Johnnybgoode92 wrote:Pay: similar, although MBB is higher later on if you can withstand the attrition in MBB or big law
Exit ops: MBB’s will generally pay more and be more interesting. The MBB exit ops will be more demanding lifestyle wise than most in house positions.
I'm curious on the compensation point. All examples below are for McKinsey.
The H1B salary database shows that 90%+ of Engagement Managers earn $165k. Let's say that those are the 1st year EMs. Assuming you make EM after 2 and 1/2 years (stub + 1 + 2), you're now equivalent to a rising 3rd year in biglaw, which means to break even w/biglaw's $270k total compensation (sans 401(k) contribution), you'd make to make a $105k bonus (let's assume you're in the middle bucket of bonuses). I find it really difficult to believe that after 2 years with the company, EMs are getting bonuses of ~65% of their base pay. There are also EM salaries at the $180k and $200k range. Let's assume that those are 2nd and 3rd year EMs, respectively, who receive yearly bumps. They would have to make a bonus ~80% of their base pay to catch up with their biglaw counterparts. Again, I find that hard to believe.
Let's climb one level higher. Let's say after another 3 years as an EM, you make an Associate Partner. The H1B salary database records those salaries hovering at $200k, $210, and $225k. Let's be generous and say that those aren't even 3 levels and there's just two levels of AP at ~$200k and ~$225k. Those would be equal to a rising 6th and 7th year biglaw associates, which means their bonus would have to be ~100% and ~90%, respectively to match their biglaw counterparts. Again, it seems unlikely to me. My roommate who is heading to BCG after their MBA quoted me 30%-50% of base for EMs/APs--or whatever is the equivalent rank at BCG.
So, assuming that McKinsey doesn't just blatantly lie and pay their employees higher than what they file on their H1B applications--I don't know why they would; you'd want to inflate, not deflate salaries if you want a higher chance at H1B approval--where the hell does this mythical compensation premium come from? This is up to the end of the 7th year. There's only one year left on the partner track at most biglaw firms. Obviously, there's the 401(k) match, but even if you shave 20% of the percentages I've provided so far and count the 401(k) as part of the compensation premium, the percentages would still seem moderately too high for me. Keep in mind: MBB supposedly has higher attrition, another fact thrown around on TLS that I doubt, so compensation should probably be higher to reward that risk.
What's also interesting about this point is that WSO, reddit, Management Consulted all go completely radio silent on specific numbers and base/bonus structures at MBB and only brandish that first year number around, which always says that you can make a bonus "up to" 35k at MBB, but let's face it. If you're middle of the road, you'd make about half that.
It kind of makes me think that this whole "MBB pays better later on" thing is a TLS invention because folks here stan MBB. At least people discuss IBD compensation with concrete numbers on WSO every year so those are more solid.
No hate on MBB. If you like thinking from a business-strategic perspective, pursue that regardless of compensation. Like biglaw, it's a great job that puts you in the top 5% of household incomes and has great exits, but I have seriously doubts that it pays significantly--or even materially--more throughout its partner-track. If anything, it might pay less.
Also, regarding exits, I can't be bothered to pull up every WSO thread that says that early to mid-level exits from MBB into industry corp. dev./strat. is $150k-$200k, but those are basically the numbers thrown around. I don't think biglaw exits are that different. Of course, LA entertainment exits might be closer to $125k, but Houston O&G or NYC financial services can also be like $225k-$250k. In both cases--MBB and biglaw--it seems pretty industry and location dependent (and intuitively, that's probably how it should be).
I can think of two positives for MBB exits outside the subjective criteria of enjoying business-side work more.
First, MBB can exit into IBD/PE. Lawyers can too. The process is basically the same. Network hard and brush up on technical interviewing. MBB folks are probably better at the latter, but that same aptitude is probably what got into MBB in the first place. If you can't do basic math fast and incorporate that math into your analysis of business problems, first, you'd never make it into MBB, and second, being at MBB won't magically make you a better candidate for IBD/PE.
Second, MBB alumni have a better chance at becoming CEO/CFO/COO. Those usually pay more than GCs, but they're also slugging it out with literally everybody else in the company for those roles--including the lawyers sometimes. If you want to be GC, you're only fighting with other lawyers.
OP, do what you want. Business school is good because if nothing else, it's less expensive both in terms of actual and opportunity cost, which is significant. I'd urge you to consider the information above. It's constructed off of bits and pieces of information, and I've never touched consulting in my life so I am definitely talking out of my ass, but I have a hard time see why I'd be wrong, which I definitely can be. Happy to be proven so by actual MBB folks.