The end of the office-based nine-to-five and access to global talent
Many fund managers in the alternatives space were previously office-centric, with some going so far as to largely rule out working from home. The pandemic therefore brought about a fairly seismic cultural shift in some firms, where the swift transition to the entire business working from home proved much more successful than anticipated.
Most of our participants reported that agile working has been embraced at all levels, with a number observing a particular mindset change among senior team members. With the viability of a more flexible model now demonstrated, and the tech to sit behind that fully present and stress-tested, few anticipate a wholesale return to offices. Whilst hiring managers acknowledge full-time remote working is likely to be rare when offices are able to reopen, they envisage office environments to undergo significant changes, transitioning to places for collaboration with little expectation of a return to a nine-to-five, five-day-a-week model.
This change creates new possibilities for accessing global talent in future, making it easier to bring in those beyond the typical 25 mile commuting radius and unavailable during ‘normal’ office hours. Our roundtable attendees observed that secondees, contractors and legal consultants will no longer be expected to necessarily be in London on a daily basis, but will instead find a new openness to seamlessly plug in from anywhere, creating much more flexibility on resourcing and unlocking the potential of truly global talent pools.
Investing in temporary team members pays dividends
Bringing in short-term legal resource in the alternatives industry is challenging because of the complex and often unique nature of the fund managers themselves, many of whom now operate across asset classes. This complexity requires secondees and legal consultants to quickly get up to speed on fund structures, special purpose vehicles and management structures before even looking at cultures, deal terms and precedents.
While remote working does not make this on-boarding process any easier, the heads of legal felt a solid investment in this process is becoming invaluable longer term. A strong collaboration between the internal team and consultants is also now critical to developing that 360 degree view – legal consultants will often continue to dip in and out of the business moving forward, or return to law firms and share that knowledge, creating dividends over time.
Proving the case for permanent headcount through interim resourcing
As an industry, the alternatives space is renowned for running lean operations, with a broad preference for outsourcing rather than insourcing. With legal departments expanding, access to flexible resourcing options is aiding that scaling process, with our roundtable participants observing a benefit in using consultants to help establish exactly what resource is needed where, helping build a case for more permanent recruitment.
Many fund managers have traditionally relied on law firm secondees to support their legal teams with short-term resourcing challenges, but now find it difficult to fill posts in busy areas at busy times – one GC commented on the challenges of finding a restructuring secondee during 2020.
Diversity and inclusion will be a growing focus across legal departments
Several participants noted diversity and inclusion was high on the agenda for their investors and was a growing focus for their firms.
Fund managers in the alternatives space say they are now increasingly looking to their third-party relationships as they seek to push for more diverse representation both internally and externally. One GC explained that the discussion in their teams is moving to look at ways that they can leverage their buying power and align their interests on diversity and inclusion with their law firms and other external service providers.
Right-sizing the legal team is a growing challenge, particularly across borders
With alternative investment firms typically staffed thinly, a number of our participants talked about their legal teams being stretched globally. This is particularly challenging outside the US and Europe: one GC highlighted China as a market that is currently a focus for many asset managers, with a fast-moving regulatory environment that makes scaling up on the legal side particularly challenging.
Observing that it can be difficult to source talent in China, and in other growth markets like India, several participants at our roundtable talked of the benefits of being able to access flexible resources, including Mandarin speakers, as they move to develop their in-house capabilities around the world.