Tracy Preston was an impressive high schooler – an honors student, competitive athlete and valedictorian. She planned to apply to all the best universities for admission.
Her school counselor, however, cautioned her against aiming too high for fear of rejection.
“I remember that moment of choice where I could let her negative narrative and small view of my choices shape my future,” Preston says. “Or I could look at the results of my hard work, believe in my abilities and apply for all of my ‘reach universities.’”
The teenager chose to be bold.
“I was accepted into every one of them,” she says. “This taught me to trust my instincts, seek a broader scope of feedback and be cognizant of the influence we wield as we interact with others. This incident also gave me a lifelong aim to be a positive good mentor for others.”
Preston graduated cum laude from Georgetown University and received her law degree from the University of Virginia School of Law. She was a lawyer at global law firms, including Baker McKenzie, Latham & Watkins and Orrick. She was the chief counsel and chief compliance officer at Levi Strauss.
“I remember how great Perry Mason was investigating the ‘mystery’ and how he was analytical and persuasive in every case…It’s good that I didn’t want to be a cowboy, because I also loved Westerns.” — Tracy Preston
For the past seven years, Preston has been the senior vice president and general counsel at one of the world’s most prestigious luxury brands – Neiman Marcus.
And 2019 might have been her most successful year so far. Last year, Preston and the four in-house lawyers who work with her:
• Defeated a $1 billion lawsuit brought by a hedge fund;
• Successfully executed a complex out-of-court liability management transaction that achieved a three-year maturity extension on substantially all of the Neiman’s funded debt, which provided the company the runway to execute its long-term strategy;
• Revamped the company’s compliance functions and implemented a new code of ethics and business conduct;
• Supervised Neiman’s purchase of a minority stake in Fashionphile, an online platform for the resale of luxury handbags and other accessories;
• Settled the lawsuit with 40 state attorneys general related to the 2013 cybersecurity breach that impacted 350,000 customers; and
• Oversaw the legal and regulatory work surrounding the opening of Neiman Marcus Hudson Yards, the company’s first store in New York City.
“Tracy understands and teaches the business’s goals, including the incredibly challenging and complex documents, while also understanding the needs of the performing trial lawyers,” says Mike Lynn, a partner at Lynn Pinker Cox Hurst. “That is almost never found in one lawyer. Tracy is a unicorn.”
The Association of Corporate Counsel’s DFW Chapter and The Texas Lawbook are pleased to honor Preston as a finalist for the 2019 DFW General Counsel of the Year for a Small Legal Department.
Preston and other finalists for the 2019 DFW Outstanding Corporate Counsel Awards will be honored Jan. 30 at the George W. Bush Presidential Center and Institute.
“Tracy is an outstanding lawyer who gets the big picture,” says DLA Piper partner Kim Askew. “She understands all aspects of her client’s business, the particular issues or circumstances that give rise to the legal questions before her, and she makes real world decisions. She is a critical thinker who is very practical in her approach.”
Preston says the icon luxury retailer is undergoing a significant evolution.
“The company is on a transformation journey to become a preeminent luxury customer platform,” Preston says. “We are moving from being a store to being the destination of choice for luxury – luxury products, services and experiences – wherever, whenever and however the customer wants to engage, (be it) online, in-store or any combination thereof.”
Preston says that Neiman Marcus believes luxury is about the experience the retailer curates for customers in relation to their hopes and desires, and the legal department plays a critical role in that strategy.
“The department must be seen as an integral part of the business, such that our clients see us as a resource and will seek out guidance involving us early in the process,” she says. “By building strong working relationships based on trust, transparency and great communication, we avoid the perception of being the ‘department of no.’
“These strong relationships help support the mission and business success of a company by illuminating the legal coordinates of risk and opportunity,” she says.
Preston grew up in Martinsville, Virginia, which is a small town in the foothills of the Blue Ridge Mountains. Her parents were educators. Her mom taught high school English. Her dad was a math and history teacher.
“At one point, my dad was the assistant principal at my high school for one year, which made for interesting moments with fellow students once they found out that he was my dad,” she says.
Preston was in the 4-H Club, Girl Scouts and Cadettes. She played tennis and basketball in high school. She also was a cheerleader and senior class president. Preston is the first and only lawyer in her family.
As a grade schooler, Preston spent weekends at her grandparents, who were fans of Westerns and Perry Mason reruns.
“I remember how great Perry Mason was investigating the ‘mystery’ and how he was analytical and persuasive in every case,” she says. “Even at that age, I loved to try and figure out what happened before he did. I thought it was like a puzzle and it looked like fun.
“I really didn’t know what a lawyer did, but he was successful, he was helping people, and it was putting pieces together to reveal the final answer,” she says. “It’s good that I didn’t want to be a cowboy because I also loved Westerns, but I didn’t have access to horses growing up.”
In what Preston calls her “long and winding road” to being a corporate general counsel, she says she wanted to be a lawyer “because I wanted to help people, solve problems and make change when and where I could.”
Preston did a summer clerkship at Baker McKenzie, where she worked for a partner who had an ERISA practice. She went to work at the firm when she graduated from UVA in 1991. She spent two years at Baker McKenzie, three years at Sedgwick and a year at Latham – all in San Francisco. With each firm, Preston expanded her practice to include employment, intellectual property and commercial litigation.
At Latham, she met partner Barbara Caulfield, a former Northern California federal trial judge who had returned to practice law. Preston says Caulfield became her mentor.
“She gave of herself, not just in the immediate, but also assisted in my future development,” she says. “She gave me the confidence to be myself in demeanor, carriage and grace, as well as being a legal strategist and problem-solver. She encouraged me to never lose my sense of humor.”
When Caulfield moved her practice to Orrick, Preston followed and stayed there for five years and made partner.
In January 2002, Levi Strauss & Co. came calling. The clothing maker hired Preston to be its associate general counsel.
For 11 years, she rose up the ranks of the Levi Strauss legal department, becoming chief counsel for human resources, head of litigation and then chief compliance officer. One of the benefits of the position was that she was able to travel and spend a significant amount of time around the globe, which “provided a different lens by which to view the world but also presents the myriad of ways to go about doing life or business.”
“It is fair to say that every journey I have travelled has provided me new ways to consider a given approach, or team dynamic as well as different ways to come to an agreement or achieve outcomes,” she says. “For example, each country has its own cadence and customs that can give a person a new reference point that can broaden one’s lifestyle and work dynamics in a larger context.”
Preston left Levi Strauss in 2013 to become the general counsel of Neiman Marcus. Or as Preston puts it, “I went from jeans to Jimmy Choo shoes.”
She says being the top lawyer at Neiman Marcus provided her with the opportunity to “expand my skillset and broaden my scope of responsibilities.”
“It was clear that the role would also allow me to forge into new and unchartered areas from my previous experience,” she says.
From day one, Preston has been busy. The challenges have been many.
Within months of moving into her new office in downtown Dallas, Preston supervised the luxury retailer’s $6 billion sale to the Canada Pension Plan Investment Board and Ares Management. The next year, she oversaw the acquisition of German-based luxury fashion retailer MyTheresa.
Over the past six and a half years, Preston and her legal team have led the divestiture of Neiman’s joint ventures in China, settled a handful of class-action lawsuits in California and have now finally reached settlement agreements related to the cyber breach the company experienced in 2013.
The March 2019 opening of Neiman’s first store – 188,000 square feet in a seven-story luxury shopping complex called the Shops and Restaurants at Hudson Yards – in New York City was one of the more enjoyable projects for Preston and her team.
“The legal team worked on all aspects of the new store ranging from real estate, brand partner arrangements, in-store experiences, liquor licensing, marketing and promotions and the list goes on,” she says. “It was a cross-functional team effort, and we are pleased with exceeding the delivered outcome, on time, with great team results.”
At the same time Preston and her team were guiding Neiman’s toward its opening in New York, they were also waging a fierce battle in a state courtroom in downtown Dallas.
New York hedge fund Marble Ridge Capital sued Neiman Marcus, alleging the retailer engaged in a fraudulent scheme to transfer its European e-commerce unit MyTheresa to its parent company in order to benefit its private equity owners.
Preston hired Lynn Pinker to handle the litigation. The firm successfully convinced a Dallas judge to dismiss the lawsuit. In fact, Neiman has countersued the hedge fund for allegedly making false statements in an effort to manipulate the price of Neiman’s debt.
“Managing high-risk, high-value litigation as Tracy does is like walking a tightrope,” says Lynn. “The performing lawyers and others in the team need encouragement and understanding to achieve their personal best, but the case goals must be strictly adhered to. Tracy walks the tightrope as if it were a wide causeway, maneuvering the team to the goal with complete understanding of the performance.”
Preston says the debt recapitalization was incredibly important for the company.
“I am proud of the work we did to successfully execute an extremely complex and comprehensive out-of-court liability management transaction,” she says. “The transaction, which took nearly two years to structure and complete, achieved a three-year maturity extension on substantially all of the company’s funded debt, thereby providing the company with the runaway to execute its long-term strategy to ensure our transformation is successful.”
Kirkland & Ellis partner Jeffrey Zeiger says Preston showcased her legal and business skills in leading the complex and novel deal that extended Neiman’s debt maturities.
“Tracy has a broad base of experience that allows her to effectively lead novel deals, high stakes litigation and day-to-day legal issues,” Zeiger says. “She routinely comes up with thoughtful yet practical solutions to complicated legal and business issues.
“She can truly handle anything that is thrown at her,” he says.
Preston admits that she gets some interesting inquiries as the GC of Neiman Marcus.
The most “unique experience hands down,” she says, is the Fantasy Gifts the retailer offers annually to customers for Christmas.
“We’ve had submarines, trips to the edge of the earth, a global falconry companion kit, yours and mine cars, a sleepover in the flagship store and a walk-on cameo in a Broadway play,” she says. “Each experience requires a different legal construct so we can delight our customers and deliver luxury customer service for the specialty product.”