Have you heard the one about the literary agency that, in the midst of our economic downturn, decided to "renegotiate" terms with its current and former personnel? Here's the deal: As you may know, a standard agent's commission for a sale to a publisher is 15 percent; that money is then split between the agent who made the deal and the firm at which he or she is employed. (Obviously, this doesn't apply when the agent owns the agency.) Most agencies split things right down the middle, essentially taking a 7-1/2 percent commission on the deal. But there's one firm that was offering its agents 10 percent—until, according to a recent memo sent out by the agency's management, "we... had to re-evaluate this because of the recent and unprecedented surge of industry panic, editor and other firings, collapsing of imprints, and general slowing down in the delivery of owed payments to clients."

Management at this agency claims that "publishers are, in effect, using the delays in paying agents such as you and us to help balance their books," and because that affects the company's ability to pay its operating expenses, it has decided to adjust the split. The memo says that all the agents at the firm agreed to take a 2 percent cut, dropping their share down to 8 percent—but the new terms were, if we're reading the memo which fell into our hands correctly, simply imposed on agents who used to work at the company and still owe it a share of the royalties on deals that were made when they were there. "We cannot in good conscience, or good business practices, continue to pay you 10% commission on your clients royalties... and need to bring your commission on these clients in line with the other agents here," these people have been told. "I'm sure this is a disappointment that may upset you, but I'm afraid we are not in a position to do anything else at this stage and keep our company financially secure and sound."

To add insult to injury, agents at the firm can work their way back to a 10-5 split, but the former agents are stuck with the 8-7 split permanently. Although, as the memo notes, these terms are still above-average within the industry, at least one agent told us of being "appalled" by the way in which the decision was made and announced.