Navigating the Talent Pipeline: Insights from the HFM European Legal Summit 2024.

The With Intelligence HFM European Legal Summit 2024 served as a dynamic hub for legal and compliance leaders in the European hedge fund sector. Over two days, attendees explored the challenges and opportunities driving the industry’s evolution. Among many of the compelling discussions was a panel titled, ‘An Eye to the Future: Where Is Legal and Compliance Talent Coming From?’, which addressed pressing concerns around team structuring and talent management.

The talent pipeline challenge

Legal and compliance recruitment is experiencing a complex balancing act. According to insights shared during the session, salary expectations for newly qualified (NQ) lawyers and increased competition for skilled professionals have pushed fund managers to rethink their hiring strategies. Harry Rogers, Head of Compliance and Legal at One Ten Associates, highlighted these issues while questioning the sustainability of the current talent pipeline.

The panel debated whether the quality of candidates entering the hedge fund sector matches historical benchmarks. They explored the implications of trends like the increased demand for legal professionals with specific transactional experience, particularly in banking, leveraged finance and private debt/credit. Attendees noted a rise in smaller fund managers hiring their first in-house lawyers and compliance professionals, signalling shifts in hiring practices across the sector.

Training and team development: A renewed focus

To combat hiring challenges, firms are focusing on internal talent development. Mentorship programmes and remote learning tools are being leveraged to upskill both junior and seasoned professionals. Harry also pointed out the challenges of embedding company culture within hybrid and remote working models, which remain a standard across many firms.

Hybrid working has necessitated new controls and processes to maintain team cohesion and compliance standards. These measures not only enhance productivity but also address employee retention, a critical issue in a competitive market where general counsel (GC) roles often see tenures of only three to five years.

Evolving legal roles and hiring trends

As the legal recruitment landscape within the alternative investment sector continues to evolve, firms are adopting innovative strategies to attract and retain top talent while addressing shifting industry demands. Emerging legal hiring trends that reflect the industry’s adaptability include:

• Tailored roles: interim hires and flexible job structures, such as ‘try-before-you-buy’ approaches, are gaining traction. These offer firms greater flexibility while ensuring candidate compatibility.
• Demand for transactional expertise: legal professionals with experience in banking, leveraged finance and private practice are in high demand, particularly within private credit/debt funds.
• Paralegal support: funds are increasingly hiring paralegals to manage growing administrative workloads.
• Global movement: there is a notable interest among professionals for overseas roles, particularly in the Middle East, driven by the expansion of fund managers in the UAE.
• Hybrid working: flexibility in working hours and remote options continue to shape hiring decisions.

Compliance market trends

The compliance recruitment market remains active across all fund sizes, with heightened demand for professionals with multi-jurisdictional regulatory expertise and technical proficiency. As previously noted, smaller funds are hiring their first in-house compliance specialists, often preferring candidates with legal backgrounds. As automation becomes a focal point, firms are seeking compliance professionals adept in systems for monitoring and reporting.

Looking ahead: Opportunities and challenges

The challenges in legal and compliance hiring are undeniable, but they also present opportunities for innovation. Firms investing in internal talent development, adopting flexible work structures and embracing automation can gain a competitive edge. Looking toward 2025, the recruitment landscape is expected to remain steady, with continued demand for legal and compliance professionals who possess niche expertise and a global outlook.

Collaboration as a cornerstone

This year’s HFM European Legal Summit underscored the importance of collaboration and knowledge-sharing across the hedge fund sector. As Harry Rogers aptly summarised, “The hedge fund sector is no stranger to complexity. By investing in the right talent and fostering strong team cultures, we can not only meet today’s challenges but also build the foundations for a more resilient future.”

For firms navigating these challenges, the summit provided a timely reminder of the importance of agility and strategic thinking in building successful teams.

To find out more about legal and compliance hiring trends and a look ahead to 2025, download our 2024/25 Compensation and Market Observations Report here. Or get in touch for support with your hiring needs.