Hedge Fund Lawyers

Note: I don't want to hear that I made a mistake going to law school lol. I'm comfortable with my decision and I have no interest in working in high finance in a technical capacity, but I do have an interest in working in high finance in a legal capacity.

Making this thread because I see a lot of lawyers working in Hedge Funds as Counsel and there seems to be a lack of information on how to break into these jobs.

Questions for Hedge Fund Lawyer (Specifically those that work for hedge funds or are doing secondment at a hedge fund)

  • Is there a pathway to work for a hedge fund without firm experience?
  • Have you seen a hedge fund take summer students for legal work?
  • What type of work do you actually do on a daily basis? Is it similar to the in-firm work?
  • Is the pay similar to in-house exit opportunities?
  • What made you go from firm work to in-house at a hedge fund?
  • For those that left, What made you leave the hedgefund? 

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Comments (20)

Most Helpful
  • Principal in PE - LBOs
Jan 11, 2021 - 11:23pm

Not sure if being a hedge fund lawyer is super exciting to be honest. I'd imagine it's a ton of compliance work and maybe some fund formation stuff. 

Jan 12, 2021 - 2:35pm

Hedge fund legal work is entirely compliance and fund formation.  Both utterly miserable for the reasons laid out in your PE post.  Although I have less experience with hedge fund legal work, it is probably less exciting and more mind-numbing, if such a sorry state of affairs is possible (only upside is predictable hours).  It is odd you are posting these questions on WSO, it is like asking a bunch of C/B-list actors how to get a job as a janitor on a movie set.  Sure, maybe they have some HR contact for a job referral, it is just not the right place.  They are above you and always will be with that scarlet JD.

Jan 12, 2021 - 3:41pm

There's a distinction between in-house counsel and transactional counsel at a lot of funds. In-house counsel is generally limited to compliance and fund formation work. I have never seen anyone hired directly out of law school for those kinds of roles, usually they hire people who have worked in a fund formation practice at a biglaw firm for several years. I think you should consider whether that is what you really want to do. Transactional roles are usually reserved for people who have experience in a particular area - finance, restructuring, M&A, etc. Those roles are fewer and further between, so it takes a lot of luck to find them. I have seen a handful of funds hiring lawyers directly out of law school for more esoteric transactional practices. But honestly I'd advise against it if that is the way you want to go - if you really want to be a lawyer, then work at a firm for a few years and then make the leap. 

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Jan 12, 2021 - 10:56pm

Our compliance director is the most miserable SoB. One of our PMs used to bully him around the office. We would have felt bad for him if he wasn't the most power-hungry little tyrant to ever scream at a junior analyst for accidentally accepting a gift from a broker without his permission.

Do you want to be him?

Big4 Audit --> TMT L/S

  • 1
Jan 12, 2021 - 11:44pm

OP, this is likely the level of respect you will achieve if you keep insisting on attending law school for a non-litigation role. YMMV, some do fine in transactional work. Overwhelming odds it will not be you. 
 

Jan 13, 2021 - 12:08am

Hedge funds are very varied organizations in terms of what responsibilities people have. I think the job usually isn't that interesting depending on the fund but the hours are probably lowkey and you're getting payed pretty well. My dad did some really minor legal work once for the GC of a hedge fund decades ago. That GC (and also at the time a Managing Partner and the CAO) directly negotiated the partial sale of the fund to JP Morgan for $1.4 billion in the mid 2000s. He also started and sold a legal consulting firm to Duff & Phelps. He did start out briefly at a big law firm in the derivatives group. I think that's probably one of the coolest careers you can have as a corporate attorney so it's not like being in-house at a hedge fund is necessarily a dead end. Depending on the fund, you can build a lot of responsibilities for all sorts of key stuff because the department divisions can be a lot less structured.

Edit: to add on to your questions, working at big law firm is usually miserable and it's super hard to become partner so that's why people go inhouse. In house hours are almost always way less and the pay decent (like 300k) whether you're at a corporate or a solid hedge fund. You can probably intern at a hedge fund as a 1L but you want to be a Summer Associate at a big law firm the next summers because you get paid really well and get credibility (that's probably the only way to get a legitimate inhouse counsel role at a fund right out of law school). Where you really want to intern as a 1L is the SEC if you want to go in house at a hedge fund in your career. SEC graduate program is a good path to becoming inhouse at a hedge fund too if you don't mind getting paid way way less than stomaching 2 years at a big law firm.

Array

  • 1
Jan 13, 2021 - 8:58am

I would be wary of career paths taken by those several decades older within the legal "profession."  Back in the 80s, attorneys were relied upon for substantive, financials-based M&A advice.  Much of current best practices and precedent were not formed, forming creative outlets.  That is all gone now in any law related to financial services.  With each passing year, arranging that sale becomes less and less likely for an attorney if they even make it to GC (another unlikely outcome, highly competitive for attorneys).

You are correct people move in house for a better lifestyle, this is not always the case though. Plenty of F500s work attorneys to the bone, they are fired or laid off if the company is taken over, the work is rote (you will work on the same kind of contract 50-60 hours a week), and the pay is not close to 300k. The overwhelming majority of associates will leave big law making a good clip less than 300k, and many will take a 50% or greater pay cut to barely above 100k.  Room for advancement and promotion is limited. Your GC and your direct manager will likely have been partners at a large firm and either left for stock packages, actual autonomy and lifestyle (which you do not have), or they were forced out of big law (partnerships are de-equitizing).  Because of up or out, a low low six figure salary should be viewed as the norm by law applicants, not 190k. Paying 1L summer jobs evaporated after 2008 outside of diversity programs, this includes Yale and Harvard Law. Working for the SEC is less exciting than watching white paint dry, those who did it 1L in various offices geographically tended to regret it. 
 

tl:dr there is a lot of misinformation about legal careers and trajectories, it is worse than the most cynical WSO 19 year old college sophomore can imagine 

  • Analyst 2 in IB - Gen
Jan 13, 2021 - 7:01pm

benjokal

That GC (and also at the time a Managing Partner and the CAO) directly negotiated the partial sale of the fund to JP Morgan for $1.4 billion in the mid 2000s. 

Sounds like Highbridge

  • Investment Analyst in HF - Other
Jan 13, 2021 - 5:23pm

Thought I should comment as an ex-restructuring lawyer, now business side at a distressed fund. It does happen on the distressed / credit side given there is value add in knowing process / docs / deal dynamics.

In terms of working as an actual lawyer in a fund, there is an enormous difference between being transaction counsel and more strictly "in-house". The former is basically a managerial version of your usual M&A / restructuring lawyer - the latter is very different and it's really all fund formation and compliance.

  • Associate 1 in IB - Restr
Jan 13, 2021 - 7:19pm

How are you finding the switch from both an interest and lifestyle perspective? As someone who went from restructuring lawyer to rx ib I do find this side of advisory more interesting but obviously hasn't come with any material changes in lifestyle (if anything possibly worse now than before).

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