If your efforts have been successful, and a publishing house has said it would like to publish your material, 
what kind of negotiation takes place, and what sort of terms are they likely to offer you? 
This topic is probably worthy of a whole PhD thesis, but let me try to provide some pointers.

COPYRIGHT

An idea as such cannot be protected by copyright; but the form in which the idea is expressed (e.g. books, but also photographs, films, computer programs etc.) can be copyrighted. 

That means that not just direct quotation, but also paraphrasing and even organisation and presentation of material in a way which is close to that used by another author, may be covered by copyright; and permission may need to be sought from the original authors or their agents. (For more on copyright's relationship to plagiarism, see http://en.wikipedia.org/wiki/Plagiarism.)

National copyright legislation protects that country's own nationals in the first instance – but the protection usually also extends to nationals of any other country which is a signatory to one or both of the international copyright conventions.

A copyright holder is generally said to have:

Economic rights

Essentially, the right to obtain appropriate financial reward for the work done. The aim is to balance fairly the rights of (i) copyright owners and 
(ii) copyright users.

Moral rights

–    ‘Paternity’ (the right to claim authorship)

–    ‘Integrity’ (the right to object to distortions of one’s work which may affect honour or reputation)

These are less widely known than economic rights, but are increasingly protected formally by copyright legislation.

The general rule is that authors are the initial owners of copyright in their work. (One exception in many national copyright laws: if a work is produced by an employee wholly in the course of his/her employment, the copyright then belongs to the employer.)

Owners of copyright can:

assign the copyright (i.e. sell it outright) to someone else, such as a publishing house.

or

license someone else (e.g. a publishing house) to publish the work – but still retaining ownership of the copyright themselves.

In general, I would advise the latter, especially if you have submitted the material on an unsolicited basis. Some publishers argue that they need to control the copyright fully in order to protect it against piracy etc.; personally I am not convinced by this. (If you license you may well, however, be asked to authorise the publisher to take legal action on your behalf in certain defined circumstances. That is probably sensible, as they are likely to be in a better position to do that than you are.)

Publishers have a rather stronger justification for asking you to assign copyright where the material is commissioned – in other words, if they (rather than you) have initiated the project, and set up its basic parameters.

Copyright is not really a unity, but a bundle of divisible rights – to produce a hard cover version, to produce a paperback version, to produce an electronic version, to license the material on to another publisher, and so on.

These will normally be itemised in the draft contract you receive; it may make sense to grant the publisher a license for all of them, but if you think you can get a better return from some of the rights by offering them elsewhere, you are fully entitled to do so. (Of course, if you are too restrictive the publisher may conclude that the project is no longer financially attractive; so you need to consider the overall situation carefully.)

CONTRACTS

Soon after your proposal for a publication has been accepted, you are likely to receive a draft contract.

There is considerable pressure in many countries to write contracts in simpler English, but plenty of jargon can still be found, in publishers’ contracts as in others. It is important to read every word carefully, and to seek clarification from your contact at the publishing house if there is anything you do not understand.

The Publishers Association in the UK has a code of practice setting out the treatment an author should reasonably expect. For a summary version, see this page.  Note that the code of practice was drawn up by publishers themselves; it is therefore the minimum you should expect from your own publisher.

FEES OR ROYALTIES?

Royalties 

Royalties are percentages of the publisher’s income paid to the author on each copy sold. The percentage may be based either on the gross income (i.e. on the published price of the book), or on the price received (the income the publisher actually gets after giving away discounts to wholesalers, retailers etc.)

Now that many countries have banned fixed prices for books, there is an increasing tendency to use a 'price received' basis; it has always been common for sales outside the publisher’s home country, where the discounts the publisher must give away will vary considerably according to the local marketing and distribution arrangements made in each area.

The publisher may pay advances against the hoped-for royalties. These will vary from a small sum to a new author, mainly to cover development costs on the title, to much larger figures paid to established authors with a good track record (and much greater negotiating power!) – even then, the publisher will need to be anticipating extremely good sales from the title concerned, so the publication must be aimed at a very large potential market. Popular fiction, as we all know, is the area where most of the best-publicised 'megadeals' occur. They are, sadly, much less likely in EFL and other forms of educational and academic publishing – though a successful author will still be in a stronger negotiating position than someone without any previous track record.

Fees

Fees, of course, are fixed sums – most frequently paid only once, but sometimes repeatable in certain defined circumstances. There is a strong tendency for royalties to be paid on licensed titles, and for fees to be paid on those assigned to the publisher; but this is not an absolute correlation. Certainly a publisher will usually want to pay fees where a title contains sections by many different authors; royalty accounting would be a nightmare in such a situation! Fees are also common where the publisher is in effect acting only as a book developer for another organisation (another company, say, or a government); in such a case the publishing house will itself be working for a fixed fee, and will not have normal sales income from the project.

Which to choose? 

If you have a choice, should you opt for fees or royalties? This really depends on how risk-averse you are. Fees are paid irrespective of the success or failure of the title, so they are safe income. With a royalty you share the fruits of success; but if the book fails to sell your return will be low. (Royalty advances are usually non-returnable, so you will still get something out of the project; but they are typically rather less than the outright fee which would be paid for the same title.)

On the whole, I would advise most people to choose a royalty arrangement. Though the fee may seem the safe choice at the time, it is still difficult later to sit and watch the publisher receiving all the benefit from a success in which one could have shared!

Typical royalties

 Inevitably, as with advances, the level of royalties depends to at least some extent on the relative negotiating power of the author and the publisher.

A best-selling popular novelist signing with a publisher for the next blockbuster (almost a guaranteed bestseller which will sell itself, unless he or she has made a total mess of it) may well ask for – and get – a higher than average royalty.

A new author with no track record is a much more uncertain proposition for the publisher, and the royalty will therefore be less.

However, the author still deserves a reasonable return for all the work done, and if you have done all the writing work, you should probably expect something in a range from 10% to 15% of price received (or the equivalent, somewhat lower, percentage of published price). The publishing house may have good reasons for offering below 10% of price received in a particular case, but if it does not volunteer them, you should politely enquire what they are!

EXPERIENCING THE JOYS OF ‘PATERNITY’ (OR 'MATERNITY'?)!

Authorship is often a hard, lonely business, especially for someone with a full-time job in another field; but there is nothing like seeing your name on the cover of a brand new title, hot off the press! 

It has been said that producing a book (and presumably therefore also an electronic publication) is the nearest thing to having a baby that a man can experience. Certainly authors can be as fiercely protective of their offspring as any mother! 

So why not seriously consider experiencing the joys of “parenthood”?