Do lawyers or investment bankers make more money? (2024)

Do lawyers or investment bankers make more money?

Investment banking has gotten so bad even the lawyers are making more money these days. Partners at big law firms now average upward of $3 million a year in compensation, reports The Wall Street Journal. Wall Street pay, meanwhile, has stagnated in recent years. Lackluster dealmaking has meant weak bonuses for bankers.

While bankers used to make multiples of what lawyers did, the lawyers have been zooming ahead, thanks to stagnant banker pay for all but the very top performers and changing dynamics at law firms. The trend took hold well before the recent slowdown in deal making dented banker pay.

As an associate, compensation rises significantly. The next level up is Vice President, which can make upwards of 500k. Highest on the food chain is the Managing Director, who makes anywhere from 500k to several million dollars. Investment banking associates are typically hired after business school.

Of the two careers, investment banking requires greater quantitative acumen and math skills. The educational requirements for becoming a lawyer are much more rigid than those for becoming an investment banker.

Investment bankers are typically the highest-paid workers in the finance industry—high salaries are most prevalent even among younger employees. The starting salary for the typical investment banker exceeds that of most other finance positions, but working in this field has its challenges.

Investment bankers make money through the fees charged to their clients. As discussed above, this includes underwriting fees for arranging the sale of securities and advisory fees for providing strategic guidance.

How can you earn a six-figure salary at top investment banking firms without any experience in 2023. On average, a first-year investment banker makes a 5-digit salary, in the range of $70,000 – $90,000, while a 7-digit salary is considered above average and is difficult to achieve for most people in their careers.

Is investment banking a declining career?

Banks don't break out investment banker headcount specifically, but data released last week by research firm Coalition, suggests investment banker headcount across the industry fell only 4% year-on-year in the first half, which is when many of the cuts at Goldman and Morgan Stanley took place.

The math you do use is very simple. As in, arithmetic. Therefore, you don't have to be a math genius – but you do have to be good with numbers.

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.

What Are the Big 4 Investment Banks? The big four are JPMorgan, Goldman Sachs, Citigroup, and Morgan Stanley. Some other global giants are treading on their heels, including Deutsche Bank, Barclays, Credit Suisse, and UBS. There are at least 100 highly-regarded global investment banks.

It is fairly common for front-office investment bankers to be earning over US$1m after 8 years in the industry. But it caps out at around US$20m, which is how much a top-performing investment banking CEO gets.

According to the BLS, medical doctors which include both medical doctors (MDs) and doctors of osteopathic medicine (DOs) earned an annual median salary of $208,000 per year in 2016. Lawyers, according to the BLS, had an annual median salary of $118,160 in 2016, a significant difference between them of $89,840.

Law Firm Partners

Surveys show: Over 20% of law firm partners achieve millionaire status. The top 5% of partners make over $3 million per year. Equity partners earn 3x more than non-equity partners.

Investment banking recruiting is an extremely competitive process, so you'll want to do whatever you can to stand out during the recruitment process. Banks value the quality of your job experience, and the quality of your schools attended, and how hard you network or “hustle” for the role.

Why doesn t everyone become an investment banker?

Even with education, experience, and enthusiasm, investment banking might not be for you. Investment bankers work long hours and often earn a high income. Lack of work-life balance is one reason to avoid becoming an investment banker. Investment bankers must also be able to manage high-pressure situations.

An investment banker's life is considered to have long working hours, working on weekends, a lot of hard work, and little sleep.

Those earning over $10m per year mostly work in management and finance, though there are significant numbers in sales, real estate, operations, medicine, law, engineering and art at this level. In fact, art has a bulge both at the bottom and at the very highest level of earnings – the celebrities.