Entertainment Law - The Fiduciary Duty Of Entertainment Attorneys: Joel V. Grubman

An attorney has a duty to act solely in the client's best interests, to disclose any potential conflict of interest, and to withdraw if a conflict would impair the attorney's ability to represent the client. In 1992 pop singer Billy Joel sued his former attorney Allen J. Grubman and Grubman's law firm for $90 million, claiming that Grubman had committed FRAUD and breach of contract. The suit alleged that while representing Joel throughout the 1980s, Grubman had defrauded the singer out of millions of dollars by negotiating secret deals with Joel's manager, Francis Weber, and by allowing Weber to control the law firm's representation, often in direct conflict with Joel's best interests. Joel claimed that if the firm had notified him of Weber's actions, Joel could have prevented millions of dollars in losses to his manager. The singer claimed that the law firm was concerned primarily with enhancing its own reputation by keeping him on its client roster, and did not want to risk losing Joel as a client by angering Weber.

Joel also alleged that Grubman failed to disclose that the law firm represented Joel's label, Sony Music, and that such representation was an inherent conflict of interest that biased Grubman's judgment during contract negotiations.

The law firm claimed that it had done nothing illegal or unethical in its representation of Joel, and stated that it was hired by Joel only to negotiate contracts, not to monitor the business ventures of Joel's manager. Furthermore, the firm claimed that Joel had earned millions of dollars as a result of his recording contract, proof that its advice to him during negotiations with the label were not affected by the firm's relationship with Sony.

The case sent shock waves through the entertainment industry, where it is not uncommon for attorneys to represent both sides of a contract negotiation, or at least have ongoing client relationships with both sides, and it is also not uncommon for an attorney to respect the decisions of an artist's manager even though the attorney's client is the artist. Joel and Grubman settled the case without disclosing the terms of settlement.