By studying legal and compliance staffing, one can see certain trends emerging – with respect to the makeup of legal and compliance teams at hedge fund managers and other private fund managers, and with respect to compensation. In a recent interview with the Hedge Fund Law Report, David Claypoole, founder and President of Parks Legal Placement LLC, shared detailed insight into the overall market for and compensation of legal and compliance personnel, including general counsels (GCs), chief compliance officers (CCOs) and junior legal and compliance personnel. In the first article in this two-part series, Claypoole discussed the factors that affect GC and CCO compensation; the current market for compensation of legal and compliance personnel; how compensation of dual-hatted employees compares to compensation of single-role GCs and CCOs; trends in how GCs and CCOs are viewed by employers; compensation of junior legal and compliance personnel; what makes an “exceptional” legal or compliance candidate; and how compensation of hedge fund GCs and CCOs compares to compensation of similar personnel at private equity and other types of managers. In this second of two articles in the series, Claypoole shares the results of his research and experience on the relationship between fund performance and compensation; trends in legal and compliance compensation, including with respect to junior compliance personnel; investments by legal and compliance personnel in the funds managed by their management company employers; and reporting lines for GCs and CCOs. On compensation, see also “Hedge Fund Manager Compensation Survey Looks at 2014 Compensation Levels, Job Satisfaction and Hiring Trends,” Hedge Fund Law Report, Vol. 8, No. 3 (Jan. 22, 2015); “Annual Greenwich Associates and Johnson Associates Report Reveals Trends in Compensation of Investment Professionals at Buy-Side Firms,” Hedge Fund Law Report, Vol. 6, No. 48 (Dec. 19, 2013). On reporting, see “To Whom Should the Chief Compliance Officer of a Hedge Fund Manager Report?,” Hedge Fund Law Report, Vol. 4, No. 22 (Jul. 1, 2011). Claypoole will expand on the insights in this series at GAIMOps Cayman, to be held in the Cayman Islands from April 26-29, 2015. For more information about GAIMOps Cayman, click here.