Big Law vs. Investment Banking

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miobrien
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Big Law vs. Investment Banking

Postby miobrien » Thu Oct 28, 2010 3:55 pm

Lock if necessary. Perhaps people ask this all the time.

I know far less about law and banking than most of you, so please fill me in.

IB isn't an option for me at this point since I'm already out of undergrad but I'm surprised how often it is positively characterized on these boards. Perhaps I've just come across posts by 0L's or law students with poor academic records / employment prospects. Nonetheless, it almost seems that people here wish they were investment bankers.

I've garnered the impression that IB is where one goes if they want to make lots of money -- particularly immediately and not down the road. Law, on the other hand, and contrary to many law school applicants' expectations, is not where one goes if making money is his motivation. In one thread someone quoted a partner at a firm he had worked with: "If you're here [working at a Big Law firm], then it's for some other reason [than making money]." What would that other reason be? (Besides having passion for or interest in law -- which would likely lead one to become a judge or professor and not a transactional lawyer.)

In another thread, someone recalled how a partner at a Big Law firm confessed to wishing she had gone into investment banking instead of law. She admitted to being jealous of her friends who were partners at Goldman Sachs even though she was also living a cushy life, making at least $300k/yr.

Crudely described, both BL and IB seem similar. One focuses on words/language, the other focuses on numbers. They are meticulous, intense, stressful professions. Lawyers and bankers work long hours, often involving rote tasks. Law focuses on the billable hour; banking on one's accomplishments productivity. Both have hierarchies: the work you do in the beginning isn't stimulating but pays well, and eventually you might make it to the top.

So is this simply a case of the grass being greener?

bdubs
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Re: Big Law vs. Investment Banking

Postby bdubs » Thu Oct 28, 2010 4:09 pm

miobrien wrote:Lock if necessary. Perhaps people ask this all the time.

I know far less about law and banking than most of you, so please fill me in.

IB isn't an option for me at this point since I'm already out of undergrad but I'm surprised how often it is positively characterized on these boards. Perhaps I've just come across posts by 0L's or law students with poor academic records / employment prospects. Nonetheless, it almost seems that people here wish they were investment bankers.

I've garnered the impression that IB is where one goes if they want to make lots of money -- particularly immediately and not down the road. Law, on the other hand, and contrary to many law school applicants' expectations, is not where one goes if making money is his motivation. In one thread someone quoted a partner at a firm he had worked with: "If you're here [working at a Big Law firm], then it's for some other reason [than making money]." What would that other reason be? (Besides having passion for or interest in law -- which would likely lead one to become a judge or professor and not a transactional lawyer.)

In another thread, someone recalled how a partner at a Big Law firm confessed to wishing she had gone into investment banking instead of law. She admitted to being jealous of her friends who were partners at Goldman Sachs even though she was also living a cushy life, making at least $300k/yr.

Crudely described, both BL and IB seem similar. One focuses on words/language, the other focuses on numbers. They are meticulous, intense, stressful professions. Lawyers and bankers work long hours, often involving rote tasks. Law focuses on the billable hour; banking on one's accomplishments productivity. Both have hierarchies: the work you do in the beginning isn't stimulating but pays well, and eventually you might make it to the top.

So is this simply a case of the grass being greener?


Biglaw is far more predictable than banking. Biglaw pays lockstep salary + variable bonus. Banking pays livable but not fabulous salaries with monster sized bonuses. Your bonus has extreme variability at a bank, and two years ago almost no one got any bonus at all. Biglaw is generally a toe the line kind of job where as long as you make hours (2000-ish) you are generally fine and will qualify for bonus. There are also more Biglaw jobs than IB jobs (generally speaking).

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dood
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Re: Big Law vs. Investment Banking

Postby dood » Thu Oct 28, 2010 4:19 pm

...
Last edited by dood on Tue Nov 09, 2010 2:06 am, edited 1 time in total.

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RVP11
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Re: Big Law vs. Investment Banking

Postby RVP11 » Thu Oct 28, 2010 4:40 pm

dood wrote:lawyers will forever work FOR ibankers.

http://www.leveragedsellout.com/2006/08 ... bigschmaw/

2nd to last paragraph.


TBF, lawyers work for everyone. It's a service profession.

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nealric
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Re: Big Law vs. Investment Banking

Postby nealric » Thu Oct 28, 2010 4:43 pm

TBF, lawyers work for everyone. It's a service profession.


Whether people realize or not, everyone works for someone.

ruski
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Re: Big Law vs. Investment Banking

Postby ruski » Thu Oct 28, 2010 4:47 pm

you always see lawyers who leave the field and become bankers. but you never see bankers give up their life and go to law school and become lawyers. that should tell you something. my boss also admitted to me that had he known what banking really was out of college, he would have gone for that instead of law school.

keep in mind banking is a tough stint. it is probably harder to become a managing director (highest level in IB) than a partner at a law firm. the kids who do banking at the lower level like analyst and associates though, you can't really compare yourself to them. yea they are making money now, but eventually they're gonna need to move on. if they can't land a a job at a solid PE or HF shop afterwards, they're aren't gonna be raking it millions any time soon. it's a much riskier business. not all of them make into good shops afterwards. i know several who are at much lower paying, yet less stressful jobs.

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RVP11
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Re: Big Law vs. Investment Banking

Postby RVP11 » Thu Oct 28, 2010 4:52 pm

ruski wrote:but you never see bankers give up their life and go to law school and become lawyers.


Are you being serious? Tons of IB people go to law school.

bdubs
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Re: Big Law vs. Investment Banking

Postby bdubs » Thu Oct 28, 2010 5:44 pm

RVP11 wrote:
ruski wrote:but you never see bankers give up their life and go to law school and become lawyers.


Are you being serious? Tons of IB people go to law school.


^^^above is correct.

For 95% of people banking isn't a career its a job. Going to law school gives you a real career option that is stable and generally well paid (for biglaw at least).
Last edited by bdubs on Thu Oct 28, 2010 7:11 pm, edited 1 time in total.

Anonymous User
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Re: Big Law vs. Investment Banking

Postby Anonymous User » Thu Oct 28, 2010 7:02 pm

I worked as an I-banker before coming to law school. It totally fucking sucked. It's cheesy. I wouldn't recommend it to anyone.

ruski
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Re: Big Law vs. Investment Banking

Postby ruski » Thu Oct 28, 2010 7:26 pm

the only bankers i know in law school either got laid off or came from no-name shops where they weren't doing anything substantive but only pitching/marketing work. this is not the "banking" that most people think of as those pple are not making bank and their exit options are limited. i am highly skeptical of anyone going from a bulge bracket to law school. if anyone has heard of someone i would be very interested to hear why.

any by bankers going to law school, i hope you mean actual investment bankers. not kids who worked in goldman sach's operations dept.

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rayiner
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Re: Big Law vs. Investment Banking

Postby rayiner » Thu Oct 28, 2010 7:30 pm

RVP11 wrote:
ruski wrote:but you never see bankers give up their life and go to law school and become lawyers.


Are you being serious? Tons of IB people go to law school.


And even if more people do law -> IB than IB -> law, how much of that is due to the latter transition requiring $200k and 3 years of schooling?

ruski
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Re: Big Law vs. Investment Banking

Postby ruski » Thu Oct 28, 2010 7:32 pm

rayiner wrote:
RVP11 wrote:
ruski wrote:but you never see bankers give up their life and go to law school and become lawyers.


Are you being serious? Tons of IB people go to law school.


And even if more people do law -> IB than IB -> law, how much of that is due to the latter transition requiring $200k and 3 years of schooling?


at the upper levels you will need an MBA anyways. if you really wanted to be a lawyer, i don't see why the extra year would be determinative.

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rayiner
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Re: Big Law vs. Investment Banking

Postby rayiner » Thu Oct 28, 2010 7:32 pm

ruski wrote:the only bankers i know in law school either got laid off or came from no-name shops where they weren't doing anything substantive but only pitching/marketing work. this is not the "banking" that most people think of as those pple are not making bank and their exit options are limited. i am highly skeptical of anyone going from a bulge bracket to law school. if anyone has heard of someone i would be very interested to hear why.

any by bankers going to law school, i hope you mean actual investment bankers. not kids who worked in goldman sach's operations dept.


If you're going to limit the IB field like that, you should do the same for law. There may not be a lot of GS associates jumping ship for law, but there aren't many W&C associates jumping ship for IB...

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rayiner
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Re: Big Law vs. Investment Banking

Postby rayiner » Thu Oct 28, 2010 7:34 pm

ruski wrote:
rayiner wrote:
RVP11 wrote:
ruski wrote:but you never see bankers give up their life and go to law school and become lawyers.


Are you being serious? Tons of IB people go to law school.


And even if more people do law -> IB than IB -> law, how much of that is due to the latter transition requiring $200k and 3 years of schooling?


at the upper levels you will need an MBA anyways. if you really wanted to be a lawyer, i don't see why the extra year would be determinative.


It is possible to get into upper level IB without an MBA, while it is impossible to get into even shitlaw without a JD.

ruski
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Re: Big Law vs. Investment Banking

Postby ruski » Thu Oct 28, 2010 7:38 pm

rayiner wrote:
ruski wrote:the only bankers i know in law school either got laid off or came from no-name shops where they weren't doing anything substantive but only pitching/marketing work. this is not the "banking" that most people think of as those pple are not making bank and their exit options are limited. i am highly skeptical of anyone going from a bulge bracket to law school. if anyone has heard of someone i would be very interested to hear why.

any by bankers going to law school, i hope you mean actual investment bankers. not kids who worked in goldman sach's operations dept.


If you're going to limit the IB field like that, you should do the same for law. There may not be a lot of GS associates jumping ship for law, but there aren't many W&C associates jumping ship for IB...


what are you talking about. if anything only the top firms have people jump because it's really hard. there are plenty of cravath associates who jump ship to IB. During my interview there, it was mentioned like 89273 times. it's almost like it was a selling point.

ruski
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Re: Big Law vs. Investment Banking

Postby ruski » Thu Oct 28, 2010 7:39 pm

rayiner wrote:
It is possible to get into upper level IB without an MBA, while it is impossible to get into even shitlaw without a JD.


yes and its possible to be a millionare without going to college. just because it happens doesn't mean its the norm. look at some directors' bios. they almost all have advanced degrees.

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rayiner
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Re: Big Law vs. Investment Banking

Postby rayiner » Thu Oct 28, 2010 7:42 pm

ruski wrote:
rayiner wrote:
ruski wrote:the only bankers i know in law school either got laid off or came from no-name shops where they weren't doing anything substantive but only pitching/marketing work. this is not the "banking" that most people think of as those pple are not making bank and their exit options are limited. i am highly skeptical of anyone going from a bulge bracket to law school. if anyone has heard of someone i would be very interested to hear why.

any by bankers going to law school, i hope you mean actual investment bankers. not kids who worked in goldman sach's operations dept.


If you're going to limit the IB field like that, you should do the same for law. There may not be a lot of GS associates jumping ship for law, but there aren't many W&C associates jumping ship for IB...


what are you talking about. if anything only the top firms have people jump because it's really hard. there are plenty of cravath associates who jump ship to IB. During my interview there, it was mentioned like 89273 times. it's almost like it was a selling point.


Cravath isn't really at the top of the legal profession. Places like W&C, Munger, etc, are.

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rayiner
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Re: Big Law vs. Investment Banking

Postby rayiner » Thu Oct 28, 2010 7:43 pm

ruski wrote:
rayiner wrote:
It is possible to get into upper level IB without an MBA, while it is impossible to get into even shitlaw without a JD.


yes and its possible to be a millionare without going to college. just because it happens doesn't mean its the norm. look at some directors' bios. they almost all have advanced degrees.


My point is that lawyers with JD's can and do jump to IB because they have a relevant advanced degree. Investment bankers can't jump to law in any capacity without going back to school for a JD.

ruski
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Re: Big Law vs. Investment Banking

Postby ruski » Thu Oct 28, 2010 7:45 pm

rayiner wrote:
ruski wrote:
rayiner wrote:
ruski wrote:the only bankers i know in law school either got laid off or came from no-name shops where they weren't doing anything substantive but only pitching/marketing work. this is not the "banking" that most people think of as those pple are not making bank and their exit options are limited. i am highly skeptical of anyone going from a bulge bracket to law school. if anyone has heard of someone i would be very interested to hear why.

any by bankers going to law school, i hope you mean actual investment bankers. not kids who worked in goldman sach's operations dept.


If you're going to limit the IB field like that, you should do the same for law. There may not be a lot of GS associates jumping ship for law, but there aren't many W&C associates jumping ship for IB...


what are you talking about. if anything only the top firms have people jump because it's really hard. there are plenty of cravath associates who jump ship to IB. During my interview there, it was mentioned like 89273 times. it's almost like it was a selling point.


Cravath isn't really at the top of the legal profession. Places like W&C, Munger, etc, are.


those are litigation firms, so those people can't jump even if they wanted to. so that could just as likely be the reason why no one leaves w&c for ib - b/c no ib would want them.

mfors
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Re: Big Law vs. Investment Banking

Postby mfors » Thu Oct 28, 2010 7:58 pm

dood wrote:lawyers will forever work FOR ibankers.

http://www.leveragedsellout.com/2006/08 ... bigschmaw/

2nd to last paragraph.


and bankers will always be salesmen

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vamedic03
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Re: Big Law vs. Investment Banking

Postby vamedic03 » Thu Oct 28, 2010 8:01 pm

rayiner wrote:
ruski wrote:
rayiner wrote:
ruski wrote:the only bankers i know in law school either got laid off or came from no-name shops where they weren't doing anything substantive but only pitching/marketing work. this is not the "banking" that most people think of as those pple are not making bank and their exit options are limited. i am highly skeptical of anyone going from a bulge bracket to law school. if anyone has heard of someone i would be very interested to hear why.

any by bankers going to law school, i hope you mean actual investment bankers. not kids who worked in goldman sach's operations dept.


If you're going to limit the IB field like that, you should do the same for law. There may not be a lot of GS associates jumping ship for law, but there aren't many W&C associates jumping ship for IB...


what are you talking about. if anything only the top firms have people jump because it's really hard. there are plenty of cravath associates who jump ship to IB. During my interview there, it was mentioned like 89273 times. it's almost like it was a selling point.


Cravath isn't really at the top of the legal profession. Places like W&C, Munger, etc, are.


Cravath may not be the top of the legal profession, but its certainly part of the top of the legal profession. The litigation only/litigation heavy firms are great, but they really are no the absolute pinnacle of the legal profession. Other firms are at the top of the legal profession for transactional, tax, regulatory, etc.

Anonymous User
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Re: Big Law vs. Investment Banking

Postby Anonymous User » Thu Oct 28, 2010 8:24 pm

yes and its possible to be a millionare without going to college. just because it happens doesn't mean its the norm. look at some directors' bios. they almost all have advanced degrees.





Completely untrue. You absolutely don't need an MBA to succeed on Wall Street. One of my best friends works at a hedge fund and my girlfriend's older brother works at GS- neither have MBAs.

Caveat- both of them are bond traders, so not truly IB but trading is the way to go in finance. Sure, top IB rainmakers make bank, but, like BigLaw, if you're not making it rain you're toiling away. Trading is much more meritocratic and its a way where you can make a lot more money a lot faster than on the IB side. There's a reason that traders are taking over Wall Street (see Blankfein, Lloyd).

Now will Dodd-Frank change the trading/IB balance of power? Possibly, but ATM traders rule the Street

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quakeroats
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Re: Big Law vs. Investment Banking

Postby quakeroats » Thu Oct 28, 2010 8:30 pm

vamedic03 wrote:
rayiner wrote:
ruski wrote:
rayiner wrote:the only bankers i know in law school either got laid off or came from no-name shops where they weren't doing anything substantive but only pitching/marketing work. this is not the "banking" that most people think of as those pple are not making bank and their exit options are limited. i am highly skeptical of anyone going from a bulge bracket to law school. if anyone has heard of someone i would be very interested to hear why.

any by bankers going to law school, i hope you mean actual investment bankers. not kids who worked in goldman sach's operations dept.

If you're going to limit the IB field like that, you should do the same for law. There may not be a lot of GS associates jumping ship for law, but there aren't many W&C associates jumping ship for IB...


what are you talking about. if anything only the top firms have people jump because it's really hard. there are plenty of cravath associates who jump ship to IB. During my interview there, it was mentioned like 89273 times. it's almost like it was a selling point.


Cravath isn't really at the top of the legal profession. Places like W&C, Munger, etc, are.


Cravath may not be the top of the legal profession, but its certainly part of the top of the legal profession. The litigation only/litigation heavy firms are great, but they really are no the absolute pinnacle of the legal profession. Other firms are at the top of the legal profession for transactional, tax, regulatory, etc.


In a past life I had the pleasure of working with a number of very successful lawyers from all parts of the profession. If we're measuring the height of the legal profession in dollars, personal injury lawyers that dominate their region go to the top of the pile. You can squirrel away north of $50-100 million without the costs and issues of working in New York or D.C. to sap your earnings.

ruski
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Re: Big Law vs. Investment Banking

Postby ruski » Thu Oct 28, 2010 9:09 pm

Anonymous User wrote:
yes and its possible to be a millionare without going to college. just because it happens doesn't mean its the norm. look at some directors' bios. they almost all have advanced degrees.





Completely untrue. You absolutely don't need an MBA to succeed on Wall Street. One of my best friends works at a hedge fund and my girlfriend's older brother works at GS- neither have MBAs.

Caveat- both of them are bond traders, so not truly IB but trading is the way to go in finance. Sure, top IB rainmakers make bank, but, like BigLaw, if you're not making it rain you're toiling away. Trading is much more meritocratic and its a way where you can make a lot more money a lot faster than on the IB side. There's a reason that traders are taking over Wall Street (see Blankfein, Lloyd).

Now will Dodd-Frank change the trading/IB balance of power? Possibly, but ATM traders rule the Street


reading comp fail. no one is talking about this. trading is a whole other beast. not even bankers can lateral into trading. pretty much if you don't get into it after college, you've missed the boat. and trading is even more risky than banking since if you have one or two negative years they just kick you out. its all about the numbers. in banking though several directors will have an mba since its much more managing/sales/people-skills focused. trading is just about turning a profit on your trades.

lawschoollll
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Re: Big Law vs. Investment Banking

Postby lawschoollll » Thu Oct 28, 2010 9:20 pm

rayiner wrote:
ruski wrote:
rayiner wrote:
ruski wrote:the only bankers i know in law school either got laid off or came from no-name shops where they weren't doing anything substantive but only pitching/marketing work. this is not the "banking" that most people think of as those pple are not making bank and their exit options are limited. i am highly skeptical of anyone going from a bulge bracket to law school. if anyone has heard of someone i would be very interested to hear why.

any by bankers going to law school, i hope you mean actual investment bankers. not kids who worked in goldman sach's operations dept.


If you're going to limit the IB field like that, you should do the same for law. There may not be a lot of GS associates jumping ship for law, but there aren't many W&C associates jumping ship for IB...


what are you talking about. if anything only the top firms have people jump because it's really hard. there are plenty of cravath associates who jump ship to IB. During my interview there, it was mentioned like 89273 times. it's almost like it was a selling point.


Cravath isn't really at the top of the legal profession. Places like W&C, Munger, etc, are.

BAM! credibility lost. Cravath isn't at the top of the legal profession? Okay. Elite *litigation* firms are where people transfer to IB from? Okay. Thanks for playing!!




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