Buy-side front office exit opps for lawyers

[Choux à la Crème]

Good day everyone! Yet another student asking about very distant career questions.

Does anyone have any insights into the feasibility of transitioning from commercial law to a front office position on the buy-side (investment management, hedge funds, private equity houses etc)? To clarify, this does NOT refer to going in-house as part of a company's legal team, but actively formulating investment decisions or managing portfolios. I am particularly interested in distressed debt or special situations investing, as it seems like legal expertise will be most valuable in those areas: e.g. using insolvency law knowledge to assess the recovery rate on bonds from an issuer at imminent risk of default.

Based on Wall Street Oasis and skimming profiles of people at Oaktree, Apollo credit division etc, it seems that such exits are not unheard of in the US but would similar opportunities be available for an E+W solicitor? This would most likely be at mid-level associate or beyond; open to MBA or CFA exams if necessary.

For context, my major was business with emphasis on quant and have experience with valuation thanks to a banking summer internship. Extensive connections in finance at junior level as most of my cohort have gone into IBD/asset management, albeit none in the distressed debt or special situations space. Magic circle training contract lined up.

Obviously rather early days, but would be very appreciated to have some light on what options are available to me in the future!

 

[George Maxwell]

Good day everyone! Yet another student asking about very distant career questions.

Does anyone have any insights into the feasibility of transitioning from commercial law to a front office position on the buy-side (investment management, hedge funds, private equity houses etc)? To clarify, this does NOT refer to going in-house as part of a company's legal team, but actively formulating investment decisions or managing portfolios. I am particularly interested in distressed debt or special situations investing, as it seems like legal expertise will be most valuable in those areas: e.g. using insolvency law knowledge to assess the recovery rate on bonds from an issuer at imminent risk of default.

Based on Wall Street Oasis and skimming profiles of people at Oaktree, Apollo credit division etc, it seems that such exits are not unheard of in the US but would similar opportunities be available for an E+W solicitor? This would most likely be at mid-level associate or beyond; open to MBA or CFA exams if necessary.

For context, my major was business with emphasis on quant and have experience with valuation thanks to a banking summer internship. Extensive connections in finance at junior level as most of my cohort have gone into IBD/asset management, albeit none in the distressed debt or special situations space. Magic circle training contract lined up.

Obviously rather early days, but would be very appreciated to have some light on what options are available to me in the future!

Hi @Choux à la Crème,

Unfortunately I am not really qualified to comment on this.

I thought I would bring in @Rob93 who (I believe) might be able to shed some light on this.

@James Carrabino @AvniD @Jessica Booker any thoughts?

 

[Jessica Booker]

Good day everyone! Yet another student asking about very distant career questions.

Does anyone have any insights into the feasibility of transitioning from commercial law to a front office position on the buy-side (investment management, hedge funds, private equity houses etc)? To clarify, this does NOT refer to going in-house as part of a company's legal team, but actively formulating investment decisions or managing portfolios. I am particularly interested in distressed debt or special situations investing, as it seems like legal expertise will be most valuable in those areas: e.g. using insolvency law knowledge to assess the recovery rate on bonds from an issuer at imminent risk of default.

Based on Wall Street Oasis and skimming profiles of people at Oaktree, Apollo credit division etc, it seems that such exits are not unheard of in the US but would similar opportunities be available for an E+W solicitor? This would most likely be at mid-level associate or beyond; open to MBA or CFA exams if necessary.

For context, my major was business with emphasis on quant and have experience with valuation thanks to a banking summer internship. Extensive connections in finance at junior level as most of my cohort have gone into IBD/asset management, albeit none in the distressed debt or special situations space. Magic circle training contract lined up.

Obviously rather early days, but would be very appreciated

I’ve worked for two prominent asset management companies, albeit on the graduate recruitment side, so can provide some insight into this.

I think you would find it difficult to transfer to a qualified level role. Like if it was the other way around (eg investment to law), I would expect you would need direct experience in investment to meet the market standards for that role, and that you would most likely be directed to graduate programmes. Some asset managers offer career changer programmes, but these tend to be on the client management side rather than with the investment teams.

I did the recruitment for an asset manager last year and we had a range of career changers enter their investment graduate programme. We had a number of coming up to NQ or recently NQ lawyers apply for their graduate programme too - and they didn’t get that, let alone get into a more senior role. Other career changers who secured the graduate programme were at the absolute pinnacle of their previous industry, and they were starting from scratch too.

It might be different in other parts of the industry, or with much smaller/less well known companies. For the specific niche you are looking at, it might be different too (I don’t know enough about that specifically). But generally investment careers make law look really uncompetitive when the application numbers and standards are compared - therefore I don’t think it is an easy move. Not to say it isn’t impossible, and maybe if you build up really strong networks S a lawyer you could strengthen your chances, but I still expect the best chance would be a “you’d have to start again from the bottom and work your way up” approach to entering the career.

 

[George Maxwell]

I’ve worked for two prominent asset management companies, albeit on the graduate recruitment side, so can provide some insight into this.

I think you would find it difficult to transfer to a qualified level role. Like if it was the other way around (eg investment to law), I would expect you would need direct experience in investment to meet the market standards for that role, and that you would most likely be directed to graduate programmes. Some asset managers offer career changer programmes, but these tend to be on the client management side rather than with the investment teams.

I did the recruitment for an asset manager last year and we had a range of career changers enter their investment graduate programme. We had a number of coming up to NQ or recently NQ lawyers apply for their graduate programme too - and they didn’t get that, let alone get into a more senior role. Other career changers who secured the graduate programme were at the absolute pinnacle of their previous industry, and they were starting from scratch too.

It might be different in other parts of the industry, or with much smaller/less well known companies. But generally investment careers make law look really uncompetitive when the application numbers and standards are compared - therefore I don’t think it is an easy move. Not to say it isn’t impossible, and maybe if you build up really strong networks S a lawyer you could strengthen your chances, but I still expect the best chance would be a “you’d have to start again from the bottom and work your way up” approach to entering the career.

Fantastic insight @Jessica Booker, thank you for sharing your perspective.

I am intrigued by what you said about the relative competitiveness of law vs. finance/IB etc. as I have thought this in the past too. Given the application numbers compared to law, are these careers actually far more competitive than law? Or do you think that it is more complex than considering application numbers vs. places?

 

[Jessica Booker]

Fantastic insight @Jessica Booker, thank you for sharing your perspective.

I am intrigued by what you said about the relative competitiveness of law vs. finance/IB etc. as I have thought this in the past too. Given the application numbers compared to law, are these careers actually far more competitive than law? Or do you think that it is more complex than considering application numbers vs. places?

From my experience, yes much more competitive. Not just on application numbers but the average quality too.

I have recruited some phenomenal people in my time into training contracts, but the asset management hires I have made have on average been a much higher quality of candidate (scarily!).

 

[Romiras]

Good day everyone! Yet another student asking about very distant career questions.

Does anyone have any insights into the feasibility of transitioning from commercial law to a front office position on the buy-side (investment management, hedge funds, private equity houses etc)? To clarify, this does NOT refer to going in-house as part of a company's legal team, but actively formulating investment decisions or managing portfolios. I am particularly interested in distressed debt or special situations investing, as it seems like legal expertise will be most valuable in those areas: e.g. using insolvency law knowledge to assess the recovery rate on bonds from an issuer at imminent risk of default.

Based on Wall Street Oasis and skimming profiles of people at Oaktree, Apollo credit division etc, it seems that such exits are not unheard of in the US but would similar opportunities be available for an E+W solicitor? This would most likely be at mid-level associate or beyond; open to MBA or CFA exams if necessary.

For context, my major was business with emphasis on quant and have experience with valuation thanks to a banking summer internship. Extensive connections in finance at junior level as most of my cohort have gone into IBD/asset management, albeit none in the distressed debt or special situations space. Magic circle training contract lined up.

Obviously rather early days, but would be very appreciated to have some light on what options are available to me in the future!

It's definitely been done before (both on in the US and UK/Europe). I have a few friends and have heard of others that have gone from the following paths into buy-side:

1. Drop out of TC --> Sell-side FO (IBD) at BB, Analyst --> Buy-side (PE/AM)
2. Qualify as NQ --> Sell-side FO (IBD) at BB, Analyst --> Buy-side (PE)
3. 2 Years PQE --> Sell-side FO (IBD) at BB, Associate and Sell-side FO (IBD) at EB, Associate (seen quite a few of these) --> Buy-side (PE)
4. 1PQE (skipped TC because he joined after the US Bar) --> Buy-side at a HF doing Long + Short (20bn ++ AUM), Graduate Program

I wouldn't say it is easy, but to get into Sell-side and then do the typical 2 years before jumping into Buy-side seems to be pretty common within my circle and, to be honest, I don't think it is that hard. If you want to go directly into Buy-side, it's much harder but not impossible. However, it would be virtually impossible to jump into a non-graduate role in Buy-side because you just do not have the technicals.

All of the above have started at a MC firm or an elite US firm. Most of them did the CFA (at least 2 levels). Strictly speaking, it's not necessary, but it shows you're mathematically inclined and helps you sell a narrative. But equally, if you are moving early in your career to Finance, and are fine starting as an analyst in Sell-side, then it's basically as hard as applying to a grad scheme out of university (not that hard).

I don't personally see the value prop of going into Law first, before into Finance, since it rarely adds to your CV, if you want to end up in Finance. Rarely do people get into elite Buy-sides straight out of university, even if they were doing a target course/degree and were gunning for it. To be clear my friends that did get these roles were always gunning for Finance from the start to end up at the various AM, HF, Quant Funds that they did (and they were top candidates). Think Oxbridge, Physics/Maths Olympiads, top 5 in their cohort, etc. My other friends that got into Finance after a Law detour often found themselves in a Sell-side role first.

 

[George Maxwell]

It's definitely been done before (both on in the US and UK/Europe). I have a few friends and have heard of others that have gone from the following paths into buy-side:

1. Drop out of TC --> Sell-side FO (IBD) at BB, Analyst --> Buy-side (PE/AM)
2. Qualify as NQ --> Sell-side FO (IBD) at BB, Analyst --> Buy-side (PE)
3. 2 Years PQE --> Sell-side FO (IBD) at BB, Associate and Sell-side FO (IBD) at EB, Associate (seen quite a few of these) --> Buy-side (PE)
4. 1PQE (skipped TC because he joined after the US Bar) --> Buy-side at a HF doing Long + Short (20bn ++ AUM), Graduate Program

I wouldn't say it is easy, but to get into Sell-side and then do the typical 2 years before jumping into Buy-side seems to be pretty common within my circle and, to be honest, I don't think it is that hard. If you want to go directly into Buy-side, it's much harder but not impossible. However, it would be virtually impossible to jump into a non-graduate role in Buy-side because you just do not have the technicals.

All of the above have started at a MC firm or an elite US firm. Most of them did the CFA (at least 2 levels). Strictly speaking, it's not necessary, but it shows you're mathematically inclined and helps you sell a narrative. But equally, if you are moving early in your career to Finance, and are fine starting as an analyst in Sell-side, then it's basically as hard as applying to a grad scheme out of university (not that hard).

I don't personally see the value prop of going into Law first, before into Finance, since it rarely adds to your CV, if you want to end up in Finance. Rarely do people get into elite Buy-sides straight out of university, even if they were doing a target course/degree and were gunning for it. To be clear my friends that did get these roles were always gunning for Finance from the start to end up at the various AM, HF, Quant Funds that they did (and they were top candidates). Think Oxbridge, Physics/Maths Olympiads, top 5 in their cohort, etc. My other friends that got into Finance after a Law detour often found themselves in a Sell-side role first.

Hey @Romiras,

I'm interested (as someone who knows relatively little about financial careers) why is sell-side easier to get into and (presumably) less sought after than buy-side?

Appreciate your thoughts on this! I hope this is the sort of discussion that @Choux à la Crème wanted to inspire!

 

[Romiras]

Hey @Romiras,

I'm interested (as someone who knows relatively little about financial careers) why is sell-side easier to get into and (presumably) less sought after than buy-side?

Appreciate your thoughts on this! I hope this is the sort of discussion that @Choux à la Crème wanted to inspire!

I'm going to preface that I'm talking about the context of IBD into PE/HF/AM as opposed to other FO roles like equity research, sales, trading. I'm also talking with certain funds in mind (e.g. not quant funds that typically want a PHD student).

Technically, there's arguably no all consuming objective reason as to why sell-side is easier to get into simply other than that there exist more roles at sell-side than their buy-side counterparts. Traditionally funds hire from sell-side (unless they run their own program which is akin to a graduate program) after they've gained two or so years experience. This is typically the time-mark where they become an associate and move into communicating with ICs and take on a more project management role and go further away from the "technicals" to-do list that an analyst would have to prepare. Therefore, they've learnt some technicals (which may or may not be that relevant to their future buy-side role depending on the fund and its strategy), they are learning about project management and therefore are more useful (they're not just a body, but a body with a brain), and they've proven they can handle certain soft factors these funds are looking for: ability to do the hours, pedigree, indication of their aptitude, etc.

Why is sell-side less sought after? Well that's a loaded question. If you enjoy serving clients, enjoy managing lots of transactions, working in a bigger team, etc, you'll enjoy sell-side. There's also typically more job stability here. Buy-side, on the other hand, with the funds I have in mind, provide a variety of different things that are attractive to the prototypical finance-minded person. You are the client. You decide what the sell-side tries to recommend/push you to buy. You don't work to their schedules (largely speaking), but they work towards yours. However, you have to manage your own portfolio and if you mess up, you will get sacked or get very little compensation. On the flip side, if you are someone who is excellent and market conditions willing, you will see financial compensation that can dwarf your sell-side counterparts (although this is becoming less true given the increased finreg). I guess there's definitely a reputation that those in buy-side are the client, the big boss, the crème de la crème, etc, as a result of the lesser roles available, the relatively cutthroat environment, and the financial upside.

 

[George Maxwell]

I'm going to preface that I'm talking about the context of IBD into PE/HF/AM as opposed to other FO roles like equity research, sales, trading. I'm also talking with certain funds in mind (e.g. not quant funds that typically want a PHD student).

Technically, there's arguably no all consuming objective reason as to why sell-side is easier to get into simply other than that there exist more roles at sell-side than their buy-side counterparts. Traditionally funds hire from sell-side (unless they run their own program which is akin to a graduate program) after they've gained two or so years experience. This is typically the time-mark where they become an associate and move into communicating with ICs and take on a more project management role and go further away from the "technicals" to-do list that an analyst would have to prepare. Therefore, they've learnt some technicals (which may or may not be that relevant to their future buy-side role depending on the fund and its strategy), they are learning about project management and therefore are more useful (they're not just a body, but a body with a brain), and they've proven they can handle certain soft factors these funds are looking for: ability to do the hours, pedigree, indication of their aptitude, etc.

Why is sell-side less sought after? Well that's a loaded question. If you enjoy serving clients, enjoy managing lots of transactions, working in a bigger team, etc, you'll enjoy sell-side. There's also typically more job stability here. Buy-side, on the other hand, with the funds I have in mind, provide a variety of different things that are attractive to the prototypical finance-minded person. You are the client. You decide what the sell-side tries to recommend/push you to buy. You don't work to their schedules (largely speaking), but they work towards yours. However, you have to manage your own portfolio and if you mess up, you will get sacked or get very little compensation. On the flip side, if you are someone who is excellent and market conditions willing, you will see financial compensation that can dwarf your sell-side counterparts (although this is becoming less true given the increased finreg). I guess there's definitely a reputation that those in buy-side are the client, the big boss, the crème de la crème, etc, as a result of the lesser roles available, the relatively cutthroat environment, and the financial upside.

Wow thank you @Romiras!

 

[Jessica Booker]

Hey @Romiras,

I'm interested (as someone who knows relatively little about financial careers) why is sell-side easier to get into and (presumably) less sought after than buy-side?

Appreciate your thoughts on this! I hope this is the sort of discussion that @Choux à la Crème wanted to inspire!

As I understand it, it’s partly down to there being more roles on the buy side (along with high attrition) compared to the sell side where typically there is smaller intakes partly where people stick to the career/organisation for longer than the average sell side. From my experience that’s often down to the culture of those organisations.

 

[Choux à la Crème]

Thank you to everyone for replying, it has been very helpful to hear insights from both recruitment and career transition angles.

Law to finance (buy or sell-side) does seem like a large jump, will certainly have to look into it more as well as reflecting on my motivations for doing so!

 

[Lastseasonwonder]

@Romiras @Jessica Booker

You both seem to have quite a bit of knowledge about this (finance careers, law to finance etc), so I wanted to ask:

Over the past year or two, I have been developing an interest in finance. Reading about PE, ECM, DCM etc really intrigues me. More recently, I was very interested in reading about the pension fund crisis following the mini-budget. In that sense, my interest in finance is a big part of the reason I am gunning for a TC - I am basically solely interested in transactional and finance-focussed practice areas.

I was thinking, therefore, about gaining some experience in finance between signing my TC (which I hope to sign this cycle) and when starting. How can I go about doing this? All summer internships at banks are for penultimate year students only and I am not one. I have read about a position for graduates called "off-cycle intern/analyst". Would appreciate both your insights on how I can gain some experience in finance during the aforementioned time period.

Of course, the TC is my priority at the moment but I am just thinking ahead and wanting to explore my interests. Honestly, I started thinking about the finance career about 8 months ago but the high barrier to entry and the fact that I have to start all over again (when I am so close to signing a TC) are the factors that are driving me to corporate law.

 

[Romiras]

@Romiras @Jessica Booker

You both seem to have quite a bit of knowledge about this (finance careers, law to finance etc), so I wanted to ask:

Over the past year or two, I have been developing an interest in finance. Reading about PE, ECM, DCM etc really intrigues me. More recently, I was very interested in reading about the pension fund crisis following the mini-budget. In that sense, my interest in finance is a big part of the reason I am gunning for a TC - I am basically solely interested in transactional and finance-focussed practice areas.

I was thinking, therefore, about gaining some experience in finance between signing my TC (which I hope to sign this cycle) and when starting. How can I go about doing this? All summer internships at banks are for penultimate year students only and I am not one. I have read about a position for graduates called "off-cycle intern/analyst". Would appreciate both your insights on how I can gain some experience in finance during the aforementioned time period.

Of course, the TC is my priority at the moment but I am just thinking ahead and wanting to explore my interests. Honestly, I started thinking about the finance career about 8 months ago but the high barrier to entry and the fact that I have to start all over again (when I am so close to signing a TC) are the factors that are driving me to corporate law.

Your use "finance" is too broad here and it could mean a variety of things. For example, are you interested in IBD or equity research or leveraged finance, etc. I would recommend you look at Wallstreet Oasis to get a better understanding of the application process and the industry itself. I would also caution that it is very hard to get an internship or full-time position in most front office roles, especially if it's at an elite boutique or bulge bracket. Relative to top law roles, it's a lot harder and far more technical. If you have not secured a TC already, I would advise against divvying up your efforts across a whole other career path that requires 100% of your attention - you will not likely get much success in either areas unless you're an absolute machine.

However, to indulge you, if you're serious about pursuing just a "finance" internship (e.g. IBD off cycle as that would likely fit your timing), then you'll need to be ready to compete with people that know the terminology, know how to prepare and talk through their models, prepare DCFs, that have been prepping the interview format, have relevant networks and experience, etc. People spend several years perfecting this on a more casual basis (i.e. throughout their time pre-university and university). If you are able to bridge that knowledge / experience gap (notwithstanding that we are also not accounting for presumable lack of relevant experience to date compared to your competitors who have been focused on "finance" roles), then you have a chance to land a finance internship. To be clear, theoretically, it is doable, but you will likely have to sacrifice a lot of your social life (and other aspects of your life) to achieve it - and to do that for just "experience" when you aren't going to seriously pursue it beyond the period between graduating and your TC seems a bit wasteful.

 

[Jessica Booker]

@Romiras has provided you with some great information here.

If you are willing to compromise on the type of organisation you do a "finance" role with, you may find it a lot easier. Outside of the big names and leaders in their sectors within finance, you may find interim roles advertised for recent graduates relatively easy to get into - there are enough of them anyway. The same goes for the type of role you step into - there will be more "admin" type roles that will be much easier to secure than an "off-cycle" internship. It really depends on the specifics that you are looking for within this very broad range of organisations/roles.

 

[Jessica Booker]

Are you trying to get into this career now or after you secure a TC?

 

[Lastseasonwonder]

Are you trying to get into this career now or after you secure a TC?

I am now pursuing a career in corporate law, so for now I think it is best to leave this conversation as it is - to remain focussed on my current path.

Thank you both - @Romiras and @Jessica Booker - for your insights!

 

[Lastseasonwonder]

@Jessica Booker - it seems that the topic of moving into IB won't leave my mind (context above - when I asked about moving into finance), and the thought and feeling of knowing another career path may be a better fit for myself is a tough one to ignore. Therefore, I wanted to ask the following:

Is it worthwhile to do a TC when knowing you want to end up in IB (and the exit options after that)? I have done quite a lot of research on LinkedIn and it seems like it has been done before - people do move over to IB at NQ or PQE. So it is definitely possible, but how do people end up making this move?
Just thinking of a way to utilise my law degree and all the time I have put into VS/TC application prep, compared to going for an MSc and straight into IB (or any other direct route to IB for that matter).

 

[Jessica Booker]

@Jessica Booker - it seems that the topic of moving into IB won't leave my mind (context above - when I asked about moving into finance), and the thought and feeling of knowing another career path may be a better fit for myself is a tough one to ignore. Therefore, I wanted to ask the following:

Is it worthwhile to do a TC when knowing you want to end up in IB (and the exit options after that)? I have done quite a lot of research on LinkedIn and it seems like it has been done before - people do move over to IB at NQ or PQE. So it is definitely possible, but how do people end up making this move?
Just thinking of a way to utilise my law degree and all the time I have put into VS/TC application prep, compared to going for an MSc and straight into IB (or any other direct route to IB for that matter).

I don’t think there is any benefit in doing a TC unless the career you are aiming for in IB is in the legal team. You are right that people do it (and the opposite way around too), but it’s not going to help you secure a role in IB (and especially front office IB).

You will start pretty much from scratch/bottom of the career ladder anyway (which is how people make the move). The vast majority of people won’t do it and will just go straight into the career.

I think there are more productive ways of utilising your time, especially given you’ll have to go through the LPC or SQE. That could be further study or a job in financial services. You’ll probably have more time then to build up your skill set and knowledge for IB applications than if you were working 50-70 hours a week as a trainee.

 

[Lastseasonwonder]

I don’t think there is any benefit in doing a TC unless the career you are aiming for in IB is in the legal team. You are right that people do it (and the opposite way around too), but it’s not going to help you secure a role in IB (and especially front office IB).

You will start pretty much from scratch/bottom of the career ladder anyway (which is how people make the move). The vast majority of people won’t do it and will just go straight into the career.

I think there are more productive ways of utilising your time, especially given you’ll have to go through the LPC or SQE. That could be further study or a job in financial services. You’ll probably have more time then to build up your skill set and knowledge for IB applications than if you were working 50-70 hours a week as a trainee.

Thank you for your response, @Jessica Booker.

Firstly, I want to make it clear that when I said IB, I do not mean IB in the legal team. I mean FO IB - 'Investment Banking Analyst'.

I understand that I would have to start at the bottom of the ladder (FO IB Analyst), but how do they (NQ+) make the move in practice? Like literally speaking? Do they reject their NQ offer and apply for IB A1 roles (for instance)? Apologies if this seems a daft question.

"I think there are more productive ways of utilising your time, especially given you’ll have to go through the LPC or SQE. That could be further study or a job in financial services" - I agree with this, and this is why I have been researching the different routes into FO IB for myself. Would you be happy if I PM you about my personal situation?

 

[Jessica Booker]

Thank you for your response, @Jessica Booker.

Firstly, I want to make it clear that when I said IB, I do not mean IB in the legal team. I mean FO IB - 'Investment Banking Analyst'.

I understand that I would have to start at the bottom of the ladder (FO IB Analyst), but how do they (NQ+) make the move in practice? Like literally speaking? Do they reject their NQ offer and apply for IB A1 roles (for instance)? Apologies if this seems a daft question.

"I think there are more productive ways of utilising your time, especially given you’ll have to go through the LPC or SQE. That could be further study or a job in financial services" - I agree with this, and this is why I have been researching the different routes into FO IB for myself. Would you be happy if I PM you about my personal situation?

They just apply like everyone else and go through the same recruitment process as a final year student/graduate. There is no alternative route for them (apart from a couple of career changer programmes, and even then they aren’t always FO Investment Analyst roles). I suspect they apply knowing the timeline of when the role would start and factor that in. They would only resign from a NQ or qualified role once they have an offer.

You are welcome to PM me - I might not be able to help if it’s specifically about IB recruitment though.