Shortage of qualified people in the Luxembourg fund industry

The shortage of qualified workforce has made headlines in the media for the past couple of years. According to the ADEM, almost 13,599 jobs were open at the end of last June, which was a record high. Most players of the financial sector have described finding it difficult to discover skilled workers for years, and law firms make no exception.

There is a struggle to find qualified lawyers, but there is an even bigger struggle to find experienced qualified lawyers, which make internal trainings even more paramount.  

Trainings are an investment for the future…

With an average of 50 junior hired every year within our firm, we feel that investing our time in trainings is more important than ever. Investment funds and private equity are not subjects that are often taught at university, and newly qualified lawyers joining a Luxembourg firm will have to learn everything from scratch. Sharing experience and knowledge to the younger generation about the industry and our clients’ business helps them to better understand our clients’ needs and thus encourages them to give a more enlightened type of advice, taking into account what is of importance for our clients’ business development. 

We also have to acknowledge that the aggregation of regulatory constraints and new rules has made it difficult for junior lawyers to apprehend the subject and that being a good fund lawyer now is more difficult than what it was ten years’ ago, simply because of the exponential increase of the regulatory landscape. The news rules on marketing or sustainable finance are just a few examples, and we expect even more in the future!

Having good civil, commercial and corporate law knowledge is important, but trainings on all aspects of the investment funds industry is crucial to make sure junior lawyers can serve clients better, with an overall understanding of the transaction, but also of the business. It is essential that law firms share cross-practice general legal knowledge to make sure junior lawyers understand the life cycle of a fund, from the setup, fundraising to the acquisition (including fund finance, acquisition finance and tax considerations). Sustainability is, for instance, a very engaging topic for both young newcomers of our firm and clients alike. ESG compliant investments are becoming mainstream and a requirement for most institutional investors.

It is in such context that we decided to launch the Loyens & Loeff Private Equity Academy, a yearly programme that will provide junior lawyers with a global overview of the Private Equity industry as well as cross-practice general legal knowledge to understand the life cycle of a Private Equity fund. The 2023 edition was articulated around 7 sessions of around an hour each, which dealt with the main components of Private Equity Luxembourg funds and their M&A transactions through Luxembourg holding acquisition structures including specific topics such as LP and non-LP co-investment structures, management incentive programs and carry structures.

We strongly believe that such type of training is beneficial for junior lawyers’ long-term development and our target is to make sure they all become not only good technicians, but also well-rounded advisers!  

… And for clients!

Law firms often give access to these trainings to their own clients, who are facing similar challenges, with an increasing number of newcomers to train.

Training clients’ employees to better comprehend the industry and its regulations enables us to provide tailor-made solutions to fund managers, investors or financial companies in their endeavours. From junior to senior, clients will feel more at ease when their requests are handled, as true know-how has been shared with them. 

We are developing specific trainings for our clients, with different degrees of complexities and different approaches, to match their demand. 

This will play a role in return on the reputation of the Luxembourg market in terms of quality of services and understanding of asset managers’ needs but will also provide (in the long run) a solution for this shortage of qualified workforce.

This article was first published by Paperjam.