JSEL Entertainment Content Chair Amanda Bello recently interviewed Professor Douglas Hand about recent legal updates in the fashion industry as well as his new casebook, The Business and Law of Fashion. Mr. Hand is one of the pre-eminent fashion lawyers in the country. He has been featured and profiled in numerous media outlets and publications including The New York Times, The Wall Street Journal, Vanity Fair, the American Bar Association Journal, Women’s Wear Daily, and The Business of Fashion. You may find his full bio at the end of the interview.
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Year In Review:
What’s the most interesting or surprising fashion law case or issue from the past year? Has anything significantly changed in the past year that students and practitioners should think about?
2021 has been a year of epic impact on many industries with the global economy still reeling from the pandemic and the supply chain issues it has wrought. I think for the fashion industry, this past year will go down as one in which several constituencies have been provided with an increased voice to promote change. My sincere hope is that the rest of this decade will address some of the systemic issues with the fashion industry.
In the U.S., the BLM movement has led to an increased awareness of some of the institutional inequalities in the already exclusionary fashion industry with groups like RAISEFashion, the Black in Fashion Council, Harlem’s Fashion Row, and others leading the charge. While 2021 has seen a lot of messaging, some notable donations, and increased promotion of black designers, the future will tell if 2021’s pledges result in lasting change. From a legal perspective, this has led to a review of DEI activations, Board representation, and hiring policies.
Globally, we’ve seen the shift in consumer behavior acknowledging the wastefulness and negative environmental impact of the fashion industry (second only to the oil and gas industry) accelerate to a seeming inflection point with both consumer and stock market support for closed-loop propositions like threadUP (which IPO’ed in 2021), Patagonia, and For Days as well as brands that engage in environmentally conscious production methods like Stella McCartney and Eileen Fischer. Over the next five years, brands will have to rectify their for-profit growth motive with the fact of overproduction of items that only become obsolete based on a cycle of marketed fashion, not a cycle of actual functional uselessness. From a legal perspective, disclosure has become paramount and the rise of the Certified B-Corp (with 2021 seeing Chloe becoming the first luxury brand to adopt this corporate responsibility) to cut through the morass of certifications and greenwashing and appeal to consumers as a result. The EU’s framework of regulation on environment, social and governance in the fashion industry is a good start on collective action I’d like to see adopted globally.
How did the pandemic disrupt the fashion industry, and do you think the law has or should respond to this disruption?
2021 has also witnessed supply chain disruptions the likes of which have not been seen since the Second World War. Given that most brands outsource raw materials and production, the initial days of the pandemic saw brands canceling orders and putting the front-line production workers on hold. Since most of these workers operate on barely livable wages largely in third-world countries, this created a humanitarian crisis that was not widely reported on. Given the multinational scope of the fashion industry and the many jurisdictions involved, the law was unable to respond to this disruption effectively putting a spotlight on the need for more international coordination.
Fashion Law Generally:
Do you think the law adequately balances the interests of the consumer with the interests of brands?
Historically the consumer has been a bit schizophrenic with respect to fashion. While many consumers have reported caring about the methods of apparel production, treatment of labor, and impact on the planet – consumer purchasing behavior has borne out that consumers also have wanted cheap new items (a lot of cheap new items). Hence the prolific rise in “fast fashion” over the course of the last two decades.
Taking today’s consumer at their word, or at least consumer reporting at face value – now, more than ever, consumers want fulsome disclosure on the entirety of a fashion brand’s supply chain. In this environment, the law’s (both U.S. and international law) low disclosure regime and the continued ability for most brands to only have to disclose what transpires within the four walls of their own corporate entity fails to adequately balance consumer interests. Too often, brands are able to hide behind a hollow “green” or human-rights-friendly-sounding certification and the fact that all of the “dirty” parts of the business of production takes place outside of their organization – usually in a small and often powerless country far, far away.
Could you share a few of your thoughts on ESG and the fashion industry?
Given the enormous cost effectiveness of industrialization, the race to the bottom inherent in an unregulated for-profit economic model, and fashion marketing’s savvy in convincing consumers to purchase that brand-new-thing because the old one you’ve got is “soooo last season”, the fashion industry has set itself on a collision course with a global reckoning.
I’m on the Board of Directors of Goodwill Industries and I’ve seen first-hand – at our enormous processing facilities in New Jersey – how much clothing cannot be re-sold (even at under $2 per pound) and winds up in massive baling systems. Turning the embedded momentum of the fashion system’s broken system will require investors as well as consumers to have more objective data for considering environmental, social, and governance factors together with financial factors in the investment as well as the purchasing decision-making process. It has to happen to effect lasting change.
What changes do you foresee in fashion law? What changes do you hope to see? What are the strengths and weaknesses of the U.S. approach to fashion law? Could we benefit from any aspects of another country’s fashion law regime?
It may sound like a lot of regulation, but fashion law needs to anticipate the development of ecodesign measures to more than just encourage but actually ensure that textile products are built for circularity. Think about it – we need to reduce waste and prevent an overall erosion of the value of materials. We also need to ensure the uptake into our consumptive system of these already used raw materials to allow consumers to easily choose sustainable textiles and have ready access to re-use and repair services.
The EU has established a goal to reduce its emissions by at least 55 percent by 2030 and achieve climate neutrality by 2050. Recent EU legislative initiatives have been taken around this topic in just the past three years, including The Circular Economy Action Plan (March 2020) which seeks to pivot consumption of fashion items from a linear model where old items wind up destroyed or buried in landfills to a circular economy where old items are re-used and have a greater life value.
The US needs to focus on similar legislation for resource-intensive sectors (including fashion). U.S law should support the circular design of all fashion products based on shared methodology. This is similar in application to the shift from fossil fuels to renewable energy. We have the technology to make clothes that are easier to repair and that include elements that more easily biodegrade. Preventing environmentally harmful products from being introduced into the market seems like a sensible form of regulation that still encourages fashion brands to thrive through innovation and scale profitable for doing so.
Could you please share a bit about your latest publication?
Certainly. The Business and Law of Fashion is edited by me and veteran fashion lawyer Barbara Kolsun with contributions from lawyers of many of the top fashion brands (both outside counsel and in-house). To my knowledge, it is the only law casebook that covers not only intellectual property issues (which are, for most lawyers, the most recognizable areas of fashion law) but also covers sustainability issues, fashion finance, privacy, the new age of advertising through influencers and collaborations, employment and has a chapter on comparative international law. This casebook is a perfect text for courses in Fashion Law, Retail Law, and business school courses related to those industries.
What do you hope that students and practitioners take from your book?
On some level, that many different types of lawyers can become fashion lawyers by focusing on this huge industry and finding the right time to join it as a practitioner. Many students and new lawyers bemoan the fact that it’s difficult to become a lawyer in the fashion industry because there is no clear path into it. But in many ways, that’s the opportunity. Being the best technical lawyer you can be out of the gate – whether that’s specializing in IP or in something less recognizably fashion law-related, like employment law – affords you the best opportunity to practice in the industry by staying close to it, staying engaged and keeping abreast of what’s going on. As I’ve mentioned, there will be many changes in the fashion industry this decade that will involve law and economics. The well trained lawyer with a knowledge of the industry and ability to practice capably within it will be in demand.
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Douglas Hand is a founding member of the law firm Hand Baldachin & Associates LLP (HBA) which specializes in the representation of fashion and lifestyle companies (such as Stella McCartney, 3.1 Phillip Lim, Anna Sui, Public School, Zadig and Voltaire, and Joseph Altuzarra – to name just a few). He is a Board member of Fashion Group International (FGI), a member of the Business Advisory Committee of the Council of Fashion Designers of America (CFDA), a member of the CFDA Fashion Awards Guild, and was on the Advisory Board of the CFDA’s Incubator while it was in existence. Douglas is also an adjunct professor of Fashion Law at both NYU School of Law (where he also sits on the Fashion & Luxury Council) and Cardozo School of Law (where he also sits on the Board of Advisors for the Fashion, Arts, Media and Entertainment (FAME) Law Center). His book The Law and Business of Fashion and Retail was published in 2020 by Carolina Academic Press (he also has another book The Laws of Style published by the American Bar Association in 2018 – and a current podcast of the same name).
Douglas began his legal career in the New York and Paris offices of the global law firm Shearman & Sterling, representing domestic and international clients in public and private transactions. Notable deals include representing Citicorp in its merger with Travelers and representing Fiat S.p.A. in its strategic alliance with General Motors. A former NCAA athlete in three sports and an avid fan, Douglas has been a contributor and speaker at conferences on the sports and entertainment sector and its intersection with the business of fashion. He sits on numerous advisory boards in the fashion industry as well charitable institutions including Board seats at the Fashion Institute of Technology (FIT) Foundation, Goodwill of NY/NJ, and The Kitchen (a supporter of interdisciplinary experimental art).