Weil NYC Info Forum

[obx]

I think it's the perception of this like, massive compensation differential that's like 10-15 years out of date at this point.

Ten years ago, i.e., pre-crisis investment bankers were making money comparable to that of private equity and hedge funds; you could make $500K easily as a junior investment banking associate. Everyone wanted to do it out of MBA, blah blah blah. So yeah, woking in BigLaw fucking sucked by comparison. You were working super hard for nothing, when the bankers on the other side of the deal were swimming in cash.

That is not remotely the case anymore. Investment banking compensation has fallen materially in nominal (not just absolute, nominal) terms. Investment banking analysts uniformly leave for the buyside after two years; it's not "cool" to do out of HBS or Wharton or GSB. And a relatively senior managing director at JPMorgan might make ~$3-4 million in an average year now, which is what he would have made as a junior director pre-crisis. (And a lot of that is going to be in stock.) If you ever get a chance, ask a 50something MD at one of the big banks about comp in the "old days" vs now. It's hilarious/depressing.

But anyway, lawyers, who don't know anything about the industry, lump banking-PE-HF all in as just "finance" and think banking is still a way to get crazy rich. Maybe they have buddies from college who did banking for two years and have a lot of money now (from their buyside job) and associate that with "being a banker." Like you hear people talk about this in the M&A context, as though leaving Skadden's corporate group or w/e to go to banking is some path to riches. Maybe at a few boutiques, I guess? But on the whole...not really. Especially factoring in shittier job security, transferability of skillset, and extreme variability in compensation.

Well, it’s much more likely to get a high financial upside buyside gig from banking than biglaw— even at the associate/vp level. It’s not as streamlined as it is for high achieving analysts, but your odds are pretty much nil in biglaw. So it’s possible that just maybe those Skadden associates who “don’t know anything about the industry” might not be quite as delusional as you imply.

[LBJ's Hair]

I think it's the perception of this like, massive compensation differential that's like 10-15 years out of date at this point.

Ten years ago, i.e., pre-crisis investment bankers were making money comparable to that of private equity and hedge funds; you could make $500K easily as a junior investment banking associate. Everyone wanted to do it out of MBA, blah blah blah. So yeah, woking in BigLaw fucking sucked by comparison. You were working super hard for nothing, when the bankers on the other side of the deal were swimming in cash.

That is not remotely the case anymore. Investment banking compensation has fallen materially in nominal (not just absolute, nominal) terms. Investment banking analysts uniformly leave for the buyside after two years; it's not "cool" to do out of HBS or Wharton or GSB. And a relatively senior managing director at JPMorgan might make ~$3-4 million in an average year now, which is what he would have made as a junior director pre-crisis. (And a lot of that is going to be in stock.) If you ever get a chance, ask a 50something MD at one of the big banks about comp in the "old days" vs now. It's hilarious/depressing.

But anyway, lawyers, who don't know anything about the industry, lump banking-PE-HF all in as just "finance" and think banking is still a way to get crazy rich. Maybe they have buddies from college who did banking for two years and have a lot of money now (from their buyside job) and associate that with "being a banker." Like you hear people talk about this in the M&A context, as though leaving Skadden's corporate group or w/e to go to banking is some path to riches. Maybe at a few boutiques, I guess? But on the whole...not really. Especially factoring in shittier job security, transferability of skillset, and extreme variability in compensation.

Well, it’s much more likely to get a high financial upside buyside gig from banking than biglaw— even at the associate/vp level. It’s not as streamlined as it is for high achieving analysts, but your odds are pretty much nil in biglaw. So it’s possible that just maybe those Skadden associates who “don’t know anything about the industry” might not be quite as delusional as you imply.

they are roughly as delusional as the 1L at Michigan who tells you her long-term career plan is to clerk on the Supreme Court. yes it is theoretically possible. no, it is almost certainly not going to happen. maybe distressed is the one exception?

[obx]

I think it's the perception of this like, massive compensation differential that's like 10-15 years out of date at this point.

Ten years ago, i.e., pre-crisis investment bankers were making money comparable to that of private equity and hedge funds; you could make $500K easily as a junior investment banking associate. Everyone wanted to do it out of MBA, blah blah blah. So yeah, woking in BigLaw fucking sucked by comparison. You were working super hard for nothing, when the bankers on the other side of the deal were swimming in cash.

That is not remotely the case anymore. Investment banking compensation has fallen materially in nominal (not just absolute, nominal) terms. Investment banking analysts uniformly leave for the buyside after two years; it's not "cool" to do out of HBS or Wharton or GSB. And a relatively senior managing director at JPMorgan might make ~$3-4 million in an average year now, which is what he would have made as a junior director pre-crisis. (And a lot of that is going to be in stock.) If you ever get a chance, ask a 50something MD at one of the big banks about comp in the "old days" vs now. It's hilarious/depressing.

But anyway, lawyers, who don't know anything about the industry, lump banking-PE-HF all in as just "finance" and think banking is still a way to get crazy rich. Maybe they have buddies from college who did banking for two years and have a lot of money now (from their buyside job) and associate that with "being a banker." Like you hear people talk about this in the M&A context, as though leaving Skadden's corporate group or w/e to go to banking is some path to riches. Maybe at a few boutiques, I guess? But on the whole...not really. Especially factoring in shittier job security, transferability of skillset, and extreme variability in compensation.

Well, it’s much more likely to get a high financial upside buyside gig from banking than biglaw— even at the associate/vp level. It’s not as streamlined as it is for high achieving analysts, but your odds are pretty much nil in biglaw. So it’s possible that just maybe those Skadden associates who “don’t know anything about the industry” might not be quite as delusional as you imply.

they are as delusional as a 1L telling you her long-term career plan is to clerk on the Supreme Court

Lol seriously? What percentage of 1Ls do you think become SCOTUS clerks? Banking -> buyside is not exactly Cornell law -> scotus. Bad take. But in the spirit of shitty analogies, it’s more like getting biglaw from Georgetown. Getting fuck you rich once you’re buyside is of course a whole ‘nother game. How long have you worked in biglaw or bb ibd exactly?

Edit: accidental anon, obx

Edit: I see you edited above. Rx is a little different because of the relative paucity of rx analysts and the somehwat unique nature of what distressed funds do (though I do know generic industry and m&a analysts at good banks get these gigs). But if you’re in a good group, you’ve got buyside opps if you put the effort in, even at associate level.

[Anonymous User]

I think it's the perception of this like, massive compensation differential that's like 10-15 years out of date at this point.

Ten years ago, i.e., pre-crisis investment bankers were making money comparable to that of private equity and hedge funds; you could make $500K easily as a junior investment banking associate. Everyone wanted to do it out of MBA, blah blah blah. So yeah, woking in BigLaw fucking sucked by comparison. You were working super hard for nothing, when the bankers on the other side of the deal were swimming in cash.

That is not remotely the case anymore. Investment banking compensation has fallen materially in nominal (not just absolute, nominal) terms. Investment banking analysts uniformly leave for the buyside after two years; it's not "cool" to do out of HBS or Wharton or GSB. And a relatively senior managing director at JPMorgan might make ~$3-4 million in an average year now, which is what he would have made as a junior director pre-crisis. (And a lot of that is going to be in stock.) If you ever get a chance, ask a 50something MD at one of the big banks about comp in the "old days" vs now. It's hilarious/depressing.

But anyway, lawyers, who don't know anything about the industry, lump banking-PE-HF all in as just "finance" and think banking is still a way to get crazy rich. Maybe they have buddies from college who did banking for two years and have a lot of money now (from their buyside job) and associate that with "being a banker." Like you hear people talk about this in the M&A context, as though leaving Skadden's corporate group or w/e to go to banking is some path to riches. Maybe at a few boutiques, I guess? But on the whole...not really. Especially factoring in shittier job security, transferability of skillset, and extreme variability in compensation.

Well, it’s much more likely to get a high financial upside buyside gig from banking than biglaw— even at the associate/vp level. It’s not as streamlined as it is for high achieving analysts, but your odds are pretty much nil in biglaw. So it’s possible that just maybe those Skadden associates who “don’t know anything about the industry” might not be quite as delusional as you imply.

Agree with your points generally, but switching into banking as an associate is not a great path to the buyside/funds. Recruiting for these places is done at the analyst level and you're swimming upstream if you're trying to go law > banking associate/vp > buyside/fund.

[Anonymous User]

Yes LBJ made a good point; the time when bankers made the big bucks are long gone after the f**king DFA.

I made the switch from big law to sell side but not b/c money. The difference is marginal: total take home / hours ratio is roughly the same. I switched career simply because I hate drafting from the bottom of my heart: I would rather spend 10 hours a day building models and decks from scratch than figuring out what's the right word for a clause in a contract that probably no one else is gonna read ever. Plus you get to screw your former colleagues in Big law when you're the underwriter / lender in a deal because you are their client.

In terms of buy side, if you are on this forum, chances are you have long missed the boat. Out of hundreds of, if not a thousand, investment bankers I personally know, less than 10 managed to go into buy side as an IB asso / VP. You need to further discount that percentage if you've already made the switch from big law to sell side. The caveat is if you have a legal Rx and Shareholder Advisory background, your odds will be much better, but still only marginally given buy side's ridiculous supply / demand of manpower.

[LBJ's Hair]

I think it's the perception of this like, massive compensation differential that's like 10-15 years out of date at this point.

Ten years ago, i.e., pre-crisis investment bankers were making money comparable to that of private equity and hedge funds; you could make $500K easily as a junior investment banking associate. Everyone wanted to do it out of MBA, blah blah blah. So yeah, woking in BigLaw fucking sucked by comparison. You were working super hard for nothing, when the bankers on the other side of the deal were swimming in cash.

That is not remotely the case anymore. Investment banking compensation has fallen materially in nominal (not just absolute, nominal) terms. Investment banking analysts uniformly leave for the buyside after two years; it's not "cool" to do out of HBS or Wharton or GSB. And a relatively senior managing director at JPMorgan might make ~$3-4 million in an average year now, which is what he would have made as a junior director pre-crisis. (And a lot of that is going to be in stock.) If you ever get a chance, ask a 50something MD at one of the big banks about comp in the "old days" vs now. It's hilarious/depressing.

But anyway, lawyers, who don't know anything about the industry, lump banking-PE-HF all in as just "finance" and think banking is still a way to get crazy rich. Maybe they have buddies from college who did banking for two years and have a lot of money now (from their buyside job) and associate that with "being a banker." Like you hear people talk about this in the M&A context, as though leaving Skadden's corporate group or w/e to go to banking is some path to riches. Maybe at a few boutiques, I guess? But on the whole...not really. Especially factoring in shittier job security, transferability of skillset, and extreme variability in compensation.

Well, it’s much more likely to get a high financial upside buyside gig from banking than biglaw— even at the associate/vp level. It’s not as streamlined as it is for high achieving analysts, but your odds are pretty much nil in biglaw. So it’s possible that just maybe those Skadden associates who “don’t know anything about the industry” might not be quite as delusional as you imply.

they are as delusional as a 1L telling you her long-term career plan is to clerk on the Supreme Court

Lol seriously? What percentage of 1Ls do you think become SCOTUS clerks? Banking -> buyside is not exactly Cornell law -> scotus. Bad take. But in the spirit of shitty analogies, it’s more like getting biglaw from Georgetown. Getting fuck you rich once you’re buyside is of course a whole ‘nother game. How long have you worked in biglaw or bb ibd exactly?

Edit: accidental anon, obx

Edit: I see you edited above. Rx is a little different because of the relative paucity of rx analysts and the somehwat unique nature of what distressed funds do (though I do know generic industry and m&a analysts at good banks get these gigs). But if you’re in a good group, you’ve got buyside opps if you put the effort in, even at associate level.

banking -> buyside is common. at the analyst level. not at the associate/vp level. without revealing too much background on here, like... I'm quite familiar with IB and buyside recruiting processes.

bankers going to buyside leave as analysts, not associates. funds don't want associates. they're viewed as second-class, both in terms of credentials ("why'd you do IB out of MBA rather than undergrad?") and financial literacy (analysts typically do the actual modeling work, although this varies by bank and group). if a good fund is looking for an experienced hire, they can pick someone up from HBS/GSB/Wharton/whatever who actually worked in buyside before MBA, or just from another fund. there are tons of qualified people and very few spots. many MBAs at HBS with prior w/e in buyside can't get back in. it's a brutal industry.

then throw in the fact that you previously worked as a lawyer, so you've already made a career switch....like idk man, we're getting into "I want to clerk on thee Supreme Court" territory. like how many IB associates go to *real* buyside roles every year, say to funds $100M+ AUM? it's a unicorn thing. the only post-MBA IB associate I know who made the switch went to a smaller fund-of-funds. again--the exception may be distressed.

apologize if the tone of my earlier post was demeaning, wasn't mean to be that way. people should just be cognizant of the reality of buyside recruiting before considering dumping BigLaw to "chase the big bucks" or w/e though. like if you wanna be a banker to be a banker, go for it. but you're gonna end up pretty unhappy if you go in with the expectation of lateraling to KKR.