Investment Bankers and Lawyers both have excellent earning potential!

You may be asking yourself who makes more, lawyers or investment bankers? Both are very highly compensated fields. Both careers have highly specialized training. This training involves extensive formal education and hands-on experience.

But which career path is better suited for you, a lawyer or a banker? If you want to be specific, you might put it as investment banking or the Law? Well, worry no more because this post will walk you through the details of both bankers’ and lawyers’ professions, and all your earnings questions will be answered.

Law vs. Investment banking

Law vs. investment banking

Law and investment banking are highly regarded professions in today’s day and age. Today’s students are frequently torn between pursuing a career in law or finance. The student’s ability and interest primarily determine what profession they choose to pursue.

This post aims to illustrate the benefits and downsides of both of these professional paths to help anyone considering such a huge decision make a more informed decision. Both professions require extensive education and dedication but can be very rewarding.

The subsequent sections of this article will go over the specifics of these professional choices, but first, let’s go over the fundamentals of both and what both careers entail.

Law and what it entails

Law and what it entails

Over the last few decades, the legal profession has experienced significant and strategic change. In today’s world, law students are seen in the courts and big law firms, corporate offices, litigation, administrative services, and a variety of other fields.

Becoming a lawyer has far more stringent academic requirements than becoming an investment banker. There is no getting around it: an ambitious attorney must first earn a bachelor’s degree before enrolling in law school. For the vast majority of students, obtaining a law degree necessitates a minimum of seven years of post-secondary schooling.

After graduating from law school (going to law school matters in the legal field), you must take and pass your state’s bar test, which is a prerequisite to practice Law. While the test can be scary, according to the National Conference of Bar Examiners, the pass percentage on the first try was 69 percent in 2018, the latest numbers as of April 2020.

Students who have adequately prepared for the exam should take it with the conviction that they will pass.

Per the Bureau of Labor Statistics (BLS), lawyers’ employment is expected to expand 6% between 2018 and 2028, as fast as the average for all professions. As a result, Law is an excellent choice for people interested in expanding their education and exploring other career paths.

An analogy: Corporate Law vs Investment Banking

For either career, anticipate work to consume the first few years of your life. In their first year, investment bankers work a minimum of 70 to 90 hours a week. This includes nearly all the Saturdays and a lot of Sundays.

There are few holiday leave, and exiting the workplace at 5:00 p.m. is a pipe dream. Investment banking is not a 9-to-5 job, although work hours grow more bearable as you advance in your career.

Corporate Law bears some resemblance (especially for those that practice under a top law firm), with long hours and a significant amount of weekend work. Because Law is such a large field, it includes career choices that involve more standard 40-hour workdays, such as working for a local public defender’s office. On the other hand, these jobs do not pay anywhere near the high starting salaries found in corporate Law.

Why Law?

In terms of the legal profession, the benefits include the possibility of earning money. Regardless of the field one chooses, there is always the possibility of making money.

For instance, money is bountiful and steadily increasing in the corporate world. However, in litigation, the money is less at first, but the exposure is much greater. If pursued long enough, the money per case might eventually exceed the income of a corporate lawyer.

A legal career spans a wide range of practice areas, and legal aid is necessary for nearly every sector if not all. In addition, the legal spectrum has steadily expanded throughout time and will continue to do so in the future. As a result, Law offers more possibilities and is a more broad sector to work in, allowing you to study many facets of the discipline.

One can work or pursue higher education with a law degree, such as a J.D. or LLM, and enter academia. Regardless, the goal of the career is to assist people in some way.

Investment banking and what it entails

Bank building

Investment bankers assist a company in raising financing by analyzing market trends, investment risk, and current economic conditions.

Endorsing securities, trading stocks, and bonds, aiding mergers and acquisitions, sustaining broker-dealer activities, and offering financial counsel regarding securities pricing, issuance, and placement is provided by an investment banker.

Hence, investment banking is primarily concerned with matching the expectations of capital holders to those who require funds for any transaction.

Investment banking has a high potential in a developing economy due to the benefits that Startups can gain, different undiscovered areas, and entrepreneurs’ drive to find win-win solutions.

There are fewer rigid educational requirements in investment banking. For instance, most firms, such as a management consulting firm, demand at least a four-year degree. In addition, investment banks nearly exclusively hire from prestigious institutions.

Students who want to be investment bankers but attend less prestigious colleges should earn a Master of Business Administration (MBA) to improve their chances, ideally from an elite business school.

Investment banking is a good option for students who choose to start making money straight away without having to go to law school for three years and taking on extra debt. This is especially true if you are a math prodigy. Putting a foot in the door is challenging if your school is not regarded as elite. Having an MBA significantly improves your chances.

Why investment banking?

The premise that investment banking requires less study time than Law is one of the significant advantages of investment banking above Law. The salary package is good from the onset, and it provides a lot of networking opportunities.

Law vs. investment banking

Law and investment banking demand the same skills, such as a strong work ethic, good teamwork, concentration, and strong emotional intelligence.

Both vocations necessitate long work hours and high-work pressure. However, Investment banking demands more excellent Quantitative Acumen than the other career option. This is the path for mathematical geniuses and those who enjoy numbers. Tread with caution if you have trouble with math and make frequent errors when computing huge numbers.

Students who excel at math and have good quantitative skills can consider a career in investment banking. In investment banking, a single blunder with numbers can incur a company a lot of money and could cost an investment banker their career.

As previously said, Law is a relatively broad discipline, so different skill sets can be used in different fields of Law based on the student’s abilities.

Litigation lawyers, for instance, must be persuasive, thick-skinned, assertive, and mentally and physically strong because the courts demand a lot of running about and mental power to deal with lengthy court cases and filings.

On the other hand, corporate lawyers must be focused, have a keen eye for detail, and possess exceptional critical thinking skills.

International lawyers must be bilingual or multilingual and possess comparative solid analytical abilities, as they will be required to evaluate the legal structures of many countries and draw connections after gaining a thorough understanding of both.

An investment banker’s starting salary is slightly higher than a lawyer’s.

Lawyers should ideally be far up to speed with developments because changes in Law, particularly corporate Law, occur more frequently than changes in parts of investment banking.

Lawyers and investment bankers both have the potential to become stuck in their professions, but lawyers have an easier way of escaping or recovering than investment bankers.

Special consideration

With a bachelor’s degree, investment bankers can earn a lot of money immediately out of school. Per the Wall Street Oasis, a first-year analyst may expect to earn between $70,000 and $150,000 per year as of 2020, owing to robust bonus structures that all businesses offer; the average pay is $88,000, and the median bonus is $39,000. But, of course, as an investment banker, the better you are at your work, the more money you will make.

An attorney’s initial income varies greatly depending on the subject of Law. According to the National Association for Law Placement, corporate Law is by far the most rewarding, especially for new associates, who received a median $155,000 income during their first year out of law schools in 2019, the most current numbers as of April 2020.

Where you stand on this gamut is determined by the law firm you work for and the location of the country where you practice. For example, according to the NALP, first-year lawyers in areas like Los Angeles, Washington, D.C., and New York might earn $190,000 per year in 2019, the most recent data available as of February 2019.

Starting pay is more difficult to pinpoint for young attorneys who do not want to practice in a corporate law firm or path. Trial lawyers, for instance, can earn six figures in their first year if they quickly establish a solid name and have a large warm market. Others take significantly longer to establish a client base and initially struggle to pay their bills.

Investment bankers are classified as commodities, securities, and financial services sales agents by the BLS and are expected to rise 4% from 2018 to 2028, somewhat smaller than the jobs. “Services provided by investment bankers, such as assisting with public offering and acquisitions, and mergers will remain to be in demand as the economy expands,” according to the BLS.

Final thoughts

Bank building

As previously said, it is primarily up to the student’s judgment to determine which of the two career paths is preferable. It is a question of do I desire to work in an investment bank or with one of the top law firms in the country. One studies a lot more than in investment banking in the legal profession.

The range of learning in Law is far greater than in investment banking. As a result, the value and quantity of legal knowledge are more, as has the dignity of being a lawyer.

Lawyers made up the majority of prominent people in world history who influenced the path of politics or the practices of their country. This is primarily due to the extensive knowledge they acquire. A lawyer can do well on the finance side, but it is usually difficult to transfer from one. As a result, if a student has the general aptitude for both of these career options, it is recommended that they choose the legal profession.

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