The corona virus pandemic has devastated the global economy and has dramatically changed the way consumer electronics lawyers have been doing business in Hollywood, New York, and everywhere in between since March.
Power lunches in the Palm were replaced by marathon zoom calls, and contract negotiations were conducted, from face-to-face meetings in Manhattan skyscrapers to FaceTime sessions in home offices and kitchens with kids rushing around. It's a whole new world, and the legal profession is adapting in countless creative and innovative ways, even though the racist tensions surrounding the death of George Floyd and others have focused on issues of diversity and inclusion.
Variety selected lawyers in our annual Legal Impact Report before the pandemic led to massive closings across the country. Work was well underway when the report was postponed to July 14th. The Power of Law breakfast became a virtual breakfast on July 15th. Over the past few months, lawyers have continued to do business and advise clients on issues related to the pandemic and beyond.
"Surely so much has changed in the world since our last conversation," says Ivy Kagan Bierman, a Loeb & Loeb partner who focuses on entertainment and work. “In the past few months, I've spent a lot of time helping entertainment companies stop productions due to the pandemic. I have dealt with all the guilds and unions on their behalf during the shutdowns and now when starting up. “She adds that she also advised clients on issues related to work culture.
Music lawyers have worked hard to help their clients find new sources of revenue to offset lost tour revenue, even if artist and publishing business continues during the pandemic.
"Interestingly, I've found the rest of the business to be pretty robust," said Don Passman, partner of Gang, Tire, Ramer, Brown & Passman, who recently updated his 1991 book "All You Need to Know About the Music." Business ”to account for streaming-related changes in business. “People still do record contracts and publish contracts. People buy and sell catalogs. "
According to John Biondo, Executive Vice President of Business & Legal Affairs at Lionsgate, who has been working from home since the "Safer at Home" order was issued from Los Angeles, COVID-19 has not slowed down the work in the studio.
For Jeff Cohen, co-founder and partner of LA-based entertainment firm Cohen Gardner, the distance work was "completely seamless".
"I definitely miss the camaraderie physically in the same place as my colleagues and things like that, but we have our weekly Zoom staff meetings and are in constant contact via email, phone, and zoom," says Cohen. who played as a child in "The Goonies" and completed his law studies at UCLA.
At Cohen Gardner, he focuses on transactional representation for customers in the entertainment, media and technology sectors and has a list of top-class actors, comedians and other industry professionals.
"The truth is that from a productivity perspective, we're 100%," Cohen continues. “You know, the big problem, in my opinion, is when to start production again seriously. And what will happen to live performances? Those are the two big problems.
“Certain productions have already started, other productions are starting and producers and studios are trying to find a mechanism to make all of this safe. And, of course, the demand for content is high, the business volume for developing new projects is high, and animation is certainly booming because you don't have to be physically present in a room with people. But as for live performances – it seems that maybe it won't really start until 2021. "
One of the challenges for lawyers in the COVID-19 era was to negotiate the ubiquitous force majeure clause that would normally relieve the parties of liability when an event occurs outside a person's control – war, crime, hurricane Category 5. But in the event of a pandemic where the number goes up without an established treatment or an end is in sight, entertainment lawyers have had to reconfigure their understanding of force majeure.
Since the 1918 flu, there has been no pandemic that has affected the world to this extent.
"Force majeure clauses are usually a cauldron, they are at the heart of an agreement and may not be given much consideration," said Neema Sahni, litigation partner at Covington & Burling in Los Angeles. “I would definitely say that this is the first time in my career that so much attention has been paid to these clauses and their meaning. Every single word of the clause – what is the meaning of it? How does the meaning of the contract change? I had to learn this area of the law, which in some cases is very out of date. They go back and look at how courts have interpreted this for decades and centuries and try to compare it to a circumstance that is very different from anything we have experienced before. It is not black and white, it is not easy and you really have to deal with the law. "
Sahni was therefore commissioned to guide their customers through the conclusion of entertainment business contracts and at the same time to think about the effects of COVID-19.
"Interestingly, unlike other contracts that are spoken generally, customers are trying to define real parameters for this pandemic," she says. "There is not much clarity or certainty about what it will look like in six months or a year, and in some ways one of the challenges of contracting is protecting yourself from the unknown." The exact impact [from COVID-19] on companies from month to month is very fluid. So it was certainly very interesting and incredibly challenging to work with customers and try to develop the right details in their contracts to protect themselves against them. "
Paul Bernstein, vice chairman of the Venable entertainment and media group, also said: "Everyone had to look carefully at the existing force majeure clauses and future agreements."
"The hard part," he says, is that these clauses are not clear in many existing contracts. “Take government shutdowns caused by a pandemic, for example. You used to have the old collective term "an act of God". So you could say a pandemic is an act of God. OK maybe. But the state of California tells you that you can't make your TV show and film – that's not an act of God. This is an act by the governor of the state of California. "
Given the slow resumption of production and the obligation on the part of those involved to adhere to a so-called “autonomous” COVID 19 compliance officer on the set, Bernstein says it will be interesting to see how this all works in practice .
Especially when the number of COVID-19 cases increases again.
It is clear that the demand for ironing out deals has increased tenfold as the industry has developed so quickly – six months ago no one had predicted that home concerts would be such a marketable venture.
"There was already a sense of urgency to do business in general, but now there is more sense of urgency," said Jodie Shihadeh, a partner at the New York-based Davis Firm. "Our customers work on innovations and every day improvise to make their music accessible to the public. For me it is really about keeping track of the daily development of the business and then predicting which sources of income will become increasingly important for customers after the temporary interruption of travel. "
The key, she says, is to keep up with customers and realize their vision, with Swizz Beatz as an example.
"He played this whole Versuz fight live on Instagram and he got totally out of hand," she says. "Now we're thinking about how to scale this idea up and make it a business. It was something that literally blossomed overnight."
In the early days of COVID-19, Tom K. Ara, co-chair of entertainment transactions at DLA Piper, performed a significant amount of "professional legal triage" for his clients. Now has the focus shifted to what's next?
“After the shock subsided, we saw people who found out, 'OK, what do we do in lockdown mode? Are we just sitting here and turning our fingers crossed or are we busy with something? "
“When production ceased, most new financing transactions were suspended or discontinued, especially bank financing. Now the focus is more on everything that is completed – distributing it, bringing it out when it is not in the cinema, releasing it on the [online] platforms as soon as possible so that there is fresh, new content. I am very busy doing business like this. "
Of course, lawyers like the rest of us are concerned with the consequences of new hobbies and spend so much time at home. Cohen, who taught himself how to play the harmonica during quarantine – "a customer and a friend bought me a great harmonica," he says – also became familiar with the refrigerator in his kitchen.
"I'm going back to my chunk weight," he quips, nodding to the chubby, geeky character he plays in "The Goonies."
"I went from chunk to hunk and now I'm sliding back to chunk," laughs Cohen. "I would go back to acting as an agent, but the agents are far too smart to sign."
Geoff Mayfield contributed to this report.