Law School Student To Finance

“I just read your article on breaking into finance from law and had a question on my own situation. I am a 2L at regional law school and am in the top third of my class. I’ve written published law review articles on M&A and corporate finance, and have become more interested in finance over my 2 years here.

I know you suggested doing Corporate Law as a transition into finance, but since I am attending a smaller school, this is not really an option. I do have some extracurricular activities related to finance, but no formal jobs or internships.

What can I do to solidify my resume to target not only banks but any type of finance job? Would a CFA or other certifications help me at all?”

Inquisitor:

Certifications such as the CFA would indeed help your case, but they’re huge time commitments and your efforts might be better spent elsewhere. So think through it carefully first.

Ultimately, work experience is the most relevant item on your resume and the key predictor of whether we’ll pick someone for an interview. A CFA would never make me say, “Ok, this person should definitely get an interview.”

Anything extracurricular related to finance/business is also good, but again it suffers from the same problem: work experience is what really counts.

I realize this is a circular answer: to get finance experience, you need finance experience first. So what do you do?

• Start small. Even a relevant part-time job or internship during the school year is a better use of time than CFA study, in my view.
• Go local. Regional and local firms often struggle to find the right people - even if your qualifications don’t exactly match, enthusiasm can go a long way.
• Offer to work for free. This may sound crazy, but any amount of money you get from an internship is not going to be significant in the long run. Focus on future benefits rather than immediate gains.

In your case, I would also strongly recommend networking with fellow authors and law review publishers and seeing if any of them have leads for Corporate/Securities Law jobs or internships.

How Summer Analysts Are Judged

“I have a summer internship coming up at a bulge bracket bank. I understand that most summer analysts receive offers, but with the tough market and hiring slowing down everywhere, I’m concerned about actually getting one this year.

In your experience, are summer analysts awarded offers more based on individual performance or on how they compare to their peers? I’m not sure how worried I should be about the competition.”

Inquisitor:

The short answer is that personal performance is most important. People tend to greatly overestimate just how much competition there is among summer analysts looking for offers, just like they incorrectly assume that full-time Analysts are also all killing each other to get top bonuses.

For Summer Analysts the logic is very simple: most interns perform quite poorly and have no chance of coming back anyway.

Some summer interns just don’t know what they’re getting into; others realize they don’t like it a few weeks in and just give up.

Your #1 priority during your internship should be performing well, getting people to like you and getting an offer (more on how to dominate your investment banking summer internship).

One caveat: At some groups/firms, it is indeed harder to get full-time offers and there is more competition among interns. Goldman, for example, is famous for giving out fewer full-time offers to summer interns compared to other banks.

But overall you should be most concerned about how well you do, not how well you do vs. others.

Turning Down Summer Offers: Trading Up

“I got a summer offer at a boutique bank and liked everyone I met there. The offer is a verbal one so I’m a bit nervous about accepting.

Recently I’ve been getting calls from larger firms that I had applied to before, so I’ve been thinking more seriously about trying to go to one of those. They would pay better and give me better opportunities for full-time recruiting in the fall.

Although it would look bad “reneging” on my boutique offer, the bank never even gave me a formal, written offer in the first place - so I’m wondering if telling them “no” and moving to one of the larger firms would be a good idea, or if it would burn too many bridges.”

Inquisitor:

I don’t think there’s much harm in reneging a verbal offer and going somewhere else if you think it’s more compelling and like the people more. “Burning bridges” should not be a major concern, especially since this is for an internship without a formal offer letter.

However, moves like boutique to middle-market don’t help much, whether it’s for lateral hiring or summer internships. So I would only do this if the other options include bulge brackets.

If you do decide to make the move, make sure you have a signed, written offer in hand from the other places - do not rely on verbal offers.

And if you turn down your verbal offer from the boutique, don’t tell them it was due to greater pay or prestige - I would instead make up an excuse around location or another non-sensitive issue so they don’t take it the wrong way.

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After launching in late November just after Thanksgiving and explaining what exactly investment bankers do, Mergers & Inquisitions featured a variety of posts in the month of December.

For those looking to switch into finance and investment banking from other careers such as engineering and law, parts I and II of the series “Breaking And Entering Into Finance” featured some tips and advice:

Becoming A Banker With An Engineering Background

Becoming A Banker With A Law Background

I’ve received questions on getting in from several other professions, including accounting, consulting and industries like pharmaceuticals, so look for “Breaking And Entering Into Finance” to continue this year. Each article actually takes considerable time to research since I’m not an expert on all (or any) of these.

Mergers & Inquisitions also featured several posts in December 2007 for those of you out there trying to get a better handle on what the job entails and how to survive and stay healthy/sane in the world of finance:

A (Bad) Day In The Life Of An Investment Banking Analyst

When I started this blog I hadn’t even thought of this idea, but a reader suggested it to me and I immediately liked the concept. This details one of the worst days I’ve had in this job - stay tuned for an account for one of my best days, which will hopefully be nearly as entertaining.

How To Stay Healthy As An Investment Banker

This one was derived from a popular thread over on Wall Street Oasis about fitness tips and whether it’s possible to stay in reasonable shape as a banker. The short answer: yes, but it takes dedicated effort and you’ll probably be less fit than you were at the beginning no matter how diligent you are.

How To Pick Your Team At An Investment Bank

A guest post by Proud Ex-Analyst, this article featured some tips on selecting your group at a bank. People often like to think in terms of investment banking exit opportunities, but the reality is if you have good experience and have worked hard, you’ll get a good job afterward. Your co-workers matter a lot more than the “prestige” of the group.

Vacation Time In Finance Jobs

Can you actually take a vacation as an investment banking analyst? Does anyone ever take time off? Yes and yes, contrary to a lot of what you’ll read out there. This article explains when and how.

I also decided to start a weekly reader Q&A and post answers to some of the questions I receive from readers each week if the questions apply to a large set of people (e.g., if you’re not asking how to get into banking after having been a monk in Nepal for 5 years and having circumnavigated the Earth by swimming and walking on your bare feet).

Q&A On Questions For Senior Banking Hires, Cover Letters And How Old Is “Too Old” To Switch In

The types of questions to expect if you’re interviewing for something other than an Analyst position, cover letter tips (hint: we barely read them) and changing careers when you’re over 30.

Q&A On Low GPA Issues, Internships For Freshmen And Saving As An Analyst

How to overcome a low GPA when applying for investment banking jobs, getting an internship even as a freshman and how much you can expect to save as an analyst.

If you want to be featured in one of these weekly Q&As or if you have any questions for me, email me and I’ll answer anything (assuming I can answer it, some of the questions I’ve been getting lately are tough).

Finally, just for fun I posted the other day a couple of reasons NOT to do investment banking. Hint: don’t say you’re in it for the “models and bottles”, because you want to start a company or to see if you can handle it.

Happy New Year everyone and stay tuned for more posts coming up this week and next!

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-William Shakespeare, Henry VI Part 2, Act IV

Decided to kill your career in law and switch into banking? Want to be paid by the results instead of by the hour (and hopefully make one of those astronomical investment banking bonuses)?

The good news is that it’s fairly common for lawyers to switch into finance and investment banking specifically. There are a few paths you can take from law into finance:

1. Get an investment banking job immediately out of law school.
2. Work as an Associate at a law firm for several years and then lateral to an Associate position at a bank.
3. Go to business school after practicing for a few years and interview for banking jobs as you finish your MBA.

Method #1 sounds appealing but is difficult to pull off. Most banks do not recruit someone immediately out of law school because the candidate would be stuck somewhere between Analyst and Associate - more experience than someone fresh out of undergrad, but not as much as MBAs with 3-5 years of work experience.

If you had finance experience before law school, your chances of breaking in increase substantially. You just need to tell a good story about why you did law and are now switching back.

If you haven’t had relevant experience, it’s better to work for a few years and transition over from a related law field such as Securities or M&A. I would recommend option #3 above - going to business school after law school - only if you have worked in a completely unrelated law field for several years and decide you want to stop defending employees and start producing lots of PowerPoint.

Ok, I’ll Go Work - What Should I Do?

You need to do Corporate Law. People have asked me if it’s possible to Intellectual Property, Employment, Litigation, and a whole host of other law specialties and switch into investment banking.

It’s not. You need to do Corporate Law.

Repeat after me: You need to do Corporate Law. Here’s a direct quote from our bank’s recruiter when I asked her this very question:

“We look at lawyers for Associate positions… a few years working in Corporate Law and getting transaction experience is a good background. It’s tough if you have done something unrelated… there are too many other qualified candidates.”

It’s not impossible to get in from other fields of law. But recruiting is ultimately a numbers game, and coming from a Corporate/Securities/M&A Law background increases your odds greatly.

Banks view their profession - doing major deals with corporate clients - as the center of the universe, like how people in the Middle Ages thought Earth was the center of the universe. One step removed from the center are other professions that deal with transactions, like Corporate Law, Tax and Accounting. If you go beyond the Outer Rim you get to people who have “real jobs” at “real companies” - companies that sell products rather than professional services.

Your goal should be to get as close as possible to the center. Even if, just like the Earth in the Middle Ages, bankers are not in fact the center of the universe.

Once you have enough experience working on transactions (usually after 2-3 years), you can think about switching into finance. Contact all your friends in the industry and ask for referrals to headhunters. Also contact any clients you worked with on transactions and ask about setting up informational meetings or discussing opportunities at their firms.

It’s best to target the industries and types of clients you worked with. So if you did Securities Law for financial institutions, focus on the Financial Institutions Groups (FIG) at banks. If you drafted purchase agreements in M&A deals for the energy industry, focus your attention on Energy groups and M&A teams at banks. And if you ever worked with UBS LA, stay far, far away.

A final tip: if you’re making a career change, it will likely be easier to get into a boutique investment bank rather than a bulge bracket, especially if you haven’t worked on high-profile transactions before.

I Have Some Leads, Now How Do I Sell?

Coming from a Corporate Law background, no one will doubt that you have the stamina to do banking. And you’ll be well on your way to truly understanding investment banking. You’ll have to prove 2 points: 1) you have the quantitative and finance skills to do the job and 2) you’re actually willing to make a big career change after 5-6 years of commitment to law.

In my guide to getting investment banking jobs, I wrote “don’t worry about the finance questions.” If you’re a lawyer getting into finance, you should do the opposite and pretend those finance questions are nuclear-tipped missiles headed directly toward you.

You should know the 3 financial statements cold. Be able to explain models and valuation methods because they will GRILL you on this. This is especially the case if you were an English major before law school and have no quantitative/finance experience (unlike the engineer breaking into finance). You should know Money Chimp like the back of your hand. Studying for a CFA course might not be a bad idea, and consider one of the finance training courses on WallStreetOasis. Make this an all-out effort to know everything about finance an incoming MBA Associate would be expected to know and you will succeed.

In some ways making the case for a career change is easier. Here’s how to frame your story:

“In law school I was always interested in the world of corporate finance and mergers & acquisitions. I took a lot of classes in the field and went to work in M&A at BIGLAW firm after graduation. I enjoyed the work at first but after a few years I was envious of the bankers on these deals. I understand both lifestyles are tough, but they actually got to see everything from beginning to end and could directly influence whether or not a company was sold. All I could do was sit on the sidelines and comment on specific issues in contracts and agreements. I want to be the dealmaker, or at least be close to the dealmaker, rather than just be the person drafting up legalese.”

And If All Else Fails

And if things don’t go as planned, you could always just go to Brazil and open your own surf shop, like this guy. (Kidding). In all seriousness, if you have any questions or comments email me or leave a comment below.

Coming up later this week: how to stay healthy with an investment banking job, and how to pick your investment banking team.

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