The investment management industry and the legal practices that serve it have experienced unparalleled growth over the last decade. The number, variety, and customization of new private funds and alternative investment products has flourished in ways few would have predicted 10 years ago. As a result, demand for law firm services in this space has never been greater and the leading law firm funds practices have never been larger or more productive. What’s more, with astonishing amounts of uninvested capital ready to be deployed, and a buyer’s market around the corner, the private funds industry is well positioned to continue its growth trajectory.
For a few very good reasons explained below, an increasing number of in-house funds attorneys are returning or jumping to law firm funds practices. My goal in this article is to educate current in-house funds attorneys (of which many have not considered a law firm transition) to understand the diverse and rewarding law firm career options available to them. In over 20 years of working at the highest level of both the in-house and law firm legal talent market, I have never seen a law firm practice area offer more opportunity in terms of subject matter diversity, career trajectory, and economics as compared to its in-house counterpart. Accordingly, I believe it’s important for current in-house funds attorneys to take stock of the present environment and appreciate the value their skillset currently commands.
The Substance of Law Firm Funds Work
As the investment management industry has expanded, law firms have been invaluable in taking the lead in creating and helping funds navigate sophisticated new fund products and structures. Having relied so heavily on outside counsel (and having seen the accompanying fees being paid!), many ambitious in-house funds attorneys have returned to law firms to get in on the action.
The variety of novel legal matters encountered by law firm funds lawyers is a function of having numerous clients with evolving businesses. Whereas a top law firm funds lawyer works across an inherently diverse set of matters, clients, and industries, an in-house funds attorney typically has one internal “client” to serve, for which day to day legal matters can often become mundane. Although the ability to work with a single client is one of the leading reasons (second only to lifestyle!) attorneys note for initially wanting to move in-house, the relative lack of subject matter diversity and limitations on expertise are causing many in-house funds attorneys to take a fresh look at leading law firm practices.
Career Trajectory and Compensation
Law firm funds lawyers that moved from in-house are happily observing that just as the substance of their work grows ever more diverse, so too have their law firm career options. Many in-house funds lawyers that move to law firms often experience a transformation from being a cog in the wheel of their former legal department into a more visible and valued member of the firm. From an economic perspective, they’ve also transformed from being an in-house legal expense into a law firm profit center and a business unto themselves.
Even for those in-house funds lawyers whose ultimate career goals are in-house, a mid-career stint in a top law firm funds practice can level up a resume and generate relationships that lead to more coveted in-house positions. Many in-house legal employers looking to fill their most senior roles are increasingly inclined to fill them with senior law firm attorneys, given those attorneys’ diverse subject matter experience. As a partner of one of the most active in-house legal recruiting firms in the country, I can attest to the fact that most law firm attorneys will obtain some of their best in-house opportunities from their own law firm clients. An experienced law firm funds lawyer will build numerous close relationships with potential in-house employers that can maximize career options and lead to a rapid ascension to a General Counsel seat.
The profit center status of law firm funds attorneys also translates into incredible compensation, with many law firm funds attorneys making significantly more than their in-house counterparts. In-house funds attorneys are increasingly feeling underpaid for the relative value of their skills within the investment funds industry, and law firms are the best place for such attorneys to capitalize on that value and reset their compensation trajectory.
Law Firm Culture Change
Although in-house funds attorneys that we talk to about law firm opportunities are usually very receptive to the points noted above, they frequently express concerns about law firm hours and culture. Many in-house funds attorneys started their careers as junior associates in law firms, and they are understandably wary of heading back to the grueling and unyielding law firm environments of their formative years.
Experienced in-house funds attorneys considering going back to a law firm should appreciate that they are not going back to the same job they left behind as a junior or mid-level associate. Instead, they will be taking on a more senior and substantially different role within the firm. The junior associate trainee position will have been replaced with business development initiatives and running point on client engagement.
It’s also important to note that in recent years law firms have endeavored greatly to accommodate the workplace culture demands of the modern workforce, especially in the form of remote working optionality and flexible schedules. In the same vein, law firm career advancement paths have significantly evolved. Many top law firms have moved on from the “up or out” systems that historically were used to clear the more senior ranks of associates. Instead, the expansion of multi-tier partnerships and highly paid Counsel-level positions has provided a greater variety of paths for funds lawyers to pursue within law firms. In-house funds attorneys that left law firms only three or four years ago will notice significant cultural changes across even the top-tier law firms.
Working With a Legal Recruiter
Experienced legal recruiters can be invaluable in helping a funds attorney capitalize on the career variables discussed above: substance of work, career trajectory, compensation, and workplace culture. Legal recruiters maintaining strong relationships with top law firm funds practices will know what is “market” and will have the standing to help negotiate on salary, bonuses, class year designation, partner track expectations, remote working arrangements, and everything in between. The investment management industry has never had as much to offer funds attorneys as it does in today’s legal talent marketplace, and current in-house funds attorneys would be wise to educate themselves on the current law firm landscape in order to make the most informed career decisions possible.
Scott Yaccarino is a Co-Founder and Partner at Empire Search Partners. Scott can be reached at syaccarino@empiresearch.com. To learn more about Empire Search’s law firm and in-house legal recruiting, visit our Legal Recruiting Services page.
