Why would anybody choose a career in IB over Law?
As a student currently considering different potential career options, I have been looking into the pros and cons of different careers such as IB, consultancy and law. Anecdotally, IB seems like the most saturated industry as I know people that had to go through 4 or 5 interviews just to get a spring week at an investment bank. Furthermore, I have seen probably ten different posts warning against going into IB due to poor work-life-balance and the unfulfilling nature of the job. Despite this, I know comparatively very few people aspiring to become lawyers even though you can make up to $220k once qualified whilst arguably working on a more diverse and interesting range of things. The culture at most law firms seems better and I know many people who have worked at the same law firm throughout their entire career whilst many people are desperate to get out of IB as soon as possible. Even if you are really interested in finance, you can still become a lawyer and specialise in private equity or M&A with the potential to earn over 7 figures if you make partner. The only argument I have seen against law is the opportunity cost from studying an extra 3 years to get your law degree but this is very US-centric as in the UK it only takes an extra year of study after your LLB to start working at a law firm. Knowing all of this, what is it about IB that draws so many people in despite all the negatives?
Law School ain’t free.
Opportunity cost of 3 years without pay.
Big Law is just as boring as IB, if not worse. Real life isn’t an episode of Suits.
In fairness in the UK you apply to firms before law school and they usually pay for it lol
Law School is only 1 year in the UK and it is fully funded by your firm including living costs. I personally don't see how IB could be more interesting than a career in law at the junior level when you are basically only given grunt work.
Yes and if you're interested in M&A / securities law at a major firm, who does they usually work for? Us, the bankers, so if we have to be responsive during a transaction, they have to be even more responsive than us since we are paying them and big law is competitive. During the SPAC boom, we would constantly (but unintentionally) send our outside counsel a list of to do's usually on Friday and they would be sending emails late friday and often throughout saturday. They definetly were working more than us. They were almost always way more responsive to our requests or the clients outside counsels requests than we were to our clients aside from the "confirming receipt, will do" email we send to clients when they want something.
Money wise probably correct but mainly for exit opps to PE/HF. Law exit opps are trash
Don't many lawyers have the opportunity to go in house and work up from there? I'm pretty sure that's what the CEO of the Bank of America did.
The pay is worse.
Bankers can do exactly the same.
Yes, the corporate counsel job at a F500 is like a banker joining the corp dev team at F500. Probably a bit better pay given most of the lawyers doing this have 4-6 years of big law experience. But their growth potential is limited as there is only so many spots available and those can be pretty cushy jobs at some companies. Even my bank's internal M&A lawyers (all ex: big law) seem to have it pretty good.
Law exit opps is basically just more law
I guess its about the passion. Go for what you love
Personally aside from my finance studies, I had a strong interest in biblical studies. So i did both simultaneously. Its like i've found a particular purpose in my life. To be in a high responsibility role working with high ethics, influencing others to the upside, having the power (money) to do positive things
It's about passion. find your passion. do you want to work in contact with the people? do you want to defend people in court?
If you are simply attracted by the attractive remuneration in Finance then you did well to think twice, you'll be better elsewhere
Unrelated but what do you think about religious and anti-ESG funds?
I like the ETF that have ethics yes. personally I systematically discard porn/weed/tobacco/alcool related stocks so I would say I'm even more strict than ESG respective structure.
I think each one have the right to express his opinion as written in the First Amendment and its totally OK to be an Anti ESG funds if this is what you want to know. now you can expect a strong interest from investors with anti-woke perspective which will create a lot of bullish momentum. But you can imagine as well that it is quite shocking to say straight away "I don't care about the environment and pollution, i dont take measures to preserve the ocean and forest"
I would say everything depend on which values are promoted
I personally considered this, but law school is an extra $200k+ in addition to lost earnings of banking during those years. Furthermore your life as a 3rd year analyst or 1st year associate is going to be just as good if not better than someone going into big law. When looking into big law I saw hours that were comparable to most groups on the street excluding sweatshops. Not to mention 1st year associate pay in IB would smoke 1st year out of law school pay. As those above have said, your exit opps in law are just law opps. Not to say banking creates so many doors, but definitely different paths to pursue. (More than law when I compared it).
I know this is pretty much just a reiteration of your points, but it was what I thought through. I also think the majority of people on this website portray banking in a more negative light than what most people's experience and opinion actually is. Most people who are happy in their group aren't coming to WSO to glorify it, instead those coming are looking to whine about their experience (Not saying there is anything wrong with venting, it's just the fact of the matter). Are banking hours a bummer? Sure, but for most people it's really not that bad - nothing in life is easy.
No matter how much finance, accounting and economics you know, if you’re better with numbers than words, go into IB. If you’re better with words than numbers, become a lawyer.
You can’t be a good banker if you’re not mathy. You can’t be a good lawyer if you’re not good at reading, writing and talking.
People don’t realize logic is just math.
Is it actually this binary? Especially when most of banking is formatting powerpoints and law is doc reviews. Doesn't exactly require high level of either skill
Listen to a DD legal call and you’ll understand why. Most boring shit ever
Law school is 3 years of $200k cost + opportunity cost of wages and big law starts at ~220
comparably, someone who sticks in IB will make 350+ in year 4 as a senior associate (made 190 this year as an analyst 1)
the money is not comparable at all. As for the work, just do what you like
Money not really an argument because 3 years in irrelevant in a 40 year career. Also big law partner comp is likely better than IBD. PE/HF will be higher
What you're doing day-to-day in IB vs law is completely different, so the fact that you're comparing them is a bit concerning and suggests to me that you are just simply looking for prestigious career paths (frankly, hard to blame you as a student).
"Arguably working on more diverse and interesting range of things" as it relates to law is certainly an opinion, but do you really understand what M&A lawyers do all day? You really need to have a passion for the intricacies of law.
I didn't love IB but I truly could never imagine being a corporate attorney, even if they made double.
You could cut my testicles off before I do law
I once had an interest in law but after seeing what they do on the legal side of deals and what my lawyer friends outside of M&A law do, I knew I chose right by not going into law. Reviewing paperwork for legal minutia or writing long memos or reviewing hundreds of documents in diligence or discovery just sounds and looks like a pain - I actually like modeling and driving deals along (I’m in M&A) and in my group I’m not moving logos around in ppt or doing a lot of bs coverage work so I definitely think I’m in a better spot than my lawyer buddies. Like others have said though, it’s a totally different career and comparing it based on junior comp and hours doesn’t really reflect what the jobs and career trajectory actually are.
Realigning powerpoint slides might be boring but walking through and making boiler plate changes to a 100+ page credit agreement is way worse, trust me. Also, when you make it to the buyside the lawyers are your clients which is a more fun dynamic :)
Big law seems worse. Imagine wrapping up a fairly final version of the SPA and then the banker and seller calls and says, "hey, yeah were completely changing the deal structure". Whole sections of a 200+ (can be 1,000+) page document have to be redrafted, which takes a bunch of turns. These documents have to be perfect in many areas to avoid lawsuits or one side backing out of a deal for free if they find a loophole. A missed comma or semicolon can be a massive deal if its in the wrong place.
As one banker in the series Suits put it, “we pay you to Color the Paperwork”
After a few years in consultant vs law vs banking, you will come to realise, Bankers have more power/say in a transaction than anyone else (except ofcourse the PE partner!)
Beyond a few years, pay is only a number, the network/influence matters more.
Ofcourse transaction law is the more boiler plate boring shit ever! If you are talking criminal or civil law, that’s a different ball game and some do find it interesting
Thoughts on restructuring law?
Sounds like more paperwork
I think career fulfillment involves being closer to the action, and if you enjoy finance, bankers are way closer to the action than lawyers. In M&A deals lawyers just exchange markups of paperwork repeatedly, often times over terms and quibbles that just aren’t meaningful. Most of the negotiations on important terms are handled by bankers, and we’re the ones actually executing the deals for the clients from beginning to end. I have never seen the lawyers on our M&A deals handle anything related to numbers at all, only NDA and (definitive agreement markups and answering legal Q&A.
If you enjoy business, then strategics/portcos are closer to the action than financial sponsors/PE funds, which are are closer to the action than bankers, which are are closer to the action than lawyers. It’s the executives at strategics that are really driving a business forward and making operational decisions.
Where I think law makes a lot of sense is if you’re a litigator of some sort. Then you really are closest to the action, and playing the primary advisor role. If you strip out first 10 years of earnings, lawyers are gonna make more over the back 30 years and likely with less work and no pitching. Lawyers don’t pitch, they get inbounds I believe, which only applies to top 1% banking MDs.
I’m in PE now and I considered law in high school / undergrad. I work with lawyers every single day and every single day I thank God I’m not a lawyer…
Because they are two completely different professions? Have you considered there are different qualities of each outside of compensation and "culture"? Do you even know what corporate lawyers do on a day to day basis? Like holy shit
.
They are so incredibly different it's not a comparison. Even if you put the money/opportunity cost aside (you will earn that back in both careers, so should choose the one that is most interesting to you) the day to day is very different and someone who likes one career may hate the other.
Even an M&A focused lawyer is spending their entire life in documents, which is interesting to some but others may not like. IB is "closer to the action" in actually putting deals together, working on valuation, etc.
God bless transaction lawyers man, I could never do the work they do. The most mind-numbing work. It is very important stuff no doubt, but I am happy to pay their absurd legal fees to simply not do that God awful job.
From my perspective as a junior banker I was telling senior lawyers what to do.
1) The market in the US is supersaturated for lawyers. Way more JDs than practicing attorneys.
2) I’m not a lawyer, but my understanding is that transitioning into finance from law is very tough. You may understand legal frameworks but that doesn’t translate to you being a good banker or modeler. The benefit of a law background is very marginal in most cases. There are some distressed shops which might be more inclined to consider law backgrounds (Elliot, for example), but going into law specifically to get a chance to compete with finance candidates for a slot at Elliot is silly.
3) Hours aren’t as light as you might think. My law buddies were getting home later than my finance buddies at times. In fact, one of the advantages a lawyer might bring as a banking candidate would probably be that the lawyer is used to longer hours and juggling multiple deadlines. The courts might close by late afternoon but research and paperwork are worked on well past that point.
We hired an ex Skadden associate at the IB associate level, was ok but pushed work to analyst a bit too often and didn't understand some technicals. He lateraled to an EB after a year, seems to be doing ok.
1. True but you could say the same about finance applicants. The bottleneck for both is applying for firms out of law school/UG.
2. Can be true although not many try make the switch. Not much point going through the effort for similar pay and hours. Although from what I've heard making the transition from restructuring law to restructuring IB/DD/SS is actually relatively doable since the law background helps.
3. True basically are the same
On 1), I don’t think it’s fair to draw an equivalence on saturation between UG business/finance/Econ, which is pretty generalist, and a 3 year grad program which culminates in a difficult to pass state exam. If you are in a law program, you want to do law stuff. And that’s all you are really qualified to do. Most people in business-related programs are not aiming for IB or its relatives. UG programs are very flexible by design. Law school isn’t. So when I say that the market is supersaturated with JDs, I mean that are way more people with law degrees than there are slots in law firms or counsel roles at businesses and end up in roles where they are severely underemployed.
What question is this?!
Maybe, because, unlike too many people on Wall Street, some people actually want to work in finance.
Law is over-saturated. At least in the US, if you don't go to a top law school, you're fucked. Waste of effort, time, money, etc. Law hours can be just as terrible as IB if you're gunning for partner at a top firm. Equivalent of law partner is an MD, and your job will be more or less the same - bring in clients. Rainmakers make 7 figs, losers get cut. Law is also going to get crushed by AI, which can do doc review pretty well.
In comparing the two, IB is way more consistent and guaranteed. I don't work in either industry, but looking from the outside, I would rather be in IB than law any day.
Not only is law probably more boring, lawyers also work harder than people in IB.
Who the fuck would willingly go into corporate law.
if you have ever read a legal document…thats why. work is not that much more interesting than ib and if u dont have a passion for law, its 100% more worth it to go into ib
My goodness, where to even begin.
Many lawyers want to be bankers, and many more only don’t want to be bankers because they believe they don’t have the right personality or skills . . they too would pursue IB if they knew they could do the job.
I don’t know any bankers who want to be lawyers, other than the occasional analyst who is just looking for something different to try.
The pay differences are too small to really discuss, they’re both careers where people who excel make tons of money and people who don’t excel hate their lives.
The two big differences (which are related to eachother) to me:
1. Bankers develop general business skills and lawyers don’t
2. Bankers have a variety of exit options naturally and lawyers can only exit to other law roles unless they put in a solid effort to re-tool themselves
Those are connected but #1 was the big reason I switched. And I’m very glad I did. Even now, almost 15 yrs out of college, I still don’t know exactly what I want to do when I grow up. But I have broad interests across fundamental public equity, LBOs, early stage and even quant sometimes. Developing and navigating those ideas requires a generalist, but thorough, working knowledge of business and I wouldn’t be able to develop that as a lawyer. No matter how much lawyers think they are adjacent to business.
The simple “tell” for me is how often senior lawyers (I’m talking M&A heads at V10 firms) can be super impressive on the law side and still know jack shit about the businesses of which they speak. And it’s not for lack of trying either. They just don’t understand it thoroughly enough to be impactful on that side.
So to me it just boils down to, do you like business or not.
this forum:
don't do medicine
don't do law
I'm sure the medicine and law forums say the same things about finance as reasons not to do it... soul sucking 80hr+ work weeks, the handful of prominent intern deaths a few years back etc
this is ultimately a finance-focused forum and people posting here have self-selected into the finance path - others may choose into the law or medicine route, but it's not a clear cut of one path over another like OP seems to think
Just to add some colour, most U.S. people are unaware of UK Law school, but it's the same as a regular degree.
Once you get into a top firm, you get sponsored to do 1 year LPC after your Bachelors (essentially to qualify to practice Law). So you're paying the same to qualify in Law as any other degree/doing IB.
Starting salary for Law is much higher in the UK (street for banks is £65k, the top 4 law firms pay ~£90k I heard).
No idea about scale, but starting off in law is not as bad as the U.S. (where law school is insanely expensive).
Fair but it depends on what type of law you are talking about. Just an average lawyer? yeah, UK then has pretty good money, feel like a lot here make less than $60-70k from even decent law schools depending on the law path chosen. If you're talking about big law or big M&A law, then those are pretty low. Most of the associates in those roles in US are starting at $200k+. Not a lot of seats available thought and are starting $200k+ in the hole from law school debt in many cases. Seems like UK would be similar just as IB comp is generally similar, a bit higher in the US though anecdotely.
Corporate city law which is similar prestige to IB. NQ Associates at the top US firms in the city make £170k + bonuses (they essentially pay Cravath with GBP conversion). Magic Circle firms i.e. the traditionally most prestigious pay like £125k + bonus for NQ. If you move to a elite US firm in London it pays more than banking because they pay US rates in London which banks don't do.
From what I've seen/heard there is probably similar if not a bit more MC + US firm law seats vs BB/EB IBD seats. And less people apply to these as well
OP, you're completely right. In the UK it's Law > IB:
Take it from me personally, IB in the UK isn't worth it. Go into law and don't look back.
Genuinely considering switch to Law (particularly Rx find it super interesting), therefore curious if your points about partner pay, difficulty of making partner vs MD is actually accurate. Would definitely agree on your other points. Curious about how the above points compares to buyside stuff, considering you're in PE. One of the things holding me back from law is lack of better exit opps to things like PE. I can understand how it beats regular IBD.
The point about competition is important, from my understanding there are more reputable city law seats vs IBD seats, and they have fewer and less cracked applicants like you mentioned. Numbers I've seen seem to make law firm acceptances in the 3% mark whereas IBD is likely <1%
Just took out a partner at a top US law firm in London into a banking role. Believe me outside of a top few people at K&E / Lathams the pay isn’t all that. I assumed this guy made 2x more than he did.
Hey man sorry for responding 4 months late.
Im studying engineering at uni, would it still be possible to apply for law schemes or would I need to do some conversion course first?
You’ll need to do a conversion course. I think the pathway has changed recently but it should be easy to find the latest information online. You can still apply for vac schemes and training contracts during undergrad, and if you secure a TC then the law firm will the cover the costs of your conversion course.
A lot of the commentary here comes from a… pure “only has finance experience” perspective. I am an attorney who is working in finance now so hopefully this will provide some better balance.
(1) A lot of the investment banking projects are higher impact projects. Sure there is a ton of grunt work that entry level people do no matter what field you are in, the end consequence being an IPO, an M&A deal, etc, often makes a larger impact than a lot of the law. A massive portion of the law is just glorified box checking.
But on the contrary, anything criminal will have a deeper, even if narrower, impact on a person than an IPO and the like.
(2) It is true that attorneys also work on deals. However, attorneys work on a far narrower set of things than bankers do. Bankers touch on the widest amount of the process out of all of the advisors. Lawyers, both internal and external, pretty much “just” do doc review and help with the transaction documents. This isn’t bad. But it is basically just reviewing documents and contract drafting.
(3) Lawyers, like bankers, generally don’t stay around for a long time at the larger firms. They generally will either move down market over time or they move to clients/buy side. It is very similar to accounting. Most entry level associates at PwC don’t end up being partners. They will almost entirely go to clients or down market. The same is true both in law and banking.
However, in the law, the compensation floor is generally higher in moving down market. This has more to do with the fact that law firms have partners while most banks don’t than anything else. On the flip side, moving down market at a bank will have greater upside relative to the same move on the legal side.
In house counsel generally make less than the buy side. But there is also a far greater ability to get into government being a lawyer than a banker.
(4) If you like litigation type work there is no equivalent in banking/finance. The same is true for being a judge, especially at the federal level.
(5) The lifestyle is brutal in both banking and law. None of them are really 40 hour weeks.
(6) Law school. You have to get in. Most are going to cost you $100k plus. While you don’t need to be T7 or bust, you pretty much need to be at the equivalent at an investment banking target school. To put it in perspective, GS will hire from the University of Wisconsin. That is a thing that happens regularly for entry level roles. The law firm equivalent of GS, Wachtell, well… I am unaware of a single time they hired a UW Law grad for an entry level role. That isn’t to say it never happens but this is just meant to demonstrate how, relative to the investment banking recruiting process, the legal recruiting process is even more particular at the highest levels
Very helpful. What made you make the move into finance? And what do you do now?
Starting a thread with “XXX career is better than IB” in WSO is exactly the same as going into a church and saying Islam is better than Christianity
Biglaw is far shittier than you think it is. Lawyers always top the rankings of professions who are most likely to suffer from depression, abuse drugs and alcohol, or kill themselves.
Law is totally saturated with miserable people who went to law school because they were interested in public policy or constitutional law and find themselves having to work at big firms to pay back their debt.
In comparison the barrier to entry for IB is much lower -- you only need a BA and if you come in as an Associate then B school is 2 years as opposed to 3 for law school.
Law school trains you to be a lawyer, and that's it. If you do a year or two of IB and decide you hate it, it's easier to lateral over to multiple other jobs in business. It's much harder to lateral over to other business jobs as a lawyer.
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