Rick Perkal is the CEO and a managing partner of Firelight Capital Partners, a New York-based private equity firm focused on investing in consumer brands. Before becoming a private equity executive, he was a senior partner at Kirkland & Ellis where he led the corporate practice group in the Washington D.C. He is speaking at Luxury Law Summit Americas, a virtual event taking place on 10 November.

What are the luxury sector’s biggest challenges?  How can brands successfully meet them?

First, the declining importance of department stores and the turbo charging of direct to consumer (DTC) online sales present a myriad of challenges to brands which were historically wholesalers with a limited network of company-owned stores. They must now grapple with the complexities of omnichannel retailing which include inventory prioritisation, geographic optimisation for distribution and the maximisation of all aspects of DTC distribution, including website functionality, shipping cost dynamics, customer analytics, search engine optimisation and buy online, pick up in store (BOPUS).
 
Infrastructure is one of the key elements needed to address this complexity, and this isn’t easy for people in key positions like head of digital or social.
 
The second challenge is trying to determine brand positioning when it comes to the growing pressure to be eco-friendly and promote sustainability. This is a tricky issue, as in many cases brands may look like hypocrites if they try to satisfy these demands. Staying true to who you are seems like the best answer to me. Potentially, there are some aspects that all brands can address such as packaging.
 
Finally, given the tremendous growth in the resale market, should brands manage the resale of their own products? It is another tricky issue; some brands are trying this but, in some ways, you clearly compete with yourself.
 
What is the sector’s biggest opportunity?

No question, hands down DTC. Optimising the supply chain would be my number two.

Briefly describe your role, and how you arrived at this point

I am the CEO of Firelight Capital Partners, a lower middle market brand-focused private equity firm, uniquely partnered with Yard, a premier marketing/branding firm. I decided to step down running the consumer vertical for a large private equity firm to focus on the lower middle market, where I felt I could be more directly involved with companies. 

Why did you move into a non-legal role?

I loved being a lawyer, which I know, is an unusual thing for a former attorney to say.  However, while I was a lawyer, I started two retail concepts and helped a friend build another. So, I did have both legal and entrepreneurial experience before I decided to go into private equity.
 
What was key to making the successful transition? Should more lawyers consider such a move?

I felt like laughing when I read this question as many lawyers dream about this transition. The key for me in making this move successful was my unique combination of being a strong business advisor to my clients, already originating deals for them, and starting businesses on the side. To make the transition, I think lawyers need a good business head, good deal instincts and a passion for understanding what drives the past and future success of a business. They must also be comfortable with losing far more deals than they win, and risking significant capital, versus getting paid by the hour.  

What attributes do you look for in a potential investment target? 

We look for opportunities where we can partner with founders or other shareholders and help them accelerate the growth of their business by utilising the assets we can bring. For example, our partnership with Yard allows us to provide strategic help to each of our portfolio companies to position them for dramatic growth. In addition, the Firelight team members and its senior and operating partners have tremendous experience in omnichannel retailing, especially when it comes to all aspects of ecommerce and social and digital marketing.

How can law firms improve their advice?

In my opinion, the best transactional lawyers have a combination of common sense and practicality.  What I mean by that is that some lawyers get lost in fighting and advising for a point that the client really doesn’t care about. The lawyer believes the client should prevail even though the point has little economic value.  
  
Which figure in the luxury sector do you most admire, and why?

I guess I would have to go with LVMH founder, chairman and chief executive Bernard Arnault, given the empire he has built in luxury.
 
And which attorney?

Well, obviously I am retired from practising law, so I can’t say ‘me’. But, I have come across many, many talented attorneys, during my years in private equity. Two who come to mind as exceptional transactional lawyers are, Harvey Eisenberg at Weil Gotshal, for middle market deals, and Andy Peskoe at Golenbock Eiseman Assor Bell & Peskoe LLP, for lower middle market deals.  
 
What other career might you have pursued in an alternative life?

I may be the only person who thinks I am hilarious, so this would probably not have worked out, but a stand-up comic or late night talk show host.
 
What’s your favourite fashion item right now? Favourite podcast and book?

I personally love watches so Patek Philippe is up there. For jewellery, I really like the design and price points of David Yurman. For outerwear, I love Loro Piana cashmere coats. For general clothing, I love Brunello Cucinelli.  For shoes, I love Wolf & Shepherd. Of course, I would be bankrupt... if these were the only places I shopped.
 
I love the podcast How I Built This. One of my favourite books is Good To Great by Jim Collins. 

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Click here to read the programme for Luxury Law Summit Americas, which takes place on 10 November, and here to book a ticket. For more information email jasmindersoor@globalcitymedia.com

More coverage of the Luxury Law Summits, which are hosted by The Global Legal Post