby X% of profit made as a result of distribution and merchandising, just distribution, just online distribution, or however you want to divvy it up)
Points are typically percentages of NET profit of the film AFTER everyone has recouped their costs. Read here for more information: http://forums.creativecow.net/thread/17/867840 or http://www.indietalk.com/showthread.php?t=10545
Payment: Salary of $XX,000.00 contingent upon the production receiving its full budget of $XXX,000.00
Be sure to note what happens if the production doesn’t meet the full budget. For instance you could offer a percentage deal: If the production brings in 70% of the full budget, the production will pay out 70% of the salary amount, and so on.
Title/Credit: For example, an ‘Associate Producer’ Credit in the titles
Be sure to note that this title will be contingent on the meeting of an expectation, so you don’t get into the typical indie trap of people claiming titles they’ve done nothing for. Conversely, you can set higher expectations with the potential of a ‘better’ title, so if the individual over-performs, they are duly recognized.
For instance, you could specify that a given title is contingent on such things as:
- Successful raising of a certain amount of money
- Providing goods and services equivalent to a certain amount of money, such as equipment, core team members, facilities, etc.
- Staying with the project for a duration of XX months, with an expected contribution of (name contribution here, typically goods, money or services)
Acknowledging existing and future contributions:
As part of this process, be sure to take the time to set expectations for the people whose involvement you are considering for the film. These can be anything from art direction to distribution consulting. But, be specific – and yet remain open to things shifting as people’s involvements shift. It’s good to have a escape clause, too, something that gives you an out if they do not lift a finger, or gives them an out if they hate the direction the film is taking.
As part of this expectations-setting process, it could also be helpful to craft a little email in anticipation of the contracting process—if only to clarify what someone has felt that they have already given to the production. It saves people feeling unacknowledged, and saves you – as the producer – from any lack of clarity as to what people are thinking.
In other words, better to discuss it now than to suffer acrimony, later.
Here’s a little exercise that you can do with everybody involved in the film to make sure you are all on the same page. It feels corporate as hell, but it’s helpful nonetheless.
Have them all fill out the following three sections:
- What you have contributed thus far
- What you intend to contribute later
- What you expect from the production.
For instance, for my role in the project I am working on, some things that I feel that I have given thus far include:
- Strategies Expertise, specifically: Marketing, distribution and fundraising
- Expertise in the form of authored documents, specifically: Film package and budget, grant applications and related authored documents
- Story genesis and co-development
- Providing human contacts that have led to these successes and developments).
Things I intend to contribute further include:
- Overseeing all facets of the film including: Scheduling, staff, financial, locations, etc
- Overseeing marketing and distribution strategies for the finished film
My expectations from the film are:
- Profit share through a percentage of the total net income, as a result of merchandising, distribution, etc.
- ‘Producer’ title, ‘Story By’ title
- Creative/ Marketing and Distribution control, split as per negotiations
III. NON-DISCLOSURE AGREEMENTS
In this time of intellectual property, and if you are at all attached to making the idea you have developed, this is crucial. The signed NDAs will serve as a record of who has heard the idea, and can help you track its dissemination in the world. Make sure your partners also understand this, and provide them with copies to have the people they pitch the film to sign.
And of course, use your common sense. Don’t be draconian, but be vigilant.
Next, I will post about CONSTRUCTING THE FILM PACKAGE. Stay tuned.
Posted in education production journal