Wednesday, March 10, 2010

Who is Worse off in this Recession? MBAs or JDs?

I was so sick yesterday that I didn't do the subject matter any justice, so I decided to try again.  I found this article on  I tend to feel for JDs more than MBAs.  My comments are in blue.  You will quickly see why:

In recession, MBA students seek backup plan

CAMBRIDGE - For decades, investment banking was a well-worn path to affluence for business-school graduates. But as Wall Street teeters, many are scrambling to find alternate routes into a brutal job market.

Facing one of the worst economic downturns since the Great Depression, some Masters of Business Administration students are lowering expectations. Aspiring investment bankers are looking elsewhere, while international students wonder if they will have better luck at home than in the United States.
I'm going to attempt to create an analogy here:  Aspiring BigLaw Corporate Lawyer are looking elsewhere, while international students with JDs are saying, "Crap, this degree is only worth something if I use it in the States.  Other JDs are saying, "How can I go back home when I signed up to take the New York Bar?" 
My law school was associated with a business school and I did notice that 1/3 of the students enrolled there were foreign.  The same cannot be said of law schools.  At least foreign MBAs can go home to another country.  JDs are forced to commit to taking a bar exam in one state and must pay to take it.  If that state doesn't cough up a job, they have to wait another 6 months and pay more fees to move on to another job market.  So, I'm thinking MBAs are more versatile in terms of locale.  
As big banks including Citigroup Inc., Bank of America Corp., and Goldman Sachs Group Inc. cut tens of thousands of jobs, MBA students who just a few years ago would have been aggressively recruited by companies now expect to fight for the handful of positions available.
Meghan Gallery, 24, enrolled at the Massachusetts Institute of Technology's Sloan School of Management in September with hopes of working on mergers and acquisitions at an investment bank. Now she would consider a summer job at a start-up company, ideally in corporate finance.  Wow!  This sounds like a great option. I would love to be invited onboard as in house counsel to a start up in solar energy or a social networking site.  The people that jumped onboard Google when it was a start up are millionaires now.  What are the options for a JD that can't get a job in BigLaw like he expected?  Document review or solo practice.  There is NO chance of making millions in either of those field.  Never mind the fact that most JDs never wanted to make as much money as a investment banker.  Most JDs just want to be middle class.

"I've literally had people say, 'Hopefully, when you get out it will be different. But if not, there will still be a lot of bodies floating around who have been in finance for five to 10 years more than you'," she said.

Shrinkant Dave, 26, an MBA candidate at Boston University who is originally from India, made a similar decision, accepting a corporate finance job at a retail chain rather than holding out for investment banking.  Once again, is this a bad option?  It sounds like a job to me?  I have very little sympathy.

"I knew there were not enough jobs to go around, so I had to improvise," Dave said. "It's slightly disappointing, but not too bad. It's still in line with my goals."

MBA students face a radically changed job market.

US employers in January cut payrolls by the most in 34 years, and President Barack Obama has called for a $500,000 cap on pay of chief executives of companies that receive federal bailout money. Wall Street has shed more than 19,000 jobs since the start of the financial crisis. General Electric Co. chief executive Jeff Immelt summed it up in a presentation in New York in early February: "Financial services ain't going to be the same in our lifetime."  Oh, woah is me.  A $500K cap is horrid, isn't it?  How many attorneys make that much?  Very few.  I admit that 19K jobs lost is a huge amount, but not all corporations are doing horribly.  Everyone that I know that worked at Lehmans and Bear Stears were quickly absorbed by companies that are doing well during this recession.


Career counselors at MBA programs are urging students to be open-minded about the jobs they will accept and to pursue aggressively those that are available. While companies are still sending recruiters to campuses, they are not hiring as many people. MIT officials estimated that recruiters on its campus were offering 20 percent fewer positions this year.  20% is laughable.  That is right in line with the unemployment statistics for the nation at large.  With law schools, I would argue that 50% of graduates are unemployed, which is far worse than the rest of nation.

Moreoever, MBAs are not a rare breed. More than 150,000 MBA degrees were awarded in the United States in the 2006 to 2007 academic year, according to government data.  Okay, I'll admit it.  That's A LOT of students for the market to absorb.  But unlike a JD, which is often used to make an unmarketable degree marketable (i.e. history, english), an MBA is often used to enhance an underlying major which was already pretty marketable (i.e. finance, accounting).  But that's just my opinion.  I think that an MBA can leave his professional degree on his resume and be considered an asset, whereas a JD needs to be dropped to succeed in other fields.

"They have to be open" to different routes to getting a Wall Street job, said Diane Riemer, assistant director for graduate career services at Boston University's School of Management. Riemer said she advises MBA candidates to think about "bridge strategies," positions that could serve as stepping stones to get students toward their dream jobs.  Do we have "bridge strategies" in the legal world?

In addition to considering a wider variety of jobs and industries, students said they are considering more geographic options -- like moving to emerging nations where multinationals and big local companies are still beefing up staff.

"People need to be a little more flexible," said Ignacio Diaz, 28, a native of Venezuela studying at MIT's Sloan School. "Not thinking only about moving to New York for finance, for example, but looking at other centers, like perhaps London, perhaps the Middle East or Asia."

Some students from outside the United States are considering whether they would be better off returning home, particularly those from still-growing economies like Brazil, China and India - though growth there has slowed too.

"I was looking to do a lot of work in the US, but one of the suggestions I got was that this is the right opportunity to go and explore," said Anand Mohanrangan, 26, an MIT Sloan student also originally from India. "I am trying to see what are the opportunities I could have to go back to India."

Like I said, at least they can do that.  We have been crippled by state bars.  Furthermore, the ABA has enabled Indian attorneys to practice in this country--but we have not been welcomed to practice in other nations.  At some point in my floundering career, I met with an american who broke in the legal market in Dubai to discuss my options should I decide to move there.  He told me that I couldn't earn much there because there are so many Indian attorneys working for bargain basement prices--my american JD would scare employers there.  Great.

A downside to moving to emerging markets could be lower pay, some students fear.

"People pay a lot of money to get here and the return on investment is higher here than if you go back," said Mahesh Konduru, 34, an Indian student at MIT's Sloan School in Cambridge, Massachusetts.
Most JDs just want a job.  Like I said, and Hardknocks wrote earlier, many JDs are willing to work for $30K.  They want a job.


The programs are costly. Last year the typical full-time MBA candidate attending a school outside his or her home state paid $32,333 per year for tuition and fees, a number that's risen 25 percent over the past five years, according to the Association to Advance Collegiate Schools of Business.  That is what JDs pay too.  But MBAs are better off once again--their program is only 2 years long.

That does not take into account books or living expenses, which many full-time students also take out loans to cover.

Compounding those concerns, many have taken on tens of thousands of dollars of debt to finance their educations.

"I am worried about it, more worried than I thought I'd be," said Matt Yosca, 32, in his final year at the MBA program at Babson College in Wellesley, Massachusetts.

Students who are using loans to cover living expenses said they are trying to cut back spending, just to minimize the amount of debt they will face after graduating.

"I'm trying not to spend too much from the loans," said David Spevick, 27, who is from Toronto and is now studying for his MBA at Boston University. He lives alone but will probably seek a roommate to save money.

Educators console students with the thought that the difficult economy will toughen them up and better prepare them for hard times later in their careers.

"There is no doubt that the students who are coming out today will be more wary of credit risks, more careful," said Andrew Lo, a professor at MIT's Sloan school, who spearheaded the school's launch of a finance track this year. "You learn nothing from success. You learn far more from failure." (Reuters)

So, I think the MBAs come out on top.  Their degree is more versatile than ours.  To an MBA, a recession means letting the dream job go and finding another way to get the dream job on a later date.  To a JD, the recession means becoming a barista at Starbucks and having to explain why you did that the rest of your life.


  1. At this point, can anyone give me a good reason why, as a bottom tier JD, I shouldn't eat a gun as opposed to the prospect of a potential lifetime career in a windowless room making minimum wage reading legalese?

    Story after story, study after study, stat after stat shows that a large majority of us are screwed and the only chance we have is to abandon the field all together or face the above mentioned choice. To be or not to be?

  2. Please don't eat a gun. That's not why Hardknocks and I post these articles. I think that most JDs are extremely intelligent people and most times very creative. Just know when to hold them and when to fold them and figure out another path. This is the time to be creative and maybe start a business or pursue a career that you will love. As for the loans, screw them. Live off the grid or let them hunt you down like the vultures that they are and live your life anyway. I'm sure that one day, the government will have to intervene or all of us will have destroyed credit which will ruin our consumer economy. I had to hustle in college to get by. I had 4 jobs and I thought that this would change by now and I would be settled in a career. Instead, I'm tossed out on the street and I'm taking legal work off the streets and doing contract work to get by, I'm also selling crap on ebay and doing whatever the hell else I need to do to make money. HUSTLE!

  3. From jobs at 7/11 to secretarial work to trash collector, application after application of mine and many of my peers have gone unnoticed or unanswered. I exist only by the graces of kind family members. I too have resorted to selling most of my worldly possessions, and have even been rejected by Pawn Shops which I didn't know could happen, or prayed for another blizzard in the hopes of shoveling out homes for 5 or 10 dollars.

    Some of my luckier friends, after almost a year of job searching, have managed to get hired back at their pre-law jobs in retail at franchise/chain restaurants and stores. I appreciate the kind words Angel and I don't mean to be a downer, but this is getting ri-blankity blank-diculous.

    As most of the readers of this and other fine blogs on the subject have received what constitutes "legal training" after our three years at our various institutions, I wonder if the same train of thought ever crosses their minds as it does mine.

    Namely, what does it say about the nature of a society and its laws when this is the state of affairs we are in? Booms and busts certainly have occurred in the past and we have recovered as a nation, I know as I was one of those poor unfortunates that also majored in History and was told that law would be an excellent post-graduate decision, but rarely has there been the kind of predatory participation from the corridors of power as there is today.

    What's next? A slow decay of the middle class as the vultures of "globalization" slowly pick at the nation's exhausted corpse? Outright collapse seems unlikely...what seems more probable is a country that has regressed back to the robber baron era where an aristocracy of landed gentry in everything but title rules over the unwashed masses.

    What happens to the legitimacy of the government itself...when even the people who are supposed to be, in the words of the ABA's little plastic card in my duct tape wallet reads, "Defending Liberty" and "Pursuing Justice" have to literally resort to living lives as fugitives to escape loan sharks who've received letters of marque for their enterprise from the sovereign?

    Maybe one of the last hopes we have is the very nature of our training itself where, like the story of the AUWCL student taking on a credit company, we go pro se. I've always wondered what it was like to be one of those lone attorneys in darker days like the great union battles following the industrial revolution or a civil rights attorney working against an entire system.

    In the end maybe we should thank our lucky stars that we now have the choice of being Atticus Finch for ourselves or facing a life as a slave to a higher power or numbers in a machine. Regardless, it's clear that it'll have to be our decision as no one in a position to change anything will do it of their own accord. You're indeed right when you say HUSTLE!

  4. I am getting depressed and I didn't go to law school. I nearly did though(took the LSATs twice), but these blogs really changed my thinking.

    There has got to be an alternative to making the final exit Demosthenes. If it really gets that bad, just live in the woods in Alaska or move to Latin America. Make those usurious vultures work to find you. You might die like Christopher McCandless (Into The Wild), but at least you will die on your feet.

    I am trying to get friend of mine to drop out(1L) but she won't listen. I even showed her the blogs. She went to law school in the first place because all she could find out of college was a job at 'Sleepy's'. I really feel like we are a lost generation.

  5. Demostheness, I know things seem hopeless right now but I agree with Angel that our situation also gives us the opportunity to tap into our creative side and actually do something we love rather than do something safe and expected. I know people who are joining the Peace Corps, teaching abroad, just straight up leaving and working at a bar in Ireland or working under the table once their visa expires. People are taking chances that could lead to something amazing that they would've never done in a good economy. Don't give up hope and don't settle for mediocrity. If you're in a rut think of ways to leave. I've been selling my mess on Craigslist too and saving money to make that leap. Look at this as a blessing that you won't have to spend the rest of your life being miserable in shitlaw. It sucks! Don't envy the people who have settled for that life. Think of things that will make you happy and set out a plan to achieve them. Most of us here are still young. I'm in my 20s and I'm not giving up that easily. You shouldn't either!

  6. Keep up the good blog work. This is the only lawyer blog that I post comments on but enjoy reading most of them. The only thing I would say about JD vs MBA is take the article's position with a grain of salt. It sounds like they are soft-selling the MBA problems. We KNOW the problems of JDs so we can see through the numerous BS. This blog itself posts articles about JDs that spin the same distortions (JD is gateway to other jobs, etc). I mean this article may be correct, but I have become much more cynical about trusting these sort of articles on their face. Thanks.

  7. KARL, send your friend to "Third Tier reality". Maybe that will have an impact. That author uses the school's and industrys numbers to show what a lousy, shiTTTy investment law school is. Oh, and MBAs are shit too.

  8. What kind of exemptions does min. Wage provide in wany 3 or 4 working poor R NOT better off in the here &now...



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