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Do lawyers make good bankers?

13 November 2007

Sarah Butcher

Not according to Prince Alwaleed bin Talal bin Abdul Aziz al Saud. He’s had enough of them.

Prince AbTbAAaS, the biggest single shareholder in Citigroup, confided to Fortune magazine that whoever replaces Chuck Prince, it most certainly, not in a thousand years of cloudless Sundays, won’t be another lawyer.

According to the The Prince, he’s told those tasked with choosing Chuck’s replacement that “…they don't hire anyone unless this guy has expertise in banking. I told them, next time no lawyer, please.”

From this we deduce that either AbTbAAaS doesn’t like the fact that Chuck Prince was once a laywer, that he doesn’t rate lawyers who become bankers, or both.

But is it really fair to write off all those legal types who’ve quit their chosen profession for the infinitely higher rewards on offer in banks (we spoke to one lawyer turned banker who revealed he left his magic circle employer after he was paid a ‘humiliating’ neutrino-sized £4k bonus)?

Even while AbTbAAaS has been denigrating lawyerly types in Fortune, the Telegraph has been lauding them on its own pages. Last weekend, the paper ran a profile of Amelia Fawcett, the ex-lawyer turned Morgan Stanley vice-chairman, turned farmer, sailor and chairman of a new company to buy out pensions.

Fawcett started out in Morgan Stanley’s legal department before moving on to bigger and better things at the US bank. By steering clear of lawyers The Prince might miss out on similar repositories of banking talent. And what about all those US lawyers who move into M&A?

Will anyone speak out in their favour (please)? Obviously, you are also free to condemn legal types to a life of lock step compensation, billable hours and being several notches further down the financial food chain.

Comments (18)

With all respect to qualified lawyers...they are not the people who should take the responsibility of making a banking/investment decision from anything other than a legal point of view.

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Comments (18)

  • In my opinion, with all our respect to all qualified lawyers and thier very important and critical roles in the banking industry, they are not the people who should take the responsibility of making a banking/investment discision from an "other than legal" point of view.  This is the era of specilization. The right man in the right place.  You can't make a banker for example take IT Networking soultion decision.

    Banking 13 Nov 2007

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  • What's clear is that Saudi princes shouldn't make investment decisions. He's only got himself to blame. Farm out those decisions to a specialist and spend time contemplating democracy (what's that word?).

    Not a lawyer 13 Nov 2007

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  • All that said, what are the chances of a 2 year qualified M&A lawyer (good New York firm, London Office) hopping into Investment Banking ie for an M&A, non-legal role. I've heard it happens-does it?

    A lawyer 13 Nov 2007

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  • You are out of context, we are not talking about the Prince but whether or not a lawyer could be a good CEO. Did you read the article?

    Anonymous 14 Nov 2007

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  • Regulation, Red Tape, Compliance & the infamous 5-point plan may work for a law firm but not a global investment back. I'm with the Saudi Prince. Please no more lawyers next time!

    Citi Employee 14 Nov 2007

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  • Who calls him AbTbAAaS? Are you trying to be cool and complex? Just call him by his name, Prince Alwaleed, like everyone does! I also agree with the Prince, lawyers should not run banks, they have the wrong type of arrogance!

    Al 14 Nov 2007

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  • Yes I DID read the article and it questions whether lawyers can be trusted to make decisions outside their specialism, in the context that Prince etc etc no longer thinks they can. Hence my comment on said Prince's decision to buy his Citibank stake in the first place. I now pose a further question, do anonymous venture capitalists often miss the point?

    Not a lawyer 14 Nov 2007

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  • Just thought I'd point out that Blankfein, CEO of Goldman Sachs and Rubin, Chairman of Citigroup, used to be lawyers.

    jimbob 15 Nov 2007

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  • That would not be wrong to have lawyers in that field but they are not easy to convince since they stop on futilities (i.e. more work for us!). But I have to admit that I do sometimes appreciate the way they assess and perceive risk. However I'd pefer to see them in the Board or in Credit Committees and not in the decision making process (anyway most of the time its hard to get a straight answer from them).
    By the way what does democracy have to do with the topic?!?! ignorant!

    Jean A. 18 Nov 2007

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  • Ignorant says as ignorant does as my mother used to say. Obviously a banker!

    Not a lawyer 21 Nov 2007

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