Finance vs. Law
Which is a better career path, in terms of:
1) Overall career compensation 2) Difficulty of reaching the top (MD in banking vs partner in law) 3) Career stability 4) Breaking into top firms (BB bank vs top law firm) 5) Work life balance
https://www.leveragedsellout.com/2006/08/biglaw-bigschmaw/
Although that story is a little exaggerated, it's not far off. Many of the horror stories that you hear about IB are also applicable in the field of law. The only big difference that I would note is that starting pay for lawyers vs. analysts at an investment bank is rather significant. Juniors at a law firm make much less starting out, but virtually do the same types and amount of work (although it may be even more boring), work the same hours, for less pay.
In finance, you get paid decent money when you're 22. In law, you take out like $150-250k when you're 22 so you have a shot of making decent money after three years of law school which is literal hell and if and only if you graduate at the top of your class with good grades when you're 25
In finance, you have a three year head start to make the same money and don't have to take out law school loans (or you could just have rich parents). Not to mention the work is more interesting arguably. Fairly similar fields and no work life balance, but if you know how compounding interest works, and would rather get paid for three years of grinding instead of paying to grind for three years, then finance is clearly the better option.
finance is more interesting, much less tedious at junior level, generally better culturally (albeit similar work life balance). but biggest difference is much more optionality. increasingly beginning your career as a lawyer means you’ll always be a lawyer, either at a law firm or in house counsel at a company. but finance experience prepares you much better to work in a variety of fields and functions within business
I’ve done both. The jobs are completely different in almost every way imaginable, and anyone who tells you otherwise is someone who hasn’t done both.
So you should do the one you’ll be better at. Any other considerations are pointless because when two jobs are so different, it’s highly unlikely you will be equally good at both. Take the time to explore who you are and which one is a better fit for your brain.
But to answer your questions:
1) Overall career compensation
Biglaw partners complain that senior ibankers make more. But there’s a lot more biglaw partners and for every senior banker there’s many more from his junior class who left along the way. So when you include all the hopefuls who didn’t make it, it’s a lot more equal.
2) Difficulty of reaching the top (MD in banking vs partner in law)
Generally harder in banking. But if that’s what you’re better at, then no.
3) Career stability
Law probably a bit more stable bc you have a clearly defined skill (you passed the bar and can practice). Financial skill set is clearly defined for some roles . . for IB you need valuation for example . . but broadly speaking there are a lot of people “in finance” who don’t necessarily have a strong, clearly defined and valuable skill set to market.
4) Breaking into top firms (BB bank vs top law firm)
Very personal. Law firms care about your law school grades and nothing else whatsoever. You could be a morbidly obese militant communist with missing teeth and body odor, and Cravath will hire you if you are top 10% at a top school. Or you could be the most presentable and likeable person on earth and if your grades are just a hair below cutoff, you’re out.
Banks are looking for a much broader skill set where the former example I gave would never get in and the latter would.
5) Work life balance
Both terrible but I’d say there’s more pressure in banking. In banking, you can always do more. The deck can always be better, the model can always be more accurate. Not true in law, when the contract is drafted it’s drafted.
could I dm you for further detail on your career? Interested in switching to law
Great answers all around. Thanks everyone, I think I'll continue to pursue banking.
Look up Paul Singer, you can start as a corporate lawyer and transition into law later on.
Provident dolorem at illum deleniti placeat molestiae omnis. Autem hic nemo perferendis non. Ea aut laboriosam id sit. Quasi nostrum sint necessitatibus voluptatum id mollitia ipsam ducimus. Vero soluta corporis esse laborum quod. Natus ex dignissimos sed mollitia ut fuga. Dolor consectetur aliquid suscipit eveniet.
Eaque nesciunt recusandae aut commodi dicta. Odit libero eius est et ipsa. Dignissimos quasi ut qui voluptatibus eum. Omnis eveniet neque ab voluptatibus.
Explicabo sed harum autem doloremque illo. Explicabo dolore ut rerum veritatis. Optio voluptates ratione esse vel maiores dicta dicta. Voluptas rerum pariatur doloremque aut dolorum qui ea. Aliquid et voluptates ipsam officia in excepturi provident quidem. Voluptas quidem maiores et distinctio veniam delectus molestiae. Maxime sed quos quo consequatur aliquam. Quae quos sed aut nobis quia quia quae.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...