Business School vs. Law School

Most business school applicants are certain b-school is for them. Others though debate business school versus law school. The following is more food for thought...

In defense of lawschool
By an HLS Graduate (former USMC)

It will come as no surprise to most people reading this thatB-school is the most common choice for EASing service members, and not withoutreason.  Here is the simple truth, mostpeople who enjoyed their time in uniform will enjoy B-School more.  

I remember my first Marine Corps’ birthday in grad shool.  It was at the business school, and prettymuch everyone there was from the B-School. They were collegially chatting and having a laugh, and then there were wethree sad souls from the law school joking about how we would make a prettygood fire team.  Frankly I think we wereoutnumbered by the exchange officers from France.   And aswe mingled with the B-schoolers we all had the same reaction: We may have madea mistake.  

But as I reflect on my choice to get a JD I become more andmore certain that it was the right choice. I wont say it is the right choice for everyone, it isn’t, but I dobelieve it offers something an MBA doesn’t, and that is that it is rock solidevidence that you can sit in a chair for hours, synthesize vast amounts ofwritten information, and write an iron clad analysis of it.  And I hate to say it, but that is what eventhe sexiest civilian jobs demand.  

So with that in mind here is a framework and some seed ideasabout which graduate program is the one for you.

Cost: Time, money,and experience

Direct costs: Of course tuition+room+etc varieswildly but due to the extra year law school will be about half again moreexpensive than B-school.

Opportunity cost:That third year of law school is a year of salary you are missing out on, sothat is a cost.

Subjective costs: without giving a comprehensive listI will submit that most vets will enjoy their classes, extra-curriculars, andclassmates more at B-school than at law school.

Total cost: So with the above in mind some very roughnumbers might look like this: 120K for an MBA vs. 160K for JD tuition + 70K ofmissed salary your third year or 230K, making law school almost twice asexpensive, and significantly less pleasant.

Revenue: Reinforcestrength or be the total package

Despite the extra pain upfront I think that the combinationof a law degree and military experience is an especially powerful pairing inthe long run. Employers look for basically the same things: leadership ability,work ethic, and intellectual horse power. And for the average student and MBA covers the bases, but as a veteranyou’ve already checked a few of those boxes.

Leadership: Employers are not worried about this one,as an officer or NCO you’ve had more leadership experience than anyone elseyour tenure.  They are also not worriedabout putting you in front of clients. The military taught you to be respectful, to dress well, and to have thekind of bearing that sets clients at ease.  

Work ethic: They also know that you are a hard worker, sort of.  Most employers’ views of the military areshaped by TV and movies, so they expect that you can run, drill, and executeSaving-Private-Ryan-style missions without complaint.  But they are worried about whether you can sitbehind a desk for hours a day and crank through towers of reports or draftkiller memos. And a JD will put their mind at ease since you don’t get throughlaw school without becoming an expert at sitting and cranking.

Intellect: Finally there is the issue ofintellect.  I won’t say that a JD is moreintellectually or academically challenging than an MBA, but I will say thatthat is the perception.  To succeed onthe GMAT and in B-School you need intellect, presence, leadership, quantskills, and a lot of common sense.  Atlaw school the only one that matters is the first, and a bit of the last.  

Fundamentally I think that a veteran with a law degree isespecially attractive to the top consultancies and corporations because you checkall the boxes.  If you know you want tobe a banker and do finance then go to B-School, but if you want to consult orgo to industry I encourage you to think about how you would look to anemployer, identify any gaps, and then choose the degree that fills those gapsmost effectively.

	Business School	Law School
US presidents	2	12 started 7 finished, 3 more became lawyers through independent study
Current Senators	5	55
CEOs of fortune 100	32	12
Opportunity	Business, finance, consulting	Law, business, finance, consulting, public sector, social sector
Typical early tenure salary (top 10 schools)	~124K	~160K

-Geoff, guest blogger, former Marine Officer, Harvard Law School Graduate, and currently a consultant at a top management consulting firm.

MBA Joint Degrees - Are Two Degrees Better Than One?

Grad school is an investment – you spend time and money early in your career with the expectation that it will lead to better opportunities and higher salaries down the road. But would two stellar degrees set you up for even greater success and earning potential? Maybe, but maybe not.

Completion of a joint degree program entails a significant additional investment of resources, and you should closely analyze the opportunity costs in order to figure out whether a joint degree program is right for you. For many prospective students the chance to earn two degrees at a top tier university will be an opportunity too good to pass up. For many others though a joint degree may not make sense. Here is a framework for thinking through this difficult decision, based both on things I considered prior to matriculating to Harvard for a J.D./MBA and things I didn’t think about but probably should have.

The analysis below considers whether to obtain a second (joint) degree, assuming that you are already committed to getting one degree at a top school. Although I will attempt to present a general breakdown, I will use numbers and thoughts specific to a Harvard J.D./MBA on occasion, simply because this is the joint program with which I am most familiar.

Is a joint degree worth it financially?

Most joint degrees allow you to save a year versus completing the two degrees sequentially. However, the additional costs are still significant. From a purely financial perspective the question is whether over the course of your career you will be able to recoup the extra year(s) of tuition and the opportunity costs of not working while completing your additional degree. I think the best way to analyze the purely financial aspect of this decision is through a discounted cash flow analysis. In other words, the outcome will hinge on how much more you think you can earn over your career with the additional degree.

Because this is primarily a b-school oriented blog, I assume you, as a prospective student, are already committed to going to Harvard b-school and are trying to decide whether to also pursue a law degree (two extra years) or an Masters in Public Policy (one additional year). I used the following assumptions:

- Career remaining right now: 35 years

- Additional cost of J.D. – two years at Harvard Law School, including tuition and cost of living

- Additional cost of MPP – one year at Harvard Kennedy School of Government, including tuition and cost of living

- Average starting salary for MBA only = 2010 average starting salary for HBS grads

- Average annual raise = 3.6% (this is quite variable based on industry, personal performance, etc., but I based this number on a Wall Street Journal article from 2006 – before the current recession)

- Cost of Capital = risk free investment rate of 30-year T-bonds (4.12%)

Using these assumptions, your starting salary would need to be 9.2% higher with an MBA/MPP or 19.5% higher with a J.D./MBA in order to make up for the additional investment. If you expect to receive higher than average (3.6%) raises over your career, the amount of additional starting salary needed to catch up over 35 years increases.

From a financial perspective then, one way to look at the question is to ask whether the additional degree will enable you to coax 9%-20% more from your post grad school employer or to get into an industry that pays 9%-20% more on average.

Will a second degree open up additional job opportunities?

The obvious answer is yes – BUT… this is most true in fields for which the second degree is a requirement (e.g., law), or where you have a very clear idea of what you want to do after grad school and how both degrees support that direction. Although a second degree is unlikely to be a serious detriment to your future ability to get a job, it is not true that “it can’t hurt.” All else equal, employers would prefer to hire b-school graduates who are likely to remain with the company for a significant time. A second degree in an unrelated field opens applicants up to additional (although not insurmountable) scrutiny regarding commitment and career direction.

Is there anything else I should consider?

The one factor that I wish I had put more thought into prior to going back to school for four years is the importance of doing something productive and meaningful with one’s life. After having spent time in the workforce (as most MBA students have), going back to school can feel somewhat unproductive after awhile. Reading cases and going to class just isn’t doing a whole lot to make the world a better place. Hopefully grad school sets you up to make bigger differences in the future, but you will not be doing a whole lot to make anyone’s life better while you are at school. For me personally, a two year “break” to go back to school felt about right – during my final two years I was very ready to be doing something more productive than going to class.

Another factor that will play into many people’s decision making is prestige. Here, having two degrees is certainly superior to one. This point is likely to serve as the X-factor for many prospective students. After thinking through the financial and job opportunities that may arise from an additional degree, you may find that a second degree does not objectively make sense – but you still want to do it. That decision is not irrational or wrong as long as the prestige value of having two degrees outweighs the additional financial and time investments you will be making.

Whether or not to pursue a second graduate degree is a tough decision that will play out differently for every person. This article provides a framework for analyzing the financial and non-financial implications of that decision in an attempt to help you make the choice that is best for you.

- Kurt W., Guest Blogger, HLS/HBS 2011 (Bio)