Breaking into IB from law
Ive recently been interested in breaking into investment banking, however im unsure of how i should go about doing so. For context, im a 3rd year associate at a large firm in nyc working in M&A. Prior to this, i worked for 2 years as a federal clerk. I went to a T7 law school but i also attended a standard state school for undergrad. Im not sure if this would be a disadvantage should i want to break in as im aware that IB places a lot of value on undergrad prestige. Would it be best for me to get my MBA to try and break in, or do you think my unique backround can land me a spot.
Transitioning from big law to IB is absolutely possible with the assumption that you have already done a few deals (front to back and can speak intelligently about them). Would advise to network with the bankers on said deals. Deals that are publicly announced are highly favorable. Would be a plus if your current law firm is amongst the “vault 14” crowd (eg, Skadden looks more attractive on paper than say Pillsbury).
In regard to your initial experience as a federal clerk, it will not carry much if any weight as it is not transactional in nature (closer to litigation / compliance work, I am assuming).
Assuming no MBA but made the switch, you will likely be on the structuring side / work on term sheet review (limited modeling) given a lack of expertise. Don’t let this detract you from trying as modeling could be learned on your own time.
Thanks for your feedback
No problem!
T7 is a unique choice for a cutoff given standard practice. 95+% odds this means Penn.
yea
What do you, Lloyd Blankfein, David Bonderman, and George Roberts all have in common?
It is very doable to lateral in as an associate. However, because you come from a non-standard background, you use up the one “get out of jail” free card people generally get. You have to be effectively perfect at everything else. Which is very doable. In particular, you need to speak inteligently about your deals. The benefit you bring (in the eyes of most people who’d likely hire you) is you have worked on deals. You need to market that well
1. Banks will always value your background. The disadvantages you point are not relevant. Your background is very invaluable. The question is which team - Coverage vs M&A vs RX vs LevFin etc. You do not need an MBA.
2. RX, LevFin and associated groups will look very favorably at you, particularly if you worked on drafting credit agreements, or were peripherally involved in the credit process tied to M&A (staple financing, etc etc).
3. Do not just assume that just because you worked as M&A lawyer means you are ready to do Coverage or M&A or that they will prefer you. The only thing that really works in your favor is that you understand a deal process (and the intensity it brings). M&A lawyers are basically quarter-backing the deal from a legal perspective- you are the liaison for say regulatory lawyer, anti-trust lawyer, ECM lawyer,etc (the job is not just drafting, its getting a bunch of specialists to provide drafting/other inputs on a deal from legal perspective). In the same way, bankers (particularly associates but also VPs) are also quarter-backing a deal but from a wider perspective - In addition to running the math and materials, you are now corralling the management, the accountants, the tax-accountants, internal finance people, debt advisory team, the lawyers, etc etc. Your similarity ends here though. Associate/VP level banking - very much focused on being in the model, checking numbers, having a good grip of financials, etc- these are tools of trade you can only learn through experience and dedication (and most of your background doesn't really help here).
4. Your biggest pitfall would be the perception that you are not good at math, or excel. You have to overcome that both in recruiting but also once you do make the switch. We had an associate once come through a top tier law firm as a lateral after 2 years of law and fell apart because he was completely unable to operate at the same level our analysts were operating at, or check work, or make incremental edits/provide meaningful guidance. (Interestingly, he is now doing something completely unrelated and fun!). As a banker, you are responsible for the numbers, and (almost always) the materials. The buck starts and stops with you. Someone above pointed learning financial modelling - you absolutely must, and not just learn it, but become at least as good as analysts/associates. That should be your standard.
5. Dealing with uncertainty- law is very definitive. Your job is to identify risks and mitigate them for your clients. Banking is often doing the opposite (outside of RX) - your job is to convince the clients to take a little more risk (more equity, more debt, another acquisition, disposal, etc etc). The greatest lawyer-turned-bankers are those that can, among things, make a balanced judgment. This is also a reflection of your earnings potential - law is fixed, banking is bonus based. Are you comfortable with that type of work and earnings?
Source: I was a M&A lawyer once.
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