Ex-military here. Most lucrative career post JD/MBA?

I am beginning a JD/MBA program at a top school. A lot of my classmates like to complain about how much less lawyers make than their counterparts in industry or finance (especially PE, which doesn't look all that strong). Is this BS?

It looks like IB, PE and BigLaw are all about the same. Factoring in the hours, PE and BigLaw seem better than IB, but PE doesn't seem better than BigLaw. Factoring in the remoteness of becoming a Fortune 500 CEO, industry seems like the least lucrative choice.

Am I missing something?

Investment Banking: $160k to start, topping out around $600k-$1m
Private Equity: $170k to start, topping out around $600k
BigLaw: $160k to start, topping out around $600k-$1m
Industry: Most CEOs make $150-$250k, and it takes them a long time to get there

 

Just go into whichever interests you the most. You'll be working shit hours initially in all the career paths you listed. Maybe less so in industry, but not too sure. The money you make will not make much difference to your lifestyle as you wont get the time spend it. Unless bolstering your savings gives you a hard on, like it does so many other people. rightfully so too..

Remember..think long term

 
Best Response

When people say that finance people make more than lawyers they are talking about the time in between starting and making partner/MD.

Lawyers make 160K base out of the gate but they get crap bonuses (standard first year bonus is ~10k). In banking, associates make 125K for their stub year plus a stub bonus of 35K plus a signing bonus of 50K so they make a lot more in that stub year. They also get a raise their first January whereas lawyers have to wait until their second January. That first raise for banking associates raises base to 150K and then the year end bonus on that is ~100K on average, so full comp of 250K vs. 170K for a lawyer that year.

Extending the equation out a little further, an 8th year associate at a big law firm makes ~290K base and, based on the standard market bonus last year, ~100K year-end bonus for total comps of 390K. By comparison, a first year VP (which is the time-equivalent of a 4th year associate in law) will make ~350K - 400K in total compensation.

So while it's true that once you've been there fifteen years the average compensation in banking and law is pretty similar, the years in between are what people are talking about.

ALL of that being said, you shouldn't choose banking vs. law based on the pay alone, you should choose it because corporate law is mindnumbingly boring.

 

Your PE number is a bit off.

PE associates will out IB/MBB will make about $230-375k at most reputable funds. A Post-MBA Associate will cash $350-$500k and receive an equity component usually in the form of carry or dollars at work (most often this is deferred and vested)

I did 2 IB, 2 years special sits fund within a large PE fund and leveraged that experience to an event driven hedge fund (cap structure agnostic)

Pay was as follows: Year 1: $520k, 2: $600k, 3: $825k, 4: $1.2M, 5: $1.3M and then left.... If you decide to go the route, your reward will come when you build a strong enough track record where a seed fund (or existing LPs) will fund you to run money. I went with the prior and was seeded at 1/10 for the initial amount of $150M, but have scaled to $4B with 1/15.

 

I call bullshit or at the very least that doesn't reflect avg comp or today's comp. Unless you're in a revenue generating role (i.e., trader, PM etc) there's no reason to pay someone 500k in their first year. My understanding is that VP and up can start negotiating carry, not a fresh post mba associate.

 
ArcherVice:

I call bullshit or at the very least that doesn't reflect avg comp or today's comp. Unless you're in a revenue generating role (i.e., trader, PM etc) there's no reason to pay someone 500k in their first year. My understanding is that VP and up can start negotiating carry, not a fresh post mba associate.

My read was that his numbers were for his time at the event-driven fund, not for the special situations role.

The numbers certainly aren't average but aren't implausible. An alum of my banking program had a really similar profile (except a stint at HBS between first and second buy-side roles) and came out with one of the guaranteed comp packages that headlined a Poets&Quants article that year. $500+ as a post-MBA is not out of line at the type of funds that hire one person every 2-3 years, and my guess is that if he's getting seeded with a 6-year track record, it was as he left a shop of that caliber.

I am permanently behind on PMs, it's not personal.
 

Your numbers are off sometimes by a factor of 10. An MD at a BB is going to make 1-3MM, a big law partner should top 1M, PE partners have such a wide range as to make giving an average meaningless, the same is true for CEOs. The odds of any entry level entrant making it to those levels ranges from poor, maybe 10% making partner at a firm to terrible for being an F500 CEO. There are CEOs making 150-250, but they're at small companies, a director will and potentially a manager will be at or above the 150-250 mark.

 
guyfromct:

Your numbers are off sometimes by a factor of 10. An MD at a BB is going to make 1-3MM, a big law partner should top 1M, PE partners have such a wide range as to make giving an average meaningless, the same is true for CEOs. The odds of any entry level entrant making it to those levels ranges from poor, maybe 10% making partner at a firm to terrible for being an F500 CEO. There are CEOs making 150-250, but they're at small companies, a director will and potentially a manager will be at or above the 150-250 mark.

What are the averages for the exit opps?

BigLaw -> Mid-small law partner $400k BB-> boutique partner $400k Non-F500 C-suite -> $200k

 

BigLaw exit opps vary tremendously from doc review at $28/hour to big fed at 100-130k, in house at 150-225k to boutique/small law/mid law partner at 100k-500k or of counsel roles all depends on timing, transferability of skills, practice area and firm, not to mention seniority. The same is true for every other profession that you listed.

 

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I am permanently behind on PMs, it's not personal.

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