Sheppard Mullin Richter & Hampton LLP: The Studious Studio - Business Practices for Artists

Sheppard Mullin Richter & Hampton LLP: The Studious Studio - Business Practices for Artists

By Christine Steiner

The recent troubles of Knoedler Gallery, now airing in the press and later, presumably, in the courtroom, may shed some light on certain art world concerns - due diligence, gallery sale practices, sophisticated fakes/forgeries, and problems with authenticity in the market. This piece discusses the importance of carefully managing the business of artistic production. These considerations include strict inventory lists, transaction history, image and information database management, responsible studio control, and good artistic practices in general.

In one of our December blog articles, we discussed an artist's catalogue raisonné as a crucial source of information for any collector conducting pre-purchase due diligence. There, we said that omission of a work from an artist's catalogue raisonné indeed can prove fatal to any potential resale of a work, notwithstanding proof the owner may offer to support authenticity. We advised that potential art buyers should exercise due diligence in investigating the authenticity of a work, and should likely seek the advice of impartial third parties in evaluating the genuineness and potential value of a work not included in an artist's catalogue raisonné. The artist's studio or estate should be consulted as well, if practicable.

These considerations were spotlighted in connection with allegations by Richard Diebenkorn's estate that Knoedler Gallery, the artist's longtime dealer, had been trading in fakes, Diebenkorn fakes, for some years. In a May 7, 2012 New York Times account of the dispute, the executive director of the Diebenkorn Foundation implied that fakes are easy to track where good studio practices are maintained: "...the family was very suspicious of these [alleged fakes] and totally confused about how they could get out of the studio with nobody knowing about it." Clearly, a well-run artist studio has information about the works, including what they are and where they go after they leave the studio. Without good inventory controls, quality images of the work, cultivation of longtime professional contacts, and studious management practices, it could prove difficult to assert and support these authenticity claims. The Diebenkorn estate conducted careful research and compiled a catalogue raisonné as part of managing the artist's work and his legacy. These practices protect the market and now aid in tracking suspicious works.

Some of these good artist management practices include developing the following support structures:

Technology Support

  • an information management software system that integrates and tracks inventory, transactions, contacts and the like;
  • organized and accessible contract files to assure prompt and complete performance of sales, communications, merchandise licenses, etc.;
  • an image database for fulfilling permissions requests, preparing inventory, responding to requests from museums, galleries, publications and the like.

Professional Support

  • strong relationships with trusted advisors, including curators, consultants, accountants, attorneys, galleries, appraisers, arts writers and other professionals;
  • experienced studio manager(s), fabrication support and other professional personnel.

Infrastructure Support

  • organized studio space,
  • safe storage with climate controls and adequate security.

These matters become especially important when an estate takes over because the artist is no longer around to guide the studio. We addressed some artist estate issues in our September blog article ("Pacific Standard Time - The Artist's Legacy"). These issues, important for assuring artistic legacy, include:

  • care for the physical works, including planning for inventory, conservation and storage;
  • placement of the work - sales, donations, gallery relations;
  • estate planning - appointing executors, attorneys, accountants;
  • planning for intangible assets - copyright, trademark, existing and potential licensing rights.

Artists face unique issues which must be carefully considered to ensure continued creative output and to preserve the artistic reputation. Artists recognize that prudently managed business affairs will also minimize problems commonly encountered when closing down a studio and during the transition of business affairs from the artist's life to the artist's estate. A comprehensive business and legal framework, which includes strong and consistent management practices, can assure that an artistic legacy is preserved in accordance with the artist's wishes.

Copyright © 2012, Sheppard Mullin Richter & Hampton LLP.

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