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Washington Legal Department of the Year: AOL Inc.
The National Law Journal
This profile is part of the "Washington Legal Departments of the Year" feature from The National Law Journal, a sibling publication of Corporate Counsel.
New York-based AOL Inc. has been all about the deals in recent years, and its Dulles, Va.-area legal department has been the engine behind them. Led by Julie Jacobs, general counsel and executive vice president for business development, AOL's 50-attorney department is one of the busiest deal-making shops in new media but its workload went well beyond mergers and acquisitions in 2012.
Jacobs' department followed its 2009 spinoff from Time Warner Inc. and its 2011 purchase of The Huffington Post by repelling a proxy battle, restructuring its chief executive officer's pay package, beating Huffington Post's unpaid bloggers in federal court and scoring a $1.1 billion patent deal with Microsoft Corp. that put sorely needed cash in its coffers. For all its work in 2012, AOL's legal department won a number of prominent awards, including the Washington Metropolitan Area Corporate Counsel Association's outstanding law department award and Corporate Secretary's Governance Professional of the Year Award for deputy general counsel Damien Atkins for his work on the proxy and executive pay issues. Jacobs' attorneys are located in Dulles plus London, Los Angeles, New York and San Francisco.
During the past six years, AOL has acquired more than 30 companies. "Yes, we do a lot of deals, but we view ourselves as being critical partners to the business," Jacobs said. "We've been active in corporate securities law, privacy issues, public policy. IP's been a huge component, and we now do a lot in terms of media law. Legal issues are driving our jurisdiction."
Jacobs, a Georgetown University Law Center grad who joined AOL in 2000 from Milbank, Tweed, Hadley & McCloy's transactional practice, points to the outcome in Tasini v. AOL last March as a "significant victory" for AOL and new media. The U.S. Court of Appeals for the Second Circuit rejected claims by writer and labor activist Jonathan Tasini that HuffPo's unpaid bloggers deserved one-third of HuffPo's $315 million in proceeds from the AOL deal. The court reaffirmed the decision in December.
Today, Jacobs said, her department is working to establish The Huffington Post's presence internationally, describing its move into Japan as a "huge initiative in the company" as it continues its transition from a technology company to a global content provider with brands like TechCrunch, Patch, Moviefone and Engadget. "As [we] expand into new geographies in the media space, we need to analyze local laws, data-protection restrictions," she said.
Jacobs described her department as the "principal architect" of the patent deal with Microsoft that returned a one-time cash dividend of $5.15 a share to investors. AOL had been under pressure from investors to realize the value of its patent holdings.
Regarding outside counsel, Jacobs identified Gibson, Dunn & Crutcher as AOL's main corporate counsel since its spinoff. Wachtell, Lipton, Rosen & Katz advised on the proxy fight with activist hedge fund Starboard Value last spring. On patent litigation, AOL has used Covington & Burling and Winston & Strawn.
Jacobs prefers to "create partnerships and efficiencies" when selecting outside counsel, but she also looks for "subject-matter experts" who can serve AOL over the long haul. As for alternative billing arrangements, the department is "open to it," but it isn't a central focus.
AOL's legal department has gotten some attention for its pro bono work. One of Jacobs' top deputies, deputy general counsel Maureen Del Duca, has been honored for her leadership in pro bono organizations, including with the D.C. Bar Foundation and the Southern Center for Human Rights. Five years ago, the department founded a monthly legal pro bono community legal clinic that offers advice on benefits, immigration and other individual matters. "Pro bono is very important for us," Jacobs said.