The crypto industry has seen a surge in the demand for lawyers. This is especially true of newbies who need to find someone that can help them navigate what seems like an impossibly complex legal system as well as represent them in court if they get caught up in any regulatory action. The shortage is so severe, one company even created a bot that helps people search for contract law vacancies on LinkedIn and then offers free consultations.
The “crypto recovery lawyer” is a term that has been used to describe the people who are in charge of recovering lost or stolen crypto assets. The industry is having a hard time finding enough lawyers, which means that there are many cases where people have lost their money.
As the cryptocurrency business confronts greater regulatory pressure and seeks to be recognized by and become part of mainstream finance, it is stepping up attempts to acquire more legal expertise.
Industry players say crypto exchanges and corporations are recruiting lawyers from law firms and other crypto companies, bringing them in-house to assist negotiate a developing regulatory environment while lowering outside legal costs. Law firms, which are losing partners to in-house jobs, are bolstering their crypto practices in order to retain that important knowledge.
The rising need for attorneys is also a watershed moment for cryptocurrency, whose early proponents were generally skeptical of regulation. The business has been quickly developing in the expectation of attracting more mainstream investment possibilities, and many people are supporting the position that regulatory clarification is needed.
While the SEC hasn’t taken any substantial steps against large crypto exchanges, it has threatened to punish firms that provide crypto loans. Dion Rabouin of the Wall Street Journal discusses why this particular aspect of the crypto market has sparked such a significant response. Mark Lennihan/Associated Press photo
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“The consensus in [the crypto] area is that you need to have someone in-house early,” said John Wolf Konstant, a senior consultant at Whistler Partners, a technology-focused legal hiring agency. “You need someone there to assist oversee the process and make sure everything is in order from the start, especially because investors will want it.”
Salary increases in the crypto field are outpacing those in the wider in-house legal market, especially for senior-level roles, according to Mr. Konstant. At the absolute top of the market, total yearly packages, including tokens and stock, may reach seven figures, he continued.
In February, Kraken’s chief legal officer, Marco Santori, tweeted that the crypto exchange in San Francisco was aiming to employ 30 attorneys in the next three months. He went on to say that he would want to recruit 60 people, but “honestly, I don’t know how to accomplish it.”
“Since my statements in February, Kraken Legal has been on pace with its recruiting plans,” Mr. Santori wrote in an email this week. “We’re bringing in the top attorneys from conventional finance and white-shoe companies.” The brain drain is genuine, and we’re thrilled about it.”
The HBAR Foundation’s principal legal officer, Jorge Pesok.
Jorge Pesok (photo)
Lawyer Jorge Pesok recently joined crypto-based nonprofit HBAR Foundation, which gives out grants to projects, as its chief legal officer after about 10 months as general counsel and chief compliance officer at crypto exchange Tacen Inc. Before Tacen, he was at law firm Crowell & Moring LLP.
“The market is hot,” Mr. Pesok said, adding that he had four job offers before deciding on HBAR, partly because of the organization’s dedication to sustainability, yet he wasn’t even seeking for a new job. “Everyone is seeking for expertise,” he added, adding that given the complexities of cryptocurrencies and the regulatory scrutiny surrounding the business, even the simplest awards made by HBAR need assistance.
According to Recruiter Whistler Partners, about 10% to 15% of all recent placements have been in the crypto or financial technology sectors, with firms hiring for both in-house counsel and law firm positions, with firms hiring for both in-house counsel and law firm positions, according to Mr. Konstant, who was a lawyer before moving into the recruiting field. During the last year, he said the firm was working on six to ten in-house legal assignments in the blockchain or fintech field at any one moment.
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Mr. Konstant said that there is fierce rivalry for all legal expertise across industries, with in-house applicants receiving numerous offers. But “it’s more evident in the crypto world,” he added, adding that people with specific understanding of crypto and prior experience working at law firms that specialize in crypto or having developed in-house crypto-focused teams are in high demand.
Firms in the crypto industry, like most other industries, would like to recruit someone with relevant direct expertise, but most plan to teach new legal personnel on the job as they learn about the many projects that each business does.
Gregory Lisa, a former partner at Washington, D.C.-based law firm Hogan Lovells, joined decentralized finance-focused business Element Finance as its first chief legal officer in December. Mr. Lisa, who previously worked as a regulator for the Financial Crimes Enforcement Network, said his new job at the 25-person startup, which develops open-source protocol for fixed- and variable-yield tokens, allows him to focus on one company’s growth rather than a portfolio of clients as an external counsel. Engaging with regulators and law enforcement, as well as addressing internal legal concerns, are now among his duties.
Cathy Yoon is the chief legal officer of MPCH, a crypto technology firm.
Lucas Hoeffel (photo credit: Lucas Hoeffel)
Mr. Lisa said, “You really have an opportunity to create the script and interact with businesses at an early stage,” adding that he had kept on as a special consultant for Hogan Lovells to assist with the transition.
After less than a year as general counsel of crypto exchange INX Ltd, Cathy Yoon joined crypto technology startup MPCH as its chief legal officer at the end of March. She said that she had no intention of changing employment, but that she was interested in assisting in the development of blockchain infrastructure that would make it easier to support and onboard more blockchain assets, which is now not achievable. Her day-to-day responsibilities thus far have included handling internal business affairs such as legal entity structure and intellectual property issues, as well as coordinating meetings with possible investors and clients.
Because crypto startups want to bring in attorneys early on to collaborate with tech teams on what issues their products are supposed to address, the increasingly competitive employment market need more lawyers who are “extremely commercial,” according to Ms. Yoon. “Lawyers have evolved from being considered as ‘keeping us out of trouble’ to crucial members of the management team,” she added.
Daniel Forester, a partner at Orrick Herrington & Sutcliffe and a leader of its fintech practice.
Photo: Orrick Herrington & Sutcliffe LLP
Law companies are beefing up their crypto services as well, sometimes attempting to purchase an entire staff from other firms, some of which are already suffering from a skills scarcity.
Orrick Herrington & Sutcliffe LLP is looking to build “a complete offering” of services for blockchain firms, from helping with entity formation to advising on regulatory issues, according to Daniel Forester, a partner at the firm and leader of its fintech practice. The law firm, with roots in the traditional technology sector, currently has about 20 partners leading its crypto-related work and is looking to lure current regulators and candidates or teams from other law firms or in-house positions, he said.
In the face of rising competition for legal talent, Mr. Forester said Orrick is focusing on retaining employees, including associates. He said of the legal industry as a whole, “There are more positions than people.” “Retention is the key to long-term success.”
Mengqi Sun can be reached at [email protected]
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The “what does a crypto lawyer do” is a question that many people have been asking. The answer to the question is that they are lawyers who specialize in the cryptocurrency industry.
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