Foreign Filming Creates Challenges For Lawyers

Entertainment lawyer Patricia Mayer recently juggled phone calls about a French movie deal with a German lawyer in Poland, a London-based sales agent and a Japanese distributor. “You end up on the phone at 6 a.m. talking to the German lady, then at 6 in the evening talking to the Japanese client ' the only time you can all get on the phone is midnight,” says Mayer, a partner with Mitchell Silberberg & Knupp in Los Angeles.

As Hollywood filmmakers increasingly shift production abroad, they're creating myriad opportunities for U.S. entertainment lawyers. While the so-called “runaway” productions are bleeding thousands of U.S. industry jobs, the migration is a boon for entertainment-law practices that thrive on international legal complexities.

Choice of Law

In the past decade, the entertainment industry has witnessed an exodus of movie and TV productions to foreign shores. The cost-saving trend became apparent years ago when studios began moving production segments to Canada. Now the industry is filming in places such as Romania, the Czech Republic and South Africa, where production and labor is even cheaper.

On the global stage, one of the first orders of business for lawyers is selecting which country's law to use. While California law is an obvious choice because of the state's strong industry roots, foreign parties often prefer to use the law of a country that isn't involved in the transactions. “Oftentimes Euro-peans prefer English law because it's European,” Mayer says. “Americans like English law because they think it's similar and besides, we read English.”

The choice-of-law provision doesn't always apply to the entire production. Some elements may fall under one national jurisdiction and others under another. Figuring out which one to use can be challenging. Mayer once worked on a film that was written in the U.S., produced in a developing world country and financed by European countries. The cast included a minor, so everything relating to his work ' hours, overtime tutoring ' had to be checked against the child labor laws of each country, which sometimes were in conflict with each other. “There is no great answer ' any of those jurisdictions could have wanted to take jurisdiction,” Mayer says.

Outsourcing isn't limited to the set and actors. When working as a producer, attorney David Stanley, who recently joined L.A.'s Greenberg Glusker Fields Claman Machtinger & Kinsella as Of Counsel, took the musical creation for an original orchestral score overseas. He hired a local composer from Los Angeles but recorded the score in Prague with a 75-person orchestra ' a cost-saving move that also raised transcontinental intellectual property issues. “Any time you are acquiring music or hiring anyone to create music, there are sophisticated legal issues relating not only to ownership, but also to who controls the performing and publishing rights,” Stanley says.

Call in Locals

When non-California law is in play, local help is a necessity. That's when people such as Guy MacLeod, an attorney with South Africa-based Irish Ashman Attorneys, come in handy. When MacLeod first started with the Cape Town firm, he assisted local and foreign producers with the “peculiar” aspects of that country's employment law. As foreign-film interest in South Africa surged in recent years, MacLeod began to work with international filmmakers on their contracts in South Africa. “We are a comfort blanket for American producers and their attorneys,” says MacLeod, who helped with legal work for “Racing Stripes” ' a movie set in Kentucky but filmed in South Africa.

MacLeod always insists on using South African law, partly because local service companies can't afford the cost of traveling to California if a dispute arises ' a trip that's significantly more expensive in South Africa's currency.

As foreign governments recognize the economic benefits of attracting production, they respond with financing incentives. Countries including Canada, the United Kingdom and more recently Romania offer a variety of wage and tax incentives as well as equity funding. (See, Entertainment Law & Finance, October 2005, for “International Film Production Incentives” by Sean F. Kane, which covers, Canada, South Africa, the United Kingdom and other countries.)

Gibson, Dunn & Crutcher partner Lawrence Ulman, who specializes in entertainment finance, represented Miramax in the financing of “Cold Mountain,” a film set in the hills of North Carolina but actually shot in Romania. The movie was blasted in a highly publicized Internet campaign for taking American jobs and millions of dollars overseas.

Regional Customs

For Ulman, the most interesting aspect of the globalized work has been understanding the people, not the paperwork. “You need to be flexible and understand that people might approach things fundamentally differently,” he says. Greenberg Glusker's Stanley works with fixers ' or locals who translate language and culture ' when he's far from home to ease interactions. While he was working on the TV show “Celebrity Mole Hawaii,” a local resident offered to bless the set and crew. The blessing came with a fee, so the show declined ' but regretted it later after a series of production mishaps. That may be superstitious, Stanley acknowledged, but following local customs is good policy.

And “even though by and large people use English,” Robert Darwell, a fluent French speaker who heads the transactional side of L.A.'s Sheppard, Mullin, Richter & Hampton's entertainment practice, notes his firm requires that all transactional entertainment law associates speak a second language.

Most people agree that the globalization of the film industry is an irreversible trend. As more countries develop the infrastructure and skilled labor force, they become more attractive as repeat customers.

Entertainment lawyer Patricia Mayer recently juggled phone calls about a French movie deal with a German lawyer in Poland, a London-based sales agent and a Japanese distributor. “You end up on the phone at 6 a.m. talking to the German lady, then at 6 in the evening talking to the Japanese client ' the only time you can all get on the phone is midnight,” says Mayer, a partner with Mitchell Silberberg & Knupp in Los Angeles.

As Hollywood filmmakers increasingly shift production abroad, they're creating myriad opportunities for U.S. entertainment lawyers. While the so-called “runaway” productions are bleeding thousands of U.S. industry jobs, the migration is a boon for entertainment-law practices that thrive on international legal complexities.

Choice of Law

In the past decade, the entertainment industry has witnessed an exodus of movie and TV productions to foreign shores. The cost-saving trend became apparent years ago when studios began moving production segments to Canada. Now the industry is filming in places such as Romania, the Czech Republic and South Africa, where production and labor is even cheaper.

On the global stage, one of the first orders of business for lawyers is selecting which country's law to use. While California law is an obvious choice because of the state's strong industry roots, foreign parties often prefer to use the law of a country that isn't involved in the transactions. “Oftentimes Euro-peans prefer English law because it's European,” Mayer says. “Americans like English law because they think it's similar and besides, we read English.”

The choice-of-law provision doesn't always apply to the entire production. Some elements may fall under one national jurisdiction and others under another. Figuring out which one to use can be challenging. Mayer once worked on a film that was written in the U.S., produced in a developing world country and financed by European countries. The cast included a minor, so everything relating to his work ' hours, overtime tutoring ' had to be checked against the child labor laws of each country, which sometimes were in conflict with each other. “There is no great answer ' any of those jurisdictions could have wanted to take jurisdiction,” Mayer says.

Outsourcing isn't limited to the set and actors. When working as a producer, attorney David Stanley, who recently joined L.A.'s Greenberg Glusker Fields Claman Machtinger & Kinsella as Of Counsel, took the musical creation for an original orchestral score overseas. He hired a local composer from Los Angeles but recorded the score in Prague with a 75-person orchestra ' a cost-saving move that also raised transcontinental intellectual property issues. “Any time you are acquiring music or hiring anyone to create music, there are sophisticated legal issues relating not only to ownership, but also to who controls the performing and publishing rights,” Stanley says.

Call in Locals

When non-California law is in play, local help is a necessity. That's when people such as Guy MacLeod, an attorney with South Africa-based Irish Ashman Attorneys, come in handy. When MacLeod first started with the Cape Town firm, he assisted local and foreign producers with the “peculiar” aspects of that country's employment law. As foreign-film interest in South Africa surged in recent years, MacLeod began to work with international filmmakers on their contracts in South Africa. “We are a comfort blanket for American producers and their attorneys,” says MacLeod, who helped with legal work for “Racing Stripes” ' a movie set in Kentucky but filmed in South Africa.

MacLeod always insists on using South African law, partly because local service companies can't afford the cost of traveling to California if a dispute arises ' a trip that's significantly more expensive in South Africa's currency.

As foreign governments recognize the economic benefits of attracting production, they respond with financing incentives. Countries including Canada, the United Kingdom and more recently Romania offer a variety of wage and tax incentives as well as equity funding. (See, Entertainment Law & Finance, October 2005, for “International Film Production Incentives” by Sean F. Kane, which covers, Canada, South Africa, the United Kingdom and other countries.)

Gibson, Dunn & Crutcher partner Lawrence Ulman, who specializes in entertainment finance, represented Miramax in the financing of “Cold Mountain,” a film set in the hills of North Carolina but actually shot in Romania. The movie was blasted in a highly publicized Internet campaign for taking American jobs and millions of dollars overseas.

Regional Customs

For Ulman, the most interesting aspect of the globalized work has been understanding the people, not the paperwork. “You need to be flexible and understand that people might approach things fundamentally differently,” he says. Greenberg Glusker's Stanley works with fixers ' or locals who translate language and culture ' when he's far from home to ease interactions. While he was working on the TV show “Celebrity Mole Hawaii,” a local resident offered to bless the set and crew. The blessing came with a fee, so the show declined ' but regretted it later after a series of production mishaps. That may be superstitious, Stanley acknowledged, but following local customs is good policy.

And “even though by and large people use English,” Robert Darwell, a fluent French speaker who heads the transactional side of L.A.'s Sheppard, Mullin, Richter & Hampton's entertainment practice, notes his firm requires that all transactional entertainment law associates speak a second language.

Most people agree that the globalization of the film industry is an irreversible trend. As more countries develop the infrastructure and skilled labor force, they become more attractive as repeat customers.