You can learn more about hedge fund law by reading books such as Hedge Fund Law and Finance: Regulation, Compliance, and Risk Management (American Bar Association, 2017) and U.S. Regulation of Hedge Funds (American Bar Association, 2014). Take hedge fund classes in college, and join finance and investment clubs. Additionally, professional associations—such as the Managed Funds Association and the Association of Corporate Counsel—provide information on hedge funds and legal careers at their Web sites.   

Lawyers provide a wide range of legal services to hedge funds. One important task is helping to establish a new fund. Lawyers work closely with the managing partner to decide how to best structure it. They ask questions such as: Who can invest in the fund? How will it be marketed to investors? Will the agreed-upon structure be in compliance with applicable laws? Will the fund be set up as a general partnership with a limited liability company (LLC) as the general partner, or will two LLCs be set up, with one LLC acting as the manager of the other? After answering these and many other questions, it’s on to drafting an operating agreement, a limited partnership agreement, a private placement memorandum, and a subscription agreement, among other documents and steps. As you can see, there are countless things to consider when starting a hedge fund, and these steps need to be handled by a lawyer who is experienced in hedge fund law—especially because tens-of-millions of dollars are at stake if errors are made during the process.   

Job responsibilities for hedge fund lawyers vary by the size of the firm and other factors. A lawyer at a small hedge fund may have more compliance responsibilities and even hold the title of chief compliance officer in addition to serving as general counsel. Larger firms employ a higher number of lawyers (and usually have a separate compliance department). In this setting, lawyers often have more specialized duties based on their experience and expertise. 

Hedge fund lawyers perform a wide range of duties. In the areas of consulting and advisory services, they analyze legal and structural risks; provide analysis and advocacy regarding complex derivatives and structures products; assist during the restructuring or wind-down of funds; provide legal counsel regarding tax and general compliance issues; provide legal vetting of new product offerings; offer legal expertise regarding complex investment strategies (such as hybrid hedge fund/private equity funds); and advise clients about laws such as the Securities Act of 1933, Securities Exchange Act of 1934, Commodity Exchange Act of 1936, Investment Advisers Act of 1940, Investment Company Act of 1940, Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010, and other national and state securities laws. They also do a lot of writing in the course of their workday. Lawyers draft and negotiate hedge fund documentation; respond to inquiries and enforcement actions by the SEC and the U.S. Department of Justice (including conducting internal investigations, responding to subpoenas for documents and testimony, and determining whether to litigate or settle enforcement actions); and drafting internal operating agreements and profit-sharing arrangements for partners. Hedge fund lawyers also travel to courtrooms to represent hedge fund management firms during legal proceedings. They also keep their skills current by participating in online and in-person courses, attending seminars, and staying up to date with regulations created by the Securities & Exchange Commission and other regulating bodies.