Big law vs investment banking (London specific)
Feels like recently law pay has had much more growth than IBD pay (magic circle went up 50% in past 5 years), but banking pay has stayed fairly stagnant.
Law also pays at fx rate in London at least at US firms, but banks pay 110k USD in New York, but only 70k GBP in London, so much worse exchange rate.
Interested why banks pay much less in London than New York compared to law firms and whether people think law is a more lucrative career in London as it feels like it especially at US law firms where NQ pay is 180k and that's just base pay - I know bonus is lower than banking, but is still pretty good at a US firm.
Was constructing a whole 12-year comparison on this then my laptop fucking died. Long story short, when comparing top bb/eb IB comp to top us law comp, IB destroys them for the first 2 years (Training contract of 50k GBP per year vs an average of 120 GBP per year for analyst 1-2), Then over the next 8 years, the comp is pretty much equivalent with both hovering at an average of 300k GBP in those 8 years. So up until this point IB outearns by about 140k GBP purely due to bonus structure and 2 year headstart. However, 10 Years in you are pretty much guaranteed to make partner by then so are at about 700K GBP in Y11 for law but Still a VP/ED (Unless you are a superstar and made MD but this isn't for another 1-2 years for most) in IB at about 500K GBP. So In the first 11 years you have pretty much made the Same in top IB BB/EB and top US Law, With law at a slight edge in the 11th year(60k will not mean much to you at this point anyways). From then on, IB Junior MD's at a top IB will generally make more than at a top law with more upside potential. You really are capped at about 1.5M as a US law junior partner but can bring in 1-3M as a junior MD in top BB/EB.
Overall though, law doesn't give you the optionality of an exit. That Exit option way before Y11 for bankers is what makes the career path significantly more lucrative with much more upside potential. In law I pretty much quoted the peak TC numbers. The peak for junior bankers would be a MMHF exit, making PM BY Y9 and having a 10mm+ Payday (unlikely but a possibility), or A MFPE Exit making MD by Y14 and raking in 3M+ TC per year because of the Carry element, Or doing the 2+2 route to join A SMHF eventually launching their own fund and retiring off the AUM. All very difficult things to do but nonetheless they have been done by bankers before and not lawyers. A lawyers most lucrative exit would be to launch their own firm and you're not doing that until you make equity partner realistically.
Would also mention that the HF figures don't stay that high, if you can clip 10m personally as an MMHF PM, you had a hell of a year, and unless you're top x% in the world you probably won't get there and stay there.
I think a better way to optimise for 8/9 figure paydays is to figure out where they happen, and if you have the skillset to be the top in that field. If you don't, pick another field and get to the top of that one. The big law vs IB vs PE vs whatever never made sense to me from a tail-end comp POV for that reason.
Junior US law partners make 1.5m…. You are most certainly not capped there…
Source: fnlondon
You forgot a bunch of kids couldn't make it at IBD so they joined FTSE100 corp dev or startup strategic finance to make a fraction of IBD asso pay for their next 5 years. Whereas those big law kids who couldn't make it will still become inhouse counsel that makes a respectable pay doing 9-5
I wonder what the competition is like for magic circle vs LMM/MM/BB/EB combined
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