To the entrepreneur who is considering a JD instead of an MBA [Updated Jan. 2011]

After finishing a BA in Economics, I found myself deciding between two options: MBA or JD. With the advice of a trusted friend/CEO of a successful, mid-sized Utah-based technology firm, and with the encouragement of my wife (who happens to be a patent agent, soon-to-be attorney), I chose law school. In so doing, I promised myself that I was only going to law school to jump-start a career in business, and I was convinced that this would thrust me far ahead of any MBA student with whom I might compete for jobs. In this blog post, I wish to make any who might be making this same decision aware of the benefits and the pitfalls of this path.

I see two main benefits of a JD over an MBA. First, a JD appears (from my one-sided view) to be the more rigorous, albeit abstract, intellectual endeavor. In the course of three years, you will take classes that train you to think, write, read, analyze, and speak in a new, more organized way. Second, a JD sets you apart from others who might be competing against you for jobs. With a law degree, you bring a new perspective to the table that some employers seek after.

As for disadvantages of the JD, there are several.

First, the cost of getting a JD is quite high in terms of both time and money. That "extra" third year for law school can be a huge opportunity cost in that you are paying more tuition ($30-40K+), PLUS you are not getting a salary ($40-80K+). Overcoming this $70-120K+ cost could take several years, or might never be fully recovered if you see no increase in income over an MBA.

Second, there are certain business concepts you just won't be taught at law school. I've been working for four months at a venture capital fund, and the MBAs I work with are significantly ahead of me in terms of understanding business concepts like leveraged buy-outs, investment banking, IPOs, etc. While I've studied the contracts that lie behind these deals, I have had no training on how to do the associated calculations.

Third, getting that first job is a huge challenge. As a law school graduate you will often be instantly placed into the "you-want-to-be-a-lawyer-and-only-a-lawyer" box by recruiters and employers. I've found that sometimes no matter how earnestly I try to explain to employers that I just want a "business" job, they can't seem to believe that I actually DON'T want to practice law. Once, after having a great conversation about a consulting spot with a Seattle consulting firm, the recruiter looked at my resume and noticed I am in law school. Somehow he instantly forgot our conversation and dismissed me with, "Oh, we actually don't really hire any lawyers. All of our legal work is sent to a local law firm."

As I prepare to begin my last year of law school, I believe that law school has been a good choice. It has led me to opportunities and people that an MBA may not have. And, ultimately, if I feel remorse over not choosing an MBA, I could definitely go back to school after a few years of working.

Thoughts? Ideas? I am eager to hear your take.

[Update Jan. 2011]

Here's a NY Times article that addresses more problems an entrepreneur might face if he or she chooses law school over an MBA. That extra year of law school (year 3) means (1) one more year of tuition and expensens and (2) one more year of NOT earning a salary.