Benefits of LLM in Tax

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sabza

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Benefits of LLM in Tax

Postby sabza » Thu Sep 01, 2016 12:06 pm

I really like tax law, and have considered getting an LLM. However, it appears that most people with LLMs go into big accounting firms rather than law firms, and generally start around $115k. Is that correct? If so, what is the purpose of getting an LLM? Originally, I thought it was difficult to get into big law tax departments, and an LLM gave you a leg up. While that might be true in some markets, it doesn't even seem like big law is the goal of most people with an LLM...is that true, or am I way off?

thatsnotmyname

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Re: Benefits of LLM in Tax

Postby thatsnotmyname » Thu Sep 01, 2016 1:26 pm

I feel like the LLM in tax has been widely discussed on this board and elsewhere before, use the forum search function to find all the details you could ever want.

To summarize for you, the advice always seems to be that if you are not getting your tax LLM from NYU, Georgetown, or Florida, the tax LLM is not worth getting. Also there seem to be primarily a couple of kinds of people who get LLM's in tax:

1. People whose employer are paying for them to obtain a Tax LLM, these people are typically already employed by Biglaw or Big 4 firms.
2. People who basically were unable to get a job offer they were satisfied with and decided to give themselves a second chance at recruiting by getting a Tax LLM.

For the people falling into the second category, it seems like the vast majority are not getting biglaw offers and the ones who are were qualified to receive them before obtaining the LLM and just happened to miss the OCI boat the first time around (i.e. these people went to good schools and had good grades but just slipped through the cracks the first time at OCI for whatever reason). Going to an accounting firm has realistically been a more realistic option for many LLM grads as Big 4 and other large accounting firms like to recruit LLMs for their specialty tax practices (i.e., M&A tax, International Tax, State and Local Tax, Transfer Pricing, etc.) Going Big 4 can be a great way to salvage your law degree if you end up offerless as it's a great, well-paying job, with great opportunity for upward mobility.

The big problem with this is that these are ACCOUNTING firms. Much of the work that you will end up doing will feel be more tax accounting work, compliance reviews, and tax consulting. You'll definitely have to write memos and help client's assess the validity of taking certain tax positions as there is definitely overlap between the services offered at a biglaw firm and a specialty tax group at a Big 4 but still most of the work that you're getting is accounting work. Which is great if it turns out that you really like accounting, but most of these people tended to major in accounting in undergrad and will now be your boss with only just a bachelors degree and a CPA license, while you put in all these extra years and money into school. More realistically though, most lawyers realize that they dislike the accounting side and try to move to biglaw firms unsuccessfully. They are occasionally able to make the jump, but most are unable to. Most are basically just stuck building an accounting skillset and a skillset for a career that they dislike but can't really leave because they can't really find a better job for a while.

Anyways, hope that helps! Also, an anecdotal piece I've heard is that even Big 4 accounting firms are souring on hiring tax LLMs for their specialty groups unless these people have specifically demonstrated some sort of inclination towards accounting or quantitative subjects. Like if you were an English major and took one tax class in law school and are now getting an LLM, they are not really interested in you as many Big 4 departments have noticed that these people end up not being very good at their tax accounting jobs and end up quitting quickly. They really want to see someone with an accounting, finance, econ, or more quant undergrad major who has demonstrated greater interest in the business side of things than the legal side. As such, getting recruited for a Big 4 firm out of an LLM program is becoming much more difficult than it has historically been as well.

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nealric

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Re: Benefits of LLM in Tax

Postby nealric » Thu Sep 01, 2016 1:42 pm

^
Good summary. I am an in-house tax attorney who did a stint in biglaw and pretty much agree with that analysis.

oliv8518

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Re: Benefits of LLM in Tax

Postby oliv8518 » Thu Sep 01, 2016 1:55 pm

So for being people going straight from law school to a biglaw firm's tax group, is there any benefit in getting a NYU LLM if the firm isn't paying for it? I know some firms give something like clerkship bonuses/advanced class year for these people but you would still pay for the degree. I just wanted to know if it was fine for someone to just work in a tax practice without an LLM?

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unlicensedpotato

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Re: Benefits of LLM in Tax

Postby unlicensedpotato » Thu Sep 01, 2016 1:57 pm

oliv8518 wrote:So for being people going straight from law school to a biglaw firm's tax group, is there any benefit in getting a NYU LLM if the firm isn't paying for it? I know some firms give something like clerkship bonuses/advanced class year for these people but you would still pay for the degree. I just wanted to know if it was fine for someone to just work in a tax practice without an LLM?


Totally fine -- most biglaw tax attorneys don't have an llm, and of the ones who do very few paid for it themselves.

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Johann

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Re: Benefits of LLM in Tax

Postby Johann » Thu Sep 01, 2016 2:00 pm

i think the hiring statistics largely disagree with the poster above. northwestern's llm program is great and should be included in any LLM list. boston has an alright llm program as well. depending on your options and career goals, an llm at another school may still be worth it, but NYU and GTown are the clear frontrunners followed by Florida, NU.

the hiring statistics will also disagree with you re employment prospects. NYU tends to be about half biglaw and half accounting. georgetown and NU are more accounting but still a decent percent get biglaw. plenty of people who had no shot at biglaw from their TT/TTT that get an llm get into biglaw because of their llm.

the work at accounting firms is largely the same as biglaw so a fair chunk of people lateral to law firms from big4 and vice versa. these are big 4 specialty groups and the work they have an LLM do is completely different from their CPAs.

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Re: Benefits of LLM in Tax

Postby Anonymous User » Thu Sep 01, 2016 2:19 pm

thatsnotmyname wrote:I feel like the LLM in tax has been widely discussed on this board and elsewhere before, use the forum search function to find all the details you could ever want.

To summarize for you, the advice always seems to be that if you are not getting your tax LLM from NYU, Georgetown, or Florida, the tax LLM is not worth getting. Also there seem to be primarily a couple of kinds of people who get LLM's in tax:

1. People whose employer are paying for them to obtain a Tax LLM, these people are typically already employed by Biglaw or Big 4 firms.
2. People who basically were unable to get a job offer they were satisfied with and decided to give themselves a second chance at recruiting by getting a Tax LLM.

For the people falling into the second category, it seems like the vast majority are not getting biglaw offers and the ones who are were qualified to receive them before obtaining the LLM and just happened to miss the OCI boat the first time around (i.e. these people went to good schools and had good grades but just slipped through the cracks the first time at OCI for whatever reason). Going to an accounting firm has realistically been a more realistic option for many LLM grads as Big 4 and other large accounting firms like to recruit LLMs for their specialty tax practices (i.e., M&A tax, International Tax, State and Local Tax, Transfer Pricing, etc.) Going Big 4 can be a great way to salvage your law degree if you end up offerless as it's a great, well-paying job, with great opportunity for upward mobility.

The big problem with this is that these are ACCOUNTING firms. Much of the work that you will end up doing will feel be more tax accounting work, compliance reviews, and tax consulting. You'll definitely have to write memos and help client's assess the validity of taking certain tax positions as there is definitely overlap between the services offered at a biglaw firm and a specialty tax group at a Big 4 but still most of the work that you're getting is accounting work. Which is great if it turns out that you really like accounting, but most of these people tended to major in accounting in undergrad and will now be your boss with only just a bachelors degree and a CPA license, while you put in all these extra years and money into school. More realistically though, most lawyers realize that they dislike the accounting side and try to move to biglaw firms unsuccessfully. They are occasionally able to make the jump, but most are unable to. Most are basically just stuck building an accounting skillset and a skillset for a career that they dislike but can't really leave because they can't really find a better job for a while.

Anyways, hope that helps! Also, an anecdotal piece I've heard is that even Big 4 accounting firms are souring on hiring tax LLMs for their specialty groups unless these people have specifically demonstrated some sort of inclination towards accounting or quantitative subjects. Like if you were an English major and took one tax class in law school and are now getting an LLM, they are not really interested in you as many Big 4 departments have noticed that these people end up not being very good at their tax accounting jobs and end up quitting quickly. They really want to see someone with an accounting, finance, econ, or more quant undergrad major who has demonstrated greater interest in the business side of things than the legal side. As such, getting recruited for a Big 4 firm out of an LLM program is becoming much more difficult than it has historically been as well.


Big4 Tax in a specialty group in a major market (not NYC) here. The above post is pretty spot on, at least for my geographic area. A lot of llms do go into big4, which is fine if that is what you want as hours are probably better than big law but a lot of the work really is accounting and the starting pay is no where near 115 (maybe for NYC...). There is a good amount of compliance, but my firm likes to hire at least a few jds/llms for their specialty groups because it requires a bunch of research, memo writing, tax controversy, planning, and the cpas in general dont really like doing it/usually aren't as strong in it. Our firm in fact just brought in a partner from a major law firm to take over their controversy work.

It is also pretty rare in my area for big4 lawyers to go to big law. Just putting that out there...seems like the lawyers are either okay with what they are doing here or hate it, which normally depends on the level of compliance they have to do. My big4 also is probably souring a little on hiring jd/llms unless they have demonstrated interest in some sort of econ/finance/accounting background--you really need to have a mind for numbers and be comfortable with large data for big4 imo.

dabigchina

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Re: Benefits of LLM in Tax

Postby dabigchina » Thu Sep 01, 2016 3:33 pm

Unless you are in Controversy, M&A, or high up in WNT, I would expect to do at least some compliance.

Also, I would get good at Excel if you are going to go down the big4 route. If you come in and tell Fed Tax (the client facing/generalists) that you don't follow their spreadsheet workpapers you are going to get laughed out of the room.

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Re: Benefits of LLM in Tax

Postby Anonymous User » Thu Sep 01, 2016 3:48 pm

dabigchina wrote:Unless you are in Controversy, M&A, or high up in WNT, I would expect to do at least some compliance.

Also, I would get good at Excel if you are going to go down the big4 route. If you come in and tell Fed Tax (the client facing/generalists) that you don't follow their spreadsheet workpapers you are going to get laughed out of the room.


I have an undergrad degree only and am working at a Big4 firm with a lot of LLMs and JDs. I think a lot of LLMs regret their decision to join a Big4 firm. They start at the same level as the people with just an undergraduate degree and do exactly the same work, which is usually a lot of compliance work unless you can get on a tax consulting client. Even then its difficult to do exclusively consulting, even if you're in a specialty group. I often heard people complaining that they didn't go to law school to prepare K-1s.

People with an undergrad only usually start at 60ish, a masters in tax (only one more year of school after undergrad) starts at 70, JD starts at 80 and an LLM starts at 85K so there's definitely a diminishing return on each extra year of education.

In my opinion if you want to do Big4 Tax, skip the LLM. You're better off with the extra year of experience over the year of education. If you want to do the LLM, don't go for a Big4 firm unless you want to feel overqualified and underpaid.

dabigchina

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Re: Benefits of LLM in Tax

Postby dabigchina » Thu Sep 01, 2016 3:54 pm

I would be shocked if anybody "wants" to do big4 tax coming out of law school. I think it's an ok fallback for people who don't get biglaw. An LLM get you another bite at the OCI apple.

In either case, big4 hiring has been down this year. They couldn't get enough warm bodies in seats in the past two years but the market has cooled a little bit. Now firms are committing most of their hiring dollars to poaching people from each other.



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