One of the best ways to understand your clients’ world is to spend time at the same learning and networking events as they do, absorbing content and having conversations about what it all means to them and for their business, in real time.
We hit the spring/summer independent agency conference season with just that intention this year. We learned so much. And a lot of what we heard had legal implications for the foundation of your agencies.
Three meaningful industry patterns I observed, and the legal consequences they could have for independent agencies, are these.
WHAT WE SEE: Agencies are passing panic about AI, and moving to implementation of it in their systems and client work.
One year ago, I heard different conversations among agency experts and leaders about the expected impact of AI on revenue models, employment, business development, and, well, owner sanity. There was a definite buzz of fear, of overwhelm, about it.
This year, most agencies are ready to roll up sleeves and Figure. It. Out.
Most agencies have begun integrating AI functionality in their operations – whether it’s a project management tool with AI capabilities, or new systems or processes built around AI functionality to run the business. They’ve also been hard at work using generative AI to create, iterate, research, and develop strategy to serve clients specifically.
THE LEGAL IMPLICATIONS:
All of it creates legal risk management implications for agencies, and has driven up demand for knowledge about how to minimize those risks and communicate to brand clients about them. This is showing up in increased adoption of:
- Written internal and external agency AI policies
- Specific contract language in agency agreements with clients, contractors and vendors about AI use and responsibilities
- Team training about legal risk, along with client conversation guidance for agency account-facing team members
Forward-thinking agencies are balancing the opportunities AI is creating for their businesses with incremental risk management steps, iterating both with regular pace.
WHAT WE SEE: Agencies recognize their profit models are evolving from making money “doing” to making money “thinking.”
It was clear from a lot of the case studies I heard during industry conferences this Spring that agencies are thinking hard about adapting their business models to the economic reality AI is forcing upon them – the need to migrate from attempting to make profit for the “doing” to making money for the insights and thinking they bring to solve client challenges.
This was very plain from the many conversations I heard or had about moving away from traditional hourly and retainer-based billing models, to billing models focused more on outcomes.
But it’s also resulting in agencies working seriously (and at a more deliberate pace) to develop and package their own proprietary solutions to deliver to the market. I heard examples of this including agencies creating:
– original systems (agencies building original technologies or agentic solutions to solve business challenges),
– owned data (agencies developing, aggregating, and leveraging their own first party data),
– proprietary research (agencies commissioning and publishing their own research about a client industry, and selling reports with insights from the research), and
– client community building (an influencer agency starting a creator-only membership community).
These are assets that are not dependent on work-for-hire client relationships, remain owned by the agency, and can be leveraged repeatedly for revenue.
THE LEGAL IMPLICATIONS:
I couldn’t personally be more thrilled about this because of the vast business opportunities it presents for agencies – we have been championing the value of agency-created IP forever at our Firm.
Your agency creates IP every day. You just may not be leveraging it as an independent income-generating asset. Yet.
Anywhere there are original, proprietary agency-built solutions, there is almost always protectible intellectual property. But leveraging this agency IP for its maximum financial value requires an intentional approach toward protection of it that includes confidentiality policies, a system of relevant trademark, copyright and trade secret protections, and relevant contract language in client agreements (or altogether separate license arrangements) to protect the IP’s integrity and value.
Agencies are taking a thoughtful approach to monetizing their agency IP, and the legal strategies that secure that IP when bringing it to market.
WHAT WE SEE: Agencies are handling more data than ever before to execute marketing magic. Some of it belongs to their clients, but a LOT of it belongs to their clients’ customers.
Marketing and advertising are heavily data dependent. This is not new.
So what’s the evolution here for agencies?
The level of reliance on customer or consumer data to prove attribution and brand ROI is continually reaching a higher bar. And the use of AI-enabled tools to process or manipulate data for campaign targeting or media buying is increasing exponentially.
THE LEGAL IMPLICATIONS:
Compliance with data privacy laws in the U.S. is not getting any less complex for marketers.
Not only is there an absence of a consistent federal law governing data privacy to guide agencies and brands (as opposed to GDPR in the EU), but individual states continue to evolve their regulations. In 2026 alone – so far – there are 4 additional U.S. states with new data privacy laws on their books. Brands are leaning on agencies to understand data privacy concerns, and to at minimum flag the issues if not outright assume legal responsibility for compliance with the rules.
Add to this the fact that AI-enabled tools are powerful options to aid agencies in leveraging data (whether it’s consumer data or simply a brand’s confidential information). The legal landmine for marketers here is that “the AI did it” is not a defense to a data privacy law breach.
So – more data laws + changing data laws + AI technology that processes and manipulates data powerfully + brands expecting agency fluency or compliance with it all = a lot of risk to manage for your agency.
What helps control the chaos?
Two important areas of focus to reduce your agency risk in this area are:
- Clear language in your client agreements about responsibility for data privacy compliance (as an agency, you’d like the brand to assume this role), and
- Proactive team training and client discussions about potential data privacy law hotspots (such as specific states, or specific audiences) before a campaign launches or an ad buy is made
While the legal implications of the business changes in the industry can feel like a lot of heartburn for agency leaders, what I observed overall was a lot of business opportunity.
Opportunities for agencies to be teachers and leaders to their client counterparts on these risk issues. Trust me, brands are looking to agencies for guidance and proactive partnership to help sidestep risk.
Opportunities for agencies to develop new streams of revenue with proprietary solutions and IP to protect profit by riding alongside their traditional fee for service models.
And opportunities for agencies to rethink their pricing and business models for greater profitability. I heard consistently that brands are not yet indicating that they expect to pay less for agency contributions – but they are expecting more value, strategy and ideation. This is good news to our eyes, because we see that this happens to be where agencies shine brightest.
We’d love to hear what you’re hearing and experiencing in agencyland right now – reach out and let us know.
