Accounting vs. Law: What’s the Difference?

Accounting and law are two professions that attract many students. Each field offers strong earning potential, upward mobility, and a variety of career paths within the profession.

Accountants and lawyers can find positions in the public sector (a federal government agency, state, or municipality) and the private sector (businesses and nonprofit organizations). Within private practice, there are two basic types of employment environments: ‘external’ – in a firm, staffed by other accounting or legal professionals, serving a variety of external clients, and ‘internal’ – in a particular company or organization. Accountants and lawyers can also work independently.

While both types of professionals can handle business matters for companies and individuals, they specialize in different things: lawyers with points of law and legal procedures; accountants with numbers, tax regulations and codes. Both fields require additional specialized study beyond a general college degree and passing an exam to receive a state license to practice (not required for all accountants, although highly recommended).

A career in accounting generally has less extensive educational requirements. On the other hand, the law tends to pay better.

Key points to remember

  • Accounting and law are two areas in which professionals can work either in a firm of professional colleagues, serving various clients, or “in-house” in a single company or organization.
  • Both professions require specialized study and offer specialized degrees, but a career in accounting has fewer rigid educational requirements than a career in law.
  • To become a lawyer, you must pass a state-sanctioned bar exam, which gives you license to practice law.
  • Most, but not all, accounting jobs require you to be a Certified Public Accountant (CPA), earned by passing a state-sanctioned exam.
  • On average, lawyers make more money than accountants, especially straight out of school.

Accounting

A accounting can work for companies that do accounting and audit work for various external clients; these are known as accounting firms (not to be confused with the civil service, i.e. government or civil service). Or they may work in-house, overseeing books and financial records as part of an individual’s staff public company or a smaller one, private enterprise. They can also prepare tax returns for individuals and businesses or work for the government.

Accountants must be adept at working with numbers. The career is often stigmatized as boring and a haven for math buffs and calculators, but many accounting jobs require strong interpersonal skills and diplomacy. Accountants spend the majority of their working weeks in various third-party client offices. These professionals must be able to integrate into various corporate cultures.

You can get an accounting job with a bachelor’s degree or even less, but the “big four” accounting firms (Deloitte, Ernst & Young, KPMG, and PricewaterhouseCoopers) want one. Moreover, they either want Chartered Accountants (CPA) or candidates eligible to sit CPA exam.

There “big fouris the nickname used to collectively refer to the four largest accounting firms in the United States In addition to auditing services, the Big Four offer tax law, strategy and management consulting, valuation, research market, insurance and legal advice.

Become a CPA

Many states or jurisdictions now require 150 hours of study per semester to earn the CPA license, even to take the exam. The colleges and universities in these states/jurisdictions determine the CPA’s pre-licensure education curriculum; it usually has a good balance between accounting, business and general education.

Many colleges and universities offer bachelor’s and master’s degree programs in accounting. To obtain 150 hours of study per semester, students do not necessarily have to obtain a master’s degree. They can meet the requirement at the undergraduate level or obtain a bachelor’s degree and take some courses at the graduate level. Some colleges offer streamlined master’s in accounting programs that allow you to bypass a bachelor’s degree and receive the necessary credits for CPA eligibility in a minimum of four years.

Right

Law school graduates also have plenty of options. Many young lawyers prefer to enter a private law firm, where they can specialize in areas such as criminal defense, labor law and international law. Others go the in-house route, as corporate counsel within a particular company, especially if they think they would like to move into corporate management. And some work for the government or for non-profit organizations.

Becoming a lawyer requires a bachelor’s degree, as well as a Juris Doctor (JD) degree from a law school, or seven years of full-time study in all. To practice law legally, lawyers must also pass the bar exam in the state where they want to work, whether for a law firm or a company. On the other hand, the CPA title is not required to work in accounting within a company, but it is for a job in an accounting firm.

Lawyers need a broad skill base which may depend on the specialty they enter. Corporate law requires long hours, demanding tasks and a tireless work ethic. Litigators must be eloquent, persuasive and able to think on their feet. You must have a deep understanding of various cultures and speak multiple languages ​​if you want to practice international law. Tax law and other specialized legal areas may require additional training beyond law school.

Main differences

On average, lawyers make more money than accountants right out of school. In 2022, the average entry-level accountant salary is $43,414 per year. Meanwhile, the most recent data from the biennial National Association for Law Placement Associate Salary Survey found that the median salary for a first-year law associate was $165,000 as of January 1, 2021. , up $10,000 (6.5%) from 2019.

Overall, attorneys can expect to earn a median salary of around $127,990, according to 2021 data from the U.S. Bureau of Labor Statistics (BLS). Half earn more than that and the other half earn less. Comparatively, accountants earn a median salary of just $77,250. Many young accountants and lawyers are charting their own career paths and therefore are not limited to the salary scales of large firms.

Many accountants and lawyers who go into private practice struggle until they build a clientele, but they can earn six-figure salaries in the first year.

According to the BLS, the number of accounting and auditing jobs is expected to grow 7% from 2020 to 2030, as fast as the average for all occupations. The projected employment growth rate for lawyers is 9%.

The biggest problem for the field of law is supply and demand. For decades, a law degree was considered a guaranteed ticket to a high-paying career. As a result, law school enrollment skyrocketed, producing large numbers of law school graduates who at times struggled to find jobs. Additionally, the prestige of the law school a person attends can have a huge influence on the jobs and salaries offered to them.

Special Considerations

Big Four accounting firms and corporate law positions require long workdays, few full weekends, and even fewer vacations. The work schedule can lighten with seniority, but the first years can be difficult. Consequently, the burnout rate is high for new associates in both fields.

You can have a career in accounting or law without it taking over your life, but those jobs don’t pay anything like the salaries you can earn working for a Big Four accounting firm or a big law firm. ‘company. Government jobs in these fields offer 40-hour workweeks and excellent benefits, but pay significantly lower wages, especially in the most senior positions.

For example, the median The federal government attorney’s salary in 2021 was $152,590, more than $10,000 less than first-year partners at private firms, and well below the seven figures that partners typically earn apart. whole.

For accountants, the gap is a little less: the median salary for the public service was $77,290. That’s not too bad compared to entry-level jobs at the Big Four, but far less than the six figures managers get and a far cry from the million-plus dollars partners command.

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