Let's have a reasonable discussion: IB vs Big Law
It seems to me big law pretty much wins out on all aspects: wlb, compensation, threshold to get into, etc. I have a friend who went to a decent but definitely not the most prestigious liberal arts college for undergrad and who later got into Penn Law after working his tails off to ace the LSAT. Penn Law is very selective, but it is nowhere as hard to get into as Penn's undergraduate program. And now he has easily landed an associate position at a big law firm in NY, making roughly $200k in his first year. Also, the vast majority of his classmates have secured positions from similar big law firms, with most of them making way over $100k. In contrast, IB at BB or EB is insanely hard to get into even if you go to a target school, in which case you still need to network your ass off. And the entry-level salary in IB is considerably lower than that at big law firms. Of course I know that law schools are super expensive and take three years to complete, but if you get into a school like Penn your life is pretty much set. Even the not-so-reputable-law-schools such as Boston College Law sends a ton of graduates to big laws.
Getting an LSAT score sufficient to go to Penn or a T14 law school to get a BigLaw job is difficult too. You typically need 95th percentile+ scores to get in to one, and the people taking the test are college kids who are already smarter than the average bear. More than 5% of people who try for IB can get in if they really want it.
Why spend 3 years in law school and rack up $200K in debt and forgo multiple years of earning potential when you could do banking and make money from the get go? You can get promoted in three years and make more money as an associate than the 1st-year law associate who came out of his 3L.
IB and PE people can ultimately make more than just about anybody except for plaintiff lawyers who hang a shingle and do class actions and mass torts or some ambulance chaser lawyer who has scores of associates working for him who are churning and burning through easy insurance settlements. Lawyer pay is highly bimodal, some by choice, but some not. IB is unimodal, and that mode prints money.
You can make a lot doing either, and people would be best served by picking something that matches passions and talents, but IB has clear advantages over BigLaw. Head over to TopLawSchools and people will argue differently, but this is WSO, and IB and PE do too well for law to come on top.
The median salary for Wharton graduates (undergrad) in 2021 was $84,500, and that's Wharton, the best undergrad business school in the country. Most graduates studying finance or econ at other schools make way less than that. Even if you manage to land an $80k job right out of college, it would still be practically impossible for you to get promoted to a position that makes $200k in just three years.
Now let's look at law schools. Penn Law is not nearly as hard to get into as Wharton undergrad is, yet it stably churns out a ton of graduates who are going to end up at big law firms whose starting salaries are upward of $200k each year. If you graduate from college at 21 and go right into law school afterwards, you will come out only 24---still in your early 20s. As for the debts, they probably amount to nothing eventually given the money one can make at big law firms. Additionally, go back to my last point in my post---you don't even need to get into an L14 to land a coveted big law associate position. Schools like Boston College, which you don't need a super stellar LSAT score to get into, are also gigantic big law associate manufacturers.
Now let's put IB and PE in perspective. Is there any surefire way to get into either of them? The answer is an obvious no.
Talking about median undergraduate compensation is an apples-to-oranges comparison. The key data point is this: "provided that someone has the will to do IB or BigLaw, which is the best path for that person to take on a risk-adjusted, probability-weighted basis?" The top 14 law schools, which produce a great preponderance of BigLaw lawyers, require 95th+ percentile test scores, when the test takers are already by-and-large intelligent people in their own right. Investment banking is a path that more than 5% of seekers can attain. IB associates make more than their 1st-year law associate counterparts, and this out-earning persists up the chain.
Bro you just compared a Wharton undergraduate degree to a Law degree, FYI most people graduate college at 22 not 21 so at the end of law school they'd be 25. 25 vs 22 is a big difference, secondly you using the 84k number is just stupid, Are you comparing IB vs Big Law or all the finance careers? Plenty of people go into other areas such as consulting, marketing, sales, tech etc etc
The number you should be using is 110k, now assuming 10k signing bonus + 60k yearly bonus( Average year, Lower/mid bucket) that's about 180k usd, not to far off 200k post tax is it?
As a banker if you stick around by the time you are 25 you will be an associate at any shops, Infact at most shops you'd be associate before 3 years mostly around 2-2.5 year mark.
Associates at decent shops make 300k + at BB/ MM and even more at EBs
Try to read what you write before posting and try to make it make sense.
We haven't even taken into account the amount of debt you'd have and what that would be like if you had rather invested it, even if assuming 150k debt per Law school grad, compound it at 10% for 30-40 years and your looking at generational wealth.
Finally IB gives you a variety of exit opportunities in almost every field out there, by the time you've done 3 years in BigLaw you're about 28-29 with presumably a lot of responsibilities and you are pigeonholed into Law.
Wouldn’t a more accurate comparison be MBA vs JD? Obviously law school grads have high starting salary compared to undergrads. And Wharton undergrad ≠ IB. A first-year analyst will make $180-200k. By the time time you finish law school, that analyst is now an associate who makes $300-350k. That analyst had 3 years of $200k+ comp and now makes comfortably more than those starting their first year in big law. Including school debt, you’re looking at a $750k+ opportunity cost.
Honestly idk if most Law students/Lawyers would disagree with you.
If I thought that all those smart people were going to disagree with me, I wouldn't have believed or written this. I just recognize that a law school forum will have a bit of a different feel than WSO.
Why aren’t Quants included in this thread?
Entirely different skillset. Big law and IB attract for the most part the same type of people. Quant attracts the opposite type. The only similarity between quant and the former 2 might be that everyone likes money.
Why would they be? Not every thread like this needs to be a comparison of every possible industry...
Screw it. It's Friday night and I'm already a few in so I might as well put on the monicker.
1) "Why spend 3 years in law school and rack up $200K in debt and forgo multiple years of earning potential when you could do banking and make money from the get go?" Seen more than enough attorneys who'd laugh at this because they broke your going broke anecdote.
2) "IB and PE people can ultimately make more than just about anybody except for plaintiff lawyers who hang a shingle and do class actions and mass torts ... "- Again, know too many attorneys that'd laugh at this.Work your way up and become a partner and then you're dictating how much these IB people are making while you're chilling in your office telling the rest of your staff what to focus on. Ask me how I might know.
3) "people would be best served by picking something that matches passions and talents" - this I will agree with because it's true.
Now go write me a LP prospectus doc for a HF in the Caymans and tell me all about it. Then tell me how attorneys aren't on the same level as IB.
Sure, there are plenty of attorneys who graduate from T14 schools who graduate without debt, but this requires one of several things: 1) financial background to defray the costs, when such financial resources could be saved and invested if the student became an investment banker instead, 2) higher academic performance on the LSAT (even more than the requisite 95th+ percentile), which then makes the whole prospect of becoming a BigLaw lawyer even more difficult to achieve, when the whole initial premise of OP's post was that it was easier than investment banking, or 3) going to a less prestigious school, which reduces the probability that the student will get into an BigLaw firm in the first place which would invalidate the point of the post. All the T14 law schools have average student debt loads of $130-170K and 65%-75% of students have loans. To suggest otherwise puts you in the position of making anecdotal claims, not me. Your response also ignores the opportunity cost of spending 3 years in school rather than earning money, when gross earnings in investment banking over the same time frame can be $500-600K, thereby placing our lawyer prospect $630-770K in the hole vis-a-vis the banker, to say nothing of investments or compound interest.
I don't understand your point on "dictating how much these IB people are making." Investment bankers negotiate the engagement letter with the client and get high success fees and retainers. How are lawyers stopping this? Even if lawyers are negotiating engagement letters, why would they be making the money-point call on how much the banker gets paid? BigLaw partners don't particularly chill more than IB partners.
I never said that "attorneys aren't on the same level as IB." This is a strawman position that I never asserted. In fact, I would gladly aver that BigLaw lawyers are on average more intelligent and better educated than investment bankers. The same is true of astrophysicists, but astrophysicists and lawyers alike do not enjoy the same pecuniary benefits that bankers do. Such is life.
Ok! This is the kind of debate I support.
1) Won't argue that.
2) I would counter that you could get a 160+ LSAT and then graduate from an at least decent school, let alone actual job experience that would rate you for BL.
3) Not entirely true. Seen plenty that have come from the not T14 who are now partners in things such as real estate or the HF world.
4) I never supposed they didn't have any loans, just that they make enough to put those loans to bed because they make more than you supposed.
5) The banker also still has to fund their education, especially with the all vaunted MBA from some "top tier" school.
6) Yes, the incoming should be negotioating those letters with HR, but a proper GC team will probe it for competencacy.
7) The strawman thing I will revoke and insert above steelman argument just on certain arguments.
Equity partners at the best firms in the country make a few million a year - this might be marginally more than your average IB MD, but if you compare apples-to-apples, your top-performing MD will blow a lawyer out of the water, not to mention the fact that for most IB is the stepping stone to private equity which is undeniably more lucrative than law.
PE is a billionaire maker, and there are many to show for it. How many billionaire lawyers are there whose wealth is purely a product of practicing law? There's that tort guy from Texas who got to $1.5Bn. Any other lawyer would effectively just be conducting business as a lawyer.
Top top top biglaw compares if not slightly outperforms middle IB, but top IB and top biglaw are comparable (if not convincingly in favour of IB) and again, that's not to mention the innumerable exit opportunities available for investment bankers where the comp is truly not comparable.
Bruce Wasserstein was worth $2.9B before he died. He went to HLS and also was a Baker Scholar at HBS. He started out in law, but then was largely successful at M&A.
Law school and being a lawyer is BORING. The business aspect is much more interesting. People who love the law are freaks and there are not many of them.
You really make me want to do this call out? Law can be boring to some, but for some of us it is interesting since it can dictate what does and does not happen. Not to mention we can study how the SEC can STFU. The stuff that goes on with the FED or FDIC, (CFTC seems to be legit at least) etc. Don't get me started on more state and local civil law issues. I don't know why I don't have a JD yet honestly.
Big Law only beats IB, in terms of WLB. And big law associates are still pulling 80+ hrs. Why would I pay for a top tier undergrad and law school, just to be the paid the same as an EB analyst. IB you're making more or less 200k, out the gate. Comp progression is also much quicker in IB. If you stick it out, have the potential to hit a milli in comp by 30. Path to IB is easier. You don't have to put in 7 years of school, and take on loads of debt, just for a slim chance at Big Law. If you have decent whit and intelligence, it's possible to get into IB even if it's not at the highest level. Lastly, have heard law is terribly boring. But it all comes down to personal interest. A career in law is great, but IB beats law in most aspects. I wouldn't sacrifice 3 years of 200k + comp for a law degree.
OP's point is that you don't need to go to a top tier undergrad for law school and top tier law schools are much easier to get into than top tier undergraduate programs. The rest I would agree
Just for a slim chance at big law lol. If you get into HYS law, or quite frankly any t-14, big law is just about as middling of an exit as they come. For the best and brightest at these schools, big law is the minor leagues, everyone wants the federal clerkships
Big law is hard to get into. I have an offer for BU Law @ 20k/year tuition + 20k living expenses... Even though it's 17 on USNews, I'm hesitant, some V20 firms, notably Wachtell, don't even do on campus interviews and only a third of the class go into big law (and there's no guarantee that all of these lawyers are being paid Cravath scale). Big law outside T14 is a gamble.
This is something I considered a lot, and the reason why IB won for me was pretty clear.
1) Exit opps: if you want to just to career banking then it's the same as working to partner in a law firm. However, IB gives you far more exit opps if you don't like it, to the obvious PE/HF/VC plus corp dev, business school etc. Law is big law or bust in terms of comp. In house lawyers typically take a large pay cut, unless you get lucky and score a cushy in house job at a FAANG. This is a real problem if you're cut as a senior associate (more common than IBD) and want to find similar earning potential.
2) Progression: It is significantly harder to move up in a law firm than in IBD. The law firm business model is skewed in a way to have a large number of associates and a very small number of partners. In IBD, VP level is pretty much a lock if you aren't total shit and you have a decent shot at MD if you're good at what you do. Making partner in a law firm is far harder and based on luck, politics, people leaving etc. Also don't compare equity partner comp to MD comp. Number of people wise MD is equal to non-equity partner in a law firm and equity partner is similar to group head in IBD.
3) Comp: From my understanding comp is ever so slightly higher in IBD, although admit its nothing to split hairs over if you are passionate about law etc. Top end of PE/HF obviously beats it though.
4) Enjoyment: Personally I'd much rather work on leading/facilitating a deal rather than being the guy drafting the paperwork. I also have an interest in markets, which would never be able to use in big law.
5) Ability: I'm much stronger quantitatively than qualitatively. I.e. I score really highly on QR tests but not as good on VR tests. I know the more senior you are this is less relevant, but I want to go into a career that my skills are more aligned to.
In house counsel at IBD and PE probably make comparable amounts of money to a VP or senior associate.
If nothing interests you, then clearly go with IB considering the opportunity cost of it vs. law school. Also, if you're undecided on what you want to do long-term, IB gives you more career options. Law is only suitable for those that see themselves practicing law even in their 60s.
Better questions to decide between IB vs. Biglaw:
1) What would you want to let yourself be consumed throughout the day? Financials or legal matters?
2) Would I like the type of work done at the highest levels of finance vs. law?
3) In what would I like to build my expertise or what I will be more willing to learn on my own?
If you pursue the field that better suits your interest and natural strengths, you shouldn't worry about compensation, debt, opportunity cost, etc. Those will take care of themselves.
I interact with lawyers a lot in my job, and over the past few days I've been using GPT4 to get a "second opinion" on the legal advice I'm getting from the human lawyers. It's disturbingly good. It's familiar with somewhat arcane laws specific to my state and can give reasonable legal advice about them. The practice of law may look quite different in the future.
Law in general sucks. First there is the cost, it’s easy for T14 grads to rack up $250k in debt.
Most big law associates, a top quintile outcome from law schools, exit to in-house where pay is good, but nowhere near partner level pay. Lawyers in general do mind numbing work, for instance in financings they get to translate a term sheet into a contract. In public finance they get to draft the preliminary official statement and opine on tax status. This isn’t the fun stuff, they are as a rule not driving commercial considerations.
Finally, their experience tends to be very niche-y. Whereas an M&A banker can exit to PE, VC, Corp dev, corporate strategy etc. An M&A lawyer can do M&A law, there are far fewer exits. The ones I’ve seen come into banking from law were generally making a huge drop in prestige think Cravath or Skadden to a middle market or lower middle market regional IB shop.
How is big law a top quintile job from t-14? Not even close. Everyone who wants it pretty much gets it. Check out mid law percentage and tell me big law is tough from these schools, especially HYS or t-6
I said law schools, not T14.
They’re both legacy jobs, risk averse paths to the 1% that worked for our parents, grandparents, great grandparents, etc. Super well defined paths with comp progression that scales well with the value you provide. It’s very optimized way to exchange your time and mental energy for money. Almost like an algebraic math equation.
But let’s just say a person like Elon didn’t take the tried and true path. There are hundreds of Elons sitting in Law firm partner offices, PE offices or group heads of IB. They didn’t take on the risk.
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Big law having a "lower threshold to get into" is only true in a narrow sense, e.g. if you are looking at acceptance rates of qualified students at target schools for both professions. Depending on how you define qualified students and target schools, this may not even be true. But big law requires an expensive three year professional degree just to be able to apply - in that sense, the threshold is much higher than banking.
Consider running a marathon as an analogy. On one hand, a high percentage of people are capable of running marathons if they train for it. On the other hand, running a marathon is really challenging, and the training for one is intense. So, we might say that the threshold is low when it comes to talent, but high in regard to the physical effort, discipline, and training required.
So yeah, sure, if you aren't able to land top finance jobs out of undergrad due to pedigree, GPA, interviewing skills, or bad luck, you can still go to law school and land big law, so long as you have a decent LSAT/GPA profile. But this still requires significantly more time, effort, and money than skipping the grad degree and going straight into finance.
In what way would this make big law better than banking? I suppose it's "better" for the student who is unable to get a banking job, but this is like saying a 6 is "better" than Margot Robbie because Margot Robbie is unatainable, but the 6 isn't - it's not what people usually mean when they say "better" in this context.
And a place like Boston College may send a relatively high number of people to big law, but from a school like that, you will need to maintain a decent class rank to be competitive. That means 3 years of stressing about grades. Realistically, you need to be at a very good law school to be able to get away with having a lower class rank - Penn is ranked 7th, for context.
Comp is better in finance. WLB may be worse, but big law is still pretty bad from what I hear, and I can't imagine anyone arguing that the time and money law school requires is worth the slightly better WLB. I'm not sure how difficult progression in law is relative to finance, but I haven't heard anyone argue it's easier to make more senior positions in law - usually I hear the opposite.
This is not meant to be critical of law school or the legal profession. I actually have considered - and still consider - going to law school myself. But law school is only worth it if you actually find law interesting. I would never go to law school to only end up doing transactional big law - I would try to be a litigator. If you are purely comparing based on compensation, finance wins.
TL:DR/ You probably won’t love BL day-to-day much more than IB. You probably couldn’t get an elite LSAT. Opportunities cost sucks, exit ops suck. Choose IB if you have the option. The LSAT is a redemption towards highly intelligent kids who fucked around in HS and chose a basket weaving feminist dance studies major
Choose what you are good at and interested in. Mainly the former.
I think people may overestimate their ability to perform on the LSAT. It’s not like the SAT/ACT, percentile wise.
RC is borderline impossible to improve and is not pretty much testing aspects of your verbal IQ. LR is similar although can be improved slightly.
Admittedly, many people could learn LG given the time/resources.
Perhaps I am biased but breaking into IB does not require much in terms of true “intelligence”/ability.
If you are just slightly above average intelligence, grew up UMC+, parents pushed you the right way, it frankly just took a bit of hard work.
If you:
1) Have the additional verbal IQ to do elite on the LSAT (good chance of t14 merit scholly)
2) Can reasonably break into IB
then I would choose IB.
WAY better exit options ($$/wlb/variety/etc), no opportunity cost, your exit options are also 10x more interesting.
There are very limited scenarios where BL makes sense over IB.
If you are actually smart but fucked around in HS (drugs? bad friend group? bad parents?) the LSAT is your surefire redemption towards $$$$. Many state-school kids with a communications 3.9high swung a 17mid on the LSAT now have their ticket to (relatively) predictable wealth.
If you are actually the type of nerd who finds BigLaw day-to-day more interesting, sure. Most people are coping about this.
If you already go to a target/semi-target, unless you are a genius (in which case Quant should be intriguing, most people don’t have a major verbal/nonverbal IQ disparity) then you should very likely pick IB.
My 2¢
I’m of the view that Big Law is god awful. If you think IB or “High” Finance sucks, oh Lordy, there is something much worse and it’s big law. You waste 3 extra years for school, significant debt to take a shot at BigLaw and you better stick with it once you get in bc there are few good alternatives and good in-house counsel positions are very hard to get. The use of non-equity partner roles to keep more and more biglaw drones out of the firms pool is prevalent. I know several BL partners well, every event I go to, wedding, ski retreat, beach whatever - they are on the phone the whole time. Not an exaggeration, they might as well not be there, they just duck off to be on calls. Also, the actual job to me is lame AF. I would 1000x rather be in an investor or be on a path that leads to being an investor and have some control over my life than have to bill hours and kiss client ass. Some people do great with it, they are born for the job, but to me lawyers are just middle men and cya. They do not “Counsel,” we have to tell them 98% of what we want to see and get them to document it as such. They are woefully inept and cannot give straight answers on the topics you would actually need an answer too. At the end of the day, they are necessary that’s about it. Most of it is copy and paste boilerplate it seems.
Have you dealt with them on a restructuring? Your restructuring guy who isn’t a lawyer will tell them what to do. it’s comical.
lawyers can graduate and move to whatever place they want, buy some chairs, a table, and a computer, and start their law firm. Finance? NYC/Chicago/LA.
Don't want to have your solo practice? No worries, study for some exams and work 15hr/workweek at the Gov't with a full package of benefits.
Want something more exciting? Fine, fight corporations on environmental issues or consumer protection.
Don't want that? Well, then try criminal law.
Too stressful? No worries, go out there and find something that you like: Tax, civil rights, family law, administrative law, sports law, litigation, etc.
What about the IB/PE guys? Can you go on your own and open your practice? I doubt it. At best you open an M&A advisory, but good luck with that if you believe that outside NYC/Chicago/LA M&A markets are so active (a recession? ouch, out of business). So you jump from exit op to exit op, but always end in the same position: a 9-5 employee answering to a boss
my dad was a lawyer and a non-professional benefit I saw is how easy is to build rapport with different people. He helped them with some small legal issues that for him would take 10-15 minutes and people will reciprocate from their side with respect and even be ready to make him favors whenever he needed those. building this type of relationship is something that no amount of money can buy but are immensely valuable as you advance in life
Going point by point. Going solo out of law school is crazy. Law school doesn’t prepare lawyers to practice. While there certainly are more large law firms headquartered outside of NYC/Chicago/LA than large financial services firms they tend to be the epicenter of big law. Small and mid size cities are more likely to have small and mid sized firms with perhaps some satellite offices of larger firms.
Government legal jobs vary widely, none of my friends in Assistant DA/Public Defender jobs are working 15 hours/week.
Environmental law jobs are usually on the side of large corporate polluters as opposed to “fighting for nature”. The not for profit ones tend to be very competitive and pay poorly.
Criminal law is usually either governmental e.g. PD/DA or frequently means a DUI/traffic court mill job. It also means dealing with a non-trivial chunk of criminals, usually an unpleasant population to deal with.
The next bunching is amusing, lots of tax lawyers go and get an LLM to specialize in it. Civil rights law if you mean Brown v Board type stuff is similar to environmental law in as much as it’s mostly done by hyper competitive to join not for profits, the ACLU isn’t an easy gig to snag. Family law is generally the seventh circle of shit law hell, enjoy the divorce of Mr and Mrs Jones, who are so acrimonious that they squabble over division of assets spending more on legal fees than the assets are worth and they wind up spending less than 30k between the two of them. Administrative law is either government or generally the domain of big or mid law. Sports law is tiny, it’s like saying become a sports agent, some people do, just not many. Litigation is so broad it’s impossible to easily characterize.
Can IB or PE guys open their own shop? Yes, where do you think all of these regional boutiques or elite boutiques came from? In PE the industry came into being within the last 40 or so years, so these were all startups at some point. Have you noticed how many firms there are?
you're just showing the low-end spectrum of those jobs. Realistically, how many accounting, finance, and economics students from all over the US make it into IB? 0.01%? 0.001%? 0.0001%? Your average lawyer salary is 130k and your average finance student salary is 95k-101k, and generally, law is practiced in all states, so again, you can pull 60k-100k living in Dakota if that's where you want to raise your family. For finance, you'll always need to stick around big cities.
stats: there are 500k law firms in the US and only 1,3k M&A advisory + 14k PE funds. To start a PE fund, you need to raise capital, so it's x100 more difficult than starting your law firm.
making into IB --> MF PE is the equivalent of being a successful civil rights lawyer.
In what world are lawyers leaving lawschool and opening a private practice. 1/100 maybe? Even that is too high.
There is a reason why a lot of lawyers will try to talk people out of law school.
The comp differential is pretty huge...
Age (X): Big Law/IBD
Age 25: $235,000 / $300,000
Age 26: $255,000 / $360,000
Age 27: $307,500 / $450,000
Age 28: $370,000 / $520,000
Age 29: $435,000 / $600,000
Age 30: $475,000 / $650,000
Big Law pays like S&T.
I knew someone who used to do big law and quit. He said that they would work more than bankers and get paid less. Plus the work is way less interesting and more tedious (e.g., Combing through legal contracts at 2am). Yeah it pays well but imagine paying 200k+ for law school, getting a big law job, getting worked to the bone, hating it, but still having to stick it out to pay off both undergrad and law school debt. At least if you get IB you don’t have a tone of debt and there are way more exit ops to cushy but still well paying roles. You can leave make like 150k working 40 hours in Corp Dev and not have to pay off law school.
For anyone who has been on WSO for more than two minutes, this thread should be a sign of a major decline in poster quality. This wouldn’t be a conversation a decade ago and the fundamentals behind the two options haven’t changed that much. Anyone advocating law over any semi-respect front office business role has no standing to opine on career topics.
Cmon, you’re a long time poster. You know this is true. Nobody would choose law over IB if halfway informed of the pros and cons.
Lol, non target kids now routinely get into IB vs after college you gotta take a hard test, 3 more year of study, just to make the same all in as an IB analyst?
Why not just come out and say your stance? Why pretend you want to debate lol?
The average lawyer is much more intelligent than the average banker, meaning it’s harder to get those roles. And they pay the same lol. You think drafting the minutia of credit agreements is easier than throwing together an IB pitch? It’s harder and you get the same or worse than banking.
It’s the same concept with engineers.
They are the smartest dudes on the planet, but their salaries suck compared to banking, where ther average banker is mediocre.
Nah the smartest people on the planet are people at Quant firms
I'd say the smartest people on the planet are in academia/research
No career promises a stable, upper-middle class income like law does. The problem is, it comes at the expense of everything else.
Upside is limited to compared to IB and consulting, because those careers build business skills while law does not. If your goal one day is to be a successful entrepreneur or CEO, you are far more likely to build the right skills from an IB/consulting/corporate career than from a law career.
Ditto for versatility; your ability to transfer an IB/consulting skill set to some other career is very high compared to law.
In terms of interesting work, corporate law loses big. Most lawyers who find their work interesting are litigators; if you have a real interest in fighting in court, then law can really deliver on your expectations. But the lawyer's role in transactions is secondary to any business person's role, whether that's a corporate person or a banker.
OP sounds like someone who places a very high priority on getting to a high salary at a young age. I can relate, because that was my single-minded obsession in college. I had come from a struggling family, and the idea of taking one test (LSAT) where a good score pretty much guarantees a nice salary a few years later, was super appealing to me. Its a less risky path than going for IB where you need good grades, good interviews, good timing in the economic cycle, etc etc. One test and your future is set.
But I'm telling you guys, its a trap designed to prey on the insecurities of smart people who didn't grow up with much. And it got me. I ended up at a V10 firm, with a high salary and proud relatives . . only to realize at age 26 that my future was pretty damn mediocre. Law doesn't lead to much after you're achieved that first rung. I had to spend a lot of time re-tooling myself, getting an MBA and then doing some tough years as an older associate in IB. Things turned out OK but that was a lot of wasted time.
I'm not here to say don't choose law. But I am here to say, think of your life as an optimization problem. You want some combo of salary, stability, interesting work, work life balance, upside, etc etc etc. Think of all the things that matter to you. I think if you evaluate law, especially corporate law, through that lens its very tough. It hyper-optimizes for salary and stability, and leaves you with little else.
Yeah, but that usually means you're pigeon holed to law.
I certainly agree with you. I hoped my 2nd and 3rd sentences covered that point but if they did not . . yes we agree.
Kind of. It depends on the type of law you practice and when you make the pivot.
A large number of the MF PE firms have at least one, and often multiple, lawyers-who-went-into-finance founders. Don’t get me started with C-level of BB banks. There are a ton of different service lines a lawyer can work in that can allow for pivots like this. It certainly isn’t common. This is absolutely true. But I think that is more of a function of what lawyers want than a function of the profession, if that makes sense?
The exception to big law sucking horribly is relationship partners. Lawyers mostly suck at sales so if you’re any good at it you’ll get paid more than the contract drones and work way less.
Wrong. Very misguided. Lol.
Investment bankers make $140-200 out of undergrad for 1-3 years
2-6 years out of undergrad they’re making $270-450
All in comp is relatively the same, if not more for banking.
This is not considering the fact that law school is three years.
Essentially you are paying $20-100k a year for law school instead of making money as an IB analyst, only to come out and make less than an IB associate all in.
What was the confusion here?
From a career perspective, not just the first few year, the work life balance at big law is way worse than finance. In finance the more senior you get the more you get paid and the less you work. In big law, you're basically grinding forever. I have several friends that are partners in big law and they still grind. Whenever I'm working on a transaction its the partners that are still grinding. Its a fatal assumption that big law hours are better. The main benefit of big law relative to finance, setting aside actual job preference, is that the likelihood of getting laid off / have some blow up / having a horrible bonus year is pretty negligible. You trade a horrible work life balance throughout your career for much greater stability than exists in finance.
It has always been my understanding that you have to graduate at the top of your class to land those prestigious law jobs, i.e., the bottom 50% of Harvard isn't landing $200,000 jobs. I could be wrong; just what I've heard.
IB and it's kind of (but not really) close. The most obvious reason being stated many times below in the lack of necessity for any education past undergrad. The high salary and lack of debt needed to pursue a career in IB is an easy first point for IB. At any point in an IB career it is some of the most competitive pay available at that level. The next reason is because of the buy side. Having a direct professional counterpart makes IB a better career because there is a built in option that automatically allows you to leave the service side of the business and become the actual client. BL is just a service and there is nothing you can graduate or progress to; you will always be working for(or on behalf of) someone else. Point 2 for IB. Lastly, I would argue that IB could be a better choice because it is a part of the larger "finance" industry. IB sits in a very unique position being included in this industry because most if not all other professional services are purely that. The world of financial services/funds etc. is very large and has its own ecosystem. You are not limited to a certain role, firm, product, or market which is a direct consequence of being in your own industry.
Big law will never beat out finance because of law school. It costs more and takes longer to get into the industry, making it only worthwhile if you love law. As is, the pay in law would have to be a lot higher to justify investing in a law degree. Imagine if you couldn't enter IB as an analyst and MBA associates had to complete difficult three year programs just to get their first role in finance. Law school is so much sweatier than the schools you can break into IB from. MBAs are way easier than law schools and plenty of undergrads break in at the analyst level from fun universities with decent GPAs.
Biglaw work, even at the highest level, is really damn boring. Litigation is soul crushing. IB is also equally stressful. The grass is not greener anywhere. All of them suck. Look for the career path that can't be found in this entire thread
Idk why this thread was necro'd. Regardless, anyone who can enter IB or another FO role in finance should not consider law school. Ditto with FAANG, consulting, RE development etc. Law will ruin a young person in so many ways (here is an outlier "great" outcome So you want to be a NY Corporate Associate? Forum - Top Law Schools (top-law-schools.com).
Also places like BC (which OP mentioned)/Fordham/GW/USC are called Trap Schools (Inside the Law School Scam: Trap schools) or TTT (third tier toilets) for good reason. They are the most stressful law schools because big law is far from guaranteed (nearly everyone works hard to get an offer, exams are blindly graded and somewhat random), but you have a somewhat realistic shot at success (20%-50% depending on the economy, in a recession Trap Schools' numbers evaporate). Your odds are better putting it all on black, at least any debt incurred would be dischargeable. Keep in mind, the big law offers Trap Schools alums get are not the V10 and V20 firms T13 students can obtain if they do well, big law firms are not made equal.
I necro'ed this thread to warn people lol
You’re doing a public service. No one with enough interest to make an account on WSO has any justification to get a JD.
I think everyone else has covered hours and exit ops so just looking at earnings potential.
Using Litquidity 2023 comp data (I know there’s mistakes but it’s easy). Looking at global median comp:
EB All in Comp: An1: $185k An2: $220k An3: $205k As1: $355k As2: $450k As3: $538k Sum: $1,953k
BB All in Comp: An1: $165k An2: $200k An3: $206k As1: $275k As2: $325k As3: $400k Sum: $1,571k
Now using top law school tuition numbers and Cravath Scale (from biglawinvestor.com) All in Comp: Law School 1: ($70k) Law School 2: ($70k) Law School 3: ($70k) 1st year: $245k 2nd year: $265k 3rd year: $318k Sum: $618k
Just looking at the difference of >=$1m over the first 6 years the delta is most likely never going to close over a full career.
Also lawyers have a bimodal pay distribution (https://www.biglawinvestor.com/bimodal-salary-distribution-curve/). You really need to go to a top school.
according to this, law partners make more than IB MDs though https://www.wsj.com/articles/on-wall-street-lawyers-make-more-than-bank…
also, in your calculation you didn't take into account that within your years in banking, your actual take home will be a lot smaller because of COL and taxes, whereas that's already baked into the $70k (assuming that covers rent/housing)
they both pay really well, ppl should just choose whatever they like better imo
The $70k is just tuition and fees not including COL. COL is going to vary from person to person so no need to include in calc. Taxes will also vary but yes the delta will shrink. Only looking at top law schools because the pay distributions for lawyers are crazy. If you're not going to the top schools then comparison really doesn't make sense with IB.
I actually discussed that WSJ article with a banking MD who used to be a lawyer. His take was they were comparing top earning lawyers to median MDs at BBs. He said if you compared a median law partner to a median EB MD banking blows it out of the water. Although, salary data for those positions are rare so really hard to get a concrete understanding.
Agree that people should do what they're interested in though! Was really only looking at earnings as other people were covering other aspects.
Edit:
I also think its important to understand how they're getting paid. Looking at how bankers and lawyers get paid there's no scale for lawyers. Its all about billable hours versus taking a percentage of a deal size in IB. You have to work more to make more in law. In IB the work required for a $1B deal vs. a $2B deal isn't that different so pay can scale pretty efficiently. This obviously has it's downsides where a lot of work in IB is not paid - i.e., not a live deal. But for top performing MDs I'm assuming a top lawyer will never touch them pay wise because of this scaling factor.
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