Donald Byrd turned us on to the music industry," says Keith Killgo, drummer of the group Byrd built and then christened, in his own image, the Blackbyrds. "But if a guy does you a favor, do you owe him the rest of your life?"

The Blackbyrds, Washington's own nationally known jazz/R&B band, are having delayed birth pangs. After five years of touring behind Byrd's jazz trumpet, and after six albums-all produced by Byrd-the six-man group is ready to fly the coop, to pull an Eagles an strike out on its own.

Trouble is, there are strings attached to the nest. Byrd, a former sideman for John Coltrane and Herbie Hancock, owns the name "Blackbyrds," and his production company has the group under contract for two more years. Fantasy Records has a contract, too-one which calls for the Blackbyrds to be in the studio right after the first of the year. The group is eager to take off with a new sound, but for all they know they may have to record under a new name-and "unknown" jazz/funk groups are dying in the bins like factory seconds.

If they're worried, they're not telling: "In show business, everything comes to an impasse," says spokesman Killgo, shrugging one elegant velvet shoulder. "It's the best thing that could've happened to the band."

The revolution has been a long time hatching, and it is rooted in the revolution Byrd himself fomented in 1973. Drawings first from the Howard University jazz studies department he had founded, Byrd assembled a group of students into a soul-jazz-fusion band as a demonstration of his teaching theories.

"The original concept as Donald Byrd saw it was to bridge the gap between academia and the professional world," says Killgo. "He wanted to take a classroom situation and turn it into a profitable experience. He thought of it as an internship. Till then, there was no program to take a musician from the classroom to the interviews."

They became Byrd's back-up band, journeymen, working weekends and summers around school, learning how the industry thinks and schedules, adds figures and subtracts them. Howard, according to Killgo, never actively supported the experiment: "They acknowledged the group was there, but we got no help in scheduling our live performances or assignments."

Their debut album, a 1973 release on the jazz speciality label Blue Note, was a small but tangible triumph over the small clubs, haphazard schoolwork and redundant flourescent motels. "The Blackyrds" made a respectable showing, and they signed (through Byrd's Blackbyrd Productions) with a larger jazz company, Fantasy, for a modest $600,000. They went on to score a low-budget but moderately successful black-social-consciousness movie called "Cornbread, Earl and Me" which starred NBA Rookie of the Year Keith Wilkes. They slowly picked up critical notice; their work behind Byrd grew more cohesive.

With their fourth album, "City Life," the Blackbyrds collected their first gold record symbolizing sales of 500,000 copies. The next two albums, "Unfinished Business" and "Action," were also gold. In 1977 Record World magazine named them the top R&B group of the year; this year they are tied for the top jazz band.

Now they are ready to take the wheel of their careers-the music, the management, even the media work and the public relations. They are increasingly individualistic entertainers-Killgo, bassist Joe Hall, pianist Kevin Toney, guitarist Orville Saunders, percussionist Dan Stewart and saxman Gary Hart-all in their mid-20s and engagingly cocky.

"Donald's concept was totally successful in that we know many things that we wouldn't have, and we have enough control and discipline to continue without him," says Killgo. But they dread any lengthy legal entanglements that could keep the band out of the studio.

"There is no animosity toward Byrd or his company, but we know what we need. And the industry has a bad habit of passing you by when you're in litigation for 10 years,"

So they are negotiating, feeling the situation out in a roundabout rigamarole that involves the Blackbyrds' manager, Byrd's lawyer and Fantasy Records. The fog is so thick that Byrd, who is out on the road promoting his latest Warner Bros. album, "I Want To Thank You For Funkin' Up My Life" (Byrd himself has never recorded as an artist for Fantasy) declines to return his calls. His lawyer has no comment, emphatically. The Blackbyrd's manager, who used to handle Byrd, is coincidentally undergoing knee surgery. And a Fantasy spokesman says helplessly, "We're just a third party in all this."

When you pass the word down the line, it comes out something else. If you're not dealing with the sources, you don't know why something is done or why it isn't," says Killgo, drawing circles in the air. But the result of this contract roulette is a precocious cynicism that these Byrd alumni might have been expected to escape: "It's hard to know the music industry until you're in it, but until you learn, you will be taken."

If the Blackbyrds survive the metamorphosis, they will paradoxically be vindicating Byrd's "concept" that an educated musician has a better chance of beating the music-biz gamble-a concept that Killgo is now passing on to his own proteges, a band from Baltimore called Rain.

"What I'm offering is not a recording contract through my connections-I'm offering organization. They come to me with songs on tape or pieces of paper, and I draw up the album concept, the group concept, the theory-pictures, brochures and exposure."

Killgo, who serves as the publicity coordinator as well as spokesman for the group, has developed such a pragmatic approach to his work partly as a result of having played with such greats as Miles Davis at the tender age of 11. In the old Bohemian Caverns club at 11th and U, where a skinny pre-"I Spy" Bill Crosby rattled off impromptu comedy between sets from Coltrane or Monk or Adderly, Killgo and his pianist father spent long nights studying and sometimes sitting in with the bands. It was a dark, low-ceilinged catacomb, and the jazz grew thick as smoke.

"That place had it," says Killgo, the old awe a whisper behind his voice. "Some places are about food or about drinking, but that club was specifically about music."

Miles Davis remained a strong influence on Killgo, but in his teens, in a trio with fellow Blackbyrds Saunders and Hall, he mixed the Davis flavoring with Grand Funk Railroad and a splash of original material. By the time he got the call to join the Blackbyrds, he was communting from Bradley University in Peoria to New York City for weekend jobs with Joe Henderson.

There is still some Miles Davis in the Blackbyrd pie, but now it is mixed with Toney's classical training and contemporary ingredients from Stevie Wonder and Earth, Wind & Fire.

It is an ecumenical approach, and at their renaissance appearance last weekend at the Ontario Theatre, they demonstrated that another element had been added-disco, the kind of insistent, redundant, funk that turns dancers into percussion instruments.

"Disco's where people are," says Killgo, smiling slightly. "You have to keep up. Once you're established, staying in there is the hardest thing." CAPTION: Picture 1, Keith Killgo: "In show business, everyting comes to an impasse ." By Harry Naltchayan-The Washington Post; Picture 2, no caption