How to Hire Regulatory & Legal Talent Strategically During Market Uncertainty

Throughout 2026, regulatory & legal hiring in Europe has faced mixed signals. Economic uncertainty, geopolitical pressure, AI adoption, employment law reform, and new and evolving regulations are making hiring decisions more cautious. But demand has not disappeared. Chambers reported that Europe’s legal market is seeing fewer deals but more complex, high-value work, with clients seeking advice earlier as they respond to regulation, digital transformation, disputes, and scrutiny.  

Louise Shearing, Director, Head of UK Legal at Larson Maddox, gives an overview of current hiring sentiment across the field:

For employers, this does not mean freezing recruitment, but instead being more intentional about where, who, and how you hire - the market may be cautious, but it is far from inactive. 

Why leading regulatory & legal employers are hiring despite a cautious market 

The current market captures the pressure many private practice and in-house legal employers in Europe are facing. Decision-making has become more complex as businesses respond to AI regulation, employment reform, sustainability rules, financial services scrutiny, and wider geopolitical risk. 

This is not only a short-term response to uncertainty. The EU AI Act is moving through a phased implementation timeline, with general-purpose AI rules and governance requirements already in force from August 2025, and most remaining rules, including key transparency and high-risk AI requirements, scheduled to apply from August 2026.  

Employment law is also facing ongoing changes. In the UK, the Employment Rights Act 2025 became law on 18 December 2025, with changes due to take effect across 2026 and 2027. Across the EU, member states must implement the Pay Transparency Directive by 7 June 2026, creating new requirements around salary disclosure, pay information rights, and equal pay enforcement.  

While some employers are taking longer to approve permanent hires as they assess client demand, budget pressure, and the skills they will need for emerging regulation, others are using the same market to secure high-impact legal and regulatory talent before competitors re-enter at speed. Louise advises:

This is where strategic hiring during market uncertainty becomes an advantage. 

Where competitors are hiring in regulatory & legal markets

Leading regulatory & legal employers are focusing hiring into functions that manage risk, support revenue, improve governance, and strengthen long-term capability. Key areas include: 

AI governance and technology regulation

The EU AI Act is creating demand for lawyers who can advise on AI risk classification, governance, transparency, data protection, vendor oversight, product compliance, and liability. The FCA has also said it wants to support safe and responsible AI use in UK financial markets, with existing rules still applying to AI deployment. Louise adds: 

Employment law and workplace regulation

The Employment Rights Act 2025 and the EU Pay Transparency Directive are driving advisory demand around workforce change, pay transparency, worker status, employee rights, consultation, discrimination risk, and compliance. Recent UK litigation around gig economy worker status also shows how employment classification remains a live risk area for employers.  

Regulatory advisory and enforcement

Financial services, professional services, consumer protection, AML, data, and claims management remain active areas for regulatory scrutiny. The FCA recently launched a review into claims management practices linked to motor finance compensation, with the SRA also investigating law firms connected to those practices.  

Funds-adjacent advisory and private capital

Funds, asset management, private markets, and financial services firms continue to need lawyers who can support regulatory change, product structuring, governance, investor communications, and cross-border activity. The EU’s sustainability Omnibus package, which amends CSRD and CSDDD requirements, is also changing the advisory burden for companies and investors.  

Data privacy, cyber, and digital regulation

AI adoption, data protection, cyber risk, and digital operational resilience are increasing the need for lawyers who can connect technical regulation with practical business advice. This is especially relevant for firms advising regulated sectors, technology businesses, financial services, and platform companies.  

Senior legal leadership and legal transformation

In-house teams are under pressure to do more with leaner resources, manage emerging risk, and support commercial decision-making. This is increasing demand for General Counsel, Heads of Legal, regulatory leaders, legal operations specialists, and senior lawyers who can modernise how legal teams work.  

Why top regulatory & legal talent is more accessible during cautious markets

Periods of uncertainty often make in-demand professionals more open to new opportunities, but not because they are moving reactively. In the regulatory & legal market, uncertainty often makes candidates more deliberate about the long-term value of their role. 

Lawyers and regulatory professionals are continually reassessing whether their current employer can offer the right exposure, training, progression, and relevance in a changing market. This is especially true in areas such as AI governance, where demand is growing but the skills required are changing quickly. 

For employers, this creates a useful window of opportunity. The best candidates may not be actively applying, but they will engage with a role that offers specialist work, a strong platform, clearer progression, and exposure to the regulatory issues shaping the market. This is especially important at mid-level, where salary pressure, rising NQ pay, and unclear progression can make retention harder, states Louise:

The cost of pausing hiring for too long

A hiring pause might protect short-term cost, but in regulatory & legal teams it can quickly create capacity, risk, and succession issues. 

For law firms, waiting too long can leave practice groups under-resourced when client demand increases around AI governance, employment reform, funds regulation, data privacy, and financial services regulation. These are areas where clients often need specialist advice quickly, and where experienced lawyers cannot be hired or trained overnight. 

For in-house legal and compliance teams, delayed hiring can increase pressure on already lean functions. As regulatory change accelerates, gaps in legal, compliance, privacy, financial crime, and regulatory advisory teams can affect governance, response times, commercial decision-making, and the business’s ability to manage emerging risk. 

In an active market where specialist professionals are open to the right move, dissatisfaction can move quickly to a resignation, leaving gaps that cost time and money to fill while competitors can benefit from their expertise and experience. 

How to improve your regulatory & legal hiring strategy in 2026

Focus on aligning every hire to a business outcome. Depending on your needs, this could mean prioritising roles that support: 

• AI governance and technology regulation, including AI Act readiness, data protection, algorithmic accountability, product compliance, vendor risk, and technology contracting.  
• Employment and workforce change, including employment reform, pay transparency, worker status, collective consultation, discrimination risk, and internal investigations.  
• Regulatory readiness and enforcement response, especially across financial services, AML, consumer protection, claims management, ESG, sustainability, data, and market conduct.  
• Commercial and funds-adjacent advisory, including private funds, asset management, regulatory structuring, investor documentation, governance, and cross-border advisory work.  
• Legal transformation and operating model change, including legal operations, matter management, AI adoption, process improvement, and resourcing strategy.  
• Succession planning, particularly at Senior Associate, Counsel, Partner, General Counsel, Head of Legal, Head of Compliance, and senior regulatory leadership level.  
• Retention of high performers, where slow compensation growth, limited training and progression, or poor work-life balance could create preventable attrition.  

Checklist: key regulatory & legal hiring priorities for 2026

Hiring effectively during market uncertainty starts with focusing on where talent will have the greatest business impact. Practical steps employers can take now to plan for the rest of the year include: 

• Map critical roles against regulatory risk, client demand, revenue, transformation, and succession plans.
• Identify where competitors are still hiring.
• Benchmark compensation before launching a search.
• Review progression, training, and retention plans for mid-level lawyers.
• Build talent pipelines across key areas before roles become urgent.
• Keep interview processes short, structured, and aligned internally.
• Give candidates clear information on remit, progression, flexibility, training, team structure, and decision timelines.
• Move quickly when the right candidate is engaged.
• Use interim, contract, or consulting support where demand is uncertain, while still making permanent hires in core capability areas.
• Plan for counter offers before final interview stage.
• Make AI training and emerging regulation part of the employee value proposition.

Build the regulatory & legal teams your competitors will wish they secured earlier

Market uncertainty is creating a rare opening for legal and regulatory employers in Europe to secure specialist and senior talent before confidence fully returns. 

Larson Maddox helps law firms and in-house legal teams identify, engage, and hire professionals across key industries, solving complex hiring challenges through specialist market knowledge, established candidate networks, and unrivalled insight into compensation, competitors, and candidate expectations. 

Request a call back today to discuss how your organisation can hire the specialist and senior regulatory & legal talent needed to move through market uncertainty and come out stronger.