“There is no such thing as a nonnegotiable contract.”

Q&A with Studio Legal’s Max Zidel.

Max Zidel will tell you that one line in a contract can mean you’re “screwed” if a project goes sideways. A good lawyer can help you figure this out, and Max is a very good lawyer. After nearly a decade at a big New York law firm and armed with a background in creative writing, art history, and theater, Max went out on his own and launched Studio Legal with Cece Xie. The pair started Studio Legal because they felt they could help artists and creative businesses navigate a rapidly changing digital landscape. They represent artists, galleries, designers, writers, photographers, creative agencies of all kinds, content creators, foundations and non-profits, collectors, brands, your good friends at Three Point Four Media, and more.

We called up Max to talk about what creatives overlook in contracts, how to protect yourself from massive financial liabilities, that one time he went to a world-renowned clown school, and when to not overlawyer things.

Three Point Four Media: Tell me about the time you went to a famous French clown school.

Max Zidel: [Laughs] When I was in university, I took an elective class that was literally called “performance.” This class, it turned out, was a clowning and mask class. It was probably one of the best classes I took. But years later when I was transitioning out of being a corporate lawyer and launching Studio Legal, I realized “I need to do something I love that will get me out of what I’ve been doing for the past seven years.”

My friend who is a working actress told me she always wanted to do a seminar at École Philippe Gaulier, the famous clown school. I went to study with Philippe Gaulier for a week in France with my friend, and it was incredible.

Are you clowning on the weekends now, or was it just a palate cleanser after years as a corporate attorney?

It turned out to be a palate cleanser. In my wildest dreams, there was a part of me that thought this would be the beginning of a new career in... something.

Well, it was the beginning of a new career! And I do think I actually use lessons from it all the time. If things weren’t going well when you were onstage, they would always tell us, “Sell tickets! You’re not selling tickets!” So you always had to reinvent yourself to make things more interesting to the audience. I think about that all the time, because so many things in life, especially in this industry, are about getting people engaged. How do you get people to want to work with you and get excited, and not just view it as a transaction for whatever you’re doing in the creative world?

How does your background working at a huge New York law firm and your background in creative writing and theater inform the way you work with clients at Studio Legal?

If we’re talking about creative work, we talk about creative work; that’s where the work begins. I genuinely feel connected to what my clients are doing. The big law part couldn’t be more useful when you actually have to solve problems and get in front of the other side, because the other side is often armed with very, very successful big law lawyers.

I was recently on a case with an artist client where they found their work being used in a massive company’s advertising campaign without their permission. I had to get on a video call with the lawyers in an attempt to settle the case, and there was a genuine shock in their eyes when we got on the call and they realized, “Oh my God, this artist has, like, an actual lawyer.”

Things escalated very quickly in a good way, and we reached a resolution quickly. It was so cordial. I realized in that moment, having worked at a big law firm and knowing what to say, what to do, and how Fortune 500 companies think about things, actually got us to the end much quicker and ended up with a much better settlement for the client.

How is AI changing the way you write contracts?

It depends on which side of the deal you’re on. One side might care about whether the other side is using AI to make creative work. When I represent creatives, I don’t worry about that because I want them to have as much leeway as they need to do whatever they want to do. Especially on the commercial side, if our clients want to get to the end faster using AI tools, I have no problem with that (though I have massive issues with AI on an ethical and societal level, especially its impact on creative industries—but that’s a separate conversation).

Sometimes we have to come up with language now in contracts that says something like, “not only does work have to be cleared and it has to be done by you, it has to be solely done by you, and original in all respects.” For some work, it’s important to not have AI involvement, like if you’re doing visual design for a bespoke collaborative product where you don’t want anybody to think it’s AI. You want it to be associated with this specific person.

AI is fundamentally changing law in many ways, which is that obviously people are using it to get legal advice and to draft contracts. I find a lot of the stuff now that we’re getting involved with was sloppily made by AI. Sometimes a new client will share their LLC operating agreement with us, and I won’t recognize at all how this template was generated, why it looks like this, why it says what it says, and it’s often erroneous in a lot of parts that make things very complicated.

I would love for more people to be able to use freely accessible AI tools to get legal help, but I cannot say that I’m very impressed with where they’re at right now.

Noah and I spun up an LLC with LegalZoom when we started Three Point Four. What are some important steps for people forming an entity?

This is a great question. The first step is always, am I going to make a corporation or am I going to make an LLC? That’s something you often want to talk with an accountant about. Forming an entity is pretty easy. I encourage people to use LegalZoom and other platforms. Forming an entity is often not a good use of lawyer time in terms of costs.

The biggest thing people starting a company with more than one person miss is step number two: The operating agreement. This is your bible for what happens if you want to do x, y, or z. For example, if someone wants to leave the relationship, what happens? It’s crazy, but one of the most common disputes I work on is where one co-founder or creative partner is in dispute with another.

By the way, the ones from LegalZoom and these other platforms, they don’t usually work for a more than one-person organization.

I was just thinking, “Huh, I wonder what our operating agreement from LegalZoom looks like.”

Hopefully you’ll never need to worry about it!

What are some key terms or clauses in contracts freelancers or studios usually overlook or aren’t careful about?

Limitations on liabilities and indemnities are the most overlooked in my experience. If you’re working on a project where there’s the capacity for something big to go wrong it’s important.

A limitation of liability basically says: no matter what happens if I was wrong and you were to try and recover from me for that mistake, the most you can get from me is x dollars, which is typically based on the fee that you actually paid me. This is important, because sometimes you get creatives who are charging a very low fee because they want to get involved with something, and then it comes back to bite them later.

Indemnity is the other way around. It’s the responsibility of the person who is giving indemnity to pay if something goes wrong. For example, when creative businesses get hired to do something, a big company might use a standard procurement agreement, and that will have the creative business or creative indemnifying them for things that go wrong. Meaning, if something goes wrong related to the work, they have to pay. So when you look at a contract, you don’t want to gloss over that, because that is financial responsibility for you.

You don’t have to overlawyer this. If you read that indemnity, and think, “None of these things could ever possibly happen, all I’m doing is writing copy,” it’s okay, it doesn’t really matter. I’m not trying to be a stickler about things that don’t matter. But if you’re dealing with production, a physical thing, or something with a lot of moving pieces, you might want to look at the indemnity section to say, “I don’t ever want to be on the hook for those things. Let’s take it down a notch.”

We’ve done a lot of work for big clients—Google, The North Face, Nike, Dropbox—and I feel like all the contracts we get from big clients are boilerplate and more or less the same. Am I being naive? The one thing I always push back on is the portfolio exemption, which allows us to share work on our website, or payment terms.

There is no such thing as a nonnegotiable contract. There are contracts that are pretty nonnegotiable because of leverage or industry norms. For example, you’re dealing with a huge company, they’re already paying you a good fee, and they genuinely won’t negotiate any of the main terms for that fee. It’s still worth trying. But most of the time, if there’s something unreasonable, that doesn’t reflect the deal, or that isn’t fair, for example, from a portfolio point of view, you can change those things if you know what to ask for.

If your agreement doesn’t reflect the deal or it’s missing key pieces, that’s a problem. Sometimes, when you actually get on the phone with the client and you ask why the contract specifies payment will only be made three days after the work is approved, all of a sudden the client remembers they had agreed some percentage was going to be paid up front. Those things absolutely need to be in there. A huge part of my job is actually expanding on and improving critical commercial terms the parties never actually discussed.

And the portfolio usage piece you mentioned is an important commercial term, because built into your fee is this ability to share work. We are always adding that in.

Don’t be afraid to push back where you think it’s okay to push back?

Be clever. You have to know your counterparty. A huge part of our job as lawyers, especially in these industries, is knowing what’s appropriate to ask for. It’s silly for us to send a very extensive redline. That’s not client-friendly lawyering. We need to always think about what are the three things we actually need to ask for?

So we have it pretty easy as writers and strategists, huh?

Writing and strategy is definitely a pretty low risk, because you’re not dealing with physical things. You don’t have really much clearance to do. Event producers, you really need to think about this stuff. Ad campaigns, where you’re taking on all the commercial production and dealing with multiple creatives and licensing terms, you have to figure that out from the start.

What we end up dealing with most is scope creep. But we’ve been adding this clause you gave us that basically says if we end up doing anything beyond what we’ve agreed to, we will have a conversation about what that costs.

You nailed it, scope creep is a big one in your field. And it’s important, because you can end up doing so many iterations when the client doesn’t know what they want. I love that clause you’re talking about. That’s a good example of how Studio Legal has taken lessons from things we’ve done over the past seven years and keep improving it all the time. Every year, I add a word or take out a few things. I am always thinking about how to adjust that clause. That’s something else I love about what we do too: Every matter I work on, I feel like I’m learning and constantly able to improve things for our clients.