Interview: Business and Legal Issues for Art Advisors with Katherine Wilson-Milne and Steven Schindler

Aug 21, 2019

Katherine Wilson-Milne and Steven Schindler, Partners at Schindler Cohen & Hochman LLP and course instructors in our Art Advisory 201 Program, discuss common conflicts and explain how the art market has changed from a legal perspective.

What are the most common sources of conflict that you come across in your work as art attorneys and how could those conflicts be prevented?
By far most of the conflicts stem from not having written agreements between artists and galleries, collectors and dealers or between other collaborators. Parties often think they are on the same page, but writing business and relationship terms down really helps to make sure all parties are really clear on their respective responsibilities.

How do you feel the art market has changed over the past 20 years from a legal perspective?
The higher price and profile of art, especially with respect to contemporary art and cultural property/appropriation issues, has made the risks for art market players much greater. The potential liability with respect to one work of art can easily be millions of dollars. That risk makes parties more inclined to document transactions, engage in better due diligence and have written agreements. The art world is not fully professionalized in this way, but it is moving in that direction due to market realities.

What would your number one piece of advice be for new art advisors starting their own business?
Do not handle your client’s money. Of course, some advisors are also dealers, but those roles are distinct. If you feel like you may have a conflict of interest, you should consult an attorney and make sure any dealings with your client are well documented.

What is the difference between a fiduciary and an agent?
An agent is someone who may legally bind her principal (i.e., sell a work of art on the principal’s behalf), because the principal has given her that authority. Examples of agents are gallerists with respect to artists they represent, dealers with respect to their consignors and money managers or financial advisors with respect to those on whose behalf they are investing. Agents always owe fiduciary duties to their principals, which means that they must act in the best interests of the principal. There are other types of fiduciary relationships (e.g., attorney-client). If you are providing specialized advice to a client and they are relying on your advice with respect to spending money or selling art, you should assume you have fiduciary obligations to that client.

Find out more about Business and Legal Issues for Art Advisors with Katherine Wilson-Milne and Steven Schindler. Enroll in our Art Advisory 201 Program today!

Note: This interview is not intended to be a source of legal advice for any purpose. Always seek the legal advice of competent counsel in the relevant jurisdiction.

Understanding the New Generation of Auction Buyers

Courtney Christensen, Christopher Barnekow, Kathleen Guzman, Alasdair Nichol

Art Market Comparison and Analysis

Heidi Lee-Komaromi, Paul Boutros, John McCord