Law school vs. Business School

Graduate School Business School - MBA
21

<p>Jwblue, I agree with almost everything you said, except for the following. </p>

<p>
[quote]
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.

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</p>

<p>I feel that this is an unfair comparison. The reason why B-school graduating salaries, even from the top schools, seem to be so low is simply that a lot of graduates, even from the top schools, simply aren't interested in getting jobs in high-paying fields like banking. In other words, a lot of B-school grads simply self-select themselves into lower-paying jobs. They don't have to take those jobs. They WANT to take those jobs. On the other hand, if you really are a 4th year analyst who decides to go to B-school, then I have to imagine that you can at very least get back that same position again. </p>

<p>I also believe there is self-selection going on when you look back at your analyst class. I have to imagine that you are only talking about those who actually survived. Granted, I know less about how Ibanking works in Europe, but in New York, most analysts won't be invited for their 3rd year. In addition, plenty of US Ibanking analysts simply quit Ibanking with no intention of ever going back because they find out that they hate the lifestyle. Furthermore, even getting the analyst position in the first place is a highly selective process in which most people don't survive.</p>

<p>So I completely agree that those people who get invited to their 3rd (or, in your case, the 4th) year of the analyst position may not need B-school, for those who were not fortunate enough to be invited to a 3rd year, or those who couldn't even get an analyst position in the first place, B-school is basically their only ticket to becoming an associate. </p>

<p>To proffer a sports analogy, the best basketball players can go from high school straight to the NBA. Those people who are good enough to make that jump don't need to play in college. But if you're not good enough to do that, and you still want a shot at the NBA, you go play college ball.</p>

22

<p>Yeah, Jwblue, I stand corrected. many CEO's don't have mba's. so it isn't "necessary", as I stated. </p>

<p>there really is no standard education for the group. very diverse.</p>

23

<p>


</p>

<p>This fits my son's position exactly.
After his graduation from undergrad Wharton, he worked two years as an analyst at a bulge bracket firm. He was invited to remain as a 3rd year analyst but an opportunity at a P/E firm came up and he was lured away.
Recently, he had a 3 month review with his boss who said." I don't know what your plans are, but you can do very well here at.............."</p>

<p>As of now, he has no plans for B school.</p>

24

<p>What are you talking about DCFA? We are comparing lawyers and ibankers all of a sudden now, I thought this was JD vs. MBA. Of course I know ibankers make more on average , after all, I do work at an ibank right now. The fact is not every MBA will become an investment banker, much less at a place like GS. Any JD coming from a t14 school can get a law firm job that pays $120-150K per year starting as long as he is not a complete screw up (I know this from family/friends who went to LS), and even decent students from schools other strong law schools like Fordham, GW, and Vanderbilt can get jobs like this. Can an average MBA grad. from even one of the top 7 schools get hired to do M&A at a bulge bracket bank? No way. If you think so, you have no idea how hard it is to get those "coveted IB jobs" to say nothing of moving up to point where you are making serious bank. Again, on average a JD is more lucrative than a MBA, there in no question about this.</p>

25

<p>
[quote]
Can an average MBA grad. from even one of the top 7 schools get hired to do M&A at a bulge bracket bank? No way. If you think so, you have no idea how hard it is to get those "coveted IB jobs" to say nothing of moving up to point where you are making serious bank.

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</p>

<p>I see quite a few people who have made the switch without prior investment banking experience after their MBA program, I'm glancing at people from the Stanford GSB right now and I'm seeing a lot of people who have spent time in before their MBA program at f500's or consulting before going for their MBA and moving on to careers in IB. </p>

<p>Obviously its going to be tough to get a job in IB no matter what, but if you're able to land an interview it should be within the realm of possibility. Even so, the top MBA programs still place well with various other companies which could allow you good upward potential for your salary later on.</p>

<p>You're an intern right now at a BB and you're an undergraduate, I don't think you're very qualified to talk about how well MBAs versus JDs fair since you've been through neither programs. I'm not either, but most of my comments can be backed up by the MBA profiles i'm looking at.</p>

26

<p>
[quote]
What are you talking about DCFA? We are comparing lawyers and ibankers all of a sudden now, I thought this was JD vs. MBA. Of course I know ibankers make more on average , after all, I do work at an ibank right now. The fact is not every MBA will become an investment banker, much less at a place like GS. Any JD coming from a t14 school can get a law firm job that pays $120-150K per year starting as long as he is not a complete screw up (I know this from family/friends who went to LS), and even decent students from schools other strong law schools like Fordham, GW, and Vanderbilt can get jobs like this. Can an average MBA grad. from even one of the top 7 schools get hired to do M&A at a bulge bracket bank? No way. If you think so, you have no idea how hard it is to get those "coveted IB jobs" to say nothing of moving up to point where you are making serious bank. Again, on average a JD is more lucrative than a MBA, there in no question about this.

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</p>

<p>I agree with your conclusion that the average JD is more lucrative than the average MBA. But not for the reasons you stated. </p>

<p>First off, I think you overstate the ability of people from t14 law schools to get 120k-150k jobs. You have to do better than just not 'be a complete screwup'. The truth is, there are decent people from t14 law schools who can't get one of those jobs. </p>

<p>Take a look at the evidence. Take, say, Duke Law, which is clearly a t14 law school. According to USNews, premium edition, the 25th-75th percentile of the salaries of Duke Law grads who take private sector jobs is 100k-125k. So clearly that must mean that there are plenty of Duke Law grads who are not making 120-150k. Or take the University of Virginia Law School. The corresponding figures are 100-128k. Yet nobody disputes that Duke and Virginia are t14 law schools. </p>

<p>Secondly, I think that if you graduate from a M7 MBA program and you really want to get a job in financial services of some kind, you can do it. It may not be with a bulge-bracket (i.e. it may be with a boutique), it may not be in M&A (i.e. it may be in sales &trading), it may not be one of the high-prestige jobs. It may not even be for an investment bank, strictly speaking. But if you want a high-paying financial services job coming out of an M7 MBA program, and you put in the proper effort to getting it, you can probably get at least one. </p>

<p>Let me give you an example. Bank of America is now looking to greatly expand its investment banking division, and has been trying to do so for a few years now. Yet the fact is, BoA has been having great trouble in filling all its interview slots at the M7 schools. For example, when they came to the MITSloan School, many of the available interview slots went unfilled. Same when they came to HBS. Granted, an interview spot doesn't mean that you will get hired, but basically, they had more jobs to fill than they had willing students. </p>

<p>Similarly, there were many many boutique firms who were also looking to recruit, but found few interested students. In fact, a few firms ended up with no interviews at all. I remember seeing them on the signup sheet, with nobody taking any of the slots. </p>

<p>Nor were these low-paying jobs. BoA was paying a LOT of money, at least as much as the bulge-bracket, and probably more. Many of these boutique firms were doing the same. For example, I remember one Middle Eastern investment banking firm (I think from Dubai) who was willing to pay something like 25% more than any of the bulge-bracket firms were (the catch, of course, is that you had to work in Dubai, but I don't think that's such a bad thing, as Dubai is a nice city). </p>

<p>What a lot of people don't realize is that the big-name bulge bracket firms often times actually pay as much as you might think. This is especially true at places like Goldman Sachs. The reason for that is simple - they are partially paying you in the form of prestige. People know that the Goldman Sachs name is a powerful resume-builder, so they may agree to work for GS and make a little less money than they could somewhere else, in order to jump to someplace big later. In other words, people are attracted to the prestige. Hence, this is why the GS interviews at Sloan and HBS were oversubscribed, at the same time when other firms, who were paying more, were not filling their interview slots.</p>

<p>But the point is, if you go to an M7 school, and you don't care about the prestige of the employer, you don't care about working specifically in M&A, you don't mind working in an untraditional locale (i.e. Dubai), and you put in a bonafide effort, I think you can almost certainly get a high-paying financial services job from somebody. </p>

<p>The REAL reason why the JD is more lucrative, on average, than the MBA is simply that there really is a huge long tail-end of bad MBA programs. There are some bad JD programs too, but nothing like the huge tail-end of no-name MBA programs. It is the presence of all of these bad programs that pull down the averages.</p>

27

<p>Sakky: The notion that top b-school grads somehow "self select" into lower paying positions is simply wrong. Sure, some want to go into lower paying professions for the better lifestyle and less stress, but by and large most top MBAs out there want to go into what pays the most (after all bschool is an investment, so the returns ought to be maximized). Just look at these facts:</p>

<ol>
<li><p>Generally, the higher ranked the bschool, the higher the starting salary after graduation.</p></li>
<li><p>The most sought after careers amongst grads of most highly ranked bschools are finance & consulting, and not middle management in corporate America, which pays far less unless one can get to the CEO level. </p></li>
<li><p>The demand for the prime finance positions (think M&A or FICC at Goldman, not credit cards at Chase) is far less than the supply of students who want these positions. This fact is true at every bschool. </p></li>
</ol>

<p>With my analyst class, I would submit there was very little self selection going on. Most of the class would have stayed in finance if they could. Some got let go because they weren't good enough, and some others couldn't handle it (I'm not sure this counts as self selection, it's more like not being cut out for something). In any case, the analyst level is like floor of a pyramid, it's simply not possible for everyone WHO WANTS to move up to do so. </p>

<p>Yes, people take a lower initial starting salary at a place like Goldman, but it's for the money, and not the "prestige". If you know anything about Goldman's performance, you'll probably know in all certainty that any shortfall in salary compared to other banks will be more than made up for in bonuses. There is nothing inherently prestigious about Goldman Sachs akin to having a landed gentry title, rather the reason to go there is to earn more money in the future due to (1) a fatter bonus in Feb. (2) the fact that senior people at Goldman generally outearn their BB counterparts by a significant amount and you aspire to be one of those, or (3) Goldman will give one more and better paying exit opps than XYZ ibank. </p>

<p>Regarding your comment on interview schedules, I think you might be a bit misguided. The vast majority of people who work in investment banks, are not "investment bankers" (see #3). There are many other divisions (e.g. equities, tech, and back office stuff), esp. in a place like BOA which are much easier to get into, but they won't pay the type of salary/bonus that so many salivate about. The divisions of large banks where one can recieve major all in compensation never have any trouble filling interview slots or offers, even at the best schools. </p>

<p>A better sports analogy would be baseball rather than basketball. Being an analyst or a MBA student is the minor league of finance, a small perecentage will make to the major league level, and it's not because of self selection either.</p>

28

<p>
[quote]
Sakky: The notion that top b-school grads somehow "self select" into lower paying positions is simply wrong. Sure, some want to go into lower paying professions for the better lifestyle and less stress, but by and large most top MBAs out there want to go into what pays the most (after all bschool is an investment, so the returns ought to be maximized).

[/quote]
</p>

<p>Let me put it to you this way. Even at the top B-schools, a significant percentage of students will not opt for the high-priced consulting or finance jobs, instead opting for lower-paid (but also lower-stress) jobs in operations. Many (not all, but many) of them COULD get consulting/banking, but prefer not to have them. Hence, this is a strong case of self-selection. To give you an example, I can name quite a few people who got offers at consulting/banking firms but turned them down for operations work. One girl got an offer from BCG, but decided to work for Johnson & Johnson instead. One guy got an offer from Bain but took Apple instead. Several people got offers from McKinsey but instead went to Google. Then there are those people who didn't even choose to interview with banking/consulting, often times because they had already come from that world and didn't want to go back. I can name quite a few people who I believe could have gotten a consulting/banking offer if they wanted one, but never even bothered to interview for one.</p>

<p>Furthermore, there is still a rather sizable minority of MBA students who are sponsored by their company, and are hence headed back to that company. I know several people who got the 'full-package-ride from Boeing in which not only did Boeing pay their entire tuition, but also paid their entire salary while they were going to B-school, and also paid them a living allowance on top (something like 2k a month extra). Here's the kicker - the company didn't even formally obligate them to return to Boeing. Of course, almost all of them do because the obligation, while not formal, is strongly implied. Boeing is not the only one - plenty of other companies such as Intel and Dell still continue to sponsor certain employees to get, what is in effect, "free MBA's". All of these people will end up taking what are in effect lower-paid operations jobs. But it ain't a bad deal considering not only did they not pay a dime for their degree, they actually GOT PAID while getting their degree. It also serves as strong "layoff-insurance", as it would be stupid for a company to sponsor somebody to get an MBA, and then lay them off, as that would basically remove those employees from any obligation (either formal or moral) to the company, which means that they would basically be handing these employees over $200-250k (in salary and tuition reimbursement) and get nothing in return. </p>

<p>But the point is this. I still see a very strong self-selection effect to lower-paid operations jobs happening with a significant percentage of the students at the top MBA schools, either because they are sponsored by such a company, or they came from the consulting/banking world and are sick of it, or have serious work-life balance issues. Many spouses, for example, will simply not countenance the notion of their husband/wife going on to a burnout consulting/banking job, especially if the couple has kids. </p>

<p>
[quote]
3. The demand for the prime finance positions (think M&A or FICC at Goldman, not credit cards at Chase) is far less than the supply of students who want these positions. This fact is true at every bschool.

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</p>

<p>But there you are - talking about 'prime'. I am not necessarily talking about prime. There are plenty of boutique banks and other such no-name financial firms who pay quite decently who can't fill their interview slots because so many people would rather work for Goldman. </p>

<p>
[quote]
With my analyst class, I would submit there was very little self selection going on. Most of the class would have stayed in finance if they could. Some got let go because they weren't good enough, and some others couldn't handle it (I'm not sure this counts as self selection, it's more like not being cut out for something). In any case, the analyst level is like floor of a pyramid, it's simply not possible for everyone WHO WANTS to move up to do so.

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</p>

<p>Nor am I necessarily talking about the notion of 'moving up'. As we both know, plenty of people approach investment banking jobs with no intention of actually staying in investment banking for long, but intend to later make a move to a corporate finance position at some company, or get into the rarefied world of PE or hedge funds. Of all of the people I know who got into investment banking, I would say that less than 1/3 have said explicitly that they know they want to stay there for more than 2-3 years. The rest of them are perfectly happy to do it for a few years just to have that experience on their resume before moving onto something else. </p>

<p>
[quote]
Yes, people take a lower initial starting salary at a place like Goldman, but it's for the money, and not the "prestige". If you know anything about Goldman's performance, you'll probably know in all certainty that any shortfall in salary compared to other banks will be more than made up for in bonuses. There is nothing inherently prestigious about Goldman Sachs akin to having a landed gentry title, rather the reason to go there is to earn more money in the future due to (1) a fatter bonus in Feb. (2) the fact that senior people at Goldman generally outearn their BB counterparts by a significant amount and you aspire to be one of those, or (3) Goldman will give one more and better paying exit opps than XYZ ibank.

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<p>Right there, you just agreed with me, so I don't know why you are disputing this point. When I said "prestige", I am not referring to a general sense of prestige within operations companies. I am talking specifically about having better exit opportunities, often times to go to other banks or to venture capital firms or whatever it is. Like I said, I know some people who are going to GS who don't really plan to be there for more than a few years. They chose GS because they know that having GS on their resume will increase their exit opportunities if and when they decide to leave. That's the point. That's what I mean by 'prestige'. The prestige is in the sense that you have gold-plated experience that will help you got top jobs later. </p>

<p>
[quote]
Regarding your comment on interview schedules, I think you might be a bit misguided. The vast majority of people who work in investment banks, are not "investment bankers" (see #3). There are many other divisions (e.g. equities, tech, and back office stuff), esp. in a place like BOA which are much easier to get into, but they won't pay the type of salary/bonus that so many salivate about. The divisions of large banks where one can recieve major all in compensation never have any trouble filling interview slots or offers, even at the best schools.

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<p>And that is why, if you actually read my post carefully, I was actually careful not to use the term "investment banking". I was just talking about financial services firms in general. </p>

<p>My point is this. Obviously the high-end M&A bulge bracket investment banking jobs will be in extremely high demand. But my point is, you don't have to go for one of those jobs. Go for sales & trading. Go work at one of those boutiques. Go do wealth management. Go work for Bank of America in the new IB division they just opened. Sure these jobs on the aggregate may not pay as well as the most rarefield bulge bracket M&A work, but they still pay pretty darn well - at least as well as the average corporate lawyer coming out of a t14 law school if not more so.</p>

<p>What I am saying is, if you come from an M7 program, and you want to get a relatively high-paid financial services job, and you make a bonafide effort to getting one, you can probably get one. Sure, it probably won't be M&A for GS. But you can get A job for some firm.</p>

29

<p>If we are to go by your logic of rampant self selction amongst MBA students for lower paying jobs, then places like McKinsey or Goldman may actually have trouble trying to recruit the cream of the crop. However, nothing can be further for the truth, far more qualified MBA students exist than the number of openings at investment banks (BB and non BB, "prime" division and "non-prime"). At almost any top bschool, the MAJORITY of grads go into finance or consulting. Out of those who don't, some could have, others couldn't (I would submit the later group outnumbers the former). Sure, not everyone who gets into Harvard goes, but for the most part those who are given the opportunity to attend, do take it--same goes for taking a position at Goldman, McKinsey, or others deemed "prestigious" (i.e. high paying or leading to high pay as we agree on). </p>

<p>"There are plenty of boutique banks and other such no-name financial firms who pay quite decently who can't fill their interview slots because so many people would rather work for Goldman."</p>

<p>How many of them do actually in fact get to work for Goldman (nevermind getting into a division where they will make major dinero)? Also how are you defining "pay quite decently"? Again, the number of jobs that'll pay $200-250K+ all in first year out of b-school is not large relative to the number of students --i.e. not every MBA from a top school who wants one will get one. Furthermore, this would tend to go against your other point about self selection into lower paying jobs since in addition to offering a relatively better lifestyle, botiques generally would pay far less than Goldman or another BB (exceptions to this rule are a few places like Lazard and Greenhill, but they aren't having any trouble filling interview slots). </p>

<p>Look, in general, I agree with your point that a MBA student out of a top 7 school should be able to get some position in the broad world of finance (if not a BB, then a no-name or in-house of a corporation). However, I disagree with the tone of how easy you make it sound; in no way is a MBA from any school going to guarantee megariches.</p>

30

<p>
[quote]
If we are to go by your logic of rampant self selction amongst MBA students for lower paying jobs, then places like McKinsey or Goldman may actually have trouble trying to recruit the cream of the crop. However, nothing can be further for the truth, far more qualified MBA students exist than the number of openings at investment banks (BB and non BB, "prime" division and "non-prime"). At almost any top bschool, the MAJORITY of grads go into finance or consulting. Out of those who don't, some could have, others couldn't (I would submit the later group outnumbers the former). Sure, not everyone who gets into Harvard goes, but for the most part those who are given the opportunity to attend, do take it--same goes for taking a position at Goldman, McKinsey, or others deemed "prestigious" (i.e. high paying or leading to high pay as we agree on).

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<p>Once again, you are misunderstanding what I am saying. I never said that EVERYBODY could get into the elite companies, of which McKinsey and Goldman Sachs are obviously members. Nor am I even talking strictly about investment banks, strictly defined. </p>

<p>I am simply saying that a lot of people have the attitude that they are simply going to go to an employer that is going to give them the most opportunity. If they can't get into a top finance/consulting firm, then they will go to industry. Specifically, there are plenty of no-name small unprestigious consulting and finance firms around that go begging for people at the M7 schools. THAT is what my logic would dictate. Trust me, I've seen it. I think you've seen it too. Plenty of people who ended up working at industry jobs at relatively prestigious industry companies could have instead worked in consulting/banking at no-name firms, and could probably be making more money too, at least to start out (although, granted, they would also be working harder). But they don't want to, probably because they figure that they can get better career training at that industry firm.</p>

<p>To give you a case in point, I know a slew of people who took strategy jobs at Microsoft out of HBS and Sloan. I am quite certain that almost all of them could have gotten a job with a consulting firm at at least a no-name firm. Maybe they didn't get the offer from Mckinsey so they ended up in strategy at Microsoft. But given the choice between Microsoft and a no-name consulting firm, I think most people would take the former.</p>

<p>To clarify the matter, the hierarchy seems to be as follows:</p>

<p>1) High-prestige consulting/banking
2) Prestigious industry firm or startup
3) No-name consulting/banking<br>
4) No-name industry firm</p>

<p>The point is, plenty of people who ended up in category 2 could have gone into 3 but didn't want to. </p>

<p>
[quote]
How many of them do actually in fact get to work for Goldman (nevermind getting into a division where they will make major dinero)? Also how are you defining "pay quite decently"? Again, the number of jobs that'll pay $200-250K+ all in first year out of b-school is not large relative to the number of students --i.e. not every MBA from a top school who wants one will get one. Furthermore, this would tend to go against your other point about self selection into lower paying jobs since in addition to offering a relatively better lifestyle, botiques generally would pay far less than Goldman or another BB (exceptions to this rule are a few places like Lazard and Greenhill, but they aren't having any trouble filling interview slots).

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<p>I think you're radically discounting the notion of general prestige. The truth is, plenty of MBA students are chasing 'prestigious' employers. Nor is this is irrational, as they understand that while they might take a hit in the short-term by going to a more prestigious but lower-paying firm, they hope it will pay off later in terms of better career opportunities by being able to leverage a better network they gain at the more prestigious firm and the general brand-namd of the firm.</p>

<p>As a case in point, plenty of financial jobs, even many no-name ones, pay better than even the most prestigious consulting job. But that seem to matter that much. I know plenty of people who got offers from the top consulting firms such as McKinsey or BCG who said that they would actually prefer to do banking - but only at one of the top bulge bracket firms. If they best they can get is to just get a job at a no-name financial firm, they'll just work for McKinsey or BCG, despite the fact that it might be lower paying. I can also give you some industry examples. Companies like Apple, and Google don't really pay THAT well, and certainly not as well as consulting/financial firms pay. Yet they were two of the most popular employers at both HBS and Sloan in the last year. Practically every MBA I know who ended up at those 3 firms had other competing offers from at least one no-name consulting/finance firm that would have paid them more. But there is a certain 'cool' prestige factor in working for Apple or Google, even though you would be making less money there. </p>

<p>{Nor are Apple/Google stock options a particularly relevant draw. I think we can all agree that the stock prices of Apple/Google aren't going to accelerate quickly anymore, hence I think anybody who joins these companies knows full well that they aren't going to become millionaires via their options. If they had joined a few years ago, sure, but now? Unlikely. But no matter. These companies are now some of the 'coolest' prestige industry companies for MBA's to join despite not paying as well as consulting/finance does} </p>

<p>
[quote]
Look, in general, I agree with your point that a MBA student out of a top 7 school should be able to get some position in the broad world of finance (if not a BB, then a no-name or in-house of a corporation). However, I disagree with the tone of how easy you make it sound; in no way is a MBA from any school going to guarantee megariches.

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</p>

<p>I never said that an MBA from any school would 'guarantee' you megariches. Where did I say that? Please point to a quote where I specifically said that it would guarantee you megariches. You can't do it, because I never said it.</p>

<p>My point is to simply counter another post that was laid forth here, which is that a graduate from a t14 law school will make more than a grad from an M7 business school. This is true only because of self-selection - a lot of M7 grads simply don't WANT to make more than a t14 law school grad does, because they'd rather have a lower-paying (but prestigious) industry job, like working for Apple. I am quite convinced that any M7 student who puts in a bonafide effort can get a job that pays better than what the average t14 law school grad gets in corporate law.</p>

<p>So, look. No business school will guarantee you megariches. But neither will any law school. That's the point.</p>

31

<p>@Aurelius
Ever make a decision? I’m in your shoes right now…</p>

32

<p>You ressurected a 7 year old thread. 18 months after this internet arguement, the floor kind of fell out from underneath both degrees but the JD MUCH moreso. Big Law is taking a bath right now on the aggregate whereas MBAs just face dimmed prospects</p>