Underperformer at PE. Switching to law over finance for stability?
I’m an associate at a PE firm, making ~$300k all-in. While I’m happy with the pay, I constantly worry about job security. I’m consistently ranked in the mid-to-low bucket during annual reviews. While I don’t think I’ll be laid off, it feels impossible to make it to VP. So, I’ve been considering a pivot to law.
I don’t think I’d excel in law either, but being a lawyer seems to offer more stability and downside protection for underperformers like me. Here’s my thought process:
I know getting into Big Law is very difficult, and making partner is even harder. However, once you’ve built your resume with a Big Law stint, the job seems stable as long as you’re okay not making partner. Plus, with a law license, you can potentially work well into your 60s or 70s, which feels important as people live longer and don’t necessarily want to retire early.
In contrast, finance offers higher compensation and the ability to earn good money early on. But making it to MD is equally tough, and trying to find a new job at the VP or director level seems challenging. Jobs in finance aren’t protected by licenses, and during downturns, you’re more likely to be impacted than lawyers. On top of that, finding a finance job as you age seems harder.
What do you all think? Am I overthinking this? Do I need to worry about job security in law too?
I think law firm headcount will be impacted by AI somewhat, but perhaps not real big law associate will be impacted. Not sure.
I think starting over in law will have some life discomforts — you’re already mid/late 20s — then you’ll be 30 when you’re starting as an associate. Associate anywhere is a young man’s game. You want to be at the very least looking over the hill at VP+ land when you start getting close to three decades on earth. It’s just so hard to be some VP’s arms and legs when you’re having kids of your own — I have friends in this position and it’s brutal. I have some career changer friends who are 30ish but did easier careers in their pre-finance days — but to go from a 4-5y hot burn like IB/PE right back into day 1 learning and proving yourself fire in a brand new field sounds absolutely unconscionable to me — but that’s just me. I’ve thought about this bc given law partner comp and my personal strengths, the thought crossed my mind. But I am getting old. I can’t do 16-18 hour days doing the most mindless things like an analyst / associate anymore.
Also, and this is critical, the job of a big law lawyer sounds and looks from what I have seen absolutely miserable. Like much worse than finance. It does not look thoughtful, or stimulating, or even worthy of a smart person’s time. Being a professor of the law on the other hand, or studying the theory of the law / philosophy underpinning it, seems quite interesting, but a different sort of career then. Even being like a SCOTUS clerk writing giant granular documents about the most minute details of some case sounds miserable. “At 2:30pm on Tuesday, the defendant remarked to the plaintiff that the whether may interfere with their plans. The defendant later denied making such remark. Before leaving the house, the plaintiff..” like are you fucking kidding me who could possibly give a shit
Anyway that’s a lot of ranting. But the other perhaps more important thing — you should evaluate why you are getting bottom bucket. If it is something like consistency or reliability which it often is, that will hold you back wherever you go. However, PE is pretty crazy so someone who is inconsistent in PE world may be a top performer in a less draining profession. My personal advice — evaluate what it is about you that is driving bottom bucket reviews. Perhaps you need to just not miss a deadline, even a softly implied one, for a full year and see if that turns things around (it may, as they must like the other stuff you bring to the table). Communicate proactively and do all the other rockstar things just to prove to yourself that you can do it, because I sense that you are perhaps feeling like you can’t, which I don’t think is fair to the effort you spent to get where you are today. When managing your time and executing work, act as though you are teaching a young apprentice associate how to do things in PE. That helps me avoid burnout — being an example for the younger guys. I like a job well done, but it can be exhausting to always do this job perfectly — but it’s a little easier when you think, hey what if an associate was over my shoulder right now wouldn’t I want them to see the best way to do this. Doing all of those things for a year will help — maybe you’ll get the VP look and maybe you won’t. If you don’t, my suggestion would be not to start brand new over but perhaps lateral to a different firm, or if you do want to get to a less crazy world, perhaps a different investment strategy like secondaries/RE, or if you’re ok with more corporate pace, corp dev or something.
You make many good points here, but one where I have to respectfully disagree with you is the age piece —
It’s absolutely never too late to grind. I’m sure you saw the IB post MBA associate who was in this position , or the post MBA MBB associate taking direction from a 24 YO EM. Careers are long, we all have our journey and the twists, and it’s never too late to make another push. Also, it’s not even like we’re talking about doing this when you are 40 (which many people do). The average amount of work experience at HYS is a few years.
But ya, as someone also considering law who was really interested in PE, it does kind of seem like not the most logical change . This post makes a lot of good points about how being a lawyer is prob worse than PE , you prob will come across similar qualities being important, etc.
Not sure there's much more stability in law. If you don't make partner at a big law firm you get kicked out and you either lateral, go to corporate, or start your own firm (same as finance). Also the only people more miserable than the PE associates and bankers on a deal are the lawyers on a deal (who are often double or triple staffed). Think about how quickly the law partners respond to your inane questions on the debt docs on a weekend...
You bring up some very valid thoughts and arguments. As a lawyer myself, I think the main component you should focus on, as you mention, is that being a lawyer is having a license to do something that most others cannot do, even if that means being a public defender. And even in the highest echelons of BigLaw there is still, generally, some path to still stay in the game, at some firm, if you are willing to put in the hours and you are competent enough. I don't think this can be said for the private equity world. There is a definite shelf life to most people's tenures in PE, and it is quite short. I also think that the outcome of going off on your own as a lawyer is on average way more sustainable than going off on your own in PE (obviously this doesn't work for some areas like VC or corporate law), which many in PE ultimately have to do if they want to stay in the game.
I also think that there is a baseline rigor to the way lawyers go about their work compared to the false precision in PE. As an experienced attorney clients will ultimately want to avail themselves of your services for your judgment and expertise, even if it may take you a long time to get to that point.
Thanks. In corporate law, let’s say I am able to execute but cannot do any client-facing work, can I still work as an associate forever even if I don’t move up to partner? I have seen some firms having of counsel. How difficult is it to become an of counsel?
No.You can't be an associate forever. However, with junior partners, this cutoff of ~6 years has been extended out a bit.
Of Counsel paths are functionally not a thing that is available to most people. You basically need to have something else marketable about you. For example, one common path for becoming an Of Counsel is by being a regulator beforehand where you don't really have the client-getting skills but your deep experience and relationships with a regulator makes you useful. It is very hard to be Of Counsel as just someone who was never good enough to become a partner. You generally need something more.
Acquire a small business and be your own boss. You get paid enough to pony up some capital and get something going of your own that interest you..
Ikr. The thing is that when you’re indoctrinated into only being a professional your entire career, you would rather spend 300k (excluding opportunity cost) on a law degree rather then spending on a small business where you could leverage some of your PE skills down the line to grow inorganically.
Law school should not be something that you just do. If you don't genuinely want to be a lawyer, do not go to law school. You do not genuinely want to be a lawyer so don't do it. However, a few additional points to consider.
(1) If you do not make partner in Big Law, you will be given the door unless you have some other marketable trait. They just aren't really promoting people beyond associate if it isn't to partner. With that being said, there is a growing number of junior partners in Big Law where they are non-equity partners who are functionally just senior associates with a title that allows the firm to bill their time at higher rates. But even with the growing use of junior partners, if you can't make it to actual partner, you will basically be guaranteed to get the boot at some point in time. The career stability you get from being in Big Law is not consistency within a firm, it is that you will always be able to find SOME job. If you are on the not on the real partner path, you will pretty much be expected to either leave for another firm or go join a business as in-house counsel.
(2) Do not underestimate the work you have to put in to be competitive for the Big Law recruiting process. It is functionally the same timeline as IB but condensed into the 3 years of law school instead of the 4 years of undergrad.
For IB recruiting, you have basically 3.5-4 semesters before you start interviewing for summer internships. You have the ability to frontload your coursework with easier classes. You are graded pretty much exclusively on your own ability to do the work. There is no curve. You can pretty much network your way into being competitive if you have the grades and some relevant experience. You basically are in entire control of whether or not you want a job in IB at A real investment bank.
In law school, you have 1.5-2 semesters before you start interviewing for summer associate jobs. Your first-year classes are functionally entirely decided for you. Your grade is not solely dependent on your own skills and knowledge. You are not just graded on your own skills and knowledge, but on how your skills and knowledge relate to the rest of the class. Not only is there a curve, law school classes are unlike virtually any other classes you'll have taken. It is going to be a transition period. It may be quick (ie - just a few weeks). It may take a while (ie - longer than a semester). But because of how early recruiting occurs, you can end up doing well in law school but have missed the boat on law school recruiting. For example, you can end up with a 3.7 GPA (which is competitive if you want a Big Law job) but you could have gotten straight Bs your first semester, half-As and half-Bs your second semester and then get As the rest of your time in law school. You'd have done very well in law school but with that type of performance, you would have missed the Big Law recruiting timeline. And, this is before how where you go to school is incredibly important. Like yes, investment banks do have target schools. But structurally speaking, you can go to any school and be just fine for getting AN IB job. Big Law is not really like that. Structurally, there is a far greater focus on hiring from target schools in Big Law than in IB. This isn't to say that it is impossible to be a non-target and get a Big Law gig, but the system is tilted against that even more so than in IB recruiting.
There are only like maybe 40-50 schools that would be beneficial for you if you want to get into Big Law. You likely can get into one of those, but know it is a much smaller list.
(3) Let's say you do even get a Big Law job. Do you know how many functions there are? It is a much wider field than IB/PE/etc. And if you are not actually interested in the work you do you will be miserable.
Incidunt beatae vel aut non occaecati nisi quia porro. Sit et fugiat est nobis. Et eveniet ut vitae sed necessitatibus accusantium aliquam.
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...