From Law to Investment Banking: Even Better Than Starring in “Suits”?
If real life imitated TV perfectly, law would be an intellectually stimulating and exciting career path for everyone.
You work with high-profile clients, try intense cases, make massive M&A deals happen, and empower the barbarians at the gate.
Except… that doesn’t quite hold up in real life.
The average corporate law job turns into a game of “How many documents can you turn, and how quickly and accurately can you turn them? Bonus points if you’re skilled with the Table of Contents feature in Word.”
Some lawyers play that game and move up the ladder, while others get bored, conclude that business is more interesting, and move into roles with more modeling and fewer “Track Changes.”
Whenever deal activity heats up and banks ramp up their hiring, more and more professionals fall into that category and move from law to investment banking.
I’ve seen that firsthand because there has been a big uptick in the number of readers and customers making that move in the past year.
A cynic might say, “We’re at the peak! If so many career changers are getting in, the bubble is about to burst!”
But even when deal activity and hiring are down, a fair number of lawyers break in – and here’s how you do it:
Why? Didn’t You Already Write About This?
Yes – in fact, it was one of the first articles ever published on M&I.
But that was a long time ago, things have changed since then, and that feature was a very “high-level” overview.
This time around, I’m basing the article on several interviews with readers and clients who have moved from law to finance.
If you haven’t already read it, that article above is a good “101” guide to this topic – but we’re going into more specific tips and advice here.
Starting Points: Becoming a Barbarian at the Gate
Let’s start with a basic, but often-overlooked point: you need to make sure you’re going into IB, or any other finance role, for the right reasons first.
A lot of lawyers think, “This job is boring and I’m intellectually under-stimulated… but bankers make a lot more money, so I should do finance instead!”
That is a poor reason to make the move because banking and law are very different professions.
If you’re a lawyer, work is “handed” to you; you can get ahead by virtue of being smart and hard-working, and by turning documents successfully.
You won’t necessarily be responsible for bringing in clients until you’re at the top, or very close to the top.
But as a banker you start wining and dining clients much earlier on, and the job changes significantly once you hit the VP level.
If you don’t like sales and schmoozing with clients, you really shouldn’t move into banking.
The stories of the most successful law –> banking career changers I spoke with all looked something like:
- Always had some interest in finance – for example, they took classes on M&A, Restructuring, or Capital Markets in law school, or classes on accounting or finance in undergrad.
- Then, they completed internships and/or full-time roles with some relation to business – even if they were not in corporate law – and they were more drawn to the “deal” side, in-line with their previously stated interest.
- And now they’re here today to leverage their finance + legal backgrounds to ultimately become a trusted adviser to management teams in [a specific industry or deal type, ideally].
If you do NOT have a story like that or you cannot point to longer-term interest in finance, put on your “spin” hat and come up with something.
Or start learning more now and think about transitioning only when your story is more credible, whether that takes 1 year, 2 years, or more.
How Much Do Your Firm and Group Matter?
I wrote previously that it’s “difficult to break in if you’re not in corporate law.”
This one is not quite true.
Several lawyers-turned-bankers mentioned litigators and even patent and environmental lawyers getting in: it all depends on how good a story you can spin.
For example, if you did environmental law perhaps you worked on cases that were related to due diligence in deals (e.g., was there a toxic spill right behind the company’s headquarters? Did this come up when a private equity firm was evaluating a company?).
If you’re in a seemingly unrelated group, switching to corporate law first sounds like a good idea.
But there’s also an opportunity cost because you need to spend time recruiting for a new group, and then work in that group for some time so you have experience to speak to.
Plus, if you move into that new group and then fail to get into banking you’re left in an awkward position: do you move back to your original group? Or stay there? Or just open a surf shop in Brazil?
On the other hand, there was universal agreement that working at a brand-name firm gives you a big advantage.
The bulge bracket banks know the top law firms, but they’re much less aware of smaller firms.
So if you’re at a smaller firm:
- Target smaller banks.
- Set yourself apart by gaining sector expertise in a specialized area (e.g., oil & gas).
- Consider moving to a bigger firm if all else fails.
Preparing to Recruit
So you’re at a top firm, or you’re targeting smaller banks, and you have a story that reflects at least a few years of interest in finance… what next?
Before you network with anyone, you need to master 2 important points:
1. Your Story – See the example above for an outline. You cannot just say you became interested very recently; it has to be an evolution over years.
You also need to emphasize that banking IS your long-term career, and you’re not just doing it because you’re “bored” with law.
It’s not a surprise, really: you’re trained to find problems, flaws, and points of contention, so your story often ends up sounding negative.
For example, one coaching client made this statement as part of his initial story:
“I’ve enjoyed my work in this corporate law team, but I’ve gotten frustrated because business-oriented questions never get answered. They always say, ‘It’s a business decision, it’s not our realm’ and we’re not responsible for the key points that clients care about.”
This statement is not a faux pas, but it sounds quite negative.
It’s better to say something like, “In addition to advising on the legal issues, I want to contribute to the actual deal process and move transactions forward – which you have the opportunity to do in banking.”
It’s a small change, but if you come across as “negative” in the first 2 minutes that impression will stick with you.
2. The Technicals – They will ask you technical questions from the beginning, even in casual informational interviews, because they assume that lawyers are bad at math.
So you need to know accounting, valuation, and transaction modeling before you contact anyone.
They do not care AT ALL about your background, and they also don’t care AT ALL how senior you are.
I have seen stories of 7th year law associates with dozens of deals getting rejected from IB roles because they couldn’t answer questions about the 3 financial statements.
Yes, it will take time to learn this material via online courses, books, in-person classes, or however else you want to approach it, which creates a problem: how do you get that kind of time?
Answer #1: Secondments and Rotational Programs
Many of the top law firms have rotational programs for new hires, so you might move through capital markets, M&A, real estate, tax, and other groups.
There are often breaks or “secondments” (where you work for a normal company temporarily) in between, where you get a reduced workload… and therefore time to learn the technical skills and network.
Answer #2: Take Your Time
If you don’t have this opportunity, spread out your learning over a longer time period.
Maybe it will take you 6 months instead of 2-3 weeks, but it’s really not rocket science, at least not the part you need for interviews.
Many lawyers mistakenly:
- Start networking before they know the technical side; or
- Attempt to cram and learn everything in a weekend.
Neither is a good strategy.
Plus, taking more time to learn these skills just makes your story more credible.
Networking Into Investment Banking: How to Become Shameless
Some people online will say that you need at least “several years of experience” to break into IB, but many stories contradict this.
As with any other career transition, the sooner the better.
It’s doable with only 1-2 years of full-time experience, and sometimes even less than 1 year.
Headhunters tend to be useless, so you should focus on alumni from undergrad and law school, plus former co-workers.
Do NOT ignore junior bankers – they can’t get you interviews/offers, but they can give you lots of information on the group, and they can introduce you to more senior people on the team.
If you do know someone more senior on the team (e.g., a Group Head), yes, contact that person first.
But if you don’t know anyone, contact an analyst first and then ask to be put in touch with an associate, then a VP, and so on, and move up the ladder like that.
Helpful vs. Useless Contacts
Former lawyers from your own firm, followed by former lawyers from other firms, will be your most helpful connections.
Networking is all about follow-up, and you’ll always get a significantly higher response rate from quick, 1-2 sentence follow-up emails sent after your initial email.
Do not underestimate the randomness of opportunities, and don’t limit yourself to specific groups at banks.
Yes, technically you have a better chance in groups with some legal overlap, like Restructuring, but…
I’ve also seen lawyers reach out to contacts they haven’t spoken to in years, find out the contact is in an unrelated division, ask about anyone he/she knows in IB, and ultimately get interviews like that.
So ideally you’ll contact bankers first, but if not, reaching out to people in other divisions at any large bank can work well.
What to Expect When Networking: “Objection, Your Honor!”
You need to be careful to avoid negativity in your story, and it’s the same when networking.
Even if you’ve emailed someone dozens of times and you haven’t heard back, you cannot let it get to you or you’ll never make any progress.
It can also be tough to convince bankers that you’d be comfortable doing the job since law is perceived as being dramatically different.
You can counter this objection by knowing the technical side very well, and even bringing in your own models and valuations… IF you know your stuff.
You can start most conversations with a simple “So what advice do you have for a lawyer moving into investment banking?” and go from there; networking is networking even in a career change.
How to Interview Like You’re a New Star on Suits
Assuming you’ve done well and progressed to more formal interviews, you’re in for a ride because they vary quite a bit.
In rare cases, bankers will ask no technical questions… but then in equally rare cases, you might get a valuation / modeling case study.
On average, though, the “fit” questions are very predictable (“Why are you switching into finance? Why now? Why banking?”) and the technical questions are quite standard (depreciation changing by $10, linking the statements, etc.).
Even if you somehow happen to get a case study, it’s usually of the form: “Here’s an annual and interim report – build a 3-statement model and valuation for the company, along with the football field graph at the end.”
So it is time-consuming, but it doesn’t require a huge amount of critical analysis, and, again, this is very rare from all the accounts I’ve seen.
You should also be prepared to discuss the business details of your cases.
Two examples from previous coaching clients come to mind:
- Corporate Loan – One reader listed the key result of his work – an increased credit line – but then he could not explain the credit stats and ratios (Debt / EBITDA, EBITDA / Interest, etc.) that determined the appropriate amount of credit.
- Deal Financing – In another case, a reader listed an M&A deal on his resume and an interviewer at a bank started asking about the mix of cash, stock, and debt, and the rationale for that mix. He knew the purchase price and the valuation stats, but couldn’t explain this side as well.
So it’s not enough to know a few stats about the purchase price and the valuation – you can and will be grilled on more detailed numbers.
If you don’t know this information for the deals and clients listed on your resume, find it and make sure you can comfortably speak to these numbers.
The hiring process itself, similar to lateral hiring anywhere, can be prolonged because banks are under no time pressure to hire you.
After your interviews begin, it might take anywhere from 1-2 months up to 6 months to win an offer.
Case Closed: An Offer as an IB Associate?
If you perform well and receive an offer, you’ll most likely join as a 1st or 2nd year Associate.
If you have a lot more experience, e.g. you are a 7th year Associate up for promotion to Partner, you might move in at a slightly higher level, but you’d never move in as a Managing Director.
Think: “Beyond a 1st or 2nd year Associate, but still not at the VP-level, unless it’s a smaller bank or a smaller regional office of a bank.”
You may also end up taking a pay cut depending on your current level; for example, 1st and 2nd year IB Associates might earn 50-60% of what 7th year Associates at top corporate law firms earn.
You’ll move up and match that pay fairly quickly if you do well, but you need to be psychologically ready for this drop.
What If It Didn’t Work: Demanding a Retrial
If you made it through interviews but did not get an offer, you need to pinpoint why by asking the interviewers directly.
The most common reasons I’ve seen include:
- “We like you, but this other candidate had more relevant work experience.”
- “We like you, but we’re not sure you have the technical knowledge to do this and we don’t have time to train you.”
If it’s the first reason, you can’t do much other than continue to interview around at different firms.
But if it’s the second reason, potentially you could go back to them and make your case again, if you’re confident you do have the skills.
This tends to work better on the sales & trading side, but it can also work here if they’re wrong and you have enough evidence to prove it.
The Law to Investment Banking Roadmap
So if you’re sitting in a frustrating law job right now and you’ve always wanted to get into finance, follow everything above and nail your story and the technical side, network without shame, and interview like you’re on TV to break in.
And if it doesn’t work the first time around, you can always go for the “retrial” option.
Just try not to make a habit of it.
A controversial case may make for the most popular podcast of all time, but it doesn’t work quite as well when it’s your own story.
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