Are Banking And Law Careers Falling Out Of Favor In The U.S.?
In 2010, Daniel Devoe was fresh out of Boston University’s School of Law when he landed what should have been a dream job: a spot at Ropes & Gray, a major corporate law firm in Boston.
Seduced by the high salary and the firm’s international prestige, Devoe eagerly signed on as an associate. But he began having second thoughts within a few months.
“The prestige wore off very quickly,” the 32-year-old Devoe says. “It just wasn’t enjoyable work.”
It’s an increasingly common refrain among young professionals, particularly for those who work in finance and law. A generation ago, a budding career at a respected law firm or a Wall Street bank was the definition of professional success in America. But, for many nowadays, those career paths are fast losing their allure.
Instead, a growing number of people are eschewing traditional legal or financial career routes for a chance to launch their own businesses or join startups. They are enticed by the opportunity to do what they consider to be more innovative and more meaningful work, not to mention the chance to potentially build the next Twitter or Facebook—and take home a piece of an outsized reward.
According to a recent nationwide LearnVest survey, when respondents were asked to name the two most aspirational careers in America today, they chose C.E.O. (36%) and entrepreneur (28%). Lawyer and banker barely registered, with just 2% each.
“What we hear students tell us is that they want to be able to see the impact they have,” says Maryellen Reilly Lamb, the director of MBA career management at the University of Pennsylvania’s Wharton School of Business.
In Devoe’s case, he spent over a year working late nights on tedious assignments before deciding that Big Law wasn’t for him. “I realized that the thing I really cared about was determining my own career path,” he says. “To do something I want to be doing—and not just for a lot of money.”
Spurred by the desire to one day launch a business, Devoe left Ropes & Gray and completed an eight-week course with the Startup Institute, which helps people pursue careers in the burgeoning field of tech. He now works for Drizly, an on-demand alcohol delivery app business, and although the transition hasn’t been easy, he’s much happier.
“It’s incredibly terrifying to go from a $200,000 salary to currently making no money and working for a startup,” he says. “There is a lot of risk, but overall, it’s definitely been a net positive. I am on the right track now.”
The rising social cachet of entrepreneurial careers has been partly driven by Silicon Valley success stories—and partly by necessity. The weak economy following the 2008 financial crisis caused many big law firms and Wall Street banks to hemorrhage jobs, as well as cut back on the lavish compensation packages that they’d once offered to new recruits.
But despite the fact that those paychecks have mostly bounced back, along with the economy, the legal field is still struggling with a glut of new attorneys—many of whom can’t find work. According to the American Bar Association, barely half of all 2012 law school graduates had full-time, long-term legal jobs as of February.
And although Wall Street has fared better, big banks are facing tougher competition from technology firms to attract talent. At Harvard Business School, 18% of students in the class of 2013 went into the tech sector—that’s up from 12% in 2012. Among Stanford Graduate School of Business graduates, tech companies overtook financial services for the first time this year, with 32% of new grads accepting tech jobs and just 26% opting to head into finance. Just two years ago, those figures were 13% and 36%, respectively.
“I got into corporate law for the wrong reasons. I thought, What’s the surest way for me to make the most money? The answer was lawyer.”
“We are definitely seeing more students who want to either start their own business or join a startup,” says Jonathan Masland, director of career development at Dartmouth’s Tuck School of Business, who adds that students are attracted by the wealth of experience they can get working for a young, entrepreneurial company.
“If it’s an earlier stage business, you can have a greater impact as a recent MBA graduate,” says Masland. “You can wear more hats—the level of responsibility is much higher than a more structured, traditional firm.”
Having more responsibility was a key factor in Sara Shikhman’s decision to leave a promising law career. “I got into corporate law for the wrong reasons,” the 32-year-old University of Pennsylvania Law School grad says. “When I was going to college, I thought, O.K., what’s the surest way for me to make the most money? I could be a doctor. I could be a lawyer. What’s going to be quicker? The answer was lawyer.”
But for the first few years as an associate, Shikhman was disappointed when all that she was given to do was “very minor stuff,” she says. “I didn’t make decisions. And whenever I tried to be innovative, I was turned down. I didn’t want that kind of life.”
So despite having no experience with building websites or e-commerce, she took a risk and launched bedroomfurniturediscounts.com, an idea that emerged from a conversation that she had with a friend who had a brick-and-mortar furniture store but no online presence. The site took off—and Shikhman has never looked back: “Starting my own company has given me more freedom and flexibility.”
Startups As Second Acts
Treating a law or finance career as simply a stepping stone to an entirely unrelated career probably isn’t what most professionals have in mind as they slog through graduate school, often accumulating significant loans in the process. But they may just be following the jobs—at least in the country’s financial and legal capital of New York City. Based on data from the New York State Department of Labor, over the past six years, the number of people working in securities and banking fell by 9%, while employment in the high-tech sector rose by 14%.
And at least some former Wall Street professionals say that their finance backgrounds have actually given them invaluable experience when it came time to launch their own businesses.
Olga Vidisheva, 27, says that she’s grateful for the two years she spent working as a financial analyst at Goldman Sachs in Manhattan because it helped teach her the value of hard work. The first summer that she interned for the bank, she says, “I don’t think that I slept.”
But Vidisheva was frustrated by the fact that her job mainly entailed advising major companies on mergers, acquisitions and other financial strategies. What really inspired her was getting into the operational details with clients. “I thrived on that, and thought, That’s what I really want to be doing,” she says.
The old mentality of choosing a career based on compensation is going out of style.
So in 2012 she launched her own fashion startup, Shoptiques.com, a site that aggregates and sells clothing, shoes and jewelry from boutiques around the world. As testament to Vidisheva’s promising business plan, the site launched with backing from coveted startup seed investor YCombinator, as well as other angel investors. “I was one of the first non-technical people they’ve ever funded,” Vidisheva says. “But I think they understand that my skills [from finance] are very valuable as well.”
Of course, plenty of new law and business grads still jump at the chance to work 100-hour weeks for major firms and banks in exchange for a big paycheck and good job security. But it’s no longer a sure sell.
“There seems to be more emphasis nowadays on loving your work,” says 33-year-old H., who left a corporate law gig to start a math tutoring company, and blogs about the experience under the pseudonym Big Law Rebel. “The old mentality of choosing a career based on compensation is going out of style.”
But Vidisheva cautions that even though launching your own business may appear attractive, there’s a risk that it’s gotten too much social cachet for its own good.
“Humans naturally have a herd mentality—and entrepreneurship is now a herd,” she says. “Everyone wants to be in a startup. I get emails everyday with completely random ideas that they haven’t thought through—they just want to be a C.E.O. And you think, Come on. Do you really think this is going to exist 10 years from now?”
Reprinted with permission from LearnVest. Want More?