Asset allocators, such as pension funds, "have become more sophisticated and expect more from the infrastructure of the firms they're investing in. They expect there to be some legal type or compliance type filling a role in the firm," Nadel said.
Newly registered firms are also subject to SEC inspections, generally within two years, sometimes followed by "deficiency letters" that detail weaknesses, Jordan said.
"You want to have a lawyer in place to help you prepare for these exams," Jordan said. "Those letters have always generated a re-look at whether the procedures and staffing is efficient."
Gary Watkins, a partner at the ACA Compliance Group, a regulatory compliance consulting firm, said he foresees additional legal hiring by financial entities.
"Increased regulation leads to more responsibilities and in turn firms may look to increase their resources by hiring additional compliance personnel," Watkins said, noting that a majority of people hired into compliance at investment adviser firms are attorneys.
Hedge fund legal recruiter David Claypoole at Parks Legal Placement predicted that over the next 18 months "there is going to be a strong demand for legal and compliance positions at asset managers."
Dimitri Mastrocola, a recruiter who heads the financial services legal search practice at Major Lindsey & Africa, said up to half of the New York searches Major Lindsey has performed in 2012 on behalf of financial services organizations have a compliance focus, either seeking a compliance officer or CCO, general counsel, or staff attorney with compliance background. It wasn't like this a few years ago, he said.
At larger funds with complex investment strategies, a CCO who is an attorney can earn from $750,000 to $1 million, including base pay and bonus, Mastrocola said. A senior associate going in-house to a hedge fund or private equity firm could expect total compensation to be similar as under a law firm, in the $250,000 to $400,000 range, Mastrocola said.
David Sobel, a CCO at broker-dealer Abel/Noser Corp. and former private practice attorney, said as the web of regulations has become more complex, his workload has expanded by about 25 percent.
Walter Zebrowski, chairman of the nonprofit Regulatory Compliance Association, said the new regulations will "translate to tremendous amounts of employment opportunities" for young lawyers and transitioning professionals if they have the right expertise.
"In the last few years, compliance has become a new profession" within financial services, noted Zebrowski, an attorney and CPA who runs an alternative investment firm.