I'm a final year law student, I've interned at some law firms (virtually) and as a result of it, I don't have much idea about the professional hierarchy at law firms.
I'm confused about whether to pursue an MBA or not after law school.
I just want to know whether law firms are equally rewarding (economically) or not if we compare them with Top Consulting Firms.
Further, how long does it take to become an Equity Partner at a Law Firm?
I've heard that Equity Partners generally earn in the range of 2.5cr-5 cr. Is it true?
It would be great if people on LI can help me in arriving at an informed decision.
The tl;dr from that suggests it takes between 9 and 13 years to make EP on average (though it excludes the many many who never make EP or leave the profession or firms before they do). It also does not explicitly take account of equity partnerships at all firms (and is a bit outdated).
As far as we understand, being an equity partner (besides the promoter equity) at most firms doesn't necessarily translate into a huge bump up in pay, though it can. It would very much depend on the exact equity model (or even non-equity revenue share model) that a firm follows, and potentially also how much your own team makes, etc.
Answering purely on the financially rewarding part:
Assuming you take a year or two off after law school to prepare for CAT or get work experience, and subsequently you go for a 2 year MBA program at the top IIMs, at the age of 26-27 you graduate from the IIM with a top consulting job (say McKinsey, BCG etc.) then you will start with a salary of 24 - 36 lacs.
At 4 years PQE at a law firm, if you become an SA you will be earning approx. 30 lacs. At 3 years PQE (A3), you will be earning approx. 22-25 lacs.
Also, keep in mind that salaries at IIMs and IITs are generally inflated (https://bit.ly/3gOqAuO). A "40 lacs package at Microsoft" by a top IIT student actually means some 20 lacs of cash at the end of the year. In case of law firms, a 30 lacs package assuming average bonus will pay you at least 25 lacs.
Further, remember that you have lost out on 2 years of salary + paid 25 lacs as course fees during your MBA. So, that's a set back of about 40 lacs even though you are graduating with roughly the same salary.
So, yes - few years after graduation, the ROI of (NLU + top law firm job) is definitely better than ROI of (IIM + top consulting job). If you plan to quit the corporate life within 5-10 years and live a peaceful life - a top law firm job makes more sense.
BUT, the benefits of a top MBA over law will kick in after that. Top equity partners (not including promoter/founding partner level equity) make somewhere in the range of 5-7 crores. Fresh equity partners fall in the range of 2-4 crores. And mind you, this comes after 20 years of PQE.
On the other hand, if you leverage your MBA properly, join the right companies, make the right transitions, you can end up as a CEO after 20 years of PQE. In which case, only the sky/negotiation is the limit in terms of your salary. Plus, the range of career options at your disposable will be too vast as compared to a lawyer.
So, yes an MBA will be more beneficial if you look at a 20-30 year career horizon. The caveats are of course - not everyone who graduates from an IIM becomes a CEO or a millionaire. It is a risk you will have to take. And you will have to keep yourself at the top of your game even into your late 50s.
On the other hand, a law firm job will give you great returns for a decently rich and smooth life. Your career and salary transition will be mostly linear without many big rises or falls.
If you're OP, it also depends a lot on what you want to do in life and what you love doing. If you don't love the law (or are madly behind becoming EP) you will never become an EP.
I mostly agree to what ROI has stated. Though, if you are really interested try getting an MBA from a foreign univ. (western/ european countries) - this will give you much better returns (money and lifestyle wise) + widen your horizons + great opportunity to settle anywhere in the world.
Don't worry about the fee - mostly working part time shall cover your expenses. (Wish someone told me this a few years back!)
A law firm job will certainly not allow you anything on these lines. Unless you are deeply interested in the field of law you can't work happily for many years. If you decide to work in a law firm/ people working in a law firm, don't worry, there are still a lot of opportunities to bail out. :)
Think and research a lot before you make your choices!
Excellent analysis! Only point I'd like to differ on is the CEO bit - even with 20PQE, most MBAs don't become CEOs, they're often heading business verticals with a cushy salary, but CEO circles are limited and riddled with nepotism and whatnot. Becoming an EP is (relatively) more straightforward if you have a book.
A query here. I am told by all around me that the path to Partner (salaried) requires one to build a book (and network from the time you're PA/Counsel). How does one kick that up even higher to become EP? From what I see, Trilegal's model seems good - just make partner, everyone's got equity. I'm still blind to a lot of that goes in from making it to equity at the other top firms.
That's just the theory. In reality, PAs/Counsels get no training towards building a book. Partner (Salaried) in such a case becomes only a promotion designation. In fact, most law firms partners in India are incapable of getting any business and virtually are just PAs/Counsels to another senior partner.
If someone wants to become an Equity Partner, it is at the Partner stage that they start building a book. This is done both through networking with long-term clients you have serviced, plus the blessings of a senior/name partner who is ready to direct a few clients your way. In that sense, "networking" within the firm with the top management also becomes important. No one becomes Equity Partner purely on merit. It's a mixture of ambition, timing, patience and blessings from the top. Though, come to think of it - that's true for most things in life!
Well then you can compare a ceo with a chief legal officer or a general counsel, who also rake in millions and are paid at par(not paid actually, profits) with CEOs. Well MBAs arent just about CEOs And compare it to litigation+ 25 yrs experience....no need to explain
I'm a final year law student, I've interned at some law firms (virtually) and as a result of it, I don't have much idea about the professional hierarchy at law firms.
I'm confused about whether to pursue an MBA or not after law school.
I just want to know whether law firms are equally rewarding (economically) or not if we compare them with Top Consulting Firms.
Further, how long does it take to become an Equity Partner at a Law Firm?
I've heard that Equity Partners generally earn in the range of 2.5cr-5 cr. Is it true?
It would be great if people on LI can help me in arriving at an informed decision.
Thanks
The tl;dr from that suggests it takes between 9 and 13 years to make EP on average (though it excludes the many many who never make EP or leave the profession or firms before they do). It also does not explicitly take account of equity partnerships at all firms (and is a bit outdated).
As far as we understand, being an equity partner (besides the promoter equity) at most firms doesn't necessarily translate into a huge bump up in pay, though it can. It would very much depend on the exact equity model (or even non-equity revenue share model) that a firm follows, and potentially also how much your own team makes, etc.
Assuming you take a year or two off after law school to prepare for CAT or get work experience, and subsequently you go for a 2 year MBA program at the top IIMs, at the age of 26-27 you graduate from the IIM with a top consulting job (say McKinsey, BCG etc.) then you will start with a salary of 24 - 36 lacs.
At 4 years PQE at a law firm, if you become an SA you will be earning approx. 30 lacs.
At 3 years PQE (A3), you will be earning approx. 22-25 lacs.
Also, keep in mind that salaries at IIMs and IITs are generally inflated (https://bit.ly/3gOqAuO). A "40 lacs package at Microsoft" by a top IIT student actually means some 20 lacs of cash at the end of the year. In case of law firms, a 30 lacs package assuming average bonus will pay you at least 25 lacs.
Further, remember that you have lost out on 2 years of salary + paid 25 lacs as course fees during your MBA. So, that's a set back of about 40 lacs even though you are graduating with roughly the same salary.
So, yes - few years after graduation, the ROI of (NLU + top law firm job) is definitely better than ROI of (IIM + top consulting job). If you plan to quit the corporate life within 5-10 years and live a peaceful life - a top law firm job makes more sense.
BUT, the benefits of a top MBA over law will kick in after that. Top equity partners (not including promoter/founding partner level equity) make somewhere in the range of 5-7 crores. Fresh equity partners fall in the range of 2-4 crores. And mind you, this comes after 20 years of PQE.
On the other hand, if you leverage your MBA properly, join the right companies, make the right transitions, you can end up as a CEO after 20 years of PQE. In which case, only the sky/negotiation is the limit in terms of your salary. Plus, the range of career options at your disposable will be too vast as compared to a lawyer.
So, yes an MBA will be more beneficial if you look at a 20-30 year career horizon. The caveats are of course - not everyone who graduates from an IIM becomes a CEO or a millionaire. It is a risk you will have to take. And you will have to keep yourself at the top of your game even into your late 50s.
On the other hand, a law firm job will give you great returns for a decently rich and smooth life. Your career and salary transition will be mostly linear without many big rises or falls.
Don't worry about the fee - mostly working part time shall cover your expenses. (Wish someone told me this a few years back!)
A law firm job will certainly not allow you anything on these lines. Unless you are deeply interested in the field of law you can't work happily for many years. If you decide to work in a law firm/ people working in a law firm, don't worry, there are still a lot of opportunities to bail out. :)
Think and research a lot before you make your choices!
If someone wants to become an Equity Partner, it is at the Partner stage that they start building a book. This is done both through networking with long-term clients you have serviced, plus the blessings of a senior/name partner who is ready to direct a few clients your way. In that sense, "networking" within the firm with the top management also becomes important. No one becomes Equity Partner purely on merit. It's a mixture of ambition, timing, patience and blessings from the top. Though, come to think of it - that's true for most things in life!
Well MBAs arent just about CEOs
And compare it to litigation+ 25 yrs experience....no need to explain
@KIAN have you considered a Reddit-esque type algo for comments? Would really encourage higher quality engagement here.