As more hedge funds appear on the scene, demand is growing for lawyers who can advise the industry, say Wall Street recruiters.
In fact, competition for lawyers with the appropriate financial services experience has become so heated, it's not uncommon for law firms to require their hedge-fund clients to agree not to poach from their staff, says Adam Zoia, managing partner of Glocap Search and head of the firm's hedge fund practice. "Most law firms servicing hedge funds are perpetually short on candidates," he says. "They're desperately seeking staff."
Hedge fund attorneys command a 20-percent salary premium, often awarded at bonus time, according to Alan Johnson, a New York City-based compensation consultant. Salaries for in-house counsel vary widely, depending on the fund size and attorney experience. A small fund may pay about $300,000, while salaries for in-house counsel at the largest could eclipse $1 million, Johnson says. At law firms, compensation often depends on the firm and the individual's professional experience.
Increased scrutiny is pushing funds themselves to rely more on in-house counsel. "Internally, hedge funds have become more like a proper business and most have in-house counsel," Zoia says. "There is more and more legal work to be done."
While specific experience with hedge funds isn't necessarily required for a job as in-house counsel or to work for a law firm's hedge fund clients, experience with financial services, particularly in a transaction-related field, is a must. "If you've been a securities lawyer or in M&A, you can pick it up," Zoia says. He notes "there is a sufficient supply of lawyers, if funds are willing to hire people without the exact, precise experience."
Kenneth M. Rich, a recruitment consultant for A.T. Kearney Executive Search in New York, says smaller funds without in-house counsel remain well-served by private law firms. "There's a plethora of qualified lawyers who cover the financial industry from large to small. Those firms are experts in this area," he says. "Many well-represented, well-known firms are coming to the industry." In addition, some individuals at work in hedge funds have law degrees and may be more sensitive to legal expectations or requirements, without acting as legal advisors, he says.