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The New Laws In Fashion

Some of seventh avenue’s leading executives have come from the law. but do a legal training and the vagaries of fashion truly mix?<br><br>Shakespeare wrote, “The first thing we do, let’s kill all the lawyers.”<br><br>If society...

“This industry, which is entrepreneurial in nature, needs access to people who can think things through in systematic ways so those on the creative side don’t get hurt.” — Jeff Kapelman

“This industry, which is entrepreneurial in nature, needs access to people who can think things through in systematic ways so those on the creative side don’t get hurt.” — Jeff Kapelman

Some of seventh avenue’s leading executives have come from the law. but do a legal training and the vagaries of fashion truly mix?

Shakespeare wrote, “The first thing we do, let’s kill all the lawyers.”

If society had heeded that call, the fashion world would have missed the likes of Peter Boneparth at the helm of Jones Apparel Group, Peter Arnold as executive director of the Council of Fashion Designers of America, Todd Kahn as president and chief operating officer at Accessory Network Group Inc. and Jeffry Aronsson as chief executive officer at Marc Jacobs International Inc.

To be sure, former lawyers holding the reins at key corporate posts in the fashion industry are few and far between. That’s because most attorneys either litigate or practice in specialties often considered playgrounds far too remote from the business of business, and for the smaller pool whose focus is corporate law or transactions involving mergers and acquisitions, even fewer choose to step out of the legal arena.

Among the negatives for lawyers in fashion, perhaps, is a vague hostility to attorneys in the industry, just as there is to MBAs. Designers feel the legally focused don’t understand the creative process, while former lawyers often complain that creative types are too off in the clouds to deal with hard-nosed issues involving the law. As always, both contain their kernels of truth and exaggeration.

To be sure, the negative perception of lawyers pervades workplaces in all industries, even when the intent is comic. “What’s wrong with lawyer jokes?” they’ll say. “Lawyers don’t think they’re funny and other people don’t think they’re jokes.”

Even those fleeing the ranks of legal work, as many have done in light of the difficult economy, rarely find themselves focusing on fashion. Those that do will often be automatically thought to be argumentative with poor communication skills and a tendency to speak legalese. Hardly the traits that mark one for Seventh Avenue stardom.

Peter Arnold, whose focus before CFDA was on corporate transactions at Sidley, Austin, Brown & Wood, notes: “I think the search firm thought I might be a good candidate because of my legal background. However, one of the perceptions when I initially applied for the job had to do with people wondering whether an attorney was up to the task and whether I had the sensibility for what the job required. Now it is not so much an issue, either because not many know I was an attorney or they have slowly forgotten that fact.”

While Arnold says that his legal background has been a positive in terms of understanding how deals are done or negotiating sponsorship agreements, there were growing pains when he first made the jump.

“For me, it was a bit of a cultural shift. People in the fashion industry move in a different time frame. Deals are sometimes concluded by a handshake in an elevator, and then things flounder because certain issues weren’t ironed out. It’s also why in a number of instances I’ve insisted on an agreement in writing,” Arnold says.

Andrew Postal, managing director at the apparel consulting firm Marketing Management Group, observes: “The legal background has been a tremendous help to me in business. The training teaches you how to both think and analyze, skills that are useful in the business world.”

For Postal, who joined his family’s business, Judy Bond Blouses, after seven years as a practicing attorney, there was definitely a learning curve in which he had to acclimate himself to a job outside the courtroom. “I found that you don’t have as much time to deliberate in business as you do when you’re in a law office. Also, when I first came into the family business, I would go to meetings and in conversations use legal phrases that only [litigation] attorneys would use. I could see people’s eyes glaze over and I had to relearn how to communicate as a businessman.”

These days, Postal’s job is more suited to his skills, one that also better utilizes the blend between his legal know-how and lessons learned on the front lines at his family’s fashion firm. As the MMG partner in charge of mergers and acquisitions in the fashion industry, he notes: “Clients can’t [lie to] us. Having run [apparel] firms, we have too deep an understanding of the fundamental issues that can cause problems for firms. When we get into a problem and start analyzing it, my legal skills help me get up to speed quickly and then to communicate what I’ve assimilated.”

Todd Kahn of Accessory Network had an easier time moving from law to business, mostly because he already had experience in corporate restructuring while at the law firm Fried, Frank, Harris, Shriver & Jacobson before jumping to Salant in 1993, about one month before the apparel firm’s emergence from bankruptcy proceedings. While at Salant, he held positions ranging from general counsel to chief operating officer.

“People do tend to pigeonhole you if they know you had a legal role. In my different business roles, I’ve found that the legal background has been extremely helpful. The discipline helps you in many ways, from negotiating licensing and acquisition opportunities to just looking at businesses with a critical eye,” he says.

Kahn explains that whether it is reviewing new lines or creating compensation programs on how to give employees incentive, his background helps him spot potential problems that often can be nipped in the bud. “I love the fact that I have the skill and experience without having to be the lawyer,” he notes.

Another example of a former attorney who gets kudos for a job well done is Aronsson, whom many agree has a “good grasp of the industry.” Aronsson, formerly the president and ceo at Oscar de la Renta Ltd., was unavailable for an interview, but one licensing expert observed that “he caught on pretty quickly” and “grasped the nuances right away. Generally speaking, the lawyers I run into who become heads of companies are not very competent and can be very difficult.”

In the business of fashion, however, there’s still the belief that maybe lawyers aren’t the ideal cheerleaders to lead apparel firms.

Gene Silverberg, executive vice president at Hilco Merchant Resources, observes: “I believe that merchants should run companies in the fashion industry because it is more of an art than a science. We should keep litigation in the courtroom, not in the cutting room. Merchandising is for someone who has sat behind the counter at one point.

Elaine Hughes of the executive search firm E.A. Hughes observes that while attorneys can function extremely well in core business positions such as finance or operations, they’re not likely to do well in merchandising and marketing posts requiring creative design talent.

She explains: “The competency of attorneys is in their ability to read and disseminate material, while much of the training for apparel design comes out of product development. There are exceptions, one being Peter Boneparth, whose background is more investment banking than legal. Through his banking experience, he became very astute at understanding the apparel business and then had this great opportunity to run one at Norton McNaughton.”

McNaughton Apparel Group has since been acquired by Jones Apparel Group. Boneparth, who now has his arms around a $4.3 billion diversified business as ceo of Jones, declined to be interviewed and the jury is still out on his tenure, so to speak, as he attempts to retain a series of licenses issued by Polo Ralph Lauren or nimbly acquire businesses or obtain licenses to compensate for the potential $1 billion in lost volume and the profit that could come with it. Fairly or unfairly, his legal background comes up often in market discussions of what’s gone awry in the once peaceful relationship between licensor and licensee.

Talk to lawyers — those still practicing and others who have transitioned out of the legal profession — and the view is markedly different.

Don Kreindler, litigation partner at Phillips Nizer, says: “I think a legal background is definitely a plus. There are many executives, not only in apparel fields but in other sectors, too, who are attorneys. The legal analysis is very helpful to anyone in business. A good lawyer is really half a businessman. While he gives legal advice to business people, he also has to give advice that is practical from a business point of view.”

Attorneys who have jumped ship, but are in other areas of the industry, agree that their backgrounds have helped them and their clients in their new careers.

Jeff Kapelman, who was a corporate and real estate specialist before joining Hilldun Corp., a factoring firm, says: “The background really helps me in contract negotiations, whether I’m bringing in new clients or working on new agreements with existing clients.

This industry, which is entrepreneurial in nature, needs access to people who can think things through in systematic ways so those on the creative side don’t get hurt.”