Author contracts no longer conform to a standard as alternative forms of publishing create new models of compensation.

By James Sturdivant

Is E-Negotiation Appropriate?

G. Richard Shell, a professor of legal studies and business ethics and management at the University of Pennsylvania’s Wharton School, is the author of the best-selling “Bargaining for Advantage: Negotiation Strategies for Reasonable People” and co-author of the recent “The Art of Woo: Using Strategic Persuasion to Sell Your Ideas.” He outlines when negotiation via e-mail can be useful—and when it is definitely not advantageous.

ADVANTAGES
24/7 access. With e-mail, “the bargaining table is always open,” Shell says. You don’t always have to get through directly to the other party, and when they are ready, they will get back to you.

It’s on the record. Having a written record of what was said and by whom can be hugely advantageous in certain circumstances. “You can go back through the string of e-mails and clarify what was actually said in a way that you can’t with phone conversations,” Shell points out.

He cites an example from his own book-publishing experience: During negotiations with a publisher, his agent suggested he communicate directly with an editor, with whom he discussed (via e-mail) possible titles for the proposed book. When Shell ended up signing a deal with a different publisher, this editor claimed to have invented the title. Shell was able to prove from the e-mail record that the title was, in fact, his idea. Of course, such a detailed record could just as easily be advantageous for the other party.

DISADVANTAGES
You can’t undo it. We’re all familiar with hitting the “send” button and then immediately wishing we hadn’t, and the stakes are much higher when it comes to business deals. A careless statement or concession can come back to haunt a negotiator later—the downside of the “on-the-record” factor mentioned above. Shell says, half-facetiously, that e-mail should be equipped with an “are you sure?” pop-up feature before every message is sent.

Misinterpretation. Even face-to-face, one wrong signal or minor offense can derail a sensitive negotiation, and Shell says the chance for such an occurrence is much greater with e-mail. If you become “the least bit emotional” in a message, he warns, what may register for the sender as “one out of 10” on the emotional scale will be interpreted as a “nine out of 10” on the receiving end. “There is this amplification, unintended, of emotion that occurs on e-mail,” he says, “and it is a reliable part of the medium. So you have to be excessively diplomatic on any subject, or you will come across as aggressive and tactless, and your personality will be misrepresented.” As a result, Shell advises that e-mail is good for summarizing points and laying out key themes, but not appropriate for sensitive subjects.

“In the old days, people could speak about a standard royalty,” he says. “Those [standards] have eroded, and they’re really all over the map now.”

Royalties based on old business models and supply chain requirements are quickly becoming obsolete in an era of Internet sales and the rise of print on demand (POD).

With the savings in printing, storage and shipping made possible by POD, online sales and e-book devices such as the Amazon Kindle, “the argument from the author’s point of view is ‘we should get more money because your costs are going down and your risks are going down,’” Kirsch says.

One contract negotiated recently by Kirsch involved a publisher deducting from the net proceeds the cost of a POD vendor to create a book, and then paying an author 25 percent of the amount that was left over, an unusually high royalty.

“They gave with one hand and took away with the other,” Kirsch says, by agreeing to a higher percentage rate in exchange for essentially passing production costs on to the author. “The publisher’s argument is a very simple [one]: We’re in a brave new world, and we don’t know how this will shake out. So we’re not going to take a financial risk on the old royalty model, which would essentially be ‘off the top’ without any recoup for the cost of goods.”

Even publishers that do not factor in production costs have abandoned percentage payments based on gross receipts.

“Years ago, it was more common for royalties to be based on the retail price of a book,” says Rod Colvin, publisher of Omaha, Neb.-based Addicus Books. “If the book sold for $19.95, the author would get 6 [percent] to 10 percent. But many publishers have switched to a percentage of net.”

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