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Which is better financially in the long run?

Getting a job in a big NYC law firm with three years of law school (I'd be paying loans for sure..)

OR

Spending a year getting a Masters in Accounting and then taking the CPA exam and end up in a Big Four Accounting firm?

Which is a better road merely from a 'making money' perspective or both equally good choices?

I was talking this over with my mom and she's convinced that being a CPA is better than being a lawyer.. since everyone wants to be lawyers- even with a T14 degree.
She says this because she heard from my sister that her firm is hiring less people now.. is it true that law firms are hiring less people?

If you just want money, I think the biglaw route is better. CPAs are not exactly scarce these days, either. Big Four pays well, but no better than biglaw, and it seems to me that partnership and exit opportunities are better for biglaw.

If you're an accountant, you'll always find a job, but once you're talking T14-type law schools, that's no longer an argument against law school.

In terms of straight cash, a law degree will serve you better; even with the loans. Both offer strong job security; but the CPA may offer more flexibility because you can do accounting firm jobs, or head up an in house department to other corporate type positions.

Laywers can move in this direction with in-house counsel/VP situations, but seems less likely. I think a CPA has less risk in achieving the highest ceiling, while laywers will have a larger risk (leaving a cush job to join a start-up company as a VP, or starting their own boutique law firm) to hit a higher ceiling.

Accountants only have so much upward mobility, even when you get a CPA. Getting a job with the big 4, isn't really that hard and probably won't set you apart from all the other accountants out there. Going to a T-14 law school is a different story altogether.

More fortune 500 CEO's have accounting backgrounds than from any other field.

MTal wrote:More fortune 500 CEO's have accounting backgrounds than from any other field.

/agreed. CPA's can move quickly up or sidewise corporate ladders.

Accounting is also a huge field. There are tons of UG accounting majors and even more people who get the M. Acc. to go along with it. You can climb the ladder, but I don't really think accounting is any better than anything else. Plus, you have to leave your role as an accountant in order to move up the ranks in most cases. Sure, you can make the climb all the way up to CFO, but I'd think it much more common to come by a promotion by leaving accounting and moving toward other portions of the company. But that's just speculation.

I know that in many corporations, the accountants tend to be separated from the larger promotion tree, so you really need to make a lateral move if you want to be a bigwig or maximize your chances of doing that.

Most companies that I've had experience with seems that accountants can be promoted becasue they have a large base of knowledge that extends to multiple departments, making them a good choice for supervisor. Or is that too logical for business practice.

Well, yeah, that definitely happens. It's just that you're not going to be a supervisor while you're doing accounting. So you might get promoted from an accounting position, but that promotion will be to a non-accounting position that would be just as open to anyone else.

I suppose the same is probably true of inhouse lawyers, though.

I guess more overall accountants means more people with the accounting degree, opposed to a very limited number of inhouse lawyers.

That's what I'm thinking. Plus, lots of people who don't actually do accounting have accounting degrees, and most people with law degrees don't end up inhouse. Accounting is a pretty common specialization for people who are in business undergrads. I know a few people who ended up doing it just because they wanted a specialization to sell and didn't like marketing.

id go with CPA.

while being a lawyer might be the last thing you do, being an accountant is usually only the beginning of a successful business career.
there is more room for growth in the accounting field than in legal services.

or get the best of both worlds - go to a law school that offers dual JD/MAcc degrees or has a strong tax/financial program.

Thanks for the tips!
Here's a possible plan for the next two years.

Take the LSAT and GMAT.. I don't mean to be cocky but given every other standardized test I have taken in my life (SAT/ACT/SAT II)- I expect to do pretty well on both of these tests. I just hope I do well enough. (LSAT: 170+, GMAT: 700+).)

Apply to T14 Law Schools AND Masters in Accounting programs.
See where I get in and how much money I get from law schools- if I end up having to pay full price for a lower T14 (if I can get Columbia/NYU right away.. I would go straight to law school), it may be smarter to get the masters in accounting- try it out, see if I like being a CPA, and then if I don't.. law school a few years later.
Otherwise, law wasn't meant to be- accounting was.

I don't have a super-hot GPA right now and am hoping to shoot it up to a 3.5 by graduation.
I'm hoping for around a 3.3 by the end of junior year.

I'm a CPA and have worked for one of the Big Four. $ wise, you can live comfortably as a CPA. The structure for promotion within the Big four is fairly typical, you are promoted annually (unless you do something terribly wrong, which is pretty hard to do) and can become a Manager generally within 5-6 years right out of college, assuming you are hired right out of college (which is also pretty hard to do with a GPA that low). This by no means is an easy feat: busy season really is BUSY, but there are other functions that are performed by the Big 4 besides auditing e.g. attestation, regulatory/compliance, specialized internal consultants, IT, Tax etc.

Being a manager, depending on geographical market as well, can range anywhere from $85k to $100k, and you'd still be under 30. Generally it is harder to become promoted after Manager level, which is when many people seek other opportunities (some even earlier during their Senior years).

It really depends on what you want to do. I would not suggest going the CPA route if you know that you want to pursue law. Obtaining your CPA is a daunting task in itself in addition to working long hours if you end up in Public Accounting. If you look at some of the numbers for top law schools, finance/accounting majors generally do not apply to law school because it's difficult to justify the opportunity cost of three years of lost income and potentially a $100k+ debt.

But FWIW, i'm planning on attending law school

They follow different career paths, and probably have similar earning potential on average. However, people are invariably more impressed when you tell them you're a lawyer than if you tell them you're an accountant.

I am writing this from my PwC office...

Money wise, go to law school. Senior managers make $200K tops, which is typically 8-10 years after undergrad.

Work wise, the vouching and tie-ins will be very painful when you first start.

My dad is a CPA who planned on going to law school, but never did.

He went to school planning on being a lawyer, but got a big # accounting job. He said he was planning on going to law school if he couldn't find good work, otherwise working a few years so he could get some money for school (he got nothing from his parents when he moved out).

As someone noted earlier, he got caught up in making money and couldn't bring himself to leave his steady job for thousands of dollars of debt. He probably would have anyway, he says, except that a bunch of CPAs he worked with had gone to law school and said it was completely not worth it.

He now says that the CPAs who told him law school wasn't worth it were idiots. His colleague at the time who did elect to go to law school is now one of the best in his field and does consulting work for almost a thousand dollars an hour.

Another relevant story; my uncle is the most wealthy person that I know personally and he is a VP of a fortune 500 company with a JD from Georgetown and no business education. My dad says his company doesn't hire JDs for VP positions, but I suppose you could always go back for an MBA if you wanted to go for a position in a company like that.

I am CPA-to-be (still have two tests left) and I'm an accountant at a mid-size company. I make an okay salary (of course not compared to biglaw associates) but I only work 40 hours a week. I have to work on the weekends about twice a year when our tax return is due.

My friend is an auditor at big four and she HATES it. She works about 50-55 hours, a lot of travelling, and she only makes $2,000 more than me. They have gone through waves of layoffs too. But I do think as of right now, the accounting job market is a lot better than the legal market.

Accounting wasn't my first choice, but I'm really glad I sticked with it till now. It is a very practical field, and you will always be able to find a job if you are a CPA (at least right now).

Apple Tree wrote:I am CPA-to-be (still have two tests left) and I'm an accountant at a mid-size company. I make an okay salary (of course not compared to biglaw associates) but I only work 40 hours a week. I have to work on the weekends about twice a year when our tax return is due.

My friend is an auditor at big four and she HATES it. She works about 50-55 hours, a lot of travelling, and she only makes $2,000 more than me. They have gone through waves of layoffs too. But I do think as of right now, the accounting job market is a lot better than the legal market.

Accounting wasn't my first choice, but I'm really glad I sticked with it till now. It is a very practical field, and you will always be able to find a job if you are a CPA (at least right now).

Just curious, I have interviews at PWC and Deloitte next week, can you give an approx range on what your friend makes and what she made her first year there?

I think this is her second year there and she's a senior associate. She makes around $50,000, but our city's COL is very low. I don't know how much she made her first year but I don't think it's much lower than that.
I'm sure offices at bigger cities will pay a little more.

My wife is a "big 4" CPA, and her firm hires a lot of lawyers. After 3 years, she was making more than the incoming lawyers.

Long term is a different story.

pluckyparakeet wrote:For now, and probably for coming years, CPA. Biglaw has perished for all but the top half of HYS and the top 20% of the other T14s. My friend who worked for PwC straight out of undergrad has bought his own house, after only working for 2 years. Being a CPA is stable, you don't need to go into massive debt for grad school, and the hours are much better. I know a CPA who moved from NYC to London, and is making $200k a year working for BT. He went to a not-so-good undergrad and doesn't have a grad degree either.

My wife worked 100 hours last week.... The hours for best CPA jobs can be brutal...

Client8 wrote:I'm a CPA and have worked for one of the Big Four. $ wise, you can live comfortably as a CPA. The structure for promotion within the Big four is fairly typical, you are promoted annually (unless you do something terribly wrong, which is pretty hard to do) and can become a Manager generally within 5-6 years right out of college, assuming you are hired right out of college (which is also pretty hard to do with a GPA that low). This by no means is an easy feat: busy season really is BUSY, but there are other functions that are performed by the Big 4 besides auditing e.g. attestation, regulatory/compliance, specialized internal consultants, IT, Tax etc.

Being a manager, depending on geographical market as well, can range anywhere from $85k to $100k, and you'd still be under 30. Generally it is harder to become promoted after Manager level, which is when many people seek other opportunities (some even earlier during their Senior years).

It really depends on what you want to do. I would not suggest going the CPA route if you know that you want to pursue law. Obtaining your CPA is a daunting task in itself in addition to working long hours if you end up in Public Accounting. If you look at some of the numbers for top law schools, finance/accounting majors generally do not apply to law school because it's difficult to justify the opportunity cost of three years of lost income and potentially a $100k+ debt.

But FWIW, i'm planning on attending law school

to give a perspective on salaries in the legal services field: i worked at a boutique litigation firm (which shall remain unnamed) where the starting salary for first year associates was 180,000 annually, and a year end performance bonus on top of that. this was in a city with a fairly low cost of living, so the salary and bonus afforded quite a comfortable life-style. i realize that this is an outlier of salaries of first year associates, but it does demonstrate the possibility of robbing the bank immediately out of law school.

crazycanuck wrote:

Apple Tree wrote:I am CPA-to-be (still have two tests left) and I'm an accountant at a mid-size company. I make an okay salary (of course not compared to biglaw associates) but I only work 40 hours a week. I have to work on the weekends about twice a year when our tax return is due.

My friend is an auditor at big four and she HATES it. She works about 50-55 hours, a lot of travelling, and she only makes $2,000 more than me. They have gone through waves of layoffs too. But I do think as of right now, the accounting job market is a lot better than the legal market.

Accounting wasn't my first choice, but I'm really glad I sticked with it till now. It is a very practical field, and you will always be able to find a job if you are a CPA (at least right now).

Just curious, I have interviews at PWC and Deloitte next week, can you give an approx range on what your friend makes and what she made her first year there?

I'm one year removed from undergrad and one year into my employment with one of the firms you're interviewing with. I passed the CPA exam last summer before I started work, yet still plan on attending law school in Fall 2010. Everything mentioned in this post above is accurate; the long hours, traveling, and not-so-significant salary. We did go through layoffs, but these seem to be over for the time being. I've seen plenty of Manager-level employees leave for six figure salaries ($100k - $110k) after approx. 5 - 6 years of employment with the firm. Take a look at Business Week's recent issue with their annual "Best Places to Launch Your Career" list. Big Four Accounting Firms are still right at the top (Deloitte is #1 again this year, PwC only a spot or two behind it) mainly due to the extensive exit opportunities available post-employment. There is a high attrition rate within each of these firms, largely due to the reasons mentioned above. It is exactly what Business Week says it is - a great place to LAUNCH your career, not necessarily finish it.

But to get back to your question on salaries (I should mention that I'm in the Northeast region and your salary will depend on the region you work in), you can expect to get an offer of about $53-$57k from Deloitte, and slightly lower from PwC. If you have a Masters degree, you'll start out several thousand dollars higher. Also, if you work in New York, you will probably start out on the higher end of the range I mentioned too.

All this said, I'll be re-taking the LSAT this upcoming Saturday, and CANNOT WAIT to get into law school. So it is feasible to do both. I cannot put a price on the experience I gained in my now over a year of work in the audit practice. Unfortunately, I don't think being a CPA counts for much on law school apps, but I hope it distinguishes me enough to give me a slight edge when compared with an individual with similar numbers. Hope this helps. Let me know if you have any questions, I took the day off to keep studying for Saturday.

Where on that salary range ($53-57k) should a new staff hire at PwC and Deloitte in Tampa expect to be?

Also, if you had such a desire to attend law school, what was your reasoning for taking the year off to work for the Big 4?

Thanks