Law school vs. Business School

Graduate School Business School - MBA
1

<p>Which is better for the salary, Law School or Business School? The starting salary seems to be about the same, but it's possible to go to law school right after your undergrad whereas for your MBA, you're looking at 6-7 years after you have graduated in order to get your MBA degree. So it seems like the total compensation for Law may be higher for at least the short run.</p>

<p>On the other hand, law school is more deterministic based on your undergrad. That is, if you didn't come out with a high GPA, you're basically screwed, wheras for your MBA, you can compensate for a low GPA with fantastic work experience.</p>

<p>Any thoughts on the issue? Certainly, there are people here who are chosing between the two.</p>

2

<p>It sounds you are looking for the big money! big time! Man, follow your heart and do what you like. If you want money, becoming an investment banker with MBA should get you enough salary but only if you are good at it. Or maybe you could be a businessman or investor selling and buying off muti-million $ worth of business or real estate. Or you can be a CEO making millions every year. If you like lawyering, I don't think it will get you that kind of money in short time, but if that's what you like to do? whatever you choose, it will worth it.
You are right, a lawyer with 6~7 years of successful experience promises a lot of things, but that does not compare to what a businessman can earn when he/she is successful in what he/she is doing. Think and research about each career and choose one that you like and can do for long. But remember, a smart and hardworking lawyer can be a successful lawyer, but not all harvard MBAs become filthy rich.</p>

3

<p>a law degree offers more security, an MBA offers more opportunity. If you're the kind of person who loves the law and the legal sector, you can earn plenty of money - but few lawyers make a killing. To earn a killing in this world, there are basically 3 ways:</p>

<p>1) Have a career as an investment banker, or at a similarly well-paid element of the financial sector like a hedge fund, PE fund, VC, etc.
2) Be the absolute best in the world at something: tiger woods makes a killing, joe schmo on the PGA tour doesn't. Phil Hellmuth, Michael Jordan, Tom Hanks, Andre Agassi, Billy Joel... if you are absolutely at the top of a high-demand, winner-take-all market, you can clean up... but those just off the top usually only scrape by.
3) Start your own business, and build it into a success. Many try, some succeed.</p>

<p>Other than that, you can be rich with a career as, say, a lawyer, doctor, etc, but you will never be ridiculously wealthy.</p>

<p>Decide for yourself where your talents lie.</p>

4

<p>Could you elaborate on why you think an MBA offers more opportunity?</p>

5

<p>MBAs typically have more types of job opportunities coming out of school</p>

6

<p>People who are rich with HFs/PEs should be lumped in the third category. Its the hedge fund managers who are super wealthy (and high and above your average top level banker) not their employees for the most part.</p>

7

<p>
[quote]
Could you elaborate on why you think an MBA offers more opportunity?

[/quote]

it'd be easier to see it for yourself than get told by some random fool on online forums. If you're in college, every spring harvard business school has a College Day that i attended last year. During their various presentations they have someone from career services talk to decent-sized groups of college kids about how they approach matching their MBA candidates with companies. If you get a chance, try to attend that or something similar at another top business school, because it was endlessly educational for me.</p>

<p>The amount of variety that these guys go into is truly staggering. I think something like 28% went into financial services and another 17% into management consulting. Those are the "typical" places, because they're so well-paying, and as they said, "if you want to work for McKinsey or Bain, you don't need our help, because they'll come looking for you - usually with whatever bribes or perks they can come up with".</p>

<p>However, that same quote continued with, "It's the MBA students out there who want to make a bit more of a creative difference in the world who we make the most difference for - those who want to join a company bringing cell phone service to remote African villages, or join a nonprofit fighting educational inequality, or start an art business in the philippines... those are the guys who we carefully plan out exactly what they enjoy, we do a whole battery of self-quizzes, introduce them to people in all sorts of fields and let them take executives to lunch to pick their brains... we serve as an idea fountain for those looking to go in a unique direction with their life."</p>

<p>That's not an exact quote, obviously, but the sense she conveyed was very very close to that. As a grad of a top MBA program, you have two categories of choices:</p>

<ul>
<li>Make a ton of money (though not "a killing" as I describe above, barring investment banking) by going into finance, VC, consulting, etc. Live comfortably, never worry about money, contribute financially to causes you believe in, etc. Perhaps get offered jobs as corporate executives somewhere down the line.</li>
<li>Start or join a business that needs top-line business sense and professional makeup, in fields or with ideas that most people have never heard of. Top MBA programs have connections in the most obscure (and, to some, fascinating) areas, which my 2AM brain is running out of examples for.</li>
</ul>

<p>But that's what I mean when I say they have opportunity. They have companies beating the door down to try and hire their MBA grads, pay them fabulous amounts of money, and put them on the fast track to becoming executives in whatever industry suits them. 50 years ago, it was a law degree that was the "union card", essentially, of the rich, successful and influential in this world, and a law degree (or a career as a lawyer) had been such for hundreds of years. That has changed. An MBA is the true multi-purpose degree of the 21st century, and those with top MBAs are the lucky few who can ACTUALLY fulfill the promise of the american dream, to "be whatever you want to be".</p>

<p>Hope that semi-rant helps,</p>

<p>Steve</p>

8

<p>Top VC partners make significantly more than their banking counter parts. Anything in the buy side results in making significant money if you are at the top of the game. However, everything comes down to entrepreneurship. The super rich guys like the managers of HFs, founders of PE/VC firms all are entrepreneurs who started their business.</p>

9

<p>There really aren't any "union cards" to speak off. MBAs are actually not that useful unless you have attended a very select few business schools. Nothing is compartmentalized in this world. Just because someone might have a law degree doesn't mean s/he will ONLY be a lawyer. Heck, risk arb desks around the world hire people with law experience to trade (MBAs are not the majority in trading floors). </p>

<p>MBAs do not give you the golden keys to any door. Typically MBAs are a point in which you can switch to a more lucrative industry or advance in your current one. Both are attained when you attend a top business school (your average business school MBA isn't going to see a drastic pay increase). </p>

<p>There are also no "sure fire" way to be "rich". One thing that can be said is that the super rich are, for the most part, either: A) entrepreneurs B) moved up in early stage companies. Middle men for the most part don't attain super rich status (and yes bankers are middle men). This is why a considerable number opt out for a move to the buy side and hope to eventually start their own shop. I should also note that banking activities actually provides a minority share of profits to the global banks nowadays as the job of bankers has become increasingly commoditized.</p>

<p>Here is a discussion on MBAs and trading which makes several good points: <a href="http://nuclearphynance.com/Show%20Post.aspx?PostIDKey=76288%5B/url%5D"&gt;http://nuclearphynance.com/Show%20Post.aspx?PostIDKey=76288&lt;/a&gt;&lt;/p>

10

<p>forget about the financial incentives behind each profession.</p>

<p>pursue your passion.</p>

<p>My guess is that if you pursue your passion, you will probably end up making more money in the long run (especially between a mba and jd. now, if it was between a phd in history or a jd, that might be a different story).</p>

11

<p>Or combine your two passions, and go for a joint JD/MBA!</p>

12

<p>I heard that the Joint Degree might act as a negative effect when getting a job as a lawyer. Because the recruiter might think that you might leave the firm at certain point, you might need solid reasons why you chose both degrees.</p>

13

<p>I second the JD/MBA proposition. It's a lot of work, and you pretty much DIE for 4 years, but you're going to be pretty much one of the most desirable candidates in both legal AND business end of the corporate world, and investment banks/PE firms/VC firms/HFs/whatever will likely bend over backwards to get you.</p>

14

<p>I say JD > MBA. Law degrees are more academic, while the reason to go to a top b school is to make connections not learn something that is intrinsically useful. Furthermore, if you have the talent, a JD from a decent school will be able to give you any job opp. that's available to MBAs (while the opposite is obvioulsy not true since MBAs can't be lawyers). If you have any doubt about this, remember Lloyd Blankfein, the CEO of Goldman Sachs has a JD, not a MBA.</p>

15

<p>I'm not sure if I entirely agree with ABirch III.</p>

<p>I think you should go into law school with the intention of practicing law, because in all likelyhood, thats probably where the opps. will be.</p>

<p>Now is it possible to switch careers from law to finance or something business related. yes. but for most that entail a pay cut. </p>

<p>(I've heard the big cuttoff is T14. if you can get into a t14, other areas outside of law will be open right out of school).</p>

16

<p>Younghov, I think you've misunderstood. All other things being equal a JD is more prestigious and lucrative than a MBA, there isn't even a question. If this wasn't the case the market would reflect that, but it doesn't, i.e. law school is tougher to get into than business school (LS has more demand as measured by # of apps, less supply as measured by # of schools).</p>

<p>You're right t14 is the cuttoff for law schools, but for bschool it's T7 at best and possibly T3 (SHW, MIT, Columbia, Chicago, and Kellogg). My point however was something entirely different--that for those JDs who have the talent, there will be a plethora of opps. in the business world, specifically finance. Having a JD won't inherently take away any opps in business, it'll just depend on the person. There are clearly many powerful JDs in the business world: The CEOs of the 2 most prestigious investment banks (Lazard and Goldman) have JDs, Jim Cramer is a JD, and so is Michael Milken. I work at a boutique investment bank where one of the most powerful and well compensated guys has a JD from St. Johns (not a top law school). Most top hedge funds, PEs, and VCs also have JDs in business roles. Trust me, there are plenty of JDs who don't practice law and in no way is the degree going to restrict a person if they have what it takes to make it in the business world. </p>

<p>My other point was that a MBA itself is useless. People go to bschool to make connections, that's really the main reason, the degree by itself isn't going to get you anywhere. A JD on the other hand does give you specific skill sets which can be transferred over to the business world.</p>

17

<p>How is a JD more lucrative than an MBA?</p>

<p>Most of the guys in law, banking, etc that have JDs have made the switch later, it isn't exactly common for them to make the switch right aftwards (although it does happen and is possible if you're coming from HYS) but in the case of Goldman Sachs' CEO and Bruce Wasserstein they both initially worked at a law firm. Hell, GS's current CEO wasn't even directly hired by GS, he was absorbed by GS when they bought the company he was working for so he's really a poor example of JDs being so great.</p>

<p>If you get an MBA you can work directly for the investment bank -- your chances of doing so are going to be more than if you were coming from a JD program, you wouldn't have to bother answering the 'why a JD question'. Plus if you could make the switch right after the MBA you wouldn't have to be in a legal job that's going to be paying less than what you make in banking, and you wouldn't have had to bother with 3 years of grad school (only 2). Plus with the work experience required to get into the MBA program you would have had a chance to pay down some of your undergrad debt.</p>

<p>Also, you mention Bruce Wasserstein but you fail to talk about Joseph Perella, who is considered one of the best deal makers of our time and co-headed an M&A firm with Wasserstein. Did Perella have a JD? Nope. Henry Paulson, the previous CEO of GS did not have a JD. Richard Fuld, CEO of Lehman Bro's doesn't have a JD either. I mean I could keep listing people without JDs but there wouldn't be much of a point. I'd be willing to go out on a limb and say that there are more bankers out there without JDs than there are with JDs and I would also say that those bankers are making more than their big law counterparts. </p>

<p>The only reason I could see getting the JD is if you were coming from a school with poor recruiting. Then you might need a JD from a prestigious school to help you get recruited by that investment bank or worse, the law firm where you'll have to work a few years before hopefully making the switch. </p>

<p>JDs don't teach you anything too great, that's why when you see a lot of these finance guys who make the switch it's because they worked M&A at a big law firm and were able to transfer that to banking. If JDs taught you so much then wouldn't you be able to go straight to working general counsel for a f500 company? </p>

<p>I just don't see a point in doing a 3 year stint at law school and then a few years at a law firm doing M&A and then making the switch to banking when people with MBAs can go straight into the game. And I would also say that it's very illogical to go to law school with the intention of becoming an investment banker when there's a good chance that it might not happen. I mean if you get into both law school and an MBA program, where would you be better off? The Law school's investment banking recruitment is going to be pretty limited to the very top of the class, but the MBA programs -- at least top programs aren't going to be revealing your grades to potential employers so you might have an easier time getting that coveted IB job.</p>

18

<p>I've always thought that, in financial terms, an MBA has a much higher beta than a jd.</p>

<p>so an mba has a higher risk/higher return than a jd.</p>

<p>While I certainly agree with AbirchIII that a law education is probably more rigerous than an mba, it seems to me that if you want to go into business, getting the JD is unnecessary and counterproductive. Not only would you lose tuition money and the opportunity cost of a solid salary, but you would lose valuable experience (which the business world is very concerned about).</p>

<p>and an mba isn't useless. if you aspire to be in the upper echelons of the business world, its necessary.</p>

19

<p>
[quote]
Younghov, I think you've misunderstood. All other things being equal a JD is more prestigious and lucrative than a MBA, there isn't even a question. If this wasn't the case the market would reflect that, but it doesn't, i.e. law school is tougher to get into than business school (LS has more demand as measured by # of apps, less supply as measured by # of schools).

[/quote]
</p>

<p>I can agree that on average, a JD is more valuable than an MBA - and that's for one very simple reason - there are a LOT of no-name crappy MBA programs out there. There are some crappy no-name JD programs too, but nothing like the proliferation of crappy MBA programs. Hence, an average JD holder is better off than an average MBA holder.</p>

<p>
[quote]
My other point was that a MBA itself is useless. People go to bschool to make connections, that's really the main reason, the degree by itself isn't going to get you anywhere. A JD on the other hand does give you specific skill sets which can be transferred over to the business world.

[/quote]
</p>

<p>But this statement goes way too far. While it is true that a lot of MBA students are there just for the networking and treat academics as secondary, that's not to say that that the academics are totally useless. If anything, MBA classes are clearly more applicable to business than JD classes are. At least MBA classes have to do with business-related topics such as organizational behavior, finance, accounting, marketing, operations, communication, and so forth. Most JD classes have NOTHING to do with business. I think it's safe to say that the average MBA class is more applicable to business than the average JD class. For example, the required 1L courses of Legal Writing and Criminal Law have minimal applicability to the business world. Classes on Legal Theory or Historical Law? Those are not exactly translatable into the business world. </p>

<p>Furthermore, the value of the MBA degree is that it 'brands' you as somebody who is interested in becoming a manager, at least, enough so that he is willing to get an MBA education. A JD always tends to elicit the question of "Why did you get the JD if you don't want to be a lawyer". </p>

<p>Hence, I don't think that the MBA degree is any more useless (in terms of getting a business job) than a JD is.</p>

20

<p>Regarding the MBA, younghov1983 stated: "if you aspire to be in the upper echelons of the business world, its necessary."</p>

<p>That is absolutely untrue. The majority of Fortune 500 CEO's do not have MBAs. I work for a hedge fund where a few people control an absurd amount of moeny, and there are not many MBAs here either.</p>

<p>After college, I worked for "bulge bracket" investment bank as an analyst, then took a more senior role at a smaller bank before finally moving to the buy side. If I look at the people from my analyst class, the ones who went back to get a MBA are on average probably less sucessful in the business world than the ones who do not have MBAs. Why you ask? It's simple--people who have already made it to the upper echelons of the business world do not desire nor need a MBA. From a monetary perspective, there is simply no logical reason for somone whose on their 4th year on Wall St. making $250K+ to quit that and spend $100K for a MBA when no bschool even has what they are currently making as average starting compensation. </p>

<p>Regarding the JD, can it be valuable in the business world? No question, there are many JDs who work on the business side, and others are smart enough to make the switch from law practice. This doesn't mean getting a JD assures that one will be the next Robert Rubin, rather simiply, if you have the brains and ability, and are looking to switch to the business side, a JD won't outrightly hurt you. Is the JD "safer" than the MBA in the sense it will guarantee one a comfortable (not wealthy) lifestyle/income? Yes again, the practice of law is closed off to those without the credentials while almost anyone start a business or work in corporate America.</p>

<p>Now as to the OP's question of JD vs. MBA? To answer your question: I agree with Birch and Sakky. For the average bear (ie. not Wasserstein or Peralla), a JD is a more valuable/prestigious degree. If however, your question is what's better if you want to work for Goldman Sachs right after finishing grad school, then the no brainer answer is go to business school--though trust me, even if you go to a top bschool, an associate gig at a BB is no sure thing by any means.</p>