Squeezed by Industry Troubles, Retail In-House Attorneys Window Shop for Other Jobs
ALM Media
Updated
NEW YORK CITY FRIDAY, MAY 8, 2015: Pedestrians walk past Saks Fifth Avenue in Manhattan. Saks Fifth Avenue is an American department store chain owned by the Hudson's Bay Company.
When Michael Brizel worked as the general counsel for luxury retailer Saks Inc. from 2007 to 2013, sales were declining and store closures became increasingly common. Morale within the legal department sank at times, especially for Saks' in-house real estate lawyer during the Great Recession when the company underwent rounds of store closures.
It got to the point where all she was doing everyday was calling mall owners and developers to negotiate getting out of our leases, Brizel recalled. It was a really stressful and emotionally difficult time.
Retailers' struggles continue to this day. As the list of store closures continues to add up, so do the challenges for in-house lawyers across the industry. Between bankruptcies and consolidation, there are fewer jobs for traditional retail lawyers and more attorneys are looking to get out, if they haven't already.
Saks never filed for bankruptcy, but it was acquired by Canada-based Hudson's Bay Co. in 2013. Preparing for the acquisition took a toll on the company's lawyers but Brizel tried his best to keep morale from plummeting. When the company was considering different options in its path forward, Brizel gathered his in-house lawyers for a pep talk of sorts and confidentially told them: 'As lawyers, we have an obligation to support a transaction. We have a job to do it ethically.'
While a handful of Saks' in-house attorneys moved on to work for Hudson's Bay, Brizel departed along with most of the company's executives.
Brizel now works as the general counsel of grocery delivery service FreshDirect. He said he didn't completely rule out jobs in the traditional retail apparel space at the time, but the right opportunity didn't present itself. That's a common refrain among once-retail-GCs.
Tom Barlow is another lawyer who recently left the industry after working in-house for United Colors of Benetton for more than 15 years. He started in 1999 as senior counsel and four years later became general counsel for the retail business unit.
Toward the end of Barlow's tenure, Benetton's struggles were becoming more apparent with store closures and layoffs.
It could be tough to let fellow employees go with whom you had worked for a number of years, Barlow told Corporate Counsel in an email.
Although it wasn't pleasant to hear the announcement the retailer would be selling off its physical stores, Barlow said it permitted me to conduct a job search without having to hide it from my employer. They understood my need to start looking for another job.
Like Brizel, Barlow considered jobs in retail. He also explored opportunities in real estate, construction and environmental law before landing a GC gig with a company that buys and sells commercial industrial assets.
Barlow isn't alone; recruiters say retail could lose more of its lawyers to other industries.
We're definitely seeing retail being hammered at the moment, said Michael Roche-Kelly, director of in-house search at Special Counsel's Parker + Lynch.
Roche-Kelly said one GC he knows, but declined to name, at a large department store chain in the U.S. isn't feeling as loyal to the industry after experiencing a significant drop in personal earnings this past year. The top lawyer's bonus, Roche-Kelly said, had paid out at about 70 percent of target two years ago and dropped to just more than 20 percent of the target the following year.
He wants to get out of retail altogether, Roche-Kelly said, noting that's not uncommon nowadays.
Tough But Not 'Doomsday'
It's certainly a tougher climate for those seeking an in-house legal job at a retailer but as Roche-Kelly pointed out, not all retailers are struggling. He said what he calls bargain basement stores such as T.J.Maxx, Marshalls and Ross Stores, which are not clients of his, are not necessarily having these problems.
Their business is booming, he said. They have a budget to add lawyers.
If there is another bright spot, it might be that not all legal departments are simply cutting head count, sources told Corporate Counsel. The bigger problem, they said, is more that vacant spots in the legal department are not being filled after lawyers depart for other reasons and that the overall pool of applicants for open jobs has expanded.
And some retail departments were operating on the lean side to begin with. Barbara Kolsun, for instance, in her most recent retail roles spanning from 2005 to 2015, was the only in-house lawyer when she served as general counsel for Stuart Weitzman, Kate Spade and Seven for all Mankind.
Lawyers with varied skill sets will be the most likely to keep their jobs in a retail environment where lawyers with narrowly specialized expertise such as real estate are being let go, said Kolsun, now a professor of Cardozo School of Law's FAME (fashion, arts, media and entertainment) program.
Is this doomsday for retail? No, she said.
Lee Sporn, former general counsel of Michael Kors, who retired last October, agrees that this isn't the end of the line for retail attorneys. He said his 13 years at Michael Kors weren't all that different from when he was in-house in the 1990s with Polo Ralph Lauren. Both retailers had about five or six in-house lawyers without much turnover.
He said that even if their company is struggling in-house lawyers enjoy a challenge, and that the importance of having legal help in hard times can provide some job security. A lot of in-house attorneys have peace of mind knowing that when there are hardships, they will actually be needed more, Sporn said. At the end of the day, they will be the ones to turn the lights off.
Even American Apparel's former top lawyer and one-time CEO Chelsea Grayson told Corporate Counsel that, despite the struggles that the retailer has faced, she isn't opposed to another job in the space. I'm industry agnostic, she said, noting she would consider the right opportunity if it happened to be in retail.
Grayson joined American Apparel in late 2014 and led the legal department as the company underwent two bankruptcies and fought several legal battles with the controversial founder and ousted CEO Dov Charney. Grayson stepped in to lead the company between September 2016 and April of this year.
But even if the outlook isn't entirely negative, it's hard to deny that it's a chaotic time to be in the retail business.
One top legal and operational executive of a publicly traded apparel retailer who spoke on the condition of anonymity to preserve relationships with a current employer said in an email that it's disingenuous for anyone who is working in brick-and-mortar retail to tell you they are not worried. The lawyer continued: I sense an uneasiness with our lawyers given the seemingly daily news about retailers closing stores or shuttering completely.
Other Opportunities
As Pete Boerner, managing director with legal recruiting consultancy Major, Lindsey & Africa, put it, more retail lawyers will be forced to explore other opportunities.
Though he hasn't personally witnessed an exodus of legal talent from retail, his group is having more conversations with lawyers in this space about their desire to transition to other industries. Consumer goods, as an example, could be a good option for some, he said.
Roche-Kelly pointed out that moving to an industry like pharmaceuticals, for instance, might not be the easiest transition. But e-commerce companies will, of course, be viable options.
Amazon, for instance, is currently looking to fill at least 50 in-house legal roles, according to job postings on LinkedIn, and there is at least one in-house recruiter dedicated strictly to filling in-house lawyer vacancies.
Brizel, the former Saks legal chief, advises attorneys to be open to such opportunities. Companies like Amazon are going to need attorneys with experience from brick-and-mortar stores, he said. And businesses in countless other industries can leverage the experience that retail attorneys have in areas such as data privacy and marketing. A lot of these skill sets are in demand and transferable, Brizel said.
