Finding an in house legal role at a reputable hedge or private equity fund has not been this hard since 2009. Legal roles within funds are some of the most sought after across industry, they are the most lucrative and selective institutions that hire in house counsel. Certain asset managers and boutique banks straddle the marketplace in terms of how they operate (often taking a multi-strategy approach) and can also provide fantastic opportunities for fledgling in house lawyers.
It has never been easy to find work as a lawyer in the funds space, however a confluence of factors have materialised over the past 10 years that have made securing a coveted position more challenging than ever before.
Supply and demand; this is the broadest and most all-encompassing explanation as to why it is now more difficult to find a legal role at a top alternative asset manager.
-There are more lawyers who have worked for funds than ever before because of the maturity of the sector, they have “plug and play” experience. This largely closes the market to those from more traditional banking or other financial services backgrounds.
-The number of lawyers in private practice focused on servicing funds clients has grown disproportionately to the number of opportunities for in house counsel in the sector. Those private practice lawyers considering a move in house will therefore find very stiff competition for most in house funds roles they will be interested in.
-Failed fund; lawyers through no fault of their own may find themselves out of work or at an impasse in their career. The funds world is risky and with great risk comes great reward but the flip side of that means some shops will go out of business further resupplying the market with top legal candidates beyond that found through natural attrition.
- Multi-billion-dollar AUM funds often have no more than 10 lawyers working for them in total spread worldwide throughout their operation. London satellite offices of major US funds often have only one or two lawyers in London so the demand for new hires is comparatively small when taken in context of all legal hiring.
-US law firms have dramatically hiked pay in recent years. Only a small subset of funds provide parity or better for those on the top US rates in London. Historically when the disparity was not as great there would have been a greater number of “financially viable” positions to transition from private practice to a fund without taking a cut on compensation.
-Clients are becoming far stricter with their requirements shopping lists for candidates. As a knock-on effect of more lawyers with general buy side experience the demand for talent has narrowed to in many cases largely negate the need for a learning curve in any new role.
-In house hiring at funds has not followed the same trajectory in the US as it has in London. In the US funds are more “staffed up” with lawyers. The market consensus was that here in London we would follow suit albeit several years behind with a similar number of lawyers working in the funds space in house, this just hasn’t happened to the same degree.
The funds world has a near total opaqueness; from a financial perspective this is desirable for both the candidate and client (and recruiter) as there is no worrying about salary bands and keeping parity with your competitors in the same way there is at the big banks. There are of course groups of lawyers within the industry that conduct salary surveys within their space (I have helped to create these reports) the results vary wildly from fund to fund with no consistency once you get past about 4/5 PQE.
This opaqueness results in a lack of access to opportunity for prospective candidates and clients. Most lawyers I speak to within the sector would struggle to name two or three head hunters that may be able to help them with their job search or if they were hiring legal counsel for their team. The market is niche and there are only a small group of recruiters who focus on placing candidates in this world.
Notwithstanding the difficulties mentioned in this article to securing a top role at a fund it is possible with the right peer and recruiter network and enough time and effort to find a position or to hire the candidate that ticks all the boxes. It is important to take a pragmatic approach and connect with experts in the industry; such measures will undoubtedly serve to boost your chances of success in such a fiercely competitive market.
Author: Ken Collins is a legal and compliance search consultant and partner with Greenway Collins covering the EMEA region.