M&A Lawyer to Investment Banking

I went to a top ranked law school and graduated, with honors, in 2002. After a successful summer associate experience with my firm where I rotated through different corporate groups, I decided to join the M&A practice when I finished law school. In the last four years, I have worked on a lot of deals including public company mergers, private equity investments and a number of highly publicized acquisitions. At this point of my career, I know that I should start thinking about what's next. I'm not interested in going in-house and I don't think I want to be a law firm partner. The only idea that has interested me over the last year is the idea of becoming an investment banker.

Recruiters are telling me that it's too late for me to make this kind of move. I find this to be a pretty hard and bitter pill to swallow. I work just as hard as the bankers on the other side of my deals and I don't think they're any smarter but they're paid an awful lot more than I am and they seem to have more options down the line beyond law firm partnership and corporate counsel positions. Is it really too late for someone like me? Do I have to go back to school to get my MBA in order to get into a bank?

Signed,
Don't Want to Start Over

Dear Start Over:

First, allow me to congratulate you for having the good sense to be thinking about your career. Far too often, successful and highly capable attorneys find themselves picking their heads up from behind stacks of documents on their desks and wondering where the last seven years have gone. You're just finishing your fourth year; it sounds like you've had terrific experience and responsibility and it's great that you're taking stock of it all. Second, you should know that you're in good company. I have worked with dozens of impressive corporate attorneys who have asked the exact same questions you've posed. And here are some answers: no, it's not too late for you to become an investment banker and no, you don't have to go back to school to get your MBA. But, it does sound like you have some homework to do. Get out a notepad, sharpen your pencil and write these questions down.

Do you really want to be an investment banker? Do you know what a day in the life of an investment banker at your level looks like? Do you personally know any attorneys who have successfully made this transition? Have you spoken to them about their experience? Do they seem professionally satisfied to you? Do you have any kind of finance background? Do you have any of the requisite quantitative skills that investment bankers possess? Can you model (and I don't mean in front of the mirror after you've done some push-ups)? What do you know about running valuation scenarios? On a more personal note: what motivates you professionally and personally? What are some of the things you really enjoy about the practice of corporate law? What are some of things you really dislike about the practice of corporate law? In what kind of work environment do you strive? What kind of long-term opportunities are you really looking for?

Assuming that you have determined that banking really is what you want to pursue, allow me to address why recruiters may be discouraging you from this transition. While my investment bank clients agree that highly qualified lawyers trained at top firms are often terrific candidates, there is a concern among bankers that lawyers who are too deeply entrenched in the law firm setting, i.e., have spent more than two or three years working as lawyers, don't always make terrific bankers for a number of reasons. First, there's a steep learning curve that must be overcome; the skills necessary to perform valuation scenarios, assessments of complex financial data and to assemble/manipulate financial models do not come naturally to everyone. Investment banks - just like law firms - are hierarchical and appropriately slotting a very experienced attorney without strong finance skills into a banking organizational chart is tricky. Additionally, there is a perception - rightly or wrongly - that lawyers who are very good at protecting their clients from exposure might not make the best bankers, for whom risk is a necessary evil. Accordingly, legal recruiters who have heard these concerns expressed repeatedly by their banking clients are probably loathe to encourage a 4th year associate (rising 5th year, gulp!) to submit a resume when these recruiters know that the likelihood of securing an interview is slim.

Having said this, if you are truly committed to making this transition, it can be done, but your best bet - as you do have more law firm experience than the average lawyer-cum-banker - is to make this move through networking. Some cautionary words as you successfully network: once you secure an interview with a bank, demonstrate that you have the quantitative chops to hold your own. If you are like many lawyers who studied Political Science, English Literature or another non-quantitative discipline (I'm guilty - Religious Studies), be prepared to show your potential bank employer that your interest in this world isn't whimsical. Enroll in a modeling class with a continuing education program, study pitch books, look into CFA certification, sit for the Series 7 (if you don't know what that is, that's a problem), investigate different companies that are active in the market, i.e., do your homework. If you're going to impress the banker who's evaluating you as a potential convert, you must demonstrate that you're committed, not just curious.

I think it's also worth mentioning that it does appear, from your brief note, as if your desire to move into investment banking is really more about your aversion to in-house legal opportunities and the prospect of law firm partnership and less about your passion for investment banking. Might it be worth asking what it is about becoming an in-house lawyer that is so unappealing? What is it about law firm partnership that won't sustain you in the long-term? Could it be that you don't want to become a partner at your present firm? Have you considered specializing within a particular corporate discipline (structured finance, private equity, hedge funds) in order to develop expertise in a field? If you have finance skills that you feel like you're not putting to use as a general corporate lawyer, perhaps you should look into structured finance, the corporate specialty area for quant-jocks! This is only an example: you don't have to go back to the drawing board - you can use skills you've already cultivated but refine your skills to become less of a generalist and more of a clear authority.

My final thought is that the life of an investment banker is too readily romanticized by the corporate lawyer. While plenty of my banking friends do subsist on diets built around tofu, lean proteins and legumes, others admit that there is some truth behind the stereotype of the red-meat-eating, chest-thumping, hard-charging Wall Street banker. While it's quite possible that you would thrive in this kind of setting, it is also entirely likely that you would find the constant references to Gordon Gekko tiresome after a few months. Only you would know but it's worth thinking about.

Good luck with all of it and please stay in touch,

Sang

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