But that assumption was shattered within a few weeks, and the year turned out to be even worse than 2020 for me (and many others, I suspect).

The main difference is that when this never-ending “crisis” began in March 2020, there was some sense of unity, as everyone was in it together for a few months.

But as it dragged on, fatigue set in, people began to hate each other even more than usual, and supposedly “democratic” governments became tyrannical.

My solution was alcohol, combined with escapism in the form of books, TV shows, and video games.

But I’ll take a break from the drinking and reality-escaping this week to do my annual edition of reader Q&A:

Job Offer Decisions

The job market has been crazy since the start of 2020, with temporary panic followed by a boom, followed by more panic, followed by a boom… [continue in an infinite loop]. All of that has led to some “interesting” questions about job offers:

Q: I won an offer at a bulge bracket bank in London, but my long-term goal is private equity. I want to delay my offer start date so I can do an off-cycle internship at a large PE firm, which should benefit me in a few years when I recruit for these roles.

Is this a good idea?

A: I would not do this because there’s too much risk. Anytime you “delay” a job’s start date, you’re taking a chance that the market will suddenly shift due to another crisis, deal slowdown, etc., which could result in rescinded job offers.

Also, I don’t think a short PE internship right before this job will help much, considering the cycle starts later in London and moves more slowly.

Q: I have a corporate development offer at a public company and a strategy consulting offer at a Big 4 firm. How should I decide?

A: The corporate development offer is better if you want to stay in finance/deal roles, while strategy consulting is better if you want operational roles, such as sales, business development, market, product strategy, etc., at normal companies.

I don’t think there will be a huge lifestyle difference between the two, and while the salary and bonus will probably be higher in corporate development, that’s not the best way to decide unless you plan to stay there for a long time.

Q: I’m trying to get into investment banking by following your strategy of winning “steppingstone roles” and moving in as a lateral hire.

I have one offer at a Big 4 firm in the management consulting group and another at a non-Big 4 firm in the valuation team.

They’re both in the same location with identical compensation, and I want to get into IB, PE, or VC in the future. Which one’s better?

A: For IB/PE roles, the non-Big 4 firm valuation offer wins because it’s more closely related. Yes, the Big 4 firm has a better brand name, but I don’t think there’s a huge difference from the perspective of the large banks.

If you want more options outside of finance, the Big 4 offer is better because management consulting tends to result in a broader skill set (or at least, that’s the perception).

Q: I’ve been working in business valuations for a few years and just received two offers: one at a technology-focused middle-market investment bank and one for a mid-level corporate development role at a VC-backed startup.

If my long-term goal is venture capital, which one is better?

A: The MM IB offer gives you more options overall, but the CD role might be slightly better specifically for VC.

But this one also depends on the level of each offer.

If it’s something like a Year 1 Analyst in IB vs. an Associate or Manager in corporate development, most sane people would take the CD offer.

Bank Rankings

As always, some banks are moving up, others are moving down, and others are mysteriously stagnant. Which means that I probably need to update that “top investment banks” article.

Q: Should RBC now be considered a bulge bracket bank?

A: I acknowledge that RBC has been moving up the ranks lately, but looking at the data (see below), it still generates less in global fees than even the “lower-tier” BB firms like CS, Barclays, DB, etc.

Also, RBC is strongest in North America and lacks these other firms’ European and Asian presences.

Finally, when re-categorizing banks, a lengthy track record is also important. So, I’m a little reluctant to look at a few years of strong performance from RBC and say it should be in the same category as GS/MS/JPM.

But who knows, maybe RBC will join this group in 5-10 years.

Q: Jefferies is clearly in a different category than the other “middle-market banks,” and it has generated more in global fees than firms like Wells Fargo and UBS.

Will it eventually be a bulge bracket or an elite boutique?

A: Well, let’s look at the data from 2021 and 2020, courtesy of Refinitiv and Mergermarket:

I agree that Jefferies is much different than the other MM banks, but I think it’s too diversified to be an “elite boutique” and a bit too small to be a BB bank if you go by deal volume or fees generated.

So… for now, no, but I could see this answer changing in the future.

Q: Should European firms like UBS, Credit Suisse, and Deutsche Bank still be considered bulge bracket banks?

A: If you look at this globally, yes, I think they should be (see the data above) – but DB and UBS are in a different category than CS, which generates much higher fees.

That said, if you’re in a region like North America where the European banks are weaker, you could make a case that firms like the ones above are better.

This debate reminds me of the argument over the “stronger” vs. “weaker” Ivy League schools, so maybe it’s time to move to the next topic.

Career Transitions

Mysteriously, everyone still wants to get into investment banking and private equity… I’m no expert, but it seems like the salaries and bonuses might play a small role:

Q: I have 5 years of work experience in civil engineering. Do you think I can use a Master’s in Finance degree to move into investment banking and then private equity?

A: I think this would be tough even if you have brand-name schools and firms on your resume/CV.

You’re over-qualified for Analyst roles but under-qualified for Associate roles, so banks would not know what to do with you.

You might be able to use the MSF for other finance roles that care less about your years of work experience, but I think you’d need a top MBA for the IB/PE route.

Q: I’m working at a major valuation firm, and I expect to contribute to purchase price allocations and portfolio valuations.

If I want to break into IB, should I try to work on Fairness Opinions instead? Would that give me an advantage?

A: They’re slightly more relevant than PPA and portfolio valuations, but I wouldn’t recommend focusing on them since the actual work is extremely tedious.

You might benefit from doing a few, but spending all your time on FOs vs. all your time on PPAs will make a much smaller difference than other factors (firm name/reputation, networking, interview prep, etc.).

Q: I’ve been in the Treasury team of a Fortune 500 company for 2 years, where I’ve worked on debt issuances and currency risk hedging. Do you think I can get into investment banking or venture capital from here?

A: VC would be a stretch coming from this role. Sure, venture debt and venture lending exist, but they’re quite different from standard investment-grade debt issuances.

You stand a better chance on the IB side, at least if you target the most relevant group (DCM). If you move quickly, you can probably win a lateral role with enough networking/preparation; if not, you could always aim for corporate banking instead.

Books, TV Shows, Movies, Games, and More

OK, here’s one area where 2021 was less bad than 2020: there were some actual, new, good movies out in theaters, new seasons of existing shows, and some good new(ish) shows.

Q: Succession Season 3 thoughts? No spoilers, please.

A: I am still a huge fan of the show, but I thought Season 3 was a bit weaker than Seasons 1 and 2. The characters are always entertaining, but the story meandered too much, and some of the “payoffs” were not that interesting.

But the final few episodes of the season were great and made me forget some of my earlier complaints.

Q: Any other recent TV show recommendations?

A: So, I spent a good chunk of this year going retro and watching a bunch of series from the 80s, 90s, and 2000s (yes, I’m old).

But in terms of relatively recent series, I’ll recommend You on Netflix.

It’s a ridiculous show with contrived-to-unbelievable writing, but it was so much fun that I just turned off my brain and enjoyed it.

I watch an average of one 45-minute episode per day, which means I can’t finish too many multi-season shows each year. Too much content, too little time.

Q: Books?

A: I was in “retro mode” and “non-fiction mode” for much of the year.

But if I had to give a single recommendation for a 2021 book, I’d say Project Hail Mary by Andy Weir (author of The Martian).

I picked it up based on a recommendation and read the whole 500-page book in ~3 days. There are some logical/story problems, but if you like sci-fi, you will be hooked.

Q: Movies?

A: I saw quite a few in theaters this year; standouts were Dune and The Last Duel.

But I missed some superhero movies, I haven’t seen the new Spiderman yet, and I’ve also not yet seen The Matrix: Resurrections. My expectations are very low, and I’m expecting brain damage if/when I watch it.

Q: Games?

A: I went as far back as 1992 and as recent as 2020 here, playing only RPGs and narrative-driven games.

If I had to give a single recommendation for something within the past 1-2 years, it would be Yakuza: Like a Dragon.

And once you’re done, play everything else in the Yakuza series. These games are overlooked in Western countries, but I think they’re excellent and even better than GTA.

Site Updates, Courses, and Articles

And now to the fun part: you might have noticed that quite a lot of content on this site has disappeared over the past 1-2 years (285 articles, to be precise).

You might have also noticed some disappearing courses and changing pricing/packaging, so let’s delve into the fun explanations:

Q: Why did you delete that article on Topic X? I found it useful! Where is all the content going?

A: The vast majority of the deleted/consolidated articles on this site had extremely low traffic.

If the top articles here attract 20,000 visitors per month, some of these deleted articles had 5 visitors per month.

It’s not a 20% difference; it’s multiple orders of magnitude.

Many articles were outdated, others were redundant, and others were relevant only for a short period, such as the 2012 or 2016 elections.

I may end up restoring or updating some of these, but I don’t think that “more content = better site.”

Q: Why did you remove the Oil & Gas Modeling course? Is it because of ESG? Did ESG activists come to your house and threaten to kill you?

A: Nope, but that would have been entertaining. I think ESG is mostly nonsense for many of the reasons Damodaran has highlighted.

Put simply, there wasn’t much interest or demand for Oil & Gas, and a lot of the content was old and in need of updates.

However, you can’t just make “quick updates” to videos that are based on older SEC filings and Excel files; “update” is a euphemism for “re-do the entire course.”

And I didn’t feel like spending a year of my life re-doing the entire course to maintain a product that generated ~1-2% of total revenue.

Q: What about all the other pricing and packaging changes? What’s happening?

A: The “core” courses are a bit more expensive now, but the Platinum package, with everything on the site, is cheaper because of the removal of the Oil & Gas course.

The main financial modeling course (Financial Modeling Mastery) has a ridiculous amount of content, and it was underpriced for a while.

The overall pricing is still not quite correct, but it’s closer to reasonable now.

I don’t think anything major will change next year, mostly because I’m tired of managing/overseeing/checking all these changes.

UPDATE: This FMM course has now been split into separate, shorter courses.

Q: OK, so what about that Project Finance / Infrastructure course? Venture Capital? Anything?

A: This one comes down to the numbers.

If I spend an entire year, or even ~6 months, working on something new or updating an existing product, it has to contribute a substantial percentage of total revenue (at least 10%).

I’m skeptical that Project Finance could reach that level (and before you leave a comment, remember that I have all the sales data on everything going back to 2007).

However, I might consider it anyway if someone else did the Excel work and research, and we set up a profit share or royalty agreement.

So, who knows – maybe 2022 will turn out to be better than 2021, and you’ll get this new course anyway…

The post 2021 End-of-Year Reader Q&A: Job Offer Decisions, Bank Rankings, Career Transitions, and Disappearing Content appeared first on Mergers & Inquisitions.

If you’re wondering about the “law school to investment banking” transition, you’re probably in one of the following categories:

1. You got into a top law school but realized you hated it when classes began.
2. You got into law school, did well, graduated, but then realized you hated your legal job.
3. You’re about to graduate from law school and are actively looking for jobs in other industries.

If one of those describes you, you’re in the right spot!

The good news is that quite a few lawyers do transition into investment banking and other fields of finance.

The bad news is that you’re probably not going to go directly from law school to investment banking.

Here’s how to think about the transition and overcome the obstacles along the way:

Step 1: Do You Have a Good Reason for Making This Transition?

In my experience, most lawyers who want to move into finance cite the following reasons:

1. “I can make more money!”
2. “The work is more interesting or more exciting.”
3. “I can influence companies and deals rather than just reviewing the paperwork.”

The problem is that most of these points become true only once you reach the top levels in investment banking (i.e., Managing Director).

Until you reach that point, you will still be working on documents and doing “project management,” just as you would as an Associate at a law firm.

Arguably, it’s still more interesting to work on valuations and deal analyses rather than reviewing 200-page agreements, but you’re still turning documents.

Another problem is that the reasoning above omits several positive aspects of legal jobs:

1. You don’t need to as skilled at sales to reach the top – yes, Partners at law firms bring in new business, but they’re still involved in cases and client work.
2. Legal jobs also tend to be more secure, especially in-house counsel roles. No matter what happens to the economy, companies still have to follow the law (barring a zombie apocalypse). Deals, however, plummet during economic turmoil.
3. Finally, the compensation for the average Managing Director at a large investment bank and the average Partner at a top law firm is not necessarily that much different (likely in the high-six-figures to low-single-digit millions).

Also, you need a different mindset to succeed in finance.

Law requires a “glass half empty” view where you look for every potential problem, loophole, and risk; investment banking is more about sales and encouraging clients to act.

At the minimum, you’ll need to get some exposure to finance via classes, internships, or client work before deciding whether or not it’s for you.

Step 2: Are You in a Position to Move Over?

If you’re reasonably sure that you have the required personality and mindset, you need to figure out whether or not you’re in a position to move over.

You are probably not going to get into investment banking right out of law school.

You would be entering IB as an Associate, which means that you’d need a few years of full-time work experience first.

To have the best chance of getting in:

1. You should be at a top law firm that does a lot of work in corporate and securities law. Think: Cravath, Skadden, Kirkland, Latham, and others in the top ~15-20. You want to be at a firm that bankers know and interact with.
2. You should be in a highly relevant group, such as M&A, capital markets, restructuring, securities, or credit rather than something like litigation or environmental or intellectual property law.
3. And you should have at least 1-2 years of deal/client experience because you’ll have to discuss that experience in interviews.

The quality of your law school matters, but the quality of your current firm is more important.

If you went to Harvard Law School, but you now work at a law firm ranked #123 in the country, bankers will be highly skeptical of you.

Step 3: Understand the Challenges and Opportunities in Law School to Investment Banking

You might assume that your main value-add as a lawyer moving into banking is your knowledge of the legal code, and how legal considerations affect deals.

Nope!

Your main value-add is execution: the ability to work under time pressure and unreasonable deadlines and deal with crazy clients to finish tasks.

It’s similar to what you do as a junior employee in banking, but the work product is different.

So, when you network and interview, you need to play up your ability to execute and get results for clients, even in unreasonable environments.

Yes, legal knowledge may help in certain groups (e.g., restructuring investment banking or distressed private equity), but execution is king.

On the other hand, you’ll also have some challenges because bankers make a lot of assumptions about lawyers:

1. Can you count? The stereotype is that lawyers are uncomfortable with numbers – even basic arithmetic – and do not know much about accounting or finance. So, you need strong evidence that you have developed these skills.
2. Do you fit in culturally? You need to show that you’re more action/sales-oriented rather than “worry about risks X, Y, and Z”-oriented.
3. Why now? Why didn’t you get into IB right out of undergrad, and why did you go to law school? And no, you can’t blame the economy or the lack of recruiting.

To answer these objections, you need to show that you’ve always had an interest in finance and that you’ve been moving toward investment banking over time.

Step 4: Craft Your Story and Resume

Your story and resume are linked because your story should reflect most of your resume.

A reasonable outline for your story, following our usual template, might look like this:

• Beginning: Where you’re from, your university and original major/career plan, and your law school.
• Spark: Banking and finance-related classes at law school, a law internship, or activities at law school that made you more interested in investment banking. Also, explain why banking appeals to you more than law.
• Growing Interest: You started taking finance-related classes, learning the technical side on your own, and networking with bankers. Although you accepted a full-time offer from a law firm, you did work that was related to finance, and you kept learning and networking on the side.
• The Future and Why You’re Here Today: You want to combine your previous industry background with law and finance and advise companies in a certain industry or on a certain deal type, and this firm has a great reputation in that area.

Lawyers often include too many negatives in their stories.

For example, they might say, “I want to switch because we’re not responsible for anything clients care about” or “I want to switch because we just review the paperwork when deals close.”

It’s better to restate those as: “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.”

Your resume should match your story closely:

• Ideally, you’ll have 2-3 deal or client experiences that sound relevant to M&A and capital markets.
• You should also have evidence of other jobs, internships, classes, and side projects that are relevant to finance.
• And you should not clutter it with entries that are relevant for law, but not finance, such as short clerkships at small law firms.

The resume templates on this site still work, so you can use one of them and then focus on spinning your work experience.

You can spin legal experience into sounding relevant by:

• Re-adjusting the focus to small details of client work that were more closely related to finance, such as how one term in a definitive agreement affected the purchase price.
• Hedging exaggerated claims to say that you supported the bankers in doing XYZ tasks that resulted in a different price or deal terms.

Be prepared to be quizzed on any deals you list, and make sure you know the financial stats, the deal terms, and the strategic rationale (see: the investment banking deal sheet).

Step 5: Learn the Technical Side

Yes, bankers will ask you technical questions, even in casual informational interviews, because they assume that lawyers are bad at math/accounting/finance/Excel.

They do not care at all about your seniority, background, or the prestige of your law firm.

Even if you’re a 7^th Year Associate, they will reject you if you can’t answer simple questions about Depreciation on the financial statements, or how Enterprise Value changes in different scenarios.

So, pick your method of study and get to it. If you have more time, our Core Financial Modeling covers everything:

Or, for more of a quick review with a focus on written text, our IB Interview Guide does the same:

You can even learn a good amount by reading the free articles on this site about investment banking interview questions and Enterprise Value vs Equity Value.

If you “don’t have time to study” due to your demanding full-time job, there are two solutions:

Solution #1: Secondments and Rotational Programs

Many of the top law firms have rotational programs for new hires, so you could use them to 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 – which means more time to study.

Solution #2: Take Your Time

If you don’t have this opportunity, spread out your studying over a longer period.

Maybe it will take you 6 months instead of 1-2 months, but learning accounting and finance is not rocket science.

It’s never “too late” to move into IB as an Associate at a law firm, and you need to know this material before you begin networking and interviewing.

Step 6: Network Aggressively

You’re a career changer, so you can’t be picky with your networking efforts.

Yes, it’s better to focus on senior bankers, such as Group Heads, if possible, but you should contact anyone you can find.

One of the best sources is former lawyers from your firm, followed by former lawyers from other firms.

Anyone else with a non-traditional background is a good bet, as they’ll be more likely to respond to your emails.

Headhunters are usually a waste of time because you do not fit the “ideal candidate” profile they’re seeking.

The approach to investment banking networking is the same as always:

1. Start by searching for contacts at banks on LinkedIn or anyone in your firm, law school, or undergrad alumni networks.
2. Reach out to them via email and send a message introducing yourself and asking if they have any tips on transitioning from law to finance. There are example email templates on this site.
3. Speak with the person on the phone, ask questions for 90% of the time, thank them, and make a “mini-ask” at the end.
4. Then, follow up with more questions and ask directly about lateral hiring at their firm.

This process could take months, depending on the hiring market and economic conditions.

If you’re not getting responses, then you need to look at the types of bankers you’re contacting and the emails you’re sending and change them.

Step 7: Interview and Win Offers

If you persist with your networking efforts, you’ll eventually start winning interviews at banks.

They could ask all the standard “fit” questions, but interviewers will focus on:

• Why are you switching into investment banking, and why now?
• What are your long-term plans? Are you doing this to become a career banker, or do you just want the exit opportunities?
• Do you know accounting, finance, and Excel? Can you do quick mental math?
• Can you discuss the financial details of deals you worked on in law, such as EBITDA multiples, credit stats and ratios, and premiums paid vs. cost synergies (or all synergies)?

Case studies, such as 3-statement modeling tests, are possible but not likely.

You can prepare by completing a few examples, but you shouldn’t spend an excessive amount of time on them.

The entire process to go from Interview #1 to Job Offer could take anywhere from 1-2 months to 6 months.

As with all lateral hiring, the timing is unpredictable because firms’ staffing needs can change quickly, and they don’t hire “classes” of lawyers each year.

The Logistics of Law to Investment Banking

Once you win and accept an offer, you’ll be hired as an Investment Banking Associate in most cases.

That could mean anything from a 1^st Year Associate to a 3^rd Year one, depending on how much experience you had at your law firm.

You might even join as a Vice President if you’re a 6^th or 7^th Year Associate with a lot of deal experience, but that is quite rare.

Depending on your level, you might take a pay cut at first.

For example, 7^th Year Associates in law earn more than 1^st and 2^nd Year IB Associates – that’s an extreme example, but it is possible.

You have little, if any, negotiating power, so we recommend accepting the offer and worrying about compensation and promotions later.

Plan B Options

If you go through this process but never win job offers, or you don’t get much traction with networking, start by asking why. For example:

• Did you not have enough work experience?
• Did you do poorly on the technical questions?
• Did you not fit in with the group’s culture?
• Did they not think your legal experience was relevant?

Some of these are fixable, and others are not.

For example, you could try to move into a more relevant group and work for another year to gain better client/deal experience.

You could complete additional case studies to get a better handle on the technical side.

And if your legal experience is in an area like intellectual property or patents, you could switch your recruiting focus to technology boutique banks, where they might appreciate your background.

You could also consider options outside of IB, such as commercial real estate, private credit or mezzanine investing, or even distressed private equity, depending on your experience.

Going to business school is probably not the best plan unless you feel like spending $200,000 and giving up 2-3 years of work experience.

Law School to Investment Banking: Final Thoughts

Ultimately, “law school to investment banking” is a misnomer because few, if any, law students move directly into IB.

You work at a law firm for a few years, ideally in M&A, securities, capital markets, restructuring, or something else highly relevant, and then switch in.

It’s not “easy,” but it is easier than moving from most other fields into investment banking at the Associate level.

Your biggest advantage is time: you don’t necessarily need to make the transition within 1-2 years, as students who just finished undergrad do.

And that’s good news when you’re looking to enter a shinier, more exciting dungeon that also requires a lot of preparation.

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