Another CPA Considering Law School

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cpa2lawskool21

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Another CPA Considering Law School

Post by cpa2lawskool21 » Sun Jan 24, 2021 3:45 pm

Hi Everyone,

I'm yet another CPA at the Big 4 who is considering law school and was wondering if I could get some advice on whether or not it'd be worth it and/or if there are certain avenues where I could leverage my financial reporting knowledge to be a successful attorney.

The long story short is I'm 32 and have spent my 20s/early 30s working for the Big 4 in various capacities. I've done everything from audit to the more consulting side (i.e. consulting on M&A or assisting controllers/CFO with financial reporting needs). While I don't hate accounting completely like most people, I am considering law for a few reasons:
  • I've worked on forensic cases and restructuring/lending engagements and want to get more involved in either deal structuring on the transaction side or want to get into white collar fraud litigation. For example, I worked on a forensics case (as a CPA) where the attorneys were assisting with the legal defense of our client from revenue recognition fraud. To me, the work the attorneys were doing was higher level and more value-add while we were basically just the nerds who crunched the numbers in spreadsheets. I think I'd find the legal side more interesting, based on my conversations with the lawyers.
  • The work I've enjoyed in accounting is less sitting at a desk all day crunching numbers and moreso interpreting GAAP and defending my positions (and indirectly my client) from auditors/regulators. Technical Accounting is similar to law in that we interpret arcane regulations and apply it to a transaction. Similar to point one, I think that legal work is seen as more value-add and higher-paying while accounting work is pretty commoditized because pretty much anyone can be a CPA
  • This is less important than points 1 and 2, but the pay is infinitely better (assuming I get BigLaw) with similar hours. Working for the Big 4 is ass and the pay is even worse. I already understand working 60 hours a week sucks, but I'd rather be paid $190K, with a lot of upside from there, than get paid $115K to do so.
The major downsides are that I'm old and my opportunity cost is quite high at this point. Having worked in accounting for 8+ years at the Big 4, I could probably exit to a Jr. Controller role in industry right now and get paid similar to 1st year BigLaw money in 3 years (or maybe even now) and work less hours, but also with less upside in pay from there. The other thing is I'd essentially be starting over at the bottom in BigLaw whereas right now, I am in a Manager position and can at least delegate some stuff to people to give me some flexibility.

The only way I can see this career shift being worth it is if I get BigLaw, which is the most important first step. My questions are if you think it's worth it for me to make this change, based on this info, and what types of law I can pursue that can make use of my background and help me excel on the job so I can maybe make partner or get a nice in-house position down the road. Even though I haven't dealt with tax directly, I'm open to doing this, especially if I can carve out a nice niche and open my own practice down the road.

Thanks for your help!

CanadianWolf

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Re: Another CPA Considering Law School

Post by CanadianWolf » Mon Feb 15, 2021 2:32 pm

If I understand correctly, you are a manager at a Big 4 accounting firm with 8 or 9 years experience earning a base salary of $115,000 per year.

You are attracted to law because major law firms (biglaw) starting salary is $180,000 or $190,000 base plus $15,000 end of year bonus.

Do you understand that the typical length of employment with one's first biglaw firm is between 3 and 4 years ?
Have you been at the same accounting firm throughout your 8 or 9 years of accounting ? I ask because your pay is low & most get significant pay increases when switching firms.

Regardless, you need to study for & sit for the LSAT exam.

Do you have a masters degree ?

Have you considered getting a masters degree in taxation ? Will your Big 4 pay for such a degree if you continue to work while attending the masters program on a part-time basis ?

P.S. As you probably know, tax--especially international and M&A--are better paid than are audit/assurance Big4 employees. Consulting for Deloitte or other management consulting firms should pay much more than your current salary, but a lot of travel is usually required.

CanadianWolf

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Re: Another CPA Considering Law School

Post by CanadianWolf » Mon Feb 15, 2021 3:18 pm

Additionally, when considering the COA (cost-of-attendance) at law school, don't forget about lost retirement plan contributions and vesting.

Assuming base pay of $115,000 and an annual bonus of $10,000 plus a retirement plan contribution of $6,000 per year, you would be sacrificing almost $400,000 in lost income & retirement benefits for 3 years of law school.

Budget $250,000 as the total COA for three years of law school.

Your total financial sacrifice for law school would be in the area of $650,000 plus lost years of retirement plan vesting. Of course, any summer employment during your law school education could reduce your total COA, but I was conservative in my estimates as law school can cost more than $250,000 and I assumed that you would not receive any increase in base pay from your current employer.

A high LSAT score could have a very significant impact on the total COA of law school.

Many Big 4 CPAs make their first lateral move after 10 years. 13 years is a common length of stay with one's Big 4 firm. Many move from Senior Manager to Director or from Director to Managing Director level positions with significant pay increases.

dabigchina

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Re: Another CPA Considering Law School

Post by dabigchina » Thu Feb 18, 2021 1:34 pm

Dude no. Don't do it.

Source: I am ex big4 cpa who went to t14.

CanadianWolf

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Re: Another CPA Considering Law School

Post by CanadianWolf » Fri Feb 19, 2021 12:14 pm

dabigchina wrote:
Thu Feb 18, 2021 1:34 pm
Dude no. Don't do it.

Source: I am ex big4 cpa who went to t14.
Could you elaborate on why you left biglaw after one year ?

What is your specialty area in accounting ?

Was surprised to read in one of your prior posts that you were only taking a 10% to 15% pay cut to return to accounting.

Thank you in advance !

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Yugihoe

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Re: Another CPA Considering Law School

Post by Yugihoe » Fri Feb 19, 2021 5:38 pm

*Drake voice*

No, don't do it
Please don't do it
Cause one of us goes in
And we all go through it

CanadianWolf

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Re: Another CPA Considering Law School

Post by CanadianWolf » Mon Feb 22, 2021 8:21 pm

Have you considered applying to an MBA program ?

Currently, your CPA license will be accepted as a substitute for the GMAT or GRE at dozens of top 100 MBA programs.

With respect to top 25 MBA programs, MIT, Virginia, Cornell, Michigan, UNC-Chapel Hill, Indiana, Texas at Austin, Emory, and Rice are likely to accept your CPA license in lieu of a standardized test score. Notre Dame, Vanderbilt, & Minnesota are others to consider.

Full-time MBA programs are two academic years. You might receive substantial scholarship offers which will greatly reduce your COA.

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Pomeranian

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Re: Another CPA Considering Law School

Post by Pomeranian » Mon Feb 22, 2021 9:31 pm

Not worth it from a financial standpoint at this point in your career.

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