Types of things to watch out for with agents:
* Charging the author a fee up front, to be accepted as a client. Can be called a reading fee, or a monthly "office expenses" charge. The best agents, and most successful ones, only charge a percentage fee of royalties the author earns, typically 15%. Suppose a realtor charged you a fee to come over and tour your house before getting the listing? How quickly would you show that realtor the door. . .
* Charging back unusually large "postage and copying fees" to send out an authors' work. One crooked agency accepts almost every client that contacts them, but in the fine print of the contract they charge "postage and handling" of up to $10 per submission they send out on your behalf. It doesn't cost $10 to send a letter and a sample chapter of a book to a publisher. This company makes a fortune from these fees whether or not they actually successfully market any of their clients work.
* Directing authors toward specific editing services or giving authors' names to these services. Sometimes they even own the editing service. Some agents make a significant portion of their income from referral fees from these services.
* Terms in Agency contracts with writers vary widely. Must be read carefully. Not standard at all.
* The agent contacts publishers pretty much at random. The agent's value to you is in the relationships they have with publishers, so that if the publisher hears from them, they know the book is worth taking a look at. Ask to see copies of rejection letters that come back from publishers. If it looks like just a form letter response, rather than a letter you would send to an acquaintance, you can bet the agent may be just picking names out of a directory of publishers.
* Puts forth a weak effort or gives up on the client's project after a few months. You have a right to ask how active the agent is going to be. How many publishers are they going to contact, how will they follow up? You also have a right to periodic reports as to whom they have contacted and the results. You must determine how much time and attention they are really going to give you.
Another reason it is imperative to have a reputable agent is that the publishing house typically pays the agent, who deducts their "cut" and sends the remainder it to the author. It's a frightening thought that a less than honest person gets their hands on the money you've earned from sweat, blood, and even tears.