I wondered if anyone might provide some feedback on an offer i just received.
my background: newly minted JD from top 40 law school, definitely not interested in practicing law; 2 years post ugrad underwriting residential and construction mortgages; philosoophy and physics BA ivy. for family reasons i've been focusing my search on the DC area, so despite preferring ibanking over consulting, the opportunities in the area are fairly slim, with most wanting a year or two at a BB firm to get in the door. i recently received an offer from a small consulting firm, focusing on cost cutting and org restructuring to portfolio companies of private equity firms (relationships with KKR, Goldman, Cerberus).
1) i was offered 65K base, reviewable in 3 months. this seems low to me. a JD with some experience in finance (internship and full time) along stellar track record in all courses taken at the business school (corp finance, accouting, modeling, IP transaction strategy) should be pretty close if not the same as MBA level salary, right? the 3 month review mitigates the discount somewhat, but i wonder if the initial discount could prevent a full adjustment after i do well. any thoughts on what my range should be at this point?
2) the engagements, as explained to me, focusing on cost cutting and some org restructuring/process improvements, no doubt provide a great view of how to operate companies efficiently and add to the bottomline. frankly, though, strategy work and finance pique my interest more thoroughly. does anyone see any obstacles in leveraging 2 or 3 years in this type of role (with increasing client management) into an i-bank, PE shop, or strategy consulting?
thanks for the advice
Wow. 4 years IVY at 40K + per year, plus 3 yrs of JD at min 25 K (In-state) up to 50K (Private) only gives you a 65K starting salary, with say hopefully a 25% bonus: 17K. All in you're at 82K salary having spent 7 yearsr of investment at a cost to yourself/family in upwards of $300000
That's a shit all return on investment.
Hopefully this story dissuades people who want finance to go the law route.
Note: I'm taking the LSAT this Saturday (seriously), lol.
no doubt. if you are certain you don't want to do law then don't go. however, it is a solid skill set, and provides a rigorous foundation that can be applied in a number of contexts. that being said, a jd/mba, or jd/msf is probably the best way to hedge your bets if you have doubts.
in the long run in think the JD is far more valuable as a skill set, assuming you have the chops to pick up the finance (and not looking to be a quant jock). not to be arrogant, but the legal curriculum is far more rigorous than an mba. it just takes some people a bit to recognize that fact.
two points, though. your ROI analysis is pretty flawed. assuming you get an mba, and you went all ivy top tier, that's 120K+ ugrad + 100K mba, getting you about 80-150 first year as a consultant. after 1 to 2 years that difference converges significantly if not disappears. you also assume though, that you didn't kick ass and get a free ride....
thanks for the lack of response in your "response"
If you were fortunate enough to get a free ride to law school, then take what i said with a grain of salt. it seems like you should have gotten an mba/jd by your analysis.
I apologize if my response wasn't necessarily geared to your question, but your information provides great insight into others potential choices and hence that's where my response was geared.
Now back to your issue, when you say that getting your JD is better in the long run, that me so, but you're dealing with a short term problem: i.e.- getting into banking or consulting with a JD degree. Your argument is thus flawed.
Your analysis of my argument assumes the following rosy scenarios: 1) You get the 65K, then get a raise soon thereafter 2) Are in a position to eventually command 80-150K without the almighty MBA (a few of my friends in Funds, HF were told that they needed an MBA to advance) 3) You did get a free ride , whereas if you had any lawyers in your family (another assumption) you would have chosen the BEST ranked law school that you could get into. I would assume someone who's been through the law school process understands what that name of the JD means in terms of salaries...
Another point, if we're talking about money, why didn't you just work as a lawyer and make some bank. I would assume that if you got a scholarship, you would at least be in the top 10-20 percent of your class and thus able to get a decent firm position in whichever city you live in.
your analysis of my analysis...
1) ROI takes into account the long term. being conservative, a 50K hit in the first 1 or 2 years is pocket change over 30 years.
2) if i were able to convince my wife to go to NYC, ALL BB banks recruit at the top 10 law schools, and start JD's at associate level. so, yes, i command that rate. the mba, frankly, is a waste of time. i know several people at HFs, PE shops, etc, who either didn't get an mba an went straight through or who are JD's. that being said, there are obviously mixed opinions about the immediate value of a JD to finance or consulting, but people were hesitant to stop smoking, or were slow to catch on the benefits of toilet paper, too.
3) i wouldn't be "assumming" if i had stated i got a free ride; i would be stating it. in fact, i didn't, but close enough.
4) working at a law firm for 2-3 years has zero appeal. my wife is a biglaw associate, as are a number of friends, both litgation and transactional. those 2 to 3 years teach you the least you could possibly learn about business/finance. you pick up some aspects along the way, but primarily a lot of doc review (i.e. skimming shit, not reading for substance or "thinking" about its worth), and random little research projects that don't amount to much. you have to be 4-6 years out before you start getting enough reponsibility to enagage in anything stimulating, and even then you're a lawyer, operating at the whim of your clients, not making deals. pay is good, true, but not good enough for me.
more to the point -- 65K is obviously below market for my skill sets and education. given that this is negotiable, is it advantageous to start at a cut rate given the 3 month review? what, in your opinion, is an acceptable range?
you raise some good questions and seem to be thinking about the issues from the right perspective. yes, $65k seems low for an advanced degree. MBAs are averaging $90k-$110k and non-gov law grads even more. $80k in DC would be a minimum acceptable bottom for me.
is there anyone at the firm (perhaps outside of the interview/offer process) that you can ask for salary input/guidance? perhaps this is norm for the firm... undercut on initial offer, payout bigger later-on, or maybe they're just cheap.
also, a friend of mine once took a low salary with review at 6 months and "guaranteed" salary increase. after 6 months of busting his arse, exceeding all of his management targets, he was let go after the 6 months. this was a dot-com startup and toward the end of the bubble (spring/summer of 2000), but it's worth keeping your eyes open. which it appears you're doing.
you could consider accepting at $65k, but asking for a guaranteed year 1 bonus minimum. of course, without knowing what the "normal" bonus is for such a position, it's obviously tough to pick a range for this summer that is appropriate.
ultimately, if you really like the firm and the opportunity, find someone there (or a former employee) to give you some scoop on compensation.
not sure who i can ask. in truth the "firm" is a group of former parters at bain/mercer/mck. really small. but the engagements, stemming from PE shops, are large. i imagine they command a competitive rate. even if it's less due to lack of brand name, they don't have as much in overhead to pay out.
so, long story short, i have to judge by comparable firms. is there a gap in billable rates for strategy vs operational work?
i think i'll ask for 85 on a 90 day term, which will probably get knocked down to 75 or 80. that's still a discount from median, and makes it easier to get above 110 if/when i do well.
have you heard about any obstacles in moving from operational/cost reduction to strategy or banking?
it's all about the options.
to say, "yes it's advantageous" or "no, it's not" depends on what your next best alternative is and the probability that you could land something better. do you haev otehr interviews ongoing? final rounds anywhere?
$65k base isn't horrible but with your education I would think that you could get at least $80k base to start with upside from that after 3 months. It can't hurt to ask for more up front -- if you present a reasonable argument related to the investment you have made in your education they might be willing to bump it to $75k-$80k...but you have to feel them out. you shoudl ask - "what is the range of bump I will receive after assuming you are happy with my work?"
Your #1 analysis of my analysis is wrong, you don't take into account my mba argument other than to see that you don't learn shit in a mba... that's bullshit and you know it. In your point #2, you make reference to top 10 law schools, but then in your post say you come from a top 40, which is it, huge difference. #3 you talk about this scholarship garbage, great you got a little covered... if you apply my better law school argument, the cost savings are disproportionate to your lower income once you start working, either finance or law
4i can appreciate your comments there
I think you should get an mba if you can't get anything substantive in finance, or a masters in finance...
my point about the mba is this....1) it wouldn't be worth the money at this point, with the JD. perhaps it would have made sense to do a jd/mba, but that's behind me now. 2) unlike the law, where it's extremely difficult to get the level of transformation from a book, the teaching method in most mba programs doesn't add significant value over work experience and self-study. my feeling is that the mba is valuable more as a degree, rather than being an intrinsically valuable investment, i.e. in spite of it's market value.
as for jd's from other than top 10 -- i mention recruiting efforts, not hiring. just like poeple go into i-banking from non-target undergrad programs.
last point i will make: if you have doubts over the convergence in compensation -- by which i mean that after you are in the door and have 3-4 years of experience, where you went to school and what degree you received becomes less and less relevant to comp (i believe this is particularly the case outside of the law) -- see george roberts. uc hastings law grad prior to going directly to bsc. no more needs to be said about his track record.
You are all getting this MBA vs law school ordeal wrong. First of all it doesn't say much if you went to law school when you're not interested in practicing law. If you're not interested, than you should not have gone. I mean after all it's hard for me to picture you in an interview for a BB explaining how you went to law school when it's not what you wanted to do. Secondly, it's not really about which one is more difficult, it's about what employers are seeking. No recruiter really cares if you did more work if they are looking for an MBA. It sounds like you are aware of the expected pay of a target school MBA grad and you seamlessly joined the two into thinking that you should receive the same pay. That being said I am sure they are aware of your skill set and I congratulate you on getting an offer. I would speak to them in more detail about what exactly "reviewable in 3 months" entails. In terms of the work, there is not one firm out there that wouldn't appreciate an applicant who is well seasoned in restructuring. My advice would be to ask the time frame in which you must reply to their offer and instead of beating around the bush career wise try and pin the nail on the donkey. If that doesn't work out use that as a backup plan. You are still young and you have many doors ahead of you. Stop concentrating on what others are getting and concentrate on your opportunities. Be honest with this firm and tell them what you were expecting and why. There's no honor in hiding what you want to do and what you want to be paid.
let me get this straight, you don't want to be a lawyer because you are operating at the whim of your clients
what do you think consulting is?
A JD...in this legal market (regardless of what you want to do)...from a "top 40" school...should be groveling on the ground for $65k...and clearly your employer knows this.
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