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Why Do Investment Bankers Work So Much?

This is a question that my then significant other asked me on the weekly/daily when I toiled as an associate at a prestigious white shoe firm back in the day. Alas, one day she decided that absence did not make the heart grow fonder and she left for a more stable fixture in her life as I cried into the new Alex McQueen scarf I had bought for her.

It was a problem that money could not solve. Just kidding, I gave the scarf to someone else and she is still poor.

Personal anecdotes aside, this is probably the most common question investment bankers face from their parents, girlfriends (boyfriends do not care) and dogs.

Assuredly this is an existential question that junior investment bankers contemplate on a regular basis. While the answer varies from banker to banker, we are pleased to provide our thoughts and observations about the topic.

Let me count the ways – not enough real estate on this website to cover all bases here but happy to offer an abridged commentary on some key reasons.

Understaffed at the Junior Level

You’re in the middle of an investment banking interview process.

When you hear that a team “runs lean” and “offers great opportunities for you to step up and take on greater responsibility” this just means that you are going to be pummelled with unprecedented savagery. Beware of these lines during the interview process – usually when you ask “why is this position open” they will respond that everyone left – for the same reason that they just gave you (runs lean, great opportunities to get yelled at by MD and client for not doing VP work when you are an analyst). And no, you will not get promoted faster.

There is a happy medium for staffing at the junior investment banking level where you will still be working 100 hour weeks for live deals, but there will also be slow days where you can clean up around 10-11 and go for drinks with the analyst pit.

As expected, investment banking has a fair level of natural attrition given the work and commitment involed and one junior leaves while the rest of the pit divides the burden. The breaking point comes when the number of junior staff gets close to the number of senior staff, who certainly are not turning down any meetings, and that’s when the floor crumbles and analysts fall into the void.

Meanwhile, senior bankers are reluctant to fill out a bunch of paperwork justifying new hires with a bureaucratic human resources division and are determined to wait until the summer analysts start in June when it is only January. Tough.

Investment Banking Fire Drills

When Johnny Analyst leaves in the morning he tells Sally Girlfriend that he just has one file he needs to take care of today and will only be around 6 hours of uninterrupted modelling.

Tough luck ever getting to that 6 hours during the day.

When investment bankers roll in at 9AM on a non-busy day, they think about all the great pastries they have seen on Instagram and wonder if today is the day they get to try the fabled cronut.

Executive director rolls out and says, “hey buddy, need you to help me get this out real quick. Drop what you’re doing and run this accretion/dilution model on this client you’ve never heard of.”

Two things just happened – 1. Johnny Analyst is now tied up for a few hours with little direction and cannot complete his initial task while this favor is of dubious importance; 2. He has been rogue staffed! Outside of the approval and jurisdiction of the staffer (the investment banking VP that allocates resources), he is now vulnerable to more work being piled on because of poor communication.

After various fire drills throughout the day servicing other groups, what was a reasonable deadline has become very tight. Senior staff leave at 9:30 and Johnny Analyst now puts his headphones on and starts doing his original 6 hour task under severe duress and time pressure before going home at 3:30/4 (it always takes longer than you think!) and missing another date.

Also beware – a “quick refresh” or “shouldn’t take more than 20 minutes” always takes 4 hours. Hopping into the backup file will unravel a bird’s nest Excel file from a legacy VP who thought they were a modeling pro but was actually quite the fool.

Misunderstandings or Indifference

“That managing director started as an analyst, so he has no patience for people complaining that they were here until 3AM last night because he used to do that in this pit and smoke cigarettes.”

“That managing director came in as an associate, so he doesn’t know how much analysts have to work.”

If you haven’t figured it out, either way you lose, buddy!

Some senior staff are more or less ambivalent to your plight – fundamentally, the work still needs to get done and it sure won’t be them staying until 3AM because they have to tuck in their kids and do MD things. And what kind of 22 year old makes $150,000 a year! What rational sentient being could possibly complain!

Some senior staff are more empathetic, but when push comes to shove your welfare is materially less important than them not having that perfect slide put together – so too bad.

From time to time (actually more often than not), you get an extremely demanding client who feels that your compensation is grossly excessive and accordingly grounds for calling you whenever – send me this, send me that. Bankers respond in turn by abusing corporate lawyers.

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ex investment banking associate

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