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Can Lawyers Become Investment Bankers | Learn the Real Fact

Can lawyers become investment bankers? This is a relevant question for many individuals nowadays. As a result, we’ve written this article to assist you. Have you decided to go to law school, begin working at a law firm, and then find that your true passion is finance and investment banking?

You’re not the only one who feels this way. It’s not uncommon for attorneys to get into finance, notably investment banking. From law to investment banking, there are various options. Follow along as we discuss this idea further down.

Can Lawyers Become Investment Bankers?

Can Lawyers Become Investment Bankers

Yes. Investment bankers, maybe lawyers! You can acquire a banking position right after graduating from law school. Furthermore, you can work as a law firm partner for a few years and then switch or you can go to a college of business after practicing for a few years and interview for banking jobs while earning your MBA.

Going straight from law school to investment banking seems intriguing. It is, however, tough to pull off, and most banks do not hire people right out of law school. They’d have difficulty determining where to place the applicant and whether to promote him to Analyst or Associate. If you had financial expertise before law school, this strategy gets simpler.

In this case, you must present a compelling narrative about why you chose law school. If you don’t have any legal expertise, it’s best to work in a law firm for a few years before switching.

Only go to business school following law school if you’ve worked in a separate legal subject like Intellectual Property or Environmental Law.

Can lawyers become investment bankers: More Possibilities?

Can Lawyers Become Investment Bankers

If you’re curious about the move from law school to investment banking, you probably fall into one of the following categories:

  • You get accepted into a prominent law school, but you found you didn’t like it after classes started.
  • You went to law school, performed well, and graduated, only discovering that you detested your legal profession.
  • You’re going to finish law school and actively seek employment in other fields.
  • If any of these apply to you, you’ve come to the perfect place! The good news is that many attorneys move on to work in investment banking and other financial professions. The bad news is that you can’t be able to transition from law school to investment banking right away. Here’s how to approach the change and overcome any roadblocks:

Step 1: What is your motivation for making this change?

Most attorneys who wish to work in finance, in our experience, cite the following reasons:

“I’ll be able to earn more money!”

“It’s more intriguing or stimulating to work.”

“Rather than merely reading papers, I can influence firms and agreements.”

The difficulty is that most of these arguments are only valid until you reach the pinnacle of the investment banking industry (i.e., Managing Director).

You’ll continually be working on papers and conducting “project management” as an Associate at a law firm until you get to that stage. Working on appraisals and transaction assessments may be more intriguing than studying 200-page agreements, but you’re still flipping paperwork.

Another issue is that the preceding logic ignores some good features of legal work:

You don’t have to be a natural salesperson to get to the top. Law firm partners bring in new clients, yet they remain active in litigation and client work.

Legal careers, particularly in-house counsel positions, are also more stable. Companies must respect the law regardless of the state of the economy. Deals, on the other hand, drop amid economic downturns.

Finally, the typical Managing Director at a big investment bank and the average Partner at a top legal firm are not necessarily that dissimilar in salary (likely in the high-six-figures to low-single-digit millions).

In addition, to thrive in finance, you must have a distinct perspective. Law necessitates a “glass half empty” mentality, in which you search for every possible flaw, loophole, and danger. Investment banking is more about persuading customers to take action. Before choosing whether or not finance is for you, you should have some experience with it via courses, internships, or client work.

Step 2: Are You Able to Switch Positions?

If you’re pretty confident you have the requisite mentality and mindset, you’ll need to determine whether or not you’re ready to make the switch.

You’re not going to be able to go into investment banking directly after law school. As an Associate, you would join IB. This implies you’ll need at least a couple of years of full-time job experience before you can apply.

To step up your chances of getting in, do the following:

It would help if you worked for a prestigious legal firm specializing in business and securities law. You desire to work for a company that bankers are familiar with and engage with. Rather than litigation, environmental, or intellectual property law, you should be in a highly relevant area such as M&A, capital markets, reorganization, securities, or credit.

You should also have at least 1-2 years of deal/client experience since you’ll get asked about it in interviews.

Although the caliber of your law school is crucial, the quality of your present company is much more so.

Bankers will be very wary of you if you graduated from Harvard Law School and now work at a law firm rated #123 in the nation.

Step 3: Recognize the Obstacles and Opportunities in the Transition from Law School to Investment Banking

As a lawyer coming into banking, you may think that your crucial value-add understands the legal code and how legal issues affect agreements.

No! Your key value-add is execution: the capacity to work under duress, meets arbitrary deadlines, and deal with irrational customers to complete projects. It’s comparable to what you’d do as a young bank employee, but the job result isn’t the same.

Consequently, while networking and interviewing, you should emphasize your capability to perform and provide customer outcomes, especially in difficult situations. Yes. Legal knowledge may be beneficial in other cases (e.g., reorganizing investment banking or troubled private equity), but the execution is king.

Step 4: Write your resume and tell your story

Because your narrative should mirror most of your CV, your tale and resume are related. Following the standard form, a realistic framework for your description would look like this:

Starting: This includes your hometown, university, and initial primary/career goal, ending with your law school.

Spark: Legal school banking and finance courses, a law internship, or law school activities that piqued your interest in investment banking. Also, explain why you are more interested in banking than in law.

Growing Interest: You began taking financial courses, self-teaching technical skills, and connecting with bankers. Despite accepting a full-time offer from a legal firm, you worked in the banking industry. You also continued to study and network on the side.

What the future holds and why you’re here now: You wish to combine your past work experience with a career in law or finance. This is in addition to counseling businesses in a particular sector or on a specific sort of transaction. And this company has a solid track record in that field.

Your résumé should closely mirror your story: Ideally, you’ll have 2-3 relevant transaction or client experiences in M&A and capital markets.You should also have documentation of previous finance-related employment, internships, courses, and side ventures.Also, items linked to law but not finance, such as brief clerkships at minor law firms, should be avoided.

Step 5: Understand the Technical Aspects

Yes, even in informal informational interviews, bankers will ask you technical questions because they presume attorneys are lousy at arithmetic, accounting, finance, and Excel. They are unconcerned with your legal experience, history, or firm’s reputation.

Even if you’re a 7th Year Associate, you’ll get rejected if you can’t answer basic questions concerning Depreciation on financial statements, or, in other words, how Enterprise Value evolves in various circumstances. So, choose your study approach and get started.

Frequently Asked Questions

Can lawyers become investment bankers?

Yes. Lawyers can become investment bankers.

Is it true that investment bankers make more money than lawyers?

An investment banker’s beginning pay is somewhat more significant than a lawyer’s. Lawyers and investment bankers both have the potential to get trapped in their employment, but lawyers have an easier time escaping or recovering than investment bankers.

Investment banking or law: which is more difficult?

Investment banking, of the two professions, requires a higher level of quantitative knowledge and arithmetic abilities. Becoming a lawyer has more stringent educational requirements than becoming an investment banker.

Is it possible for attorneys to work in the financial sector?

Some companies operate for investment or commercial banks on complicated and often cross-border financings. On the other hand, others’ work tends to focus on more traditional domestic financial transactions. A solid understanding of bankruptcy rules is essential for attorneys working in leveraged finance.

Conclusion

In conclusion, investment banking provides various merits. And if you need more help as a lawyer, the above highlight on “Can lawyers become investment bankers” will aid you immensely.