Does law pay better than top HF?
First the report of the wachtell lawyer going to Kirkland for 80mm over 3y
Then if you look at top law firms the profit per partner is $5-10mm for over a dozen law firms and law tends to be less skewed and many are paid lockstep vs one person taking all the economics
Considering how large law firms are and how it’s relatively easier/safer to make partner vs crush it as an MMPM or PE partner, plus the fact they are paid cash with no deferred or fake carry, is there an argument that biglaw is best risk adjusted career for someone?
The corporate legal job is boring as hell. You shuffle paper for 7-10 years before you even sniff non-equity partner. Just depends if that shit is appealing to you
Depends on personal preferences and the kind of lawyer. I could easily see how someone would find the role of an RX lawyer to be more interesting/stimulating than an RX banker for example. Litigation is obviously a niche of it's own. Some people love lit. I personally know a Project Finance associate that left his IB role to go to law school and loves his job and works on some pretty impressive and high stakes things. His hours aren't horrible and he makes bank. Seems like a great gig to me.
Based on my exposure and network think the right tails for top performers x top shops skews HF > PE > Law > IB. To the point above, the difference is marginal enough where the calculus for career decisions should come down to personal interest/personality vs. EV
How would you rate median performers in these four career tracks?
Median: PE > IB > Law > HF
“The median performer” at the low and mid levels gets pushed out. If you mean the median performer at the top level, then probably:
PE > IB >= Law > HF
But it’s difficult to even consider as you are now talking about the “median of the top” which for some of these, especially HF, is not a well defined concept.
Seems right although I will point out that the average equity partner profit/compensation reached a record $11.1 million per equity partner last year. Some hit $30MM+. Mind you these are pure cash distributions. All this with AI being as good as it is... I am pretty sure that clears the MD average at even the top PE shops. I think Kirkland actually decided to stop reporting their Profits Per Partner because their PE clients were mad that their lawyers are making more than they are.
I think you're on to something and probability-weighted, you likely end up better in big law. Right tails are obviously much bigger in HF and PE, but that is always an extremely unlikely outcome.
No lol
Wachtell is as competitive as Elliott/Citadel, and u don't get offered this paycheck unless you're an absolute psychopath that billed 3000 hours a year for decades (3k hours of literally sitting on your desk looking for typos in Word and performing "duty of care" where 99.5% of things you do no one cares, but there has to be someone that checks it's compliant and there are no issues)
if u open my profile u'll also find a thread sharing my view on why law sucks when you look beyond the $
The individual receiving $ 80 million is the new head of RX and will replace David Nemeck at K&E. Also, RX is one of the most stressful big law practices.
Ugh so stressful gaslighting borrowers into an LME vs Ch 11 to guarantee yourself at least two fee paying events
lol
Gets the PE partner a little more time to vest carry grants man it’s a win win
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No, because most lawyers can't get in to a top "big law" shop, just like most finance people can't get a job at Citadel or Jane Street. *IF* you get a job at a top 5 law firm, then you'll make more money than the average finance person, but that's meaningless. It's equally true to flip it around and say*IF* you get into a top 5 hedge fund, you'll make more money than the average lawyer. But that's irrelevant to most people because most people will never work at a top 5 firm in *either* field, and there's no way a college kid considering careers could predict if he'll be the lucky one.
The "average" lawyer who is not at a top 5 big law shop makes like 80-120k. Pretty sure the "average" finance person makes more than that, plus with fewer hours and no law school debt.
It’s really bot that hard at all to get into BigLaw lol. Getting into a BB IB is arguably harder. And the latter will also have slightly higher career earnings on average.
Not true. Getting into a top 5 law firm first requires getting into a top 5 law school, and that's *already* only ~5-10% of all applicants. And then Cravath accepts only ~10% of job applicants, so the cumulative odds are 10% of 10% = maybe 1% or less.
I'll prefer my chance in the Morgan Stanly recruiting pipeline straight out of undergrad any day of the week.
comparing biglaw to bb ib analyst track (so stay in ib or move to pe/hf). meaningfully larger # of biglaw associates vs. ib analysts
citadel lol
You can't compare "the average lawyer" to all of finance because law is a way more diverse field. There are a ton of public interest lawyers, public defenders, immigration attorneys, etc, obviously not in it for the money, that pull the average salary down.
A more accurate comparison would be "Corporate Lawyer" vs Finance. The average corporate lawyer is clearing $200k easily. The AM Law 100 big law firms all pay the same scale and you typically make $250,000 your first year out of law school, with lockstep increases from there for the next 10 or so years (topping out at like $600k - $700k) until they make partner or are pushed out, or go in-house.
Sure getting these jobs requires either going to an elite school, or networking your way in. It's the exact same with IB or PE.
Also, the average finance person is not an investment banker or PE associate... its a financial analyst which ranges from like $50k to $150k.
It’s pretty easy to look up law firm pay scales. It’s very consistent and monotonic, assuming you can last.
Buyside of course is all over the place.
Really hard to make apples to apples comparisons.
lifestyle adjusted, buy side and sell side jobs are better pay and probably more interesting.
But if you just want something laid out for you, law is better.
The mentioned partner above is literally 1 / 1.3 million lawyers in the US. Compare that with the average or median comp in HF.
probably 5,000 equity partners at top 10-20 law firms with average $5+ million in comp
same or fewer # of top MM/LO/SM PMs or partners in those seats
the 1.3mm lawyer denominator should be compared to finance professionals in general (accounting, consulting, ibd etc.)
The answer to the title is obviously no. Top HF is billion dollar outcomes.
“HF” is not a career path like PE or Law. It’s rolling the dice to see if you get lucky for as long as you can bear it.
If you win, it’s easier to keep going of course.
There is no work you can do to ensure you are correct about a trade. It is gambling.
PE is different — it’s really not hard at all to deliver 12% net returns doing LBOs.
Law is even more different as all you are doing is taking a vig when anyone does anything. Great model tbh.
Junior lawyers are the first to be automated away. I think our legal spend will prob drop by half this year. You don’t need an associate billing $800-1000 an hour looking up change of control clauses in material contracts when AI does it in 10 minutes for $5 in tokens
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