How much finance/econ do you have to know for corporate law?

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roranoa
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Re: How much finance/econ do you have to know for corporate law?

Postby roranoa » Fri Mar 04, 2011 12:16 am

vamedic03 wrote:There's a ton of BS in this thread.

If you want to work for a top corporate practice, you only need 1 thing: great 1L grades.

Look, this blabbing back and forth about CFA and CPA is a waste of time. You don't need any business background to get a position as a corporate SA. You need good law school grades.


Yes but I think there's some credibilty in one response that quotes a Yale law professor.
I also think it would give me a boost if I knew the material beforehand.

roranoa
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Re: How much finance/econ do you have to know for corporate law?

Postby roranoa » Fri Mar 04, 2011 12:21 am

Anonymous Loser wrote:Because this thread has reached a surprising length without anyone bringing it up, I feel it is worth pointing out that learning how to use CNTRL+F encompasses 95% of the tasks assigned to the typical first- through fifth-year corporate associate.


I think you're mistaking the CNTRL+F function for something else.

Otherwise, I just don't get it..
Last edited by roranoa on Fri Mar 04, 2011 2:35 am, edited 1 time in total.

JeNeRegretteRien
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Re: How much finance/econ do you have to know for corporate law?

Postby JeNeRegretteRien » Fri Mar 04, 2011 12:52 am

Despite the glib response vamedic03 offered above, she/he had some good advice in another thread - while in law school, take corporate finance and accounting, either as offered at your law school or the business school. 

As for learning some finance on your own, here are some thoughts based on my experience, although I had the luxury of learning finance both through industry and in school, so take it with a grain of salt:

The CFA I materials are superb, but probably overkill, even if you don't plan to take the test. So only spend the $1K on those if you have some secret love of finance. I have them, they're an amazing reference and purpose built for self study. But they might be a bit much, so if you get them don't worry about or take the test and don't let them stress you out. Just use them (or really, parts of them) as a convenience.

If you want to get a head-start, just for self-confidence, maybe you could read (if you're gung-ho) McKinsey's book on Valuations (might be too steep, so check it out before buying) and occasionally check out McKinsey on Finance. More approachably (sic?), read M&A related articles in the FT, Business Week, and HBR. 

In law school, if you'd really like a great Finance intro, maybe consider finding a financial modeling class. Not because you'll be doing any, but because it is a shockingly efficient way to learn in one class all the practical finance and accounting you'll need. Best finance class I ever took. They're modeled on the training an iBanker gets, and it's a great way to learn finance efficiently.

The point that none of this is necessary or vital, however, is true. Will it be helpful, of course. Even if it just makes you feel more comfortable / confident. Can a deliberate effort to understand finance be a competitive advantage in getting a job, or more importantly doing well in it, naturally. You're not going to regret learning some finance, especially if you enjoy it. And the more finance you know the more exit options you'll have. And it will give you some sense of whether you actually like this stuff.

[edited for clarity, and to add a few more ideas]
Last edited by JeNeRegretteRien on Fri Mar 04, 2011 1:40 am, edited 3 times in total.

Sup Kid
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Re: How much finance/econ do you have to know for corporate law?

Postby Sup Kid » Fri Mar 04, 2011 1:09 am

JeNeRegretteRien wrote:Despite the glib response vamedic03 offered above, she/he had some good advice in another thread - while in law school, take corporate finance and accounting, either as offered at your law school or the business school.

Especially accounting, as just understanding the basics of a balance sheet and the credit/debit system are incredible helpful. Plus, it'll be essential if your aim is to go in-house 5 years down the line.

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nealric
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Re: How much finance/econ do you have to know for corporate law?

Postby nealric » Fri Mar 04, 2011 1:11 am

You do need to understand many aspects of finance in a corporate practice, but it's hardly necessary to have any background before starting at a firm.

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well-hello-there
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Re: How much finance/econ do you have to know for corporate law?

Postby well-hello-there » Fri Mar 04, 2011 2:13 am

JeNeRegretteRien wrote:To wit: the pass rate for EACH exam is 35%-45% (approximately like the bar exam).

I knew a few people in undergrad who were studying for CFA I and they were NOT stellar finance students. If the 35%-45% pass rate holds true for each of the three exams, then CFA II and III must be insanely harder than CFA I. I'm thinking about a large percentage of testers who likely fail CFA I and then give up on pursuing the charter altogether.
What is your source for the bar passage rates being 35-45%? Even the worst tier 4 law schools manage to pull off better than 50% bar passage rates.

JeNeRegretteRien wrote:90% of business has not that much to do with accounting - not at the level of a CPA, anyway. I mean most PE people and senior executives don't know that much about accounting, and a truly tiny number have CPAs.

I found your post informative and I'm not trying to be hostile but I think you're just speculating here about most senior executives not knowing much about accounting. Corporate accounting is a popular stepping stone into corporate management because the auditors get to know so much about how a particular corporation operates and that knowledge is critical to running the business.

roranoa
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Re: How much finance/econ do you have to know for corporate law?

Postby roranoa » Fri Mar 04, 2011 2:39 am

JeNeRegretteRien wrote:Despite the glib response vamedic03 offered above, she/he had some good advice in another thread - while in law school, take corporate finance and accounting, either as offered at your law school or the business school. 

As for learning some finance on your own, here are some thoughts based on my experience, although I had the luxury of learning finance both through industry and in school, so take it with a grain of salt:

The CFA I materials are superb, but probably overkill, even if you don't plan to take the test. So only spend the $1K on those if you have some secret love of finance. I have them, they're an amazing reference and purpose built for self study. But they might be a bit much, so if you get them don't worry about or take the test and don't let them stress you out. Just use them (or really, parts of them) as a convenience.

If you want to get a head-start, just for self-confidence, maybe you could read (if you're gung-ho) McKinsey's book on Valuations (might be too steep, so check it out before buying) and occasionally check out McKinsey on Finance. More approachably (sic?), read M&A related articles in the FT, Business Week, and HBR. 

In law school, if you'd really like a great Finance intro, maybe consider finding a financial modeling class. Not because you'll be doing any, but because it is a shockingly efficient way to learn in one class all the practical finance and accounting you'll need. Best finance class I ever took. They're modeled on the training an iBanker gets, and it's a great way to learn finance efficiently.

The point that none of this is necessary or vital, however, is true. Will it be helpful, of course. Even if it just makes you feel more comfortable / confident. Can a deliberate effort to understand finance be a competitive advantage in getting a job, or more importantly doing well in it, naturally. You're not going to regret learning some finance, especially if you enjoy it. And the more finance you know the more exit options you'll have. And it will give you some sense of whether you actually like this stuff.

[edited for clarity, and to add a few more ideas]


Awesome advice as always!

Are you attending Harvard? I took the liberty of browsing through some of your posts.
Congrats on that if I'm right.
Last edited by roranoa on Fri Mar 04, 2011 6:24 am, edited 1 time in total.

JeNeRegretteRien
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Re: How much finance/econ do you have to know for corporate law?

Postby JeNeRegretteRien » Fri Mar 04, 2011 3:36 am

well-hello-there wrote:
JeNeRegretteRien wrote:To wit: the pass rate for EACH exam is 35%-45% (approximately like the bar exam).

I knew a few people in undergrad who were studying for CFA I and they were NOT stellar finance students. If the 35%-45% pass rate holds true for each of the three exams, then CFA II and III must be insanely harder than CFA I. I'm thinking about a large percentage of testers who likely fail CFA I and then give up on pursuing the charter altogether.
What is your source for the bar passage rates being 35-45%? Even the worst tier 4 law schools manage to pull off better than 50% bar passage rates.

JeNeRegretteRien wrote:90% of business has not that much to do with accounting - not at the level of a CPA, anyway. I mean most PE people and senior executives don't know that much about accounting, and a truly tiny number have CPAs.

I found your post informative and I'm not trying to be hostile but I think you're just speculating here about most senior executives not knowing much about accounting. Corporate accounting is a popular stepping stone into corporate management because the auditors get to know so much about how a particular corporation operates and that knowledge is critical to running the business.



No worries. Here's my rationale:

I'm thinking of bar passages rates not by school, but by state. Which of course vary by jurisdiction, but in DC or CA bar passage rates of 50% +\- 10% don't appear unusual, at least based on a casual look at ncbex data. CA is admittedly a tough state, but for a while there, 35% pass rates seemed frighteningly common, but maybe my memory is off.

But, true, the CFA pass rate is lower on average than the bar exam. Which I think affirms the basic point: CFA, not a casual or demonstrably easy exam.

As to backgrounds of senior management, my thinking isn't based on a large N data set, but is not rank speculation - it's just what my experience working with senior management teams bore out. But clearly no one person's experience is definitive. And, of course, career track varies by company and industry.

And your point seems actually consistent with mine: Do a high % of auditors go into client companies, probably. Especially into the accounting and finance function. Can it be a useful background, of course. But are a large % of senior executives (the functional heads like VPs of marketing/sales/HR/R&D or division GMs, CEOs, and CEO staff that make up the bulk of management teams) coming out of auditing or accounting backgrounds? Not in my experience. Does it happen, yes. But, in my experience, it's not the background most of those execs have. But maybe it's different in industry-groups that I haven't worked with.
Last edited by JeNeRegretteRien on Fri Mar 04, 2011 3:54 am, edited 2 times in total.

JeNeRegretteRien
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Re: How much finance/econ do you have to know for corporate law?

Postby JeNeRegretteRien » Fri Mar 04, 2011 3:43 am

roranoa wrote:
Awesome advice as always!

Are you attending Harvard? I took the privilage of browsing through some of your posts.
Congrats on that if I'm right.


Totally happy to try and help. Feel free to PM me if you have any more questions, I may or may not circle back to the thread.

Thanks for the congrats!

abudaba
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Re: How much finance/econ do you have to know for corporate law?

Postby abudaba » Fri Mar 04, 2011 7:20 pm

This post is gold. Thanks to all for the information

Tag.

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Mickey Quicknumbers
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Re: How much finance/econ do you have to know for corporate law?

Postby Mickey Quicknumbers » Fri Mar 04, 2011 7:24 pm

vamedic03 wrote:There's a ton of BS in this thread.

If you want to work for a top corporate practice, you only need 1 thing: great 1L grades.

Look, this blabbing back and forth about CFA and CPA is a waste of time. You don't need any business background to get a position as a corporate SA. You need good law school grades.

nobody really questioned that after thesealocust said it the first time.

tlslsnlsp
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Re: How much finance/econ do you have to know for corporate law?

Postby tlslsnlsp » Sat Mar 05, 2011 9:38 pm

nealric wrote:You do need to understand many aspects of finance in a corporate practice, but it's hardly necessary to have any background before starting at a firm.


Does this mean you can learn everything you need finance/accounting/business-wise after your hired? As in your relative lack of finance/accounting/business knowledge will not be a barrier when you're interviewing/SAing?

roranoa
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Re: How much finance/econ do you have to know for corporate law?

Postby roranoa » Sun Mar 06, 2011 7:29 am

tlslsnlsp wrote:
nealric wrote:You do need to understand many aspects of finance in a corporate practice, but it's hardly necessary to have any background before starting at a firm.


Does this mean you can learn everything you need finance/accounting/business-wise after your hired? As in your relative lack of finance/accounting/business knowledge will not be a barrier when you're interviewing/SAing?


I think you should ignore that response.




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