Big Law vs. Investment Banking Forum

[ruski]

Also, it seems that you're comparing post-undergrad salaries with post-law school salaries...which makes little sense to me. By the time an undergrad finishes 2-3 years at pretty much any top bank, he/she would have exit options or an associate level salary. (and no LS debt)

this is not quite true. finding a top HF/PE after doing banking for a couple years is not that easy, even coming from a top bank. I know several at bulge brackets who failed to secure a decent shop.

also from what i've seen bankers put in much more hours than lawyers, so its not really fair to compare. face time is much more important in banking than in biglaw. at the biglaw firm im at now, its not abnormal for associates to leave before 7 if its a slow week. IBD analysts will rarely, if ever, leave before 7 - even if they have nothing to do - they just have that type of culture where they expect you to devote your time to the firm - none of this pretending to care about "lifestyle" like in biglaw. also everyone is pretty much expected to be in by 9, like every other corporate job. not really sure how the practice of law evolved so that a law firm is completely deserted before 10.

[HarveyBirdman]

Also, it seems that you're comparing post-undergrad salaries with post-law school salaries...which makes little sense to me. By the time an undergrad finishes 2-3 years at pretty much any top bank, he/she would have exit options or an associate level salary. (and no LS debt)

this is not quite true. finding a top HF/PE after doing banking for a couple years is not that easy, even coming from a top bank. I know several at bulge brackets who failed to secure a decent shop.

also from what i've seen bankers put in much more hours than lawyers, so its not really fair to compare. face time is much more important in banking than in biglaw. at the biglaw firm im at now, its not abnormal for associates to leave before 7 if its a slow week. IBD analysts will rarely, if ever, leave before 7 - even if they have nothing to do - they just have that type of culture where they expect you to devote your time to the firm - none of this pretending to care about "lifestyle" like in biglaw. also everyone is pretty much expected to be in by 9, like every other corporate job. not really sure how the practice of law evolved so that a law firm is completely deserted before 10.

you're telling me biglaw attorneys typically work 10 to 7?

[ruski]

if its a slow day/week, then yes. im saying ibanks put much less emphasis on "lifestyle" than law firms do. you'll never hear of a "lifestyle ibank." or an ibank that offers an alternative work schedule like so many law firms do. just look how law firms have stupid rankings like "best firm for mothers/women" and stuff like that. i'm not going to argue whether a "lifestyle" firms even exists, but the fact that its such strong selling point that so many law firms try to have reveals something. ibanks have a much more stringent policy on face time than law firms. im not saying lawyers dont work long hours. im saying bankers work longer hours.

not only that, but at the higher levels the disparity is huge. partners often work as long as associates, if not longer. an MD doesnt even put in half the hours that an analyst/associate does.

[Verity]

I personally think the best way to go into IB (or general investment) after LS (if you end up going) is to do some Biglaw work for a few years at a firm that does awesome corporate work, save money, and then trade for yourself or open an investment partnership. Some could argue that working for yourself can be even more taxing than working for a demanding firm; but the sky's the limit when you're the boss. Just make sure you know what you're doing.

[troggers]

I personally think the best way to go into IB (or general investment) after LS (if you end up going) is to do some Biglaw work for a few years at a firm that does awesome corporate work, save money, and then trade for yourself or open an investment partnership. Some could argue that working for yourself can be even more taxing than working for a demanding firm; but the sky's the limit when you're the boss. Just make sure you know what you're doing.

That's not what investment banking means.

http://en.wikipedia.org/wiki/Investment_banking

[rayiner]

Also, it seems that you're comparing post-undergrad salaries with post-law school salaries...which makes little sense to me. By the time an undergrad finishes 2-3 years at pretty much any top bank, he/she would have exit options or an associate level salary. (and no LS debt)

this is not quite true. finding a top HF/PE after doing banking for a couple years is not that easy, even coming from a top bank. I know several at bulge brackets who failed to secure a decent shop.

also from what i've seen bankers put in much more hours than lawyers, so its not really fair to compare. face time is much more important in banking than in biglaw. at the biglaw firm im at now, its not abnormal for associates to leave before 7 if its a slow week. IBD analysts will rarely, if ever, leave before 7 - even if they have nothing to do - they just have that type of culture where they expect you to devote your time to the firm - none of this pretending to care about "lifestyle" like in biglaw. also everyone is pretty much expected to be in by 9, like every other corporate job. not really sure how the practice of law evolved so that a law firm is completely deserted before 10.

you're telling me biglaw attorneys typically work 10 to 7?

Definitely happens.

[glewz]

Also, it seems that you're comparing post-undergrad salaries with post-law school salaries...which makes little sense to me. By the time an undergrad finishes 2-3 years at pretty much any top bank, he/she would have exit options or an associate level salary. (and no LS debt)

this is not quite true. finding a top HF/PE after doing banking for a couple years is not that easy, even coming from a top bank. I know several at bulge brackets who failed to secure a decent shop.

also from what i've seen bankers put in much more hours than lawyers, so its not really fair to compare. face time is much more important in banking than in biglaw. at the biglaw firm im at now, its not abnormal for associates to leave before 7 if its a slow week. IBD analysts will rarely, if ever, leave before 7 - even if they have nothing to do - they just have that type of culture where they expect you to devote your time to the firm - none of this pretending to care about "lifestyle" like in biglaw. also everyone is pretty much expected to be in by 9, like every other corporate job. not really sure how the practice of law evolved so that a law firm is completely deserted before 10.

I think you've mistakenly assumed that I meant HF/PE when I mentioned "exit options." 2-3 yrs post-undergrad, exit options also include corporate finance, venture capital, consulting, etc.

[PDaddy]

It's a question of balance....balancing risks, work hours, career flexibility, and long-term goals.

Theoretically, a lawyer can always do anything an MBA can do, but an MBA cannot practice law. If one wants a law degree but the life of an MBA, the best route is to get a law degree but with a business focus. That has always been my preference. If one wants to do PI, teach or be a judge, more power to them. That isn't my goal.

I won't let the IB's and other MBA's have all of the fun and make all of the money while I toil away doing more work for less money. In today's world, $300K a year is peanuts for the super-ambitious. It's a living, but - thanks to the media - I know what ballin' out of control really means. It means a yacht and a villa on the French Riviera, and a home in the Hamptons right next door to Diddy. It means being at the Super Bowl and the NBA All-Star Game every year!

Call me shallow and materialistic, but this world is ruled by money. You can make piles of cash and still give back to the community. I care about community, and I care about public interest and would even be glad to do pro bono work. I just don't think it should mean sacrificing everything else. But IMO anyone who sacrifices like a rich person just to NOT become rich is a sucker. Top IB's can make in one year what top attorneys make in a lifetime. Average experienced IB's make more in one year than average attorneys make in five. Arguments against the pursuit of wealth are counterintuitive for any attorney. The more money one makes, the more resources and freedom one has to give back.

True, IB is not for the risk-averse; however, BigLaw attorneys are not risk averse. Anyone who goes into BigLaw should nurture his career as though he plans to transition into business or banking. That includes getting an MBA at some point, and studying finance, general management and/or marketing.

Early on, attorneys have the edge. But after 3-5 years, the IB's, as well as other MBA's have the better deal...financially, at least. Attorneys can have the whole ball of wax if they build their carrers properly.

I think you watch too much MTV. If you're a star trader at Goldman Sachs straight out of undergrad, maybe you'll make $200K right out of undergrad (though with D-F, those days are probably over). But there's only one Goldman. Start anywhere with a lower ROE (read: everyone on Wall Street), and even if you do really well, you probably won't crack $100K. Getting a job at Goldman is like getting a job at Wachtell or Williams & Connolly out of law school. And working for a mid-tier law firm is WAAAAAAY better than working at a Wall Street bucket shop. There are 4 or 5 places on Wall Street that are good places to work out of undergrad. The rest are awful. And not "DLA Piper" awful, but "$70K first year salary with Wachtell hours" awful.

No point in posting anonymous dude...especially since your comment doesn't hold on its own. GS, Blackstone are very similar in prestige, and a good number of the top banks have comparable compensation. And I actually think getting a job at GS is easier than at Wachtell/W&C, provided that you attend the right school. At mine, (top public) at least 6 people got GS IBD straight out of undergrad (2009); competition was pretty much business/econ/some engineering & quant heavy majors. I would expect that Ivies had greater success.

Also, it seems that you're comparing post-undergrad salaries with post-law school salaries...which makes little sense to me. By the time an undergrad finishes 2-3 years at pretty much any top bank, he/she would have exit options or an associate level salary. (and no LS debt)

I agree. GS is not THAT difficult to get into, and if you work smart...

[rayiner]

I think you've mistakenly assumed that I meant HF/PE when I mentioned "exit options." 2-3 yrs post-undergrad, exit options also include corporate finance, venture capital, consulting, etc.

2-3 year post analyst exit options = $100k corporate finance job or law school.

[ruski]

I think you've mistakenly assumed that I meant HF/PE when I mentioned "exit options." 2-3 yrs post-undergrad, exit options also include corporate finance, venture capital, consulting, etc.

2-3 year post analyst exit options = $100k corporate finance job or law school.

right but no analysts are competing for the 100K corporate finance jobs. they are competing for the top HF/PE shops where the upside is much more than a 100k. all the bankers i know are gunning for firms like KKR, not competing for some corporate finance job at a fortune500.

[Anonymous User]

No point in posting anonymous dude...especially since your comment doesn't hold on its own. GS, Blackstone are very similar in prestige, and a good number of the top banks have comparable compensation. And I actually think getting a job at GS is easier than at Wachtell/W&C, provided that you attend the right school. At mine, (top public) at least 6 people got GS IBD straight out of undergrad (2009); competition was pretty much business/econ/some engineering & quant heavy majors. I would expect that Ivies had greater success.

Also, it seems that you're comparing post-undergrad salaries with post-law school salaries...which makes little sense to me. By the time an undergrad finishes 2-3 years at pretty much any top bank, he/she would have exit options or an associate level salary. (and no LS debt)

Blackstone isn't structured anything like a bank. Yes, they have an asset-management division and an M&A advisory practice, but they don't do trading or cap markets, and in absolute size, they're small (1500 employees or so). And, while I'm not familiar with Blackstone's compensation out of undergrad (or even if they hire straight out of undergrad at all), I can tell you that none of the other big banks have comparable compensation anymore. They did in 2006. But it's not 2006 anymore. Merrill, Lehman and Bear all either disappeared or were folded into other banks, and the ones that are left are either struggling (relatively speaking) and still paying nowhere near what they did during boom times (Morgan Stanley and Citi), or never did pay Goldman-level salaries (JP Morgan). At top Ivies, a job there is pretty much hitting the jackpot, so being in the top 10% at Harvard or Princeton still isn't guaranteed to get you a job. And, unlike in law, where there's not a HUGE dropoff between, say, Wachtell and Cleary or Simpson Thatcher, and then between, say, Simpson Thatcher and Gibson Dunn, in banking there are fewer players absolutely, and WAY fewer top players.

[Anonymous User]

To put it another way, if you've got a job at Kramer Levin or Schulte Roth, you're still doing Big Law and collecting a fat paycheck. If you've got a job at Oppenheimer or whatever, it's the legal equivalent of doing asbestos litigation in Arkansas.

[Verity]

I personally think the best way to go into IB (or general investment) after LS (if you end up going) is to do some Biglaw work for a few years at a firm that does awesome corporate work, save money, and then trade for yourself or open an investment partnership. Some could argue that working for yourself can be even more taxing than working for a demanding firm; but the sky's the limit when you're the boss. Just make sure you know what you're doing.

That's not what investment banking means.

http://en.wikipedia.org/wiki/Investment_banking

I know what the f IB is. Ever hear of "angel investors," or "venture capital"? Those are subsets of IB that people can do on their own. That's one aspect of what you can do after Biglaw.

[IrwinM.Fletcher]

I personally think the best way to go into IB (or general investment) after LS (if you end up going) is to do some Biglaw work for a few years at a firm that does awesome corporate work, save money, and then trade for yourself or open an investment partnership. Some could argue that working for yourself can be even more taxing than working for a demanding firm; but the sky's the limit when you're the boss. Just make sure you know what you're doing.

That's not what investment banking means.

http://en.wikipedia.org/wiki/Investment_banking

I know what the f IB is. Ever hear of "angel investors," or "venture capital"? Those are subsets of IB that people can do on their own. That's one aspect of what you can do after Biglaw.

Saving enough to become your own venture capitalist after a few years in biglaw? Lulz.

Most PARTNERS don't have adequate savings to take a realistic stab at that. Do you have any idea what your risk of ruin is when trying something like that with less than a crapton of money?

[rayiner]

I think you've mistakenly assumed that I meant HF/PE when I mentioned "exit options." 2-3 yrs post-undergrad, exit options also include corporate finance, venture capital, consulting, etc.

2-3 year post analyst exit options = $100k corporate finance job or law school.

right but no analysts are competing for the 100K corporate finance jobs. they are competing for the top HF/PE shops where the upside is much more than a 100k. all the bankers i know are gunning for firms like KKR, not competing for some corporate finance job at a fortune500.

No shit. But out of the scads of analysts hired every year by the banks, a tiny handful get HF/PE. The typical exit for an analyist is some corporate finance job at an F500.

The potential upside is definitely higher in finance, no doubt. No lawyers are pulling in $100s of million like top HF managers are. But then again, Bill Gates spends all his time doing philanthropy now and still makes almost a billion a year cashing out his MSFT equity. Is that data point relevant to the argument of engineering versus finance as a career option?

[englawyer]

Saving enough to become your own venture capitalist after a few years in biglaw? Lulz.

Most PARTNERS don't have adequate savings to take a realistic stab at that. Do you have any idea what your risk of ruin is when trying something like that with less than a crapton of money?

yeah agree on this. the only way to lower the risk is to invest in many different companies. even at the angel level (like 300k investment) you would probably need 5 million or so to "play around with" in order to get a reasonably low level of risk. that has to be money that is truly expendable...even if you make $1 mil/yr its unlikely you will have that much "extra" money around.

[Anonymous User]

No point in posting anonymous dude...especially since your comment doesn't hold on its own. GS, Blackstone are very similar in prestige, and a good number of the top banks have comparable compensation. And I actually think getting a job at GS is easier than at Wachtell/W&C, provided that you attend the right school. At mine, (top public) at least 6 people got GS IBD straight out of undergrad (2009); competition was pretty much business/econ/some engineering & quant heavy majors. I would expect that Ivies had greater success.

Also, it seems that you're comparing post-undergrad salaries with post-law school salaries...which makes little sense to me. By the time an undergrad finishes 2-3 years at pretty much any top bank, he/she would have exit options or an associate level salary. (and no LS debt)

Blackstone isn't structured anything like a bank. Yes, they have an asset-management division and an M&A advisory practice, but they don't do trading or cap markets, and in absolute size, they're small (1500 employees or so). And, while I'm not familiar with Blackstone's compensation out of undergrad (or even if they hire straight out of undergrad at all), I can tell you that none of the other big banks have comparable compensation anymore. They did in 2006. But it's not 2006 anymore. Merrill, Lehman and Bear all either disappeared or were folded into other banks, and the ones that are left are either struggling (relatively speaking) and still paying nowhere near what they did during boom times (Morgan Stanley and Citi), or never did pay Goldman-level salaries (JP Morgan). At top Ivies, a job there is pretty much hitting the jackpot, so being in the top 10% at Harvard or Princeton still isn't guaranteed to get you a job. And, unlike in law, where there's not a HUGE dropoff between, say, Wachtell and Cleary or Simpson Thatcher, and then between, say, Simpson Thatcher and Gibson Dunn, in banking there are fewer players absolutely, and WAY fewer top players.

Not quite like winning the jackpot. My friend from Harvard UG said a lot of her friends, many unremarkable (apart from being at Harvard), could get GS with decent grades -- 3.8+, which isn't too hard given the grade inflation that occurs there.

[Anonymous User]

I guess it's useful to distinguish jobs at Goldman. It's not easy, but not THAT hard to get a job in a back office division, or in legal. It IS incredibly hard to get a job in trading or IB.

[rayiner]

Not quite like winning the jackpot. My friend from Harvard UG said a lot of her friends, many unremarkable (apart from being at Harvard), could get GS with decent grades -- 3.8+, which isn't too hard given the grade inflation that occurs there.

I think he was talking about Blackstone, not Goldman, which is pretty much like winning the jackpot.

Also, these days, with how quant heavy finance has become, those 3.8's are often folks who got them in physics, etc. Quite remarkable as far as undergraduates go.

[gunner3]

Saving enough to become your own venture capitalist after a few years in biglaw? Lulz.

Most PARTNERS don't have adequate savings to take a realistic stab at that. Do you have any idea what your risk of ruin is when trying something like that with less than a crapton of money?

yeah agree on this. the only way to lower the risk is to invest in many different companies. even at the angel level (like 300k investment) you would probably need 5 million or so to "play around with" in order to get a reasonably low level of risk. that has to be money that is truly expendable...even if you make $1 mil/yr its unlikely you will have that much "extra" money around.

I definitely agree with this statement. I am a finance student from a great UG business school and I was thinking IB for a while. Even in smaller markets (read: midwest, intermountain, south (excluding Texas)), you need $5mm at the least in CASH! If you know many people who have $5mm in cash saved after "a few years in biglaw", you let me know. People don't do IB to have a career in IB. An analyst at GS, JPM, C, etc. only makes $80,000/yr. before bonuses. People do IB so they can get into PE/HF because that is where the RIDICULOUS money comes from.

[ruski]

I think you've mistakenly assumed that I meant HF/PE when I mentioned "exit options." 2-3 yrs post-undergrad, exit options also include corporate finance, venture capital, consulting, etc.

2-3 year post analyst exit options = $100k corporate finance job or law school.

right but no analysts are competing for the 100K corporate finance jobs. they are competing for the top HF/PE shops where the upside is much more than a 100k. all the bankers i know are gunning for firms like KKR, not competing for some corporate finance job at a fortune500.

No shit. But out of the scads of analysts hired every year by the banks, a tiny handful get HF/PE. The typical exit for an analyist is some corporate finance job at an F500.

The potential upside is definitely higher in finance, no doubt. No lawyers are pulling in $100s of million like top HF managers are. But then again, Bill Gates spends all his time doing philanthropy now and still makes almost a billion a year cashing out his MSFT equity. Is that data point relevant to the argument of engineering versus finance as a career option?

pretty dumb analogy. most bankers at a bulge bracket have a decent shot at getting into a top PE/HF - doesn't mean they are guaranteed but it is certainly not out of their reach. however, NO engineer can expect to become the next bill gates. in fact, many young bankers enter IB precisely for the reason of one day breaking into PE/HF.


have no idea why one would equate entering PE/HF with becoming the next bill gates.

[09042014]

2-3 year post analyst exit options = $100k corporate finance job or law school.

right but no analysts are competing for the 100K corporate finance jobs. they are competing for the top HF/PE shops where the upside is much more than a 100k. all the bankers i know are gunning for firms like KKR, not competing for some corporate finance job at a fortune500.

No shit. But out of the scads of analysts hired every year by the banks, a tiny handful get HF/PE. The typical exit for an analyist is some corporate finance job at an F500.

The potential upside is definitely higher in finance, no doubt. No lawyers are pulling in $100s of million like top HF managers are. But then again, Bill Gates spends all his time doing philanthropy now and still makes almost a billion a year cashing out his MSFT equity. Is that data point relevant to the argument of engineering versus finance as a career option?

pretty dumb analogy. most bankers at a bulge bracket have a decent shot at getting into a top PE/HF - doesn't mean they are guaranteed but it is certainly not out of their reach. however, NO engineer can expect to become the next bill gates. in fact, many young bankers enter IB precisely for the reason of one day breaking into PE/HF.

Just do Operating Systems in the early 80's brah.

[Verity]

I personally think the best way to go into IB (or general investment) after LS (if you end up going) is to do some Biglaw work for a few years at a firm that does awesome corporate work, save money, and then trade for yourself or open an investment partnership. Some could argue that working for yourself can be even more taxing than working for a demanding firm; but the sky's the limit when you're the boss. Just make sure you know what you're doing.

That's not what investment banking means.

http://en.wikipedia.org/wiki/Investment_banking

I know what the f IB is. Ever hear of "angel investors," or "venture capital"? Those are subsets of IB that people can do on their own. That's one aspect of what you can do after Biglaw.

Saving enough to become your own venture capitalist after a few years in biglaw? Lulz.

Most PARTNERS don't have adequate savings to take a realistic stab at that. Do you have any idea what your risk of ruin is when trying something like that with less than a crapton of money?

I said "after Biglaw," not "right after Biglaw." The fact is that even if you like Biglaw and stick around as long as possible, there's a good chance you'll get pushed out involuntarily. Going the BB IB route also doesn't come close to guaranteeing PE/HF work. If you can save a few hundred thousand dollars while working, an investment partnership with elements of IB is not a bad idea.

[rayiner]

2-3 year post analyst exit options = $100k corporate finance job or law school.

right but no analysts are competing for the 100K corporate finance jobs. they are competing for the top HF/PE shops where the upside is much more than a 100k. all the bankers i know are gunning for firms like KKR, not competing for some corporate finance job at a fortune500.

No shit. But out of the scads of analysts hired every year by the banks, a tiny handful get HF/PE. The typical exit for an analyist is some corporate finance job at an F500.

The potential upside is definitely higher in finance, no doubt. No lawyers are pulling in $100s of million like top HF managers are. But then again, Bill Gates spends all his time doing philanthropy now and still makes almost a billion a year cashing out his MSFT equity. Is that data point relevant to the argument of engineering versus finance as a career option?

pretty dumb analogy. most bankers at a bulge bracket have a decent shot at getting into a top PE/HF - doesn't mean they are guaranteed but it is certainly not out of their reach. however, NO engineer can expect to become the next bill gates. in fact, many young bankers enter IB precisely for the reason of one day breaking into PE/HF.

have no idea why one would equate entering PE/HF with becoming the next bill gates.

I'm not equating entering PE/HF with becoming the next Bill Gates. I'm equating top hedge fund managers (the handful who make $100s of millions to $1 billion) with Bill Gates (and Brin, Ellison, etc). The point is talking about an outcome that happens to a small fraction of the field isn't particularly useful.

What %-age of people who start out as first-year associates in BB banks end up at a top HF/PE? What's the career outcome for the median first-year?

[Verity]

I'm not equating entering PE/HF with becoming the next Bill Gates. I'm equating top hedge fund managers (the handful who make $100s of millions to $1 billion) with Bill Gates (and Brin, Ellison, etc). The point is talking about an outcome that happens to a small fraction of the field isn't particularly useful.

What %-age of people who start out as first-year associates in BB banks end up at a top HF/PE?

+1, I think a lot has been erroneously said on TLS about the MBA -> IB route paying off better than the JD -> Biglaw route. Both are hard to get in the first place, and mobility/compensation isn't better for IB (in a lot of cases its far worse).

That's why I advocate entrepreneurship where I can. If you spend roughly 5 years in Biglaw and save some dough, make some connections, and gain great experience and insight, if you have initiative and skill then going your own way is probably has the best prospects.