Business In Archviz

By Jeff Mottle

Business in Arch Viz. Vol. 4 - Contracts


Welcome to the fourth installment of our new RebusFarm Business in Arch Viz series.  Over the next year we will be featuring two articles every month. Each new article will discuss the business side of working in and running businesses in the visualization industry.  We will feature articles from some of the top studios in the world and have in-depth answers to questions that every studio and artist in the industry should know.  

The goal of this series is to provide a long-term resource for not only new artists and business owners entering the industry, but also long-time industry veterans.  The topics will range from contracts and IT infrastructure to hiring and business strategy.

Studios participating in this series include: 2G Studio, ArX Solutions, Beauty and the Bit, Cityscape, DBOX, Designstor, Digit Group, Inc., Factory Fifteen, Kilograph, Luxigon, MIR, Neoscape, Public Square, Steelblue, The Neighbourhood, Transparent House, Urbansimulations and many more. Collectively these companies generate hundreds of millions of dollars a year in revenue, and have decades of experience running some of the most successful businesses in the industry.


We hope you enjoy the series!

We would like to also like to sincerely thank RebusFarm for supporting this series. Through their support they are helping better our industry and contribute significantly to future generations of visualization businesses in our field. If you are looking for one of the best rendering farm companies in the world, we highly recommend checking them out here

CONTRACTS

by Matthew Bannister (DBOX) / @dboxcreative

image courtesy DBOX (@dboxcreative) / dbox.com (432 Park Avenue)




When you first started, did you use a contract?  Were they basic or properly drafted legal documents?

Our first couple of ‘dialog box’ projects back in 1996 were with my Princeton graduate thesis professor Liz Diller, so those were done on a handshake.  If only the next twenty years could have been that simple.  We did quickly form our own contract and I do have a copy of it in my drawer.  I take it out every now and then when I need a good laugh. It wasn’t a properly drafted legal doc but I was fortunate to start DBOX with a couple of very sharp cookies and together we quickly figured out what we should be including in the document.  We tried to write it and make it sound all lawyerly and complex.  Just hilarious. 

In the beginning with we were not overly concerned with the number of reviews in the rendering process.  Our mindset was based on deadlines, and the idea that you would make best efforts towards a deadline and just like school, you would get done…for better or worse. For presentation imagery, that hasn’t changed much as long as a drop dead, deadline is defined. We then had two disastrous jobs that changed our somewhat  freeform approach forever. One project had a deadline that just kept being pushed back and that is where the ‘best efforts’ goes out the window.  The client while being a lovely chap (who we shall refer to as XYZ) was the fussiest human being on planet earth.  We spent about a month discussing refracted light on the specs of dust in the road, that’s when we weren’t discussing whether the grout lines were all accurate to the 1/64”.  We have an internal award in his name…..so when a new client starts to get that way we christen them with the XYZ award.

Another was a competition that had a hard deadline, where printed boards needed to be on a specific flight.  The client changed the design too late and we tried to accommodate, when we should have been pointing to a contract and saying ‘NO WAY’.  It was as hairy as it gets.  When the client wasn’t busy moving the goal posts, he was screaming down the phone about suing us if we missed the deadline. One DBOXr passed out from stress as the final disks got stuck in traffic. Of course our internet went out on the day. This was all back in ‘97.  Contracts got a serious review after these two wars….and hard deadlines or design changes that would affect hard deadlines became important clauses to be addressed.  In the case of design presentation, and planning work these two clauses are more important than the number of reviews.  This is a ‘time is not of the essence’ clause. We shall get back to that later.

Given how specialized our industry is, how hard is it to draft a document that speaks to the nuances of this field?  Is it hard to work with lawyers to establish the terms?

We were rather fortunate in that we got ourselves into some legal hot water in 2003 by unintentionally leaking an image to the press on a project that couldn’t possibly have a bigger front page day. Gulp. What we were attempting to do was to ensure we got credit.  It backfired and Reuters released the images before the public release. A friend of mine who runs a Wall St firm quickly introduced us to a very seasoned NYC lawyer that was way our of our league and he jumped in, got us out of handcuffs and put out the fire.  He took a liking to us as we were unlike any other firm (or perhaps people) he had represented before and he crafted up a contract that one can still trace clauses to today.  While this seems like a longwinded story, the key here is CREDIT.  We instinctively knew early on that we needed to ensure that we received credit for our work and in order to do that one needs to maintain copyright.  As a side note, if you get credit for your work, you will find that your work does all the marketing for you.  In DBOX’s 20 year career we have been involved in three projects that got massive long term press coverage.  This keeps the phone ringing every day of the week.  When the economy slows down, the phone has to keep ringing and ringing.

The main reason we transformed from a purely CGI studio to a full service Brand Creation Agency, is to control our work. Make sure our credit gets printed.  We once had a Sales and Marketing ‘Guru’ exchange our credit for his on the way to press. While that is a war story for another day, it did make us even more vigilant.  I have seen some incredible visualization firms work with branding companies and receive zero credit.  You get to the back of the property brochure that is filled with full page spreads of CGI work and all you see is the Graphic Design Agency credit. I have even some share visualization credit with the ‘Graphic Design’ Agency. How much input could they have had to share a CGI credit? Would a photographer do that with a creative director?  I think it’s perhaps understandable if one CGI company is subcontracting some work to another, at least then it is likely that an expert in the field is managing a directing the process from a CGI lens as well as the client.  It’s also understandable is if one CGI company is working as part of another’s team for a specific project.  Some companies work this way to staff projects. In that case the credit is probably not extended.  The important point here is make sure you have credit stipulated in your contract so it makes sense and is fair.  If you agree to have no credit in the contract, then at least you know what to expect later on when everyone else is celebrating how great ‘their work’ looks. 

Do you normally provide the contacts or do your clients? If they do, how do you resolve whose contract to use?

We always provide the contract.  Certain architecture firms have tried to enforce their contract and terms on us and we have either turned down the work or done the work without a contract. This is very rare, but in some cases it is better to perform a project without a contract than to sign one that could cause all sorts of issues with liability and ownership based on a client’s onerous wording. Firms have said they will not work with us if we don’t sign their contract.  It doesn’t tend to work out that way.  If you are professional and produce consistent quality work, the firms will find a way to get you on a project when they need you regardless of contractual requirements.  It is rarely the legal people at the firm who are the people that want and need you in the first place.

For full service branding and marketing accounts (DBOX is a brand strategy, design, digital and film studio as well as CGI studio) we sometimes have to muscle through a contract provided by a client.  This is rare and sometimes we choose to not do the project rather than move forward. The stakes are higher as it involves about a dozen services on a project that lasts years. Negotiating a contract takes a lot of time and energy and in the end our attorneys make sure that the key clauses from our contract end up in the client’s contract we have been forced to use. Some contracts take several months to resolve. The problem with the client enforcing their contract is that they are nearly always too broad and are written with contractors as the subject.  My advice is to not let time pressure the process.  Again, I stress, that moving forward with a client’s contract is very rare for us. Be careful with liability. Don’t sign language that was designed for a firm that has a significantly different job or financial stake in the game. 

How detailed do you get with your agreements and what sort of items do you include beyond the standard boilerplate?

I don’t know what the standard boilerplate is for our profession and because I haven’t seen other firms contracts it’s unclear whether ours is detailed or not.  The best contract is actually a very concise one that only focuses on issues that actually matter. Our ‘rendering’ contract is about two and a half pages. An overly detailed contract could work as a serious dead weight over time.  All the time spent discussing things that don’t matter can add up.

Do you ever have to enforce a contract?  If you do, is it already past the point of no return, or can it be done amicably?  Has a client ever had to enforce a contract with you?

Very rarely. We have never had any legal issues over the production of a project.  The key here is that the person at your client’s office that handles the contract is never the person you execute the work with.  With this in mind it is important for a project lead on your side to spend half an hour going over the contract with the project point (on their side) so that they understand the rules of engagement.  This is something that is so easily forgot. I need to remind our team often of this.  The problem lies in feeling responsible to rush forwards. Don’t. Get things organized first and always get a down payment. Anywhere from 50-75%. You need this for cash flow, especially if you are moving a good percentage of your resources onto a project.

To those who don’t use contracts to solidify deals in the industry, what advice would you give to them?

For them to please consider whether they are actually contributing to the forward trajectory of our business and industry. At the end of the day we are all better off using contracts, perhaps even the same contract.  I don’t say this to level the field, but to potentially save the field.  If architects became accustomed to one contract it would become a fast formality.  The same can be said for developers with marketing image contracts.

Can you hire any lawyer who specializes in contracts or did it take time to find one that understand our industry?

We have a lawyer who specializes in contracts and intellectual property. So yes, having the appropriate lawyer is important. No point visiting a dentist if you have a broken arm.

Also be very wary of a contract that has been drafted for you that seems overly complicated.  If the language seems hard to understand then it could lead to unnecessary negotiation.  Some lawyers have been known to make things complex so that they are required to jump on a $ call to ‘save the day’.  For the most part you should be able to negotiate your contract yourself.  For our full serves projects we sometimes get our lawyers involved with their lawyers, but never for pure rendering jobs.  We work with our lawyers to update our rendering contract when we feel it needs a refresh but that’s a different matter.

Were most of the clauses in your contracts carefully planned or are they a history of lessons learned over the years?

I would say that all of the clauses relating to process and credit are from our personal history, whereas our attorneys planned all the clauses relating to liability.  They also helped us make valid arguments for clauses relating to deadlines.

Do you continue to update your contracts, if so, how often?

Yes.  We have separate language now that relates to two different types of imagery. The “usage” for design presentation, public review and competition type images versus marketing & advertising images. 

For example what is important to understand here is when you are commissioned to produce an advertising/marketing image for a developer client who is selling/renting/leasing a property, you are not making that image to advertise and market the various other consultants/designers and anyone else on the project.  If those consultants want to use your imagery to market themselves, publish in books etc, then they need to pay your firm additionally for that “usage”.  That would be a usage license outside and separate to your agreement with the property developer. So in brief the usages are granted to promote and sell the property.  This includes PR. It also includes usage for those investing in the property to promote their businesses.  The developer also maintains usage rights to promote their business.  They are the ones, with their investors, who are paying for it so you don’t want to limit them. There has in the past been a free for all attitude, by third parties to use the images to promote their own businesses. It is an epidemic.  We have seen Engineer firms for example, run ads in trade magazine using our work. Not only does this clause provide a level of control over our IP it also has the potential to create an additional stream of licensing income. 

Conversely when you are hired by an Architect/Designer to produce a “design presentation/planning/competition” image (an image they will be using to exhibit proof of concept to their client or get a project through planning), that image cannot be used as a Marketing & Advertising image by their clients to later sell the property….unless of course this is agreed upon in advance.  

What is critical is outlining in advance what the work can be specifically used for and at what exact fee.  For example, if an Architect client insists that their client needs to be able to do whatever they want with it, then you need to have that in writing and price accordingly to cover such broad and undefined usage. We believe you can’t just let an image go to serve anyone’s purpose.  There can be some grey areas and you will later have to use best judgment.  The point is to have a piece of signed paper to point to if you feel someone is violating usage rights.

Perhaps all visualization firms already practice this way. My guess is they don’t. 

While I am at it, I’d like to explain that we have recently implemented a somewhat different approach and contract for Marketing Images in the US, versus Marketing images in the UK. In the US (especially in NYC) the broader development team specifically the Sales and Marketing team play a very important, significant and critical role in the production of marketing material.  In the UK the Sales team is less active in the production of Marketing Materials.  The Sales and marketing teams in the US are most often heavily involved in ‘pre-development’ which is guiding the developer during the design process to ensure the product meets a market and specific demographic.  This means that the production of an interior marketing image (for example, living spaces, kitchens, bathrooms, amenities etc) tends to be a working design process that is explored through rendering.  The client and the Sales and Marketing Team’s first true understanding of all that has been specified comes to life in preliminary previews.  Even if an interior designer or decorator/stylist has supplied the client and DBOX with a full and detailed spec sheet, as soon as the intent is visualized it becomes a moving target.  Why? Because the Sales and Marketing Team know what will sell and if what they are seeing doesn’t fit that bill (“it won’t sell) then they and the developer will want to change some, if not all of what they are seeing. 

It is very easy to get swept up into this important design process, however it is very hard to track financially.  Many of those initial comments that the development team might have about what they don’t like, has nothing to do with the visual work but to do with the design that has been delivered to be visualized.

To work through this and be fair with the client, we have started to bill all this design process hourly.  It is an open-ended process and working through stages, with a constant drip of information and requests is too difficult to manage as a staged process with a production team.  Once everything, and we mean everything, is in place (think of a finished real apartment that has been staged and the flowers have been moved into their final resting place), we then go to a flat fee for creating the marketing rendering.  This has a series of stages that are to do with nuances, materiality, reflectivity etc.  As soon as those flowers get moved, again, we go back to an hourly model until everything is once again in place.  This approach encourages efficiency from the development team and can actually save the client money, while making our production schedules more manageable.  We always have more rendering work (see reasons above relating to credit) than we can do, so the more efficient we can be the better for all involved.  We’d prefer to ultimately charge less and get the job done in efficient hours than charge more in inefficient stages.  This approach can also be extended to exterior marketing renderings that have specific and complex landscape. 

What are some examples of clauses in a contract that are most important for companies working in visualization?

I cannot say what is most important for other companies but below are clauses that have proved important for us.

If you decide to use any of this language make sure you completely understand them. I would rather you contact me than just copy and paste.

Lastly.  You are on your own.  DBOX is not in any way responsible for any language you use or edit…and before you dive in your Agreement (contract) has to be governed by and construed in accordance with the laws of (whatever State or place you are based). Make sure it holds water where you are not where we are.

The below is the tip of the iceberg.  I have tried to present topics and clauses in this interview that we feel will be helpful to the industry as a whole. The industry is still relatively new and we all need to grow together. Perhaps there needs to be another forum that gets into deeper topics that come up when presenting a full service creative account contract.

Ok..grab some popcorn.


SAMPLE CONTRACT CLAUSES

The use by Client of individual X work products in connection with the Services shall be conclusive evidence that the Services relating to such individual X work products have been completed and approved and accepted by Client. Measurements are not independently verified and no on-site surveying is included in this Agreement. X will adjust dimensions at Client’s request and will therefore not be responsible in the event of any disputes which arise relating to the accuracy or “truthfulness” of any representation.

X is the sole and exclusive author and owner of any and all work product conceived and/or created in the performance of the Services hereunder and any work product conceived of, created and/or developed by XXXXXX prior to, independent of or outside the scope of this Agreement (the “X Works”), but not of any works in the public domain, works owned by a third party, or works owned or controlled and provided to X by Client. Logos and tradenames created for and finally approved by Client shall be deemed the exclusive property of Client. X shall have the sole right to file copyright registrations and the applications therefor with respect to the X Works with the (COUNTRY) Copyright Office but shall have no obligation to do so. Under no circumstances shall any of the X Works be deemed to be a “work made for hire”.

Notwithstanding anything heretofore contained in this Agreement, including the license given to the Client to reproduce the XXXXXX Works in accordance with this Agreement, and without limitation of XXXXXX’s rights in and to the XXXXXX Works incident to its ownership of the XXXXXX Works, XXXXXX shall retain the right to use all of the XXXXXX Works for its own promotional purposes including the right to display such work for publicity or promotional purposes, in trade shows, museums, exhibitions, compendia, advertising of all kinds, brochures and books depicting its work, as well as in advertising and promotional materials. XXXXXX will respect confidentiality and “publicity hold” requests from the Client before the project is made public by Client or its affiliates.

XXXXXX will make all commercially reasonable efforts in order to meet the agreed deadline with a quality product, but this Agreement shall not be construed to mean that time is of the essence. During the course of the scheduled timeframe, XXXXXX will try to accommodate all of the Client’s requests that do not put the project behind schedule. XXXXXX will notify the Client which requests might jeopardize the project schedule or budget.

Client and XXXXXX each mutually waive all rights to consequential damages for claims, disputes, and other matters in question arising out of or relating to this Agreement. The liability of XXXXXX to Client under any claim relating to this Agreement or the performance of XXXXXX services shall in no event exceed the amount actually paid to XXXXXX under this Agreement. Any claim or dispute arising out of or relating to this Agreement, other than a dispute relating to non-payment by the Client, shall be subject to mediation as a condition precedent to arbitration, and such mediation shall be requested and conducted in accordance with the rules of the American Arbitration Association. Claims and disputes not resolved by mediation shall be decided by arbitration in accordance with the rules of American Arbitration Association, with the exception that that XXXXXX need not, at its sole discretion, arbitrate matters relating to non-payment under this Agreement. Client agrees to indemnify XXXXXX and hold it and its directors, officers, employees and agents harmless from and against any losses, claims, damages, judgments, costs, expenses and liabilities (collectively “Liabilities”) and will reimburse each of them for all reasonable legal fees and expenses, including the reasonable fees and expenses of counsel, as they are incurred, in investigating, preparing or defending against any claim, action or proceeding brought by a third party, which is caused by, arises out of or relates to the Services, this Agreement or the Project and which is not caused or contributed to by any breach of or default by XXXXXX under this Agreement or by any negligence of XXXXXX.

If for any reason the Client stops progress on the Services for more than 5 days, the job will be re-scheduled into XXXXXX’s production schedule at XXXXXX’s convenience. If Client fails to a make payment when due, the job may be re-scheduled or terminated at the discretion of XXXXXX. Client shall be fully responsible for all of its payment obligations hereunder, regardless of the Client’s financial arrangements with third parties. In the event that any sales, use, excise or similar taxes shall be imposed under any federal or state law with respect to the Services or use of the XXXXXX Works, Client shall be responsible for payment of such taxes and XXXXXX shall have no responsibility therefor. All payments by Client to XXXXXX under this Agreement shall be due and payable no more than 30 days from the date of each invoice sent by XXXXXX. Amounts unpaid after 45 days from the date of invoice shall bear interest at the prime rate then charged by Citibank N.A. in New York City plus 2%, or the maximum interest rate allowed by law, whichever is lesser, which interest shall accrue daily starting on the 45th day after the applicable invoice is sent to Client.

In order to evidence that XXXXXX is the owner of the copyright with respect to all XXXXXX Works and to give the proper professional credit to XXXXXX, the Client shall cause the following notice to appear visibly near or at the bottom of each reproduction of each XXXXXX Work whenever it is used: “© XXXXXX, Inc.”

NOTE. Make sure you have credit guidelines for all social media channels.  While they are hard to chase at least you can ask for credit when someone with 3M IG followers uses an image without credit.

Last but not least some “usage” language.  Please make sure you read this in conjunction with the discussion (i) above.

Use of Work Product:

(a) X hereby grants to Client, Client’s Agents and Allowed Affiliates(as defined below) a nonexclusive, nontransferable, royalty-free license to use, reproduce, distribute and publicly perform and display the X Works solely to promote, market and advertise the Project and Client.  For the purposes only of this Section, “Client’s Agents” means public relations firms, marketing firms, advertising firms, sales agents and leasing agents engaged by Client to promote the Project or Client.

(b)The license granted in Section 8.2(a) specifically and without limitation does not include the right to license, sublicense or otherwise allow any use of any of the rights granted in Section 8.2(a) to or by any third party, including but not limited to Client’s affiliates, agents, third party vendors, contractors, subcontractors, architects, designers, interior designers, engineers and/or construction companies.  Notwithstanding the foregoing, Client may sublicense or otherwise allow the Allowed Affiliates to use the X Works pursuant to Section 8.2(a).

The “Allowed Affiliates” means [list the specific parties who are allowed to use the X Works].

X agrees, in its sole discretion, to respect any reasonable confidentiality and “publicity hold” requirements imposed by Client on the publication of X Works.  Notwithstanding the forgoing, X retains the right, after the X Works have been made public, to use all X Works and other material created under this Agreement in all media now known or later developed.

About Matthew Bannister

Matthew Bannister founded DBOX immediately upon completing his graduate studies in architecture in 1996. His vision was, and remains, a unique multi-disciplinary design and communications agency that produces intelligent creative solutions across multiple platforms and mediums for clients in property development, architecture, and the arts. Matthew has consistently focused on building and nurturing a team whose talents include creative direction, branding, design, photography, film, and digital experiences. In addition to his operational responsibilities, which entail frequent travel between DBOX’s studios in London, New York, and Miami, Matthew is a hands-on creative director. He leads internal design reviews, directs films, and shoots many of DBOX’s lifestyle campaigns.

In 2006, Matthew was named one of ‘The World's Top Creatives Under 40’ by Wallpaper* magazine, and was named ‘Avant Guardian’ for emerging fashion photography by Surface Magazine. In 2015, he was named one of ‘The 20 Biggest Power Players In New York City Real Estate’ by the New York Post. Under his leadership, DBOX has been the recipient of multiple awards, including the Emmy® Award, the World Luxury Award, the Golden Award of Montreux, the Type Directors Club Award of Excellence, the NAHB Nationals, and the American Design Awards.

Matthew studied fine art at the Parsons School of Design, he earned a Bachelors of Architecture from Cornell University, and earned a Masters of Architecture from Princeton University. He has taught visual communications at the School of Visual Arts, Parsons School of Design, and at The Graduate School of Architecture at Princeton University. He is currently a visiting lecturer at the School of Architecture, Art & Planning at Cornell University.

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thanks a lot , Jeff
My pleasure. :)
thanks a lot , Jeff
Always get a deposit!!!
very nice and educative ! If i may ask, as i understood, you have copy right to your images, and if so you have it applied globally? thanks, stefan

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Business in Arch Viz. Vol. 4 - Contracts by DBOX

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About the author

Jeff Mottle

Founder at CGarchitect

placeCalgary, CA