“105 hour weeks for four months straight.”
“I went home at 2AM every day.”
When I was 12 years old, I was sitting at an extended family dinner when a few mothers began gossiping about their children, the children of people they knew and the children of people that they had heard of.
“Did you hear? Lawrence’s son is leaving investment banking in London and is coming back to Vancouver. He is retiring at 40 years old.”
“Oh wow, he must have a lot of money now.”
I asked my mother how much money investment bankers made. She said millions, but they worked hours to the point where they did not sleep and no one ended up doing it for more than a few years because they all burn out.
Every finance student and half of the accounting students becomes intrigued by investment banking courtesy of a similar conversation stream when they start their ostensibly prestigious undergraduate business school education. First they hear about the money and 90% of them are interested. Then they hear about the hours and then 89% of them are still interested.
Usually, the number thrown around is 100 or 120 hours a week. How accurate is this range?
100 Hour Weeks in Investment Banking
The honest answer is it depends. For 100 hours, most investment bankers will hit this threshold at least once in their relatively short careers – usually during live deals. 120 hours a week is possible during live deals and has been achieved by the sorry founders of this website, but 120 hours is not that common and certainly not feasible on a regular basis.
Given that there are only 168 hours in the week, 120 hours implies 17 hours a day including Saturdays and Sundays which means assuming an hour to go home and back including a shower leaves 6 hours of sleep while the rest of your waking life is in the office.
Some melodramatic bankers, hoping to put on a cool front as if it’s no big deal, will tell you that the hours themselves are not that bad – it’s just that the fear of uncertainty and potentially canceling a date or Saturdays for the boys gets to people.
They lie, the hours get to everybody (and they also lie about having available dates or friends). We find the tipping point is 85 hours a week. Every hour over that is unfortunate, with each marginal hour more lamentable than the last.
So, while new bankers should certainly expect to work 100 hours a week when joining certain groups, it certainly does not represent all of investment banking nor is it anywhere close to the norm – we would peg the real average at about 70-80 hours a week with large upside skew – 70 or 80 hours can be bumped up to 100-120 hours during live deals, but do not usually dip below 60 hours even during slow times due to face time – even if there is no real work to be done.
Here are some observations on what influences the number of hours and the quality of hours, so to speak.
Investment Banking Hours are Group Dependent – and Group at Bank
Hours across all groups will be affected by dealflow. When the oil price is hot and equity markets are frothy, energy bankers will be working a lot. When the gold price is high, mining bankers will be working a lot.
When the oil price is low and companies are reluctant to make approaches to consolidate until the price stabilizes, energy bankers may not have much to do. When gold collapsed and mining companies got into trouble in 2015, mining bankers did not have very much deal flow – but they still stayed in the office every day until 2AM working on pitches or building models for the sake of building models.
Mining, M&A and restructuring hours are bad at 90% of banks – but in other industry groups, this varies. However, there is a strong correlation between the relative strength of the group (via the senior banker or group head) and the hours worked. Best-in-class groups that close deals on the regular are usually busy.
On the flip side, groups with low revenue may still work very bad hours. This is based on senior staff expectations and group culture and can change if people at the top are replaced.
A group that has no dealflow but still requires junior bankers to stay until 2AM every day is not a coveted group. This is most prominent at boutiques where the senior bankers may be paid solely on commissions – as there are no variable costs for analysts, they will be ground to the floor working on meaningless pitches.
Investment Banking Hours are Junior Dependent
If you are exceptionally good or do not know how to avoid staffings that go nowhere, you may find yourself perpetually staffed. If you are bad but not awful, you will find yourself out of staffing and out of a job at the end of your analyst stint. If you are awful, you will find yourself out of a job quickly.
Investment Banking Hours are Variable
You could be working 55-60 hours a week and then suddenly 105. This may be deal dependent – which may in turn be sector dependent. During slow periods, junior bankers end up working less than accountants and wonder about their good fortune in landing a lucrative career with excellent work life balance until they get hit with a Friday night staffing at 4PM which turns into two months of 105 hour weeks.
You Are Not “Working” All the Time in Investment Banking
Although the hours are long in investment banking, these are not necessarily productive hours. Bankers are not “cranking” for 120 hours a week.
Investment banking is a sales job – at the junior level, you are supporting a sales job – and works in line with the whims of the client. This means that inquiries at 2AM must be addressed and conference calls may have to interrupt sleep at 4AM. Cross-border mergers and acquisitions across multiple time zones are the worst for this.
However, this also means that a very large chunk of the day is spent with nothing to do while bankers wait for feedback/comments/turns from senior bankers, opinions from lawyers and due diligence materials from clients. Junior bankers stick around and wait.
Face time is half cultural and half pragmatic. Junior bankers must stick around the office for as long as the senior staff are there just in case they are needed for anything – senior bankers adhere to this as a hard and fast rule because they see junior bankers as overpaid given the value they add. Kiting early is a sign of disrespect and will not be looked at favorably during bonus season.
For a lot of analysts, they finish the day’s work at 2AM and put it on a senior banker’s desk to review in the morning. The junior banker rolls into the office at 10AM and is stuck in conference calls for the entire day while the senior banker ignores the review materials until 3PM. The senior banker finishes marking it up at 4PM and hands it off to the junior banker who ends up staying until 2AM – and so the circle of life continues. It is fair to say that a lot of the time is spent on ESPN while waiting for comments.
We would caveat that you cannot actually be good at your job without putting in the time.
Bankers from great firms who managed to be “lucky’ doing 9-6 get found out when they move to a commensurately well known private equity firm. This is the same logic that getting promoted too early serves no one. There is no substitute for doing the work.
So are hours good? It depends – the deal process has infinite permutations but core pieces are always there. If a good understanding is developed, that is all that is necessary.
The quality of work is very important.
The worst is a group that generates no money, at a no-name organization, with low pay and bad hours on useless projects (and bad people).
So what should you do when the hours are long but empty?
- Look for another job if the group is bad
- Practice modeling LBOs and private equity prep questions
- Read on different industries
- Read this website
Why Are Investment Banking Hours Exaggerated?
Some of the reasons why this figure is grossly exaggerated is because:
- Some junior bankers are insecure, especially those who have historically not held relative social value, and need to show hours as a badge of honor
- Some junior bankers with nothing better to do may drag out their hours in an attempt to look like they are working hard – unfortunately, senior staff do not actually care how much junior staff work and (sometimes) have an understanding of how long certain tasks should take, so this strategy backfires as these analysts are seen as slow/incompetent or dishonest
- They used to actually be that bad – some senior bankers did use to work 100 hour weeks on a regular basis in the 80’s, 90’s and early 00’s; back then investment banking was a much more lucrative and exclusive club and paid above every other career. Today, technology and other more relaxed finance jobs compete for talent, so investment banks have had to dial it back
Humorously, some (most) people who boast about their hours and purport to be investment bankers are not actually investment bankers – people lie about being in special forces, knowing celebrities and have other fake tales of San Francisco because they are trying to deceive romantic partners or are otherwise crazy.
This is extremely common. Back when Tinder first came out, my date asked me what I did for a living. I told her to take a guess and she said I was an investment banker. I asked her how she knew and she said that her last 8 Tinder dates were investment bankers. Since I knew most of the investment banking analysts at the time that were savvy enough to use/have a smartphone in the Stone Ages, this meant that someone was lying.
Just last week one of my friends in health sciences introduced her boyfriend as a “big shot investment banker that makes $200,000 a year”. After some puffery on his part and genuine curiosity on my behalf in locking down an interview for the website, it turned out that he actually worked in operational risk management. He spent the rest of the evening rather reserved and sans eye contact, but in case he is reading this – hey buddy, we could use an interview for risk management.