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Who makes more MBA or JD?

JSRJSR Registered User Posts: 39 Junior Member
edited November 2011 in Graduate School
I am a very ambitious person and I will admit that even though I love being well educated, wealth is a big driving force for me. I am currently an undergraduate business major and i'm looking to either get a law degree or an MBA. Given 100% effort in either field, which graduate degree will earn me more money?
Post edited by JSR on

Replies to: Who makes more MBA or JD?

  • caliphariuscalipharius Registered User Posts: 456 Member
    It is highly, highly contingent. I am sure you can adduce aggregate numbers somewhere, but I don't know that they will be indicative of "100% effort."

    You can become wealthy by either path. It would be foolhardy to choose the carrer you like less because it does marginally better in the aggregate than the other. You're more likely to be financially successful doing something you enjoy than something you dislike, as it will be harder to keep up 100% effort for the span of an entire career in the latter case.
  • sakkysakky - Posts: 14,759 Senior Member
    On average, a JD makes more than an MBA, but that' mostly due to the fact that there are lots and lots of mediocre no-name MBA programs out there. There are also mediocre no-name JD programs out there too, but I doubt that there are as many as there are MBA programs. Hence, the average MBA salaries get dragged down by all the mediocre MBA's.

    I agree with calipharius in that it is highly contingent, especially on the industry that you choose. If you just want to make lots and lots of money, go to investment banking. However, most MBA's, even at the top schools, do something else besides investment banking. In fact, many will choose less remunerative industries because of a higher quality of life or other factors.
  • LeroyGradLeroyGrad Registered User Posts: 23 New Member
    Even if wealth is a major motivator, you should still think about which of the two career paths is more interesting for you and go with that one.

    Answering the question directly, however, JDs make far more money on average than MBAs do. In fact, Stanford business professor Jeffrey Pfeffer and UW business prof Christina Fong recently found that MBA degrees conferred no advantage on graduates and provide no significant overall financial reward. (See their now-infamous paper at http://www.aomonline.org/Publications/Articles/BSchools.asp) The reasons for this are myriad, and I won't recount them since you can read the article for yourself, but the gist of it is that the MBA does not result in any significant monetary gain and that its only real value in financial terms is the networking it facilitates.
  • sakkysakky - Posts: 14,759 Senior Member
    Actually, no, that is NOT what the paper says. The paper actually states that the EDUCATION of the MBA is probably not particularly valuable. And I agree.

    To wit, the paper never deals with the issue of selectivity. For example, the paper states that those in investment banking (or other high-end business jobs like consulting) without MBA's make as much money (or more) than those with MBA's. The major problem with this is obvious - it is difficult to stay in investment banking or consulting or jobs like that without an MBA. Those who manage to do it are obviously highly extraordinary people. For most mere mortals, getting an MBA is one of the few realistic ways they can even have a job in banking or consulting.

    Think of the way that the banking career path is structured. You come in right out of undergrad for a 2-3 year analyst stint. Most of these analysts will then be released, whereupon they will usually go to B-school. A small fraction of them will be promoted to the associate level right after their analyst stint. So, sure, I agree that for those who get that promotion, they don't need B-school. But the truth is, most of them don't have that choice. So for the vast majority who didn't get promoted and yet still want to continue in banking, going to B-school is the way to do it.

    And then of course there are plenty of people who never even got an analyst job offer in the first place. If these people still want to be bankers, then, again, the only realistic way for them to do it is to go to B-school. What else are they going to do?

    Secondly, the paper is actually mostly focused on the CURRICULA of the MBA experience. To that, I would agree that a lot of it is not particularly useful. Most of the value is indeed in the networking, the access to the career offices, and the selectivity of the school itself as a signal to the labor markets that were you good enough to get admitted in the first place. But this is nothing new and not specific to B-schools. The truth is, most undergrad programs don't teach you anything that is truly useful for the job, and the value of the bachelor's degree is usually attributable to the selectivity of the school as well as the networking and the access to the career office. Most college grads report never using most of the things that they learned in college. So the B-school education is really no worse.

    The point is this. Just think of a guy who's a regular Dilbert-esque working Schmoe. Now he decides that he wants to be a banker or a consultant. What is he going to do? He can't just walk into the offices of Goldman Sachs or McKinsey and demand that they give him a job. For guys like that, an MBA is one of the few realistic options he has available. Sure, if companies like that were already making him nice job offers, then he wouldn't need an MBA, but the fact is, they're not making him any offers. So he's gotta do what he's gotta do to get access to these companies. What else is he going to do?
  • LeroyGradLeroyGrad Registered User Posts: 23 New Member
    While it is true that the paper is mostly about the curricula of business schools, the juicy part of the article for the mainstream press has been the claim that "there are almost no economic gains from an MBA degree unless one graduates from a top-ranked program," which Pfeffer derives from his synthesis of previous studies. Everything else Sakky says, however, is a fair representation of Pfeffer's study and quite astute.
  • sakkysakky - Posts: 14,759 Senior Member
    I completely agree that the benefits of going to a no-name MBA program are quite small. And the fact is, the vast majority of MBA programs are no-name programs. On the other hand, like I've always said, if your employer is going to sponsor you to get a no-name MBA, then, heck, why not get it.
  • GigamanGigaman Registered User Posts: 12 New Member
    Well with a JD you could always open up your own law firm. I am not sure if an investment banker could do the same. Law is a safer field, don't have to worry too much about getting laid off.
  • sakkysakky - Posts: 14,759 Senior Member
    Investment bankers can definitely do the same. In fact, most of the extremely successful bankers leave banking to start their own funds. Most of the entire Greenwich, Connecticut hedge fund industry (of which Greenwich is hedge fund heaven) consists of funds started by former bankers.

    Opening up your own law firm is not that simple, as I'm sure ariesathena could tell you. You have to secure clientele and deal with all of the headaches involved in starting any business. It's obviously very good if you are highly entrepreneurial and you know how to promote yourself, but if you don't have that kind of personality, then it's a very bad fit.

    I don't know about not having to worry about being laid off. The truth is, associates at the big firms get "laid off" all the time. Of course, they don't call it that. Rather, you get induced to resign. That's because as an associate at a big law firm, you're basically fighting to make partner, and the fact is, most associates will not make partner. If it's clear that you're not going to make it, the firm is going to nudge you out, gently at first (hence, convincing you to resign), but they will fire you if you don't take the hint.

    Furthermore, it is also true that in a general economic downturn, law firms will lay associates off left and right. For example, during the tech downturn, Silicon Valley law firms that specialized in advising tech clients were laying young lawyers off left and right.

    For example, consider this quote:
    "Firm-wide, Gray Cary is rebounding from a tough year in 2002, when it laid off 68 lawyers as the dot-com crash hit home in Silicon Valley. "


    Same thing happened after 9/11 - lots of New York law firms laid off a lot of young associates. So don't fall for the notion that you don't have to worry about being laid off if you are a lawyer.
  • UCLAriUCLAri Registered User Posts: 14,740 Senior Member
    Law is a safer field, don't have to worry too much about getting laid off.

    My uncle, a very highly rated attorney (Martindale-Hubble rating, for what it's worth), might not agree with you on that one. He's found that even partners in mid-sized firms can find themselves with "job trouble" down the line.
  • LakeWashingtonLakeWashington Registered User Posts: 9,160 Senior Member
    How right you are, UCLAri. Remember the bloodletting that began at the big firms nationwide a few years ago? Being a partner ain't what it used to be. Heck, being an associate at a 'white shoe' law firm ain't what it used to be. The associate track to partner is now longer, in some cases years longer. And in other cases, firms have created "non-partner track positions," wherein you can remain with the firm as long as they are happy with your work, but you're just another salaried employee like the receptionist and the paralegal. I don't know if bankers or MBAs have it better though.
  • collegecanwaitcollegecanwait Registered User Posts: 456 Member
    Being an MBA allows for an exponential income growth, meaning you can become truly wealthy. Most (but not all) areas of law confine you to hourly wages.
  • uicgrad1uicgrad1 Registered User Posts: 66 Junior Member
    Really depends on what you want to do with yourself. They're kinda totally different programs with two completely different intended objectives. MBA would be cheaper - in most cases - and be less time consuming. But law is probably more flexible for people who really aren't sure what field they want to work in. Every major employer has a legal staff. Plus, you can work in many different capacities and move in and out of different fields easier. I think the MBA is becoming so common nowadays, that it doesn't care the weight it once did, personally. I still think a law degree impresses people more (if you are looking for that). I also think MBA is more convienient for working professionals, trying to go to school part-time. I would personally rather go to law school if I had both options put in front of me, but I'm not you. That's not really something someone can give you good advice on, because they are too different and it really depends on what you want to do.
  • jgates82jgates82 Registered User Posts: 1 New Member
    Honestly, as an MBA, I think it depends. When I finished B-School, I went to work with a firm and have built a career while still in my mid-twenties. I used my undergrad education (dual-major in International Business and also in Economics) during B-School to leverage my work and in the end it all depends on what you want to do with yourself and how you want to use what you have. The key in any profession is to learn to combine skills to create opportunity. It's not about prestige, honors, etc. It's about comfort with yourself, your profession, and your willingness to work regardless of advanced degree path.

    I think that in the end, if people spent more time concentrating on improving and strengthening and channeling their skills, the debate becomes marginal. I have been down this road many times with friends in either profession. Just be sure not to lose focus on what is important to you and you'll be fine. With JDs, I saw many of my friends working long hours, becoming irritated, etc. Same with MBAs. When you have a multi-million dollar client or client-base that you are working with, hours drag on, quality of life suffers and on the financial side, what is the point (regardless of profession) of the income if you can't enjoy it? I have no regrets in my decision to attend B-School and I think for those who are hunting prestige, I look at this as the "neighbor" example. Most people in the world are focused on their own personal or closely related affairs and could care less as to what it is YOU do for a living. They care about what is important to THEM as individuals and you should do the same. Build YOU and the professional gains will come with that as a secondary benefit. Best of Luck!
  • 2quantum2quantum Registered User Posts: 1 New Member
    Does it really make sense to think that JDs are only wealthy when they become partner and MBA's when they become fund manager at Goldman Sachs? While its safe to assume that the world's top law firm partners and fund managers are wealthy, it is a false dichotomy to assume JD's and MBA's are only wealthy when they arrive at these positions. Mostly because these are the people whom merely best serve the wealthy.

    The assumption that job security is somehow a wealth track attribute is fallacious. The most secure government job is probably not going to get you a Bentley, yacht or jet.
    Job means you are employed by someone else....if this is your end then maybe you need to stop browsing the internet and get back to work on company time.

    My opinion is the Entrepreneurial JD leader has more opportunity to make millions than his/her MBA counterpart. This is because of his/her power; power to...

    1) Execute opportunities
    2) Defend wealth against foes (IRS, contract breachers, thieves, fowl competitors, etc.)
    3) Reach agreements (and transactions)
    4) Avoid many sloppy thinking pit-falls.
    5) Play politics (especially when the government is stepping so much in many various industries, especially the MBA's beloved finance industry)
    6) (unfortunately) power to strip the wealth of people and corporations in a single blow

    Yet, wealth is the ability to get the world's best engineers, attorneys, finance gurus, and sales-pros to work for you! Wealth is not being the best engineer, attorney, finance guru, or sales-pro. This is because such professions are seeing salary, commissions, retainers, and not interest, equity, and true leverage.
  • AlfonsitoAlfonsito Registered User Posts: 1 New Member
    Hi JSR,

    As per my mother's advice, (making herself as an example) you could always finish your name with JSR M.B.A., J.D. This makes all the difference in the market today. :)
This discussion has been closed.