CUMULUS MEDIA: In-House Legal Work, Small Department

Mary Welch | November 21 2013

Whether it's dealing with the Federal Communications Commission, signing off on more than 500 contracts every month, buying radio stations or finalizing Rush Limbaugh's contract, the merry band of lawyers at Cumulus Media say they have fun.

"We really do enjoy each other's company, both in the office and outside," says Nicole Waller, vice president and assistant general counsel. "We've gone off on girls' weekends together. We are very busy with a lot of pressure and juggling. We try to keep it light in the office and not let it get to us."

The attitude helps the team handle the fast and furious pace of the media world. "I think because we take our jobs very seriously, we try to have fun. It makes it easier for a station manager to call us if he or she has a quick question," says Ashley Herd, who joined the team in 2012 from Meyer Moser Lang, where she worked primarily on Cumulus' legal matters.

"Being able to answer a quick question on the spot oftentimes helps stop something from becoming a bigger problem," she says. "We're approachable and accessible to folks. They're not calling the dreaded 'legal.' They're calling me or Nicole or Richard."

General counsel and secretary Richard S. Denning sets the tone for this camaraderie, "We try not to place blame or make someone feel bad. Our job is to serve and come up with a solution," he says.

Denning left Dow Lohnes & Albertson in 2002 to join Cumulus as its first general counsel. He handled the job solo before adding Waller in 2006. "The department just evolved. There weren't a lot of systems or protocol to follow. Actually, there wasn't any. That was the first task," he says.

The job became increasingly challenging as Cumulous went on an acquisition binge, picking up enough new radio stations to grow its revenue from $201 million in 2001 to more than $1 billion in 2012. The Atlanta company now has more than 7,000 employees working at 500-plus radio stations in 110 cities and is the second-largest operator of radio stations in the United States, behind Clear Channel Communications.

"I didn't want, nor necessarily need, a large legal team," says Denning. "I could have made the case for it, but it wasn't what I wanted. What I wanted were intelligent, hard-working lawyers with very high standards who could work with me. I didn't want to hurry my decisions. I wanted everyone to be fully engaged."

Denning hired Herd only after Waller made the case that the department needed another lawyer. "She was right," he said. "We together worked on a mind-blowing amount of work for about a year before she called me on it, especially since she was going on maternity leave." The trio of lawyers is assisted by paralegal Melissa Weatherly.

Denning, also corporate secretary, focuses on corporate work, M&A, regulatory issues and litigation management, jumping in to assist with large contracts and employment issues as needed. Waller primarily handles operational issues, such as vendor contracts, IP issues, real estate and promotional events and sweepstakes, as well as employment agreements and HR issues. Herd's background is employment litigation so she takes on EEOC work and other small litigation matters in addition to assisting Denning and Waller with corporate and operational matters.

"Even though we have our specialties, we have so much work coming in that whoever can handle it, handles it," says Waller. "It's all very egalitarian. Depending on what's happening, Richard may be working on a copier lease."

The majority of the work is what Denning calls "system oriented and document oriented," and often is handled efficiently with templates. "We have the templates and negotiate around the edges."

Even with the templates, Waller says that only about 20 percent of the contracts are approved on the first review. "Probably less," corrects Denning.

"We are very aggressive in regard to our reviews of contracts," Denning says. "We don't let things slide. We take the position that the best contract is one that is read. The amount of contracts we review monthly—probably around 500—can beat you down, so you have to have a system."

Many of the contracts start with a standard template that the Cumulus team—especially Waller—devised. When you see the "same sort of contracts or issues over and over, it's easy to create a template," says Waller. "I'm extremely organized so I created these templates and systems that allow us to handle a high volume of work in an efficient and effective manner."

The system is based on shared files and emails that allow the department's lawyers to go into each other's work and see what was done previously. The files are consistently named year after year so that it is not only easy to find a file but also see how the template has changed. If Herd fields a request for guidance on an issue, she goes into the files and often finds an answer. The goal, says Denning, is that there "may be 22 different requests for something but there is one answer. And, if what they're sending us is different [from our templates], we know they didn't go through legal."

Of course, dealing with talent—everything from the morning guy in Muncie, Ind., to Rush Limbaugh, the conservative radio talk show host with a national following—is anything but standard.

"When talent is involved, that can be challenging," Denning admits. "You have lots of people at the table—agents, lawyers, managers, the talent—and egos. We try to problem-solve as a group and find the common goal. We facilitate and really act as business attorneys and focus on what is most important."

The trio relies heavily on three main firms as well as a host of local firms for litigation. "Over the years we did center our work on certain firms and they do work on a variety of alternative fee arrangements such as a special rate or flat fees. It works for us and helps manage our budget," Denning says.

Jones Day handles a majority of the M&A and Securities and Exchange Commission work with Wiley Ryan and Pillsbury Winthrop Shaw Pittman handling the FCC cases.

The outside counsels are firmly embedded into the company. "It would take a lot for another firm to come in and take over," Denning says. "They have such institutional knowledge and a history has developed between them and me. They know me well enough to know what I like and don't like. They don't have to figure me out. And we get very good results."

When litigation emerges—often on employment issues—the team does an initial review looking for areas that "could create a concern for us," Denning says, adding that mediation is often employed but the company will litigate, especially if it feels it is morally right.

"We are a principled team and a principled company," says Denning. "If we look things over and say 'Well, we maybe could have done this differently,' we're more than willing to mediate. But if we believe we did the right thing, then generally we will not settle and we'll be aggressive."

In addition to employment issues, M&A has been an active legal category. Currently, the company is acquiring Westwood One (formerly Dial Global Inc.) for $260 million in cash, while selling 53 radio stations to Townsquare Media for $238 million, and in a separate deal, swapping 15 radio stations with Townsquare Media.

The company's biggest deal took place in late 2011 when it purchased Citadel Broadcasting in a cash and stock deal valued at around $2.5 billion. Handled by Jones Day, the deal ended what The New York Times called "months of stalking by Cumulus, which made several bids for its larger rival." That deal brought the total number of radio stations owned by Cumulus to 525.

Sometimes these deals lead them into parts of the law they previously didn't have to focus on—such as unions. Several of the stations in the Citadel deal had unionized employees. The day after the deal closed Waller received a call from one of the new station managers, saying he wanted to change the format and fire six employees. "It was new severance agreements, new tutoring the manager on how to do it. We were literally thrown into this new world of learning how to deal with unions."

The quick pace of their own industry also has been challenging. "Even with all the technological progress, the legal issues are still similar—the IP rules, how to structure the deals," says Herd. "Also helping us are the people on the front lines, like our station managers. They'll call and ask about a new way to do a promotion on Facebook, and then we're off figuring it out."

Herd serves as the team's social media expert. She reads what listeners write on the stations' Facebook and Twitter accounts, reviews any Facebook changes and has even been known to look at the Facebook accounts for the plaintiffs in lawsuits. "We've had litigation, for instance, where someone claimed that they had injured their foot at a station event and Ashley found them tweeting pictures of themselves skiing and dancing in high heels," Waller says.

Denning says he may add another attorney after the Westwood deal is completed. "That will drive a lot of work and I want to make sure we have the ability to keep up without anything falling in the cracks. But we're still going to handle an incredible amount of work, not stagnate and keep it light."

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