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

[Anonymous User]

Hoping to get a little perspective, hopefully from full-time associates or people who have summered. I'm in the fortunate position to have an offer at a v5 firm and a top investment banking firm. I feel very conflicted about which direction to go (this is for next summer by the way).

My main concerns with the law are that 1) It seems essentially impossible to advance to partner and have a long-term career at any law firm, 2) the pay seems outpaced over the years compared with banking, 3) the hours never get better and arguably get worse.

My main concerns with i-banking are 1) although presumably almost all are given full-time offers, it is not the guarantee that you have going to a top law firm, 2) the salary is very bonus-contingent, meaning if the firm / economy has a bad year you're in trouble, 3) less job security if said firm / economy does badly and they need to ax people.

I'm sure the hours and lifestyle are going to be equally bad so I'm not considering that too much. I think long-term I would like to have more of a business-related role, but I do enjoy learning about the law as well and feel that it would be odd to go to law school and not practice for at least a year or two.

Would appreciate any thoughts / advice! Especially on other angles I may not be considering. Thanks very much in advance.

[loomy78]

hours will most likely be worse as an ibanker. i would say go with the career which you find the work most interesting. if you have no strong feelings, then you can really evaluate both careers on the same pay/hours/QOL scale.

[lax11570]

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

[Desert Fox]

Hoping to get a little perspective, hopefully from full-time associates or people who have summered. I'm in the fortunate position to have an offer at a v5 firm and a top investment banking firm. I feel very conflicted about which direction to go (this is for next summer by the way).

My main concerns with the law are that 1) It seems essentially impossible to advance to partner and have a long-term career at any law firm, 2) the pay seems outpaced over the years compared with banking, 3) the hours never get better and arguably get worse.

My main concerns with i-banking are 1) although presumably almost all are given full-time offers, it is not the guarantee that you have going to a top law firm, 2) the salary is very bonus-contingent, meaning if the firm / economy has a bad year you're in trouble, 3) less job security if said firm / economy does badly and they need to ax people.

I'm sure the hours and lifestyle are going to be equally bad so I'm not considering that too much. I think long-term I would like to have more of a business-related role, but I do enjoy learning about the law as well and feel that it would be odd to go to law school and not practice for at least a year or two.

Would appreciate any thoughts / advice! Especially on other angles I may not be considering. Thanks very much in advance.

I don't believe the hours and lifestyle will be equally bad.

Average Ibanking associate is 80-85 hours.

I'd be shocked if the average V5 associate is above 70 hours. Its probably not even above 65.

I have no clue how they do it. How much do you have in loans?

[jbagelboy]

I would decide this based on whether you want to be an attorney, i.e. practice law and provide legal advise, or a banker, providing financial advise/risk analysis/ect. Think about the type of deal you'd probably be working on, and what components of the deal prove most interesting/intellectually challenging to you at each level, from diligence on up. Sounds trite but that's honestly the biggest difference and most determinative of your happiness. Both roles involve serving a client, but the type of service takes a different form and the two are not truly interchangeable. Maybe one would bore you and you'd be looking for outs and one wouldn't.

[Anonymous User]

I would decide this based on whether you want to be an attorney, i.e. practice law and provide legal advise, or a banker, providing financial advise/risk analysis/ect. Think about the type of deal you'd probably be working on, and what components of the deal prove most interesting/intellectually challenging to you at each level, from diligence on up. Sounds trite but that's honestly the biggest difference and most determinative of your happiness. Both roles involve serving a client, but the type of service takes a different form and the two are not truly interchangeable. Maybe one would bore you and you'd be looking for outs and one wouldn't.

OP here.

Thanks for all the posts. This does make a lot of sense, you basically articulated the choice I need to be making. It's really hard to tell without having really been in either environment before, but I suppose the banker role sounds a bit more interesting. I did hear that in more senior levels it becomes a bit more "sales-y" in the sense that it's just about drumming up business, so the law seems a bit more substantive in that respect.

To the other poster, I will be debt-free when I graduate so no loan considerations.

[Pikappraider]

Would you be starting as an analyst or associate with the bank?

Either way the hours will be much worse than big law

[Anonymous User]

Would you be starting as an analyst or associate with the bank?

Either way the hours will be much worse than big law

Associate. So biglaw hours aren't as terrible as people say then? Or is IB just that much worse?

[Pikappraider]

Would you be starting as an analyst or associate with the bank?

Either way the hours will be much worse than big law

Associate. So biglaw hours aren't as terrible as people say then? Or is IB just that much worse?

Ibankers lol at big law hours. They actually work 80 hours weeks while it feels like big law complains about 80 hour weeks when working 60-70

I'm guessing your v5 is not wachtell?

[FSK]

My impression is that the lateral options as an associate at an Ibank aren't nearly what they are at the analyst level....not as many opportunities to eventually end up in PE/HF/VC work.

[KidStuddi]

1) It seems essentially impossible to advance to partner and have a long-term career at any law firm

It's not impossible to make partner somewhere, it's just not very likely it's going to happen at the first firm you pick. But more to the point of your comparison, from what I know of I-Banking the advancement prospects there are just as bad if not worse and the attrition rate is every bit as high. Is this not the case where you have your offer?

[Law Sauce]

Personally, I'd probably take the law firm. Job security is likely going to be much better (at least through year 4 or 5), even if you leave the v5 after a few years, you should be able to lateral to many other city/firms depending on your practice area of expertise. I'm less confident about doing that on the Ibanking side, especially if they cut you early or the economy moves past you for whatever reason. Also, after you burn out of Ibanking, I'm less confident what skills you would fall back on. At least with the law you are learning and gaining valuable experience as you hustle your way through the first couple years; it seems more like you are working your way towards something, at least if you are not totally sweatshopping it.

But an Ibanking bonus will blow the v5's away, of course, and if you are willing to take on the risk and go for it, you may end up finding/creating a cool after-Ibank position for yourself in some other business.

So... what type of person are you? Risk-averse or routine-driven? Creative/entrepreneurial or free-spirited? (Not that you couldn't be a banker or a lawyer with either type of personality.) And what would you rather do: would you rather analyze a long document in an office or pound the pavement on the phones trying to shake out $?

[mvp99]

Hoping to get a little perspective, hopefully from full-time associates or people who have summered. I'm in the fortunate position to have an offer at a v5 firm and a top investment banking firm. I feel very conflicted about which direction to go (this is for next summer by the way).

My main concerns with the law are that 1) It seems essentially impossible to advance to partner and have a long-term career at any law firm, 2) the pay seems outpaced over the years compared with banking, 3) the hours never get better and arguably get worse.

My main concerns with i-banking are 1) although presumably almost all are given full-time offers, it is not the guarantee that you have going to a top law firm, 2) the salary is very bonus-contingent, meaning if the firm / economy has a bad year you're in trouble, 3) less job security if said firm / economy does badly and they need to ax people.

I'm sure the hours and lifestyle are going to be equally bad so I'm not considering that too much. I think long-term I would like to have more of a business-related role, but I do enjoy learning about the law as well and feel that it would be odd to go to law school and not practice for at least a year or two.

Would appreciate any thoughts / advice! Especially on other angles I may not be considering. Thanks very much in advance.

I don't believe the hours and lifestyle will be equally bad.

Average Ibanking associate is 80-85 hours.

I'd be shocked if the average V5 associate is above 70 hours. Its probably not even above 65.

I have no clue how they do it. How much do you have in loans?

True. Ibanking analyst work substantially more than biglaw associates... 80-85 average and 100 hours weeks are not uncommon. But I've also read that Ibank associates work around 10-20% less.

[Anonymous User]

1) It seems essentially impossible to advance to partner and have a long-term career at any law firm

It's not impossible to make partner somewhere, it's just not very likely it's going to happen at the first firm you pick. But more to the point of your comparison, from what I know of I-Banking the advancement prospects there are just as bad if not worse and the attrition rate is every bit as high. Is this not the case where you have your offer?

OP here. Offer is non-WLRK.

I think it may be comparable or lower than law firms but that is a guess. The reason is that pay generally goes up and hours go down with advancement, and that it isn't terribly hard to make VP after 3 years (although not a given of course).

Personally, I'd probably take the law firm. Job security is likely going to be much better (at least through year 4 or 5), even if you leave the v5 after a few years, you should be able to lateral to many other city/firms depending on your practice area of expertise. I'm less confident about doing that on the Ibanking side, especially if they cut you early or the economy moves past you for whatever reason. Also, after you burn out of Ibanking, I'm less confident what skills you would fall back on. At least with the law you are learning and gaining valuable experience as you hustle your way through the first couple years; it seems more like you are working your way towards something, at least if you are not totally sweatshopping it.

But an Ibanking bonus will blow the v5's away, of course, and if you are willing to take on the risk and go for it, you may end up finding/creating a cool after-Ibank position for yourself in some other business.

So... what type of person are you? Risk-averse or routine-driven? Creative/entrepreneurial or free-spirited? (Not that you couldn't be a banker or a lawyer with either type of personality.) And what would you rather do: would you rather analyze a long document in an office or pound the pavement on the phones trying to shake out $?

Good reasoning, thanks for the post. Job security is definitely something weighing on me. If deal flow and the economy slows when I start, then banking does seem like quite the risk. If I were to get axed early on it could make for a bad situation.

[Anonymous User]

1) It seems essentially impossible to advance to partner and have a long-term career at any law firm

It's not impossible to make partner somewhere, it's just not very likely it's going to happen at the first firm you pick. But more to the point of your comparison, from what I know of I-Banking the advancement prospects there are just as bad if not worse and the attrition rate is every bit as high. Is this not the case where you have your offer?

OP here. Offer is non-WLRK.

I think it may be comparable or lower than law firms but that is a guess. The reason is that pay generally goes up and hours go down with advancement, and that it isn't terribly hard to make VP after 3 years (although not a given of course).

Personally, I'd probably take the law firm. Job security is likely going to be much better (at least through year 4 or 5), even if you leave the v5 after a few years, you should be able to lateral to many other city/firms depending on your practice area of expertise. I'm less confident about doing that on the Ibanking side, especially if they cut you early or the economy moves past you for whatever reason. Also, after you burn out of Ibanking, I'm less confident what skills you would fall back on. At least with the law you are learning and gaining valuable experience as you hustle your way through the first couple years; it seems more like you are working your way towards something, at least if you are not totally sweatshopping it.

But an Ibanking bonus will blow the v5's away, of course, and if you are willing to take on the risk and go for it, you may end up finding/creating a cool after-Ibank position for yourself in some other business.

So... what type of person are you? Risk-averse or routine-driven? Creative/entrepreneurial or free-spirited? (Not that you couldn't be a banker or a lawyer with either type of personality.) And what would you rather do: would you rather analyze a long document in an office or pound the pavement on the phones trying to shake out $?

Good reasoning, thanks for the post. Job security is definitely something weighing on me. If deal flow and the economy slows when I start, then banking does seem like quite the risk. If I were to get axed early on it could make for a bad situation.

Quality of exit opportunities vary a lot from IB, even within GS/MS/JPM. However in law, quality of exit opportunities from Cravath/S&C are not going to be significantly different from those at Davis Polk/STB/Skadden/Cleary/Deb/etc.

[SLS_AMG]

1) It seems essentially impossible to advance to partner and have a long-term career at any law firm

It's not impossible to make partner somewhere, it's just not very likely it's going to happen at the first firm you pick. But more to the point of your comparison, from what I know of I-Banking the advancement prospects there are just as bad if not worse and the attrition rate is every bit as high. Is this not the case where you have your offer?

OP here. Offer is non-WLRK.

I think it may be comparable or lower than law firms but that is a guess. The reason is that pay generally goes up and hours go down with advancement, and that it isn't terribly hard to make VP after 3 years (although not a given of course).

Personally, I'd probably take the law firm. Job security is likely going to be much better (at least through year 4 or 5), even if you leave the v5 after a few years, you should be able to lateral to many other city/firms depending on your practice area of expertise. I'm less confident about doing that on the Ibanking side, especially if they cut you early or the economy moves past you for whatever reason. Also, after you burn out of Ibanking, I'm less confident what skills you would fall back on. At least with the law you are learning and gaining valuable experience as you hustle your way through the first couple years; it seems more like you are working your way towards something, at least if you are not totally sweatshopping it.

But an Ibanking bonus will blow the v5's away, of course, and if you are willing to take on the risk and go for it, you may end up finding/creating a cool after-Ibank position for yourself in some other business.

So... what type of person are you? Risk-averse or routine-driven? Creative/entrepreneurial or free-spirited? (Not that you couldn't be a banker or a lawyer with either type of personality.) And what would you rather do: would you rather analyze a long document in an office or pound the pavement on the phones trying to shake out $?

Good reasoning, thanks for the post. Job security is definitely something weighing on me. If deal flow and the economy slows when I start, then banking does seem like quite the risk. If I were to get axed early on it could make for a bad situation.

Quality of exit opportunities vary a lot from IB, even within GS/MS/JPM. However in law, quality of exit opportunities from Cravath/S&C are not going to be significantly different from those at Davis Polk/STB/Skadden/Cleary/Deb/etc.

What? Where did OP say anything about CSM or S&C?

Also, why is everyone on this board obsessed with being an i-banker?

[jbagelboy]

What? Where did OP say anything about CSM or S&C?

Also, why is everyone on this board obsessed with being an i-banker?

thank you. while I empathize with the choice OP has to make, you'd think we're on wall street oasis sometimes

[runinthefront]

.

[hill1334]

I feel that you should also consider which job you will find more purposeful on a daily basis, not just which job you will make more money in or even which job you will enjoy the work in more. At least in my experience, it becomes a lot easier to motivate myself to work 65+ hour weeks when I am working on a case I actually care about. Maybe I am romanticizing work a little bit, but I think it is true that burnout can be more easily averted if one actually finds their job worthwhile to some extent.

user has been outed and warned for posting in legal employment as a 0L

[lawhopeful10]

Not to hijack the thread but OP and anyone else with info mind giving me some advice here. I'm a 2L near the top of my class at a regional T1. I have a couple interviews left but with no offers so far I have accepted striking out as a real possibility. I think I would like law but I'm not desperately committed to it and I was thinking of applying to a bunch of investment banks since it seemed the hiring season there is a later. Does anyone know if my grades 1L year give me a shot at any of these jobs or are they usually only reserved for students at top schools. Thanks in advance.

[$$$$$$]

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.

There is more risk/reward in banking, which for someone with zero debt, I would think is very attractive, but the decision to work at a V5 probably wouldn't preclude you from doing investment banking in the future if you join an M&A group or something similar. This is especially true if you were able to get banking out of law school.

[lawstudent_87]

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.

[sparty99]

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.

[Anonymous User]

Lots of misinformation ITT. First off, IB hours are substantially and indisputably worse than law firm hours. Full stop. Compensation for junior analysts is usually less than for junior associates, even after bonus (which is substantially higher). That changes after two years, when most analysts either become VPs or leave for a private shop and start making lots more money. That said, exit options for I-bankers never really get easier, whereas transactional lawyers have the option to move to a (relatively) cushy in-house gig and still make decent money.

It's true that lawyers typically have more job security than I-bankers, who are routinely laid off along with the booms and busts. That said, getting laid off in IB is nbd, whereas junior lawyers who get latham'd may never work in Biglaw again. The lateral market for juniors sucks and there is a stigma associated with law firm layoffs which isn't present in IB.

There are ups and downs to both career paths. The real question is: what do you want to do? None of us can answer that.

[Anonymous User]

Some points here:

(1) I-banking makes good money, but it will not be the millions you read about people making in finance. The millions are reserved for trading: i-banking and trading are completely different departments, like litigation vs. corporate.

(2) Do you like Excel/Powerpoint or Word? My impression is that Ibanking is much more quantitative.

(3) Is it important to you to be the alpha? Investment bankers usually drive and pitch the deal, and get the negotiation done on big picture strategy points. Lawyers help fill in the gaps and make sure the deal will actually work: lawyers are support staff in the world of deal work. Of course this varies from firm to firm and deal to deal, but if you are into the "thrill of the deal" banking might be better.