The US legal market has seen a high level of activity in the first quarter, with numerous lawyers joining new firms and firms themselves opening new offices.
Hogan Lovells’ co-head of global fund formation, David Winter, explains what’s driving the hiring spree in private equity.
“We’ve moved into a compliance-focused environment, with Dodd-Frank, ILPA-driven enhanced reporting and transparency, and increased SEC enforcement in recent times. Clients are spending more time on compliance, and requiring legal advice in that process,” Winter told pfm.
But Winter was cautious about the possibility of any radical regulatory changes under the new administration.
“In terms of the regulatory environment, I think the sensible thing to do [for private equity firms] is to prepare for business as usual. Nobody should be firing their CCO or ditching their compliance policies. The compliance landscape in the US is driven as much at the staff level of the SEC as at the political level, and our operating assumption is that changes, if any, will be modest and gradual. That being said, some practical change might occur simply owing to expected SEC resource constraints,” he said.
A buoyant market in primary and secondaries deals has meant lawyers are in demand.
“We have seen increased legal needs as the result of the natural maturation of the industry and the fact that many of our clients are raising more money,” Winter said. “Additionally, the secondaries market is more robust and there’s more of an interest in co-investment structures, which are both yielding a greater need for private funds legal services,” he added.