Investment banking vs. V5 firm - what would you choose? Forum

[Anonymous User]

You'll make significantly more money if you do investment banking, but hours will definitely be worse. What bank/firm is the associate position with, and what group? This should help people give you advice since different groups within the banks/firms have different reputations (just like with law firms), and give you a heads up if you are entering certain groups and worried about stability.

OP here. It's a general offer and not group-specific, and even if I indicated a group there's no guarantee I'd be placed there. I'd rather not get too specific on the firm - but if you look at the "v5" in banking consisting of GS, MS, JPM, BlackStone, Credit Suisse it's one of those. I realize that v5 is a dumb designation for law or banking but that's just to give an idea of which ones I'm looking at if that helps.

Compensation for junior analysts is usually less than for junior associates, even after bonus (which is substantially higher).

The IB position is for the associate level however. I heard that at the bulge brackets total 1st yr comp is usually 180-200k, reflecting usually a 70-100% bonus, is that inaccurate?

[Anonymous User]

This is a simple question with a simple answer that only you can decide. Do you want to go into law or business? Only you know the answer to that and asking an internet message board will not be useful. You need to talk to I-bankers (in-person) and Big law lawyers (in-person) and evaluate what skills you want to gain over the next two to three years and where you want those skills to lead you.

OP again - I think what makes the decision tough for me is the long-term view of both fields. I really like the idea of being a lawyer in the short-term, but I know I can't count on making partner or staying at this firm for long, and I have heard that going in-house is not necessarily the amazing green pasture everyone makes it out to be - work gets somewhat boring, pay decreases, you're still at the beck and call of management. With IB, even though the first couple of years are awful, you do have the possibility of promotion, substantial pay increases, and hopefully exit ops into business roles.

But with that being said, I like the idea of practicing law out of law school, and I did feel like I clicked with people at the firm I'm considering. Also, as others have mentioned in this thread, it seems more "substantial" than what bankers do, which let's be honest is quite a bit of hocus pocus.

[$$$$$$]

Correct me if I'm wrong but I don't believe IB associates are making that much more than biglaw associates. I know VPs can make between 250k-500k but
I believe IB associates are making approximately 200k after bonus.

Yea as a first year associate, if bonuses are lacking. Banking is doing very well right now, and keeping a lot of investment banks net + while their trading businesses suffer, you can be sure that bonuses are going to be good the next few years. I have friends that are 2nd and 3rd year associates who cleared $250K at middle market firms, so my guess is those at the MS/GS/BS are clearing even more.

[$$$$$$]

You'll make significantly more money if you do investment banking, but hours will definitely be worse. What bank/firm is the associate position with, and what group? This should help people give you advice since different groups within the banks/firms have different reputations (just like with law firms), and give you a heads up if you are entering certain groups and worried about stability.

OP here. It's a general offer and not group-specific, and even if I indicated a group there's no guarantee I'd be placed there. I'd rather not get too specific on the firm - but if you look at the "v5" in banking consisting of GS, MS, JPM, BlackStone, Credit Suisse it's one of those. I realize that v5 is a dumb designation for law or banking but that's just to give an idea of which ones I'm looking at if that helps.

Compensation for junior analysts is usually less than for junior associates, even after bonus (which is substantially higher).

The IB position is for the associate level however. I heard that at the bulge brackets total 1st yr comp is usually 180-200k, reflecting usually a 70-100% bonus, is that inaccurate?

If you have a job at Morgan Stanley, Goldman, JPM or Blackstone as an investment banking associate, I would take it and not look back, those places are the top of the top of the investment banking world and you will have loads of opportunities from there. Also, look into specific groups because the premium at the next level (PE/HF/etc.) is based on the firm and the group. Like MS M&A, Goldman TMT, Blackstone M&A are the best groups at each respective place, and if you can get into one of those the world is your oyster from a finance or business development perspective

[Hutz_and_Goodman]

I think this decision is not really about exit opportunities its about what you want and who you are. What types of stuff do you like to do, and which career will play to your strengths? Do you want to be a lawyer or a banker? Does your skill set make you likely to succeed at one or the other? (are you better with words or numbers, do you like the law or the business world, what kind of personality do you have, etc.). I have friends who are not great at math and don't really like quantitative work and have done stuff like get an MBA from Harvard/Wharton. This hasn't worked out well because even with that degree they can't thrive in the career bc they don't love the work and aren't that amazing at it. I think making this choice based on money would be a mistake because in either career it's really hard to predict at this stage how much you'll make, and there is not much correlation between $ and happiness/satisfaction when you are talking about people in upper-middle class professions.

[lfars]

Fourth year biglaw associate - I'd probably choose investment banking. I'd work for 7 years, save a lot of money, and then retire. The only thing that would hold me back is the hours. The I-banking hours are MUCH worse. It's to the point where I'm not sure I would be able to last 7 years.

[juzam_djinn]

You'll make significantly more money if you do investment banking, but hours will definitely be worse. What bank/firm is the associate position with, and what group? This should help people give you advice since different groups within the banks/firms have different reputations (just like with law firms), and give you a heads up if you are entering certain groups and worried about stability.

OP here. It's a general offer and not group-specific, and even if I indicated a group there's no guarantee I'd be placed there. I'd rather not get too specific on the firm - but if you look at the "v5" in banking consisting of GS, MS, JPM, BlackStone, Credit Suisse it's one of those. I realize that v5 is a dumb designation for law or banking but that's just to give an idea of which ones I'm looking at if that helps.

Compensation for junior analysts is usually less than for junior associates, even after bonus (which is substantially higher).

The IB position is for the associate level however. I heard that at the bulge brackets total 1st yr comp is usually 180-200k, reflecting usually a 70-100% bonus, is that inaccurate?

If you have a job at Morgan Stanley, Goldman, JPM or Blackstone as an investment banking associate, I would take it and not look back, those places are the top of the top of the investment banking world and you will have loads of opportunities from there. Also, look into specific groups because the premium at the next level (PE/HF/etc.) is based on the firm and the group. Like MS M&A, Goldman TMT, Blackstone M&A are the best groups at each respective place, and if you can get into one of those the world is your oyster from a finance or business development perspective

I think I would agree w/ this for OP's situation b/c it sounds like, in the long run, he may well be interested in transitioning to biz as opposed to staying in law (unless, as he mentioned, he had the opportunity to make partner)

But seriously...who gives a crap if those banks you mentioned are "at the top of the investment banking world"? You'd think that if you went to law school, you may very well be interested in being a LAWYER... Just LOL@ the finance obsessors on this board

OP, great options, can't really go wrong but hours are indeed worse in IBD (esp. if you are at an NYC HQ) with correspondingly higher earning potential that is somewhat watered down by risk/volatility given the bonus-dependent nature; keep in mind doing biglaw and eventually transitioning to banking is possible (although unlikely), but doing banking will foreclose law in your future. GL with the decision

[McAvoy]

JW as I haven't really heard of this -- do IBs actually recruit law students? Or does OP presumably have a finance background/experience?

[Anonymous User]

I think this decision is not really about exit opportunities its about what you want and who you are. What types of stuff do you like to do, and which career will play to your strengths? Do you want to be a lawyer or a banker? Does your skill set make you likely to succeed at one or the other? (are you better with words or numbers, do you like the law or the business world, what kind of personality do you have, etc.). I have friends who are not great at math and don't really like quantitative work and have done stuff like get an MBA from Harvard/Wharton. This hasn't worked out well because even with that degree they can't thrive in the career bc they don't love the work and aren't that amazing at it. I think making this choice based on money would be a mistake because in either career it's really hard to predict at this stage how much you'll make, and there is not much correlation between $ and happiness/satisfaction when you are talking about people in upper-middle class professions.

I think the study say that after 100k (not NYC 100k probably) you only get marginal gains of happiness....

[Anonymous User]

JW as I haven't really heard of this -- do IBs actually recruit law students? Or does OP presumably have a finance background/experience?

Investment banks recruit JDs. Though you would have to have strong finance credentials (econ at Ivy UG, previous IB experience) and strong law school credentials (high enough for Cravath/S&C/etc.).

[Anonymous User]

Former JD/MBA straight into banking here. I can't say what you should do because everyone has different strengths and goals. What do you want to do long term?

I chose banking straight out because it suited my personality and I just never liked law. However, a lot of the people I work with were lawyers first, and I know some of my friends have been recruited to finance from their firms. Remember that life is long and you can do a lot of different things over the course of it. If I were unsure, I'd probably start in law and see how you like it. If you don't, go to a bank. I think you can do a lot of non-law stuff after a few years in a law firm, so don't get scared or be discouraged by people on this board when they say this is your one shot to do banking. It isn't. Lots of ex lawyers doing every manner of job out there.

[Anonymous User]

Former JD/MBA straight into banking here. I can't say what you should do because everyone has different strengths and goals. What do you want to do long term?

I chose banking straight out because it suited my personality and I just never liked law. However, a lot of the people I work with were lawyers first, and I know some of my friends have been recruited to finance from their firms. Remember that life is long and you can do a lot of different things over the course of it. If I were unsure, I'd probably start in law and see how you like it. If you don't, go to a bank. I think you can do a lot of non-law stuff after a few years in a law firm, so don't get scared or be discouraged by people on this board when they say this is your one shot to do banking. It isn't. Lots of ex lawyers doing every manner of job out there.

OP here. Thanks for the perspective. That's good to hear. I do realize that for practicing law, it's literally right out of law school or never. I am just a bit worried about getting pigeon-holed into the law and wasting time spinning my wheels (one of my IB interviewers was an ex-lawyer and said this is basically how he felt about his time as a lawyer looking back). Without having worked at either an NYC law firm or IB it's just really hard to tell which environment and work I'll like more.

[Anonymous User]

Former JD/MBA straight into banking here. I can't say what you should do because everyone has different strengths and goals. What do you want to do long term?

I chose banking straight out because it suited my personality and I just never liked law. However, a lot of the people I work with were lawyers first, and I know some of my friends have been recruited to finance from their firms. Remember that life is long and you can do a lot of different things over the course of it. If I were unsure, I'd probably start in law and see how you like it. If you don't, go to a bank. I think you can do a lot of non-law stuff after a few years in a law firm, so don't get scared or be discouraged by people on this board when they say this is your one shot to do banking. It isn't. Lots of ex lawyers doing every manner of job out there.

OP here. Thanks for the perspective. That's good to hear. I do realize that for practicing law, it's literally right out of law school or never. I am just a bit worried about getting pigeon-holed into the law and wasting time spinning my wheels (one of my IB interviewers was an ex-lawyer and said this is basically how he felt about his time as a lawyer looking back). Without having worked at either an NYC law firm or IB it's just really hard to tell which environment and work I'll like more.

Just don't get scared. I think law is a better starting point if you're into it or think you might be, and if nothing else you'll always be able to use it as a point of leverage against other business people who don't know anything about it. I hated law school and the idea of a firm, but if you don't hate it I think it's a solid starting point.

[Anonymous User]

Just to add some narrow context here, my personal guess is that OP has an offer at CS.

To the person who said, "if you have an offer at GS/MS/JPM/BX, take it and don't look back" - it's notable that the 5th firm included on the OP's list, but conspicuously missing from that later comment, was CS.

In my opinion, it's clearly not in the same league as those four *and* it was definitely recruiting JDs this year, actively, at least at my school. So my bet is that he has a CS offer. That makes the choice quite a bit less obvious, at least from the usual silly and stupid metrics of prestige, money, etc.

To add more global context, to the people who wonder whether banks hire JDs - in the lifetime of most current JD students, GS has named 5 new CEOs, 3 of whom have JDs and only 2 of whom have MBAs, so you're free to draw your own conclusions. It's clearly not the preferred degree industry wide, but you guys oversell the difficulty of these moves.

Bob Rubin worked as an associate for a couple years at Cleary; Lloyd Blankfein worked, or at a minimum summered, at Proskauer. So don't worry too hard about whether being a lawyer now will screw you over as banker. Frankly, what will determine if you succeed is probably just how good you are at what you do and how well you can work in these environments.

Most of these lawyers who were successful in the IB world would have done just fine in biglaw as well. For example, see Adebayo Ogunlesi - who was the head of IB at CS before starting his own fund. He started his career at CSM and, oh yeah, he was a SCOTUS clerk and magna at HLS. I think people on this board really underestimate the degree to which talent and smarts are basically transferable across these two professions [and also consulting and so on]. Yes numbers vs. words, etc., etc., but frankly, I don't know anyone who thinks banking MDs and higher-ups are spending their time in excel, and I also don't know anyone who thinks they could be a serious corporate partner at WLRK without having pretty decent fluency with finance and numbers.

So my advice - do what you think you will enjoy and go where you think you will ultimately thrive and succeed. But don't worry too much about it. Decisions aren't really irreversible and life will probably work out just fine for you if these are the options you're juggling. Don't worry too much, trust your gut, and if it doesn't feel right, move on. Simple as that.

[Monochromatic Oeuvre]

Investment Banking - the compensation blows away what you will get at a law firm.

You'll make significantly more money if you do investment banking, but hours will definitely be worse.

This flame needs to stop because it's not true even at the associate level of BB. BB associates and Biglaw midlevels make similar levels of compensation, with BB associates working similar hours or longer. At the analyst level i-bankers are being paid significantly less than junior associates while working longer hours.

[Anonymous User]

Investment Banking - the compensation blows away what you will get at a law firm.

You'll make significantly more money if you do investment banking, but hours will definitely be worse.

This flame needs to stop because it's not true even at the associate level of BB. BB associates and Biglaw midlevels make similar levels of compensation, with BB associates working similar hours or longer. At the analyst level i-bankers are being paid significantly less than junior associates while working longer hours.

Ehh it's not really fair to compare I-banking analysts to biglaw junior associate salaries. One requires 3 years of law school debt, the other you get when you're 22 years old fresh out of college.

[jbagelboy]

Investment Banking - the compensation blows away what you will get at a law firm.

You'll make significantly more money if you do investment banking, but hours will definitely be worse.

This flame needs to stop because it's not true even at the associate level of BB. BB associates and Biglaw midlevels make similar levels of compensation, with BB associates working similar hours or longer. At the analyst level i-bankers are being paid significantly less than junior associates while working longer hours.

Ehh it's not really fair to compare I-banking analysts to biglaw junior associate salaries. One requires 3 years of law school debt, the other you get when you're 22 years old fresh out of college.

True, but mono's on point about the associate comparison too. Also let's keep in mind that yes, Goldman Sachs will far outpace market lockstep, but that's also la creme de la creme of IB vs. median large firm pay. For consistency you'd have to match to Wachtell, Boies, Kellogg, Susman, ect., the top of the associate pay scale, where midlevel associates receive competitive compensation to top tier investment bankers.

[SLS_AMG]

Investment Banking - the compensation blows away what you will get at a law firm.

You'll make significantly more money if you do investment banking, but hours will definitely be worse.

This flame needs to stop because it's not true even at the associate level of BB. BB associates and Biglaw midlevels make similar levels of compensation, with BB associates working similar hours or longer. At the analyst level i-bankers are being paid significantly less than junior associates while working longer hours.

Ehh it's not really fair to compare I-banking analysts to biglaw junior associate salaries. One requires 3 years of law school debt, the other you get when you're 22 years old fresh out of college.

Uh, yeah it is fair. We're on Top-Law-Schools.com in the legal employment forum. Presumably everyone here will already be in law school or finished with it, which means that this factor should play zero part in a comparison.

[Anonymous User]

Investment Banking - the compensation blows away what you will get at a law firm.

You'll make significantly more money if you do investment banking, but hours will definitely be worse.

This flame needs to stop because it's not true even at the associate level of BB. BB associates and Biglaw midlevels make similar levels of compensation, with BB associates working similar hours or longer. At the analyst level i-bankers are being paid significantly less than junior associates while working longer hours.

Ehh it's not really fair to compare I-banking analysts to biglaw junior associate salaries. One requires 3 years of law school debt, the other you get when you're 22 years old fresh out of college.

True, but mono's on point about the associate comparison too. Also let's keep in mind that yes, Goldman Sachs will far outpace market lockstep, but that's also la creme de la creme of IB vs. median large firm pay. For consistency you'd have to match to Wachtell, Boies, Kellogg, Susman, ect., the top of the associate pay scale, where midlevel associates receive competitive compensation to top tier investment bankers.

This is not true. GS/MS/etc. is analogous to CSM/S&C/etc. These firms are big, old, and prestigious, but they do not offer the highest compensations. Wachtell, Boies, Kellogg, Susman, etc. are more analogous to boutique investment banks such as Centerview/Qatalyst, where analysts makes a lot more than 1st year associates in BigLaw.

[$$$$$$]

Investment Banking - the compensation blows away what you will get at a law firm.

You'll make significantly more money if you do investment banking, but hours will definitely be worse.

This flame needs to stop because it's not true even at the associate level of BB. BB associates and Biglaw midlevels make similar levels of compensation, with BB associates working similar hours or longer. At the analyst level i-bankers are being paid significantly less than junior associates while working longer hours.

Flame? Sonny, this shit is truth. Base might be lower, but during boom times Associates at investment banks will make significantly more (i.e. 30-50%+) than Biglaw associates. Not a associate that I know at BB's and MM firms didn't clear $220K this year, and this year wasn't even that good and some of these guys are in non-NYC markets. The years before this they were a little lower, but the market for these services is roaring back and banks are taking advantage to make up for the lack of trading revenues.

Also, why are you talking about analyst level compensation? You can't get biglaw out of undergrad, so what is even the point of talking about analyst comp. No one here mentioned analyst levels, but with $85K base + bonus bonus (in good times), you pretty much make the same thing, maybe $20K less, as a biglaw associate but without 3 extra years of school and presumably no debt.

No one is saying that banking is better than working at a firm (especially due to stability and volatility of employment), but seriously, if you are truly interested in "the deal" and the financial markets and making money, its a freaking no brainer which route you should take.

[Monochromatic Oeuvre]

Flame? Sonny, this shit is truth. Base might be lower, but during boom times Associates at investment banks will make significantly more (i.e. 30-50%+) than Biglaw associates. Not a associate that I know at BB's and MM firms didn't clear $220K this year, and this year wasn't even that good and some of these guys are in non-NYC markets. The years before this they were a little lower, but the market for these services is roaring back and banks are taking advantage to make up for the lack of trading revenues.

I heard $180k-200k all-in for first year analysts at BB/MM last year. That was only ever so slightly better than Biglaw. Yes, if it were 2007 all over again, 30-40% more could be expected (depending on what Biglaw bonuses looked like). That does require one to be bullish about the next few years, though. Law is definitely less cyclical, and in 2009 BB associates weren't making more than Biglaw associates.

Also, why are you talking about analyst level compensation? You can't get biglaw out of undergrad, so what is even the point of talking about analyst comp. No one here mentioned analyst levels, but with $85K base + bonus bonus (in good times), you pretty much make the same thing, maybe $20K less, as a biglaw associate but without 3 extra years of school and presumably no debt.

Because, as has been mentioned, we're in the employment forum and everyone here presumably got, or is getting, a JD. So it's a sunk cost w/r/t a decision between fields. No one saying going into BB analyst instead of taking $250k in debt was a bad idea. TLS CW is that if you have a stable career option, like BB, CS, EE, etc. coming out of UG, you should take it.

But in circumstances like OP's, I'm a little confused. If he has a first-year associate offer, that means he has at least a couple years of good work in finance. Presumably, the only reason that someone with an opportunity to advance leaves that to go to law school is if they REALLY want to be a lawyer. But if that were the case, he wouldn't have made this thread.

[Anonymous User]

Flame? Sonny, this shit is truth. Base might be lower, but during boom times Associates at investment banks will make significantly more (i.e. 30-50%+) than Biglaw associates. Not a associate that I know at BB's and MM firms didn't clear $220K this year, and this year wasn't even that good and some of these guys are in non-NYC markets. The years before this they were a little lower, but the market for these services is roaring back and banks are taking advantage to make up for the lack of trading revenues.

I heard $180k-200k all-in for first year analysts at BB/MM last year. That was only ever so slightly better than Biglaw. Yes, if it were 2007 all over again, 30-40% more could be expected (depending on what Biglaw bonuses looked like). That does require one to be bullish about the next few years, though. Law is definitely less cyclical, and in 2009 BB associates weren't making more than Biglaw associates.

Also, why are you talking about analyst level compensation? You can't get biglaw out of undergrad, so what is even the point of talking about analyst comp. No one here mentioned analyst levels, but with $85K base + bonus bonus (in good times), you pretty much make the same thing, maybe $20K less, as a biglaw associate but without 3 extra years of school and presumably no debt.

Because, as has been mentioned, we're in the employment forum and everyone here presumably got, or is getting, a JD. So it's a sunk cost w/r/t a decision between fields. No one saying going into BB analyst instead of taking $250k in debt was a bad idea. TLS CW is that if you have a stable career option, like BB, CS, EE, etc. coming out of UG, you should take it.

But in circumstances like OP's, I'm a little confused. If he has a first-year associate offer, that means he has at least a couple years of good work in finance. Presumably, the only reason that someone with an opportunity to advance leaves that to go to law school is if they REALLY want to be a lawyer. But if that were the case, he wouldn't have made this thread.

First year analysts are not making $180k-200k all-in at BB/MM, not even those in the top bucket. The only analysts possibly making that much are at Centerview/Qatalyst/etc.

[Anonymous User]

Did this offer come from the CS superday on Friday? I haven't heard back, so I'm hoping this isn't the case

[jbagelboy]

Flame? Sonny, this shit is truth. Base might be lower, but during boom times Associates at investment banks will make significantly more (i.e. 30-50%+) than Biglaw associates. Not a associate that I know at BB's and MM firms didn't clear $220K this year, and this year wasn't even that good and some of these guys are in non-NYC markets. The years before this they were a little lower, but the market for these services is roaring back and banks are taking advantage to make up for the lack of trading revenues.

I heard $180k-200k all-in for first year analysts at BB/MM last year. That was only ever so slightly better than Biglaw. Yes, if it were 2007 all over again, 30-40% more could be expected (depending on what Biglaw bonuses looked like). That does require one to be bullish about the next few years, though. Law is definitely less cyclical, and in 2009 BB associates weren't making more than Biglaw associates.

Also, why are you talking about analyst level compensation? You can't get biglaw out of undergrad, so what is even the point of talking about analyst comp. No one here mentioned analyst levels, but with $85K base + bonus bonus (in good times), you pretty much make the same thing, maybe $20K less, as a biglaw associate but without 3 extra years of school and presumably no debt.

Because, as has been mentioned, we're in the employment forum and everyone here presumably got, or is getting, a JD. So it's a sunk cost w/r/t a decision between fields. No one saying going into BB analyst instead of taking $250k in debt was a bad idea. TLS CW is that if you have a stable career option, like BB, CS, EE, etc. coming out of UG, you should take it.

But in circumstances like OP's, I'm a little confused. If he has a first-year associate offer, that means he has at least a couple years of good work in finance. Presumably, the only reason that someone with an opportunity to advance leaves that to go to law school is if they REALLY want to be a lawyer. But if that were the case, he wouldn't have made this thread.

First year analysts are not making $180k-200k all-in at BB/MM, not even those in the top bucket. The only analysts possibly making that much are at Centerview/Qatalyst/etc.

I'm pretty mono meant associate not analyst. Analyst is typically $70-80K + $40-50K bonus so $130K on the upper end

[Anonymous User]

JW as I haven't really heard of this -- do IBs actually recruit law students? Or does OP presumably have a finance background/experience?

Yes they recruit JD's to work as associates. You don't need any background in finance or accounting, as they have training programs before you start to do that. You are also responsible for "supervising" the analysts that are usually recruited straight from undergrad.