Early life
Daniels was born on December 24, 1959, in West Philadelphia, the eldest son of Clara May (Watson) and William Louis Daniels. Daniels has four siblings: Cheryl, Lydia (aka Girlie), Maynard and Leah. His younger sister, Leah Daniels-Butler, is a television and film casting director credited with casting many of his projects. When Daniels was a teenager, his mother arranged for a neighbor's family who was a butler for the owner of the Philadelphia Flyers hockey team to use that owner's address in Radnor so that Lee could attend the public Radnor High School. In 1975, when Daniels was 15 years old, his father, who was a police officer, was killed in the line of duty. He graduated from Radnor High School in 1978.
After graduating from Radnor, Daniels attended Lindenwood University in St. Charles, Missouri. However, he soon realized the liberal arts school was not for him, and he moved to Hollywood, Los Angeles, eventually working as a receptionist in a nursing agency. Before long, Daniels started his own nursing agency, specializing in HIV/AIDS treatment. Eventually, he sold his nursing agency and segued into casting. He began his career in entertainment as a casting director and manager after a chance meeting with a Hollywood producer, working on such projects as Purple Rain and Under the Cherry Moon. He continued managing talent. The documentary My Big Break features Daniels early in his career when he was managing actor Wes Bentley, who starred as Ricky Fitts in American Beauty. In the documentary, Daniels comments on Bentley's reluctance to capitalize on his newfound celebrity status.