Career choices: Law, banking or accountancy?
If a career in the Square Mile sounds attractive, should you opt for law, banking or accountancy?
The City offers the chance of an intellectually challenging, fast-paced and prestigious legal career. Many people decide from day one that it’s the environment they want to work in.
But are you sure about the law? Maybe another City career appeals. Many talented people who might choose the legal profession are lured into accountancy or banking instead. If you’re still deciding exactly where you fit in to the matrix, then read on. We’ve asked careers experts for their views on the law, banking and accountancy industries so you can compare and contrast careers.
The solicitors’ profession has one of the most complex recruitment processes of any industry. You probably already know that it recruits two years in advance and that it requires additional exams and previous formal work experience, called vacation schemes.
If you are searching for a City training contract, you won’t get far without completing at least one vacation scheme in your second year. There are also work experience schemes available for first years. These are not yet viewed as a compulsory part of the recruitment process, but if you know during your first year that you want to be a lawyer then there are worse ways to spend a few weeks of your holidays.
City firms typically sponsor their intakes’ additional exams, although not every firm can afford to do this. Law undergraduates are required to undertake the Legal Practice Course (LPC) in the two-year gap between being recruited and starting their training contract. Graduates in subjects other than law need to take the Graduate Diploma in Law (GDL) before starting on the LPC.
“It’s quite a process to get your head around these days,” says University of Oxford careers adviser Juliet Tomlinson. “The hurdles students have to overcome are many more than they used to be. It’s a long process and a tough process.”
The academic criteria required by firms are tough too. Graduates generally need a good 2:1 at degree level, with all modules at an even standard. If a module or two is lower than a 2:1, you’ll need to be able to offer a good explanation as to why. This is less to test knowledge on whichever obscure history or politics unit you chose and more to assess how conscientious you are when feeling less than inspired.
The final challenge for prospective City lawyers, which is common across banking and accountancy too, is developing commercial awareness.
The banking and investment sector offers more variety than the legal sector. While one City law firm is much like another in terms of work, prospective bankers can choose between working in a retail bank, investment bank or wealth management firm.
“Banking is still one of the most lucrative and competitive areas to get into,” says London School of Business & Finance careers head Nadim Choudhury. “Students need to understand that.
“Especially in financial services or corporate finance banking, it is almost unheard of these days for graduates to get into roles without at least one good internship in their penultimate year.”
A summer internship is crucial for would-be bankers, just as vacation schemes are for prospective lawyers. To maximise your chances of getting a summer internship in the second year, it is advisable to get on to an Easter scheme in your first year.
“Banks and investment firms are increasingly using summer internship programmes for penultimate-year students as the main method of sourcing full-time hires,” says University of Oxford careers adviser Damilola Odimayo. “The High Fliers Graduate Market report for this year shows that 61 per cent of banking and finance vacancies in 2015 will likely be filled by graduates who have already worked for the employer.”
Although there are many hoops to jump through when it comes to getting work experience, bankers can afford to take a more relaxed approach to their professional exams.
“Bankers do not have to qualify before they can work,” says Association of Graduate Recruiters (AGR) chief executive Stephen Isherwood. “There is the Chartered Financial Analyst (CFA) qualification, which is just as rigorous as the LPC, but you do these as you work and the qualification varies depending on the type of banking that you do.”
Most banking and investment firms do not require specific qualifications from graduates and they will often recruit students who have not studied a finance or economics-related degree. There will be the almost universal requirement, however, for that degree to be a 2:1 or above.
Accountancy splits neatly into two parts: chartered accountancy and management accountancy.
Chartered accountants will work within an accounting firm (the ‘Big Four’ being Deloitte, EY, KPMG and PwC) and have multiple clients. They will focus on auditing, recording financial trends and providing business advice. Management accountants will work within a company, advising it on its current and future financial plans.
Chartered accountants undertake a training contract, which usually lasts three years but can last longer. During this, they undertake exams for either the Association of Chartered Certified Accountants (ACCA) or the Institute of Chartered Accountants in England and Wales (ICAEW).
Management accountants, meanwhile, take Chartered Institute of Management Accountancy (CIMA) qualifications alongside three years of supervised relevant practical experience.
Most firms do not require you to have studied a numerate degree, although strong numeracy skills are a requirement for a career in this sector. However, most will have a minimum 2:1 requirement.
“Large accounting firms do tend to recruit from their internship and placement programmes but gaining an internship is not a necessity for a job in this sector,” says Odimayo. “According to the High Fliers graduate report 2015, 29 per cent of accounting and professional service vacancies are likely to be filled by graduates who have previously worked for the employer.”
Not so many years ago, lawyers joined a firm as a trainee and stayed until they were made partner six to 10 years later, or until it became obvious they weren’t going to make it. Once they were a partner, they stayed until retirement. That cradle-to-grave career path is now far less common as young lawyers’ aspirations have changed.
Lawyers qualify after the two-year training contract. While the majority stay with the firm, some move on after qualification, either by choice or necessity. If lawyers do choose to move firms, they typically move at around four years’ post-qualification experience (PQE) or eight years’ PQE. At around 10-12 years’ PQE, associates are made partners.
However, ‘going in-house’ is now a far more common career route. In-house lawyers work within a company, not a law firm, advising on the strategic direction of the business and dealing with its legal needs.
“When I was young, becoming an in-house lawyer was a second-rate option,” says careers expert and author Chris Stoakes. “Nowadays it is a wonderful career. If lawyers manage to reach the board of a FTSE 100 company, then they are working in a whole different world.”
After a graduate banking programme lasting two to three years, bankers progress to analyst status. In turn, analysts become associates after another couple of years. After five to ten years of experience, you become a vice-president or associate director. From there, once you’ve notched up between ten and 20 years, you become a director.
As in law firms, movement is common between banks and types of firms, and between larger and smaller firms.
“If you look at major CEOs in big companies the majority will come from finance backgrounds,” says Choudhury. “They will have the necessary skills. Even if you don’t stay in finance it sets scene for a good career.”
Career progression at an accountancy firm typically consists of becoming a manager around three years after qualification and becoming a senior manager three years after that. It is possible to enter the partnership of a big firm around eight to 15 years after qualification, though in smaller firms accountants may be able to progress more quickly. In both cases, such as in law and banking, progressing to partner or director level is competitive and not always achievable.
“There is an understanding within the industry that the Big Four train the industry’s accountants,” says Choudhury. “Most leave on qualification and either go into the industry or to smaller firms.”
Outside of a firm, CIMA-qualified, management accountants’ career progression will fit in with whatever opportunities are in line with the company’s wider growth plan and established milestones.
“Those working in the City have more in common culturally than they would with organisations outside it,” says Stoakes. “Lawyers tend to think accountants are more boring than they are and investment bankers think they’re more exciting than commercial bankers, who they think are more staid. But really, the City is all about being clever, confident and knowing when alarm bells are ringing and when to escalate something.”
Stoakes advises graduates to pick firms according to personal preference and instinct, not reputation or profit per equity partner (PEP).
“Find the firm that feels right for you, that is comfortable for you,” he says. “Even within somewhere as strait-laced as major firms, there are differences.
“People look for what will look good on a CV, but the right question is: ‘Where will I be happiest?’ It might be a six-partner firm, not a 600-partner one, but you might be much, much happier there.”
Tomlinson stresses that prospective lawyers should investigate firms’ cultures on their own. “There are old images of firms which hang around for years and are no longer valid,” she explains. For example, US firms have a reputation, rightly or wrongly, for longer hours. But in fact, lots of US firms have been here for years and are used to the London way of working. In contrast, some have been here for a while but have not taken trainees and others have only just launched. There are always differences in culture, as there are in different practice areas.”
Whatever the culture, lawyers need certain skills, which fall roughly into three camps. Intelligence is a given. On top of that, firms are looking for commercial awareness and business skills, relationship and interpersonal skills (whether working with clients or each other) and resilience and perseverance, being good under pressure and having stamina.
“Money should not be your main motivation when trying to be a banker,” says Choudhury. “It is about delivering exceptional service and having a clear motivation to solve problems and deliver the best possible client experience that you can.
“Gone are the days of Wolf of Wall Street. Banks are reflective of society. You need to strive for excellence and have leadership and influencing skills.”
Some of the common traits needed within the banking sector mirror those needed in law. Energy and stamina are prerequisites due to the responsibility and pressure bankers operate under, as are teamwork and interpersonal skills.
Also vital are analytical skills, confidence and decisiveness when dealing with numbers and an understanding of the wider concepts in global markets and the industry.
Because of the huge variety of roles within the banking sector, different skills are required for different positions.
“A sales person within an investment bank will need to be dynamic and quick-thinking, with a real passion for the markets, as well as the ability to communicate effectively and build strong relationships with clients,” says Odimayo.
“Someone working within compliance will need to have an interest in financial regulations, be analytical and detail-oriented and have strong project management, communication and interpersonal skills.”
Accounting roles are incredibly diverse as they fall both within the City and in-house. The rationale in choosing a law firm to work for can be applied to accountancy firms too. The Big Four may train almost everybody, but whether a huge firm is for you, only you can decide.
The skills needed to be an accountant include, unsurprisingly, a head for figures, an active interest in finance and the commercial awareness that comes with that.
Interpersonal skills, team working, stamina and commitment also feature as highly on accountancy firms’ wish lists as they do on those of banks and law firms. Presentation skills, report writing and attention to detail are also prized.
Sponsor’s comment: Becky Huxley-Binns, vice provost, University of Law
It is no coincidence that law, accountancy and banking all require transferable, highly developed commercial skills, but as a first-year undergraduate the first reaction on discovering this might well be to panic and wonder how on earth to develop these additional skills as well as getting the best grades possible.
My advice is to consider first what skills you have already developed and make sure your CV shows them in the most positive light.
It may not be obvious to you but if you had any regular hobbies as a child and a teenager and perhaps still do, you have already started to develop these highly desired skills. If you were a Scout or a Guide or did the Duke of Edinburgh schemes, you have shown team working and dedication. If you were or are a sports player, you have shown determination, resilience, team skills and stamina. Paid or unpaid work placements, including for example, a Saturday job in a shop, shows some experience of working in a client-facing role. You can express that, honestly and without exaggeration, as experience of customer relations. Extracurricular activities such as debating or public speaking, musical recitals or theatrical performances show confidence and the ability to communicate effectively.
I encourage you too to continue to develop these skills further by taking part in additional activities organised by your institution such as clinic, mooting and negotiation exercises. Summer work placements and internships are oversubscribed and your CV will need to stand out to get a place; and by linking your hobbies to the skills you have developed is a great way to do that.
You should also reflect on where there are gaps, which there will be, and try to identify opportunities to fill them with new experiences and skills. Find out what careers support is available and take full advantage of it. For example, our students at the University of Law can access, among other things, the advice of our dedicated staff in the Employability Service, a mentor in the legal profession and our JobSearch vacancy database.
Finally, it’s always impressive to show you have your finger on the pulse. So make sure you stay up to date by reading the legal press as well as key commentators on social media and dazzle everyone with your sector knowledge.