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If you plan on visiting Lilliemae Ibayan Stephens, capri pants are highly recommended. Stephens, the 29-year-old general counsel of ultrahip clothiers bebe stores, inc., says the old loafer-and-suit combo just won’t cut it in her office. Dressed in a pool-colored sleeveless bateau neck top, Stephens says, “I’ve gotten the comment from outside counsel that it’s very stressful to decide what to wear to my company.” That anxiety is understandable, given bebe’s reputation as a superchic women’s clothing retailer. The company’s business model is simple — find the most cutting-edge fashions, copy them, and bring them to the masses. Until this year, when bebe’s stock took a serious slip on the Wall Street runway, that formula had worked well, with the retailer posting an average growth of 37 percent over five years. You know a company is stylish when even the lawyer is cool. “There are mornings when I get dressed, and my husband says, ‘You don’t look like a lawyer today,’” Stephens says. “And it usually involves leather.” Beyond Stephens’s style, however, lies a lawyer with substance. After graduating from Stanford Law School in 1996 at the age of 25, Stephens joined the corporate and securities group of Gray Cary Ware & Freidenrich’s Palo Alto office. She was part of the four-lawyer Gray Cary team that handled bebe’s initial public offering in 1998. Seeing that Stephens’s work was smoother than a silk slip, bebe founder Manny Mashouf offered her the general counsel job during the IPO. Stephens turned him down, thinking that she was not yet dressed for success as a general counsel. “I was concerned that I wasn’t ready for it because I was just so junior,” Stephens says. Although Stephens may not have believed in herself, Gray Cary certainly was aware of the lawyer’s ability to serve stylish clients; the firm assigned Stephens another retail account and a fashion designer. “I can’t tell you how unusual it is to have fashion clients amid Silicon Valley,” Stephens says. At the beginning of 1999, six months after bebe’s IPO, Stephens decided it was time to jump ship. Even her supervising partner at the firm told her that bebe was the right move. Far from causing bad blood between Stephens and Gray Cary, the defection might have actually improved the relationship. “I became a client, so everyone was very nice,” Stephens says. “Probably nicer than if I had just been an associate.” Although Stephens earned the same salary at bebe as at Gray Cary, her six-month delay cost her dearly in stock options. At the time Stephens was first offered the general counsel slot, bebe’s stock was selling at $11 per share. After Stephens’s wait, the stock had shot up to over $32 per share. With a slight chuckle, Stephens says, “It ended up not being a very wise financial choice.” That would be one of Stephens’s few missteps along the road from associate to general counsel. Of course, at some points during the transition Stephens felt more like she was wearing studded heels than a seamless dress. Says Stephens: “Not only are you the only lawyer, but you’re also ‘The Lawyer.’ People carry so many preconceived notions of lawyers. ‘Lawyers stop deals’ and that kind of thing.” In addition to overcoming those biases, Stephens had to convince her chic coworkers that being one of the youngest general counsels of any company traded on the Nasdaq would not hinder her performance. In fact, Stephens says her age jibed well with bebe’s younger employees, nipping potential human resources problems in the bud. Opposing counsel were another story. Says Stephens: “Every now and then I get ‘I’ve been doing this for 30 years.’ That one I love, because I just go, ‘I wasn’t born yet.’” Stephens’s youth did not prevent her from immediately cleaning house. “I audited every department for potential liability. They really liked that,” Stephens says with more than a hint of sarcasm. “Maybe that wasn’t the best way to start off, but it was a great way to learn the company and assess the risks.” The ax fell on many of bebe’s outside law firms. She fired three of the domestic firms and “ten to 15″ of the firms doing bebe’s international work. “I did a lot of analyzing of the outside counsel, whipping those folks into shape,” Stephens says. The law firms, which had not been supervised by an in-house lawyer for half a year, had grown fat. Says Stephens: “It’s amazing how the outside counsel, without an inside attorney, were not focusing, while running up bills.” Amidst the firings, Stephens stayed true to her roots, keeping Gray Cary while cutting most other firms loose. That kind of decisiveness quickly caught the eye of bebe’s upper management. Earlier this summer she assumed the title of “vice president of legal and business affairs.” Her duties include negotiating and drafting licensee agreements to sell bebe products to stores like Bloomingdale’s and Nordstrom’s, as well as developing bebe’s e-commerce and international expansion. In spite of bebe’s early success, the fashion gods are not smiling on the company at the moment. While annual revenues enjoyed enormous growth throughout the 1990s, bebe has suffered double-digit losses in same-store sales throughout the summer. The company’s stock has plummeted this year, losing two-thirds of its value. (bebe’s stock was trading at $11 5/8 on August 11.) Stephens says the falloff was partly caused by bebe missing some key fashion trends last season, including colored bottoms and a resurgence of denim. In addition, marketing director Heather Vandenberghe exited the company in January, and discount retailers have introduced fashion-forward designs to compete for bebe’s customers. But Stephens says she is not worried, pointing out that the company’s 125 U.S. stores still post better sales-per-square-foot than most competitors. Says Stephens: “The strength of any management team is best borne out when business is tough.” Stephens, who will celebrate her thirtieth birthday in October, has no plans to return to private practice. For Stephens, working at a cutting-edge fashion retailer is far too engaging to walk away from, and the clothing discount she gets is a pretty attractive perk. Now wearing bebe almost exclusively, Stephens has developed fashion tastes that are far too risque for a law firm. After all, firms frown on pink camisoles, and leather boots are strictly forbidden — unless the lawyer is a man.

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