by John Rolfe
The Associates
At the next rung up the investment banking ladder are the associates, that’s what we were. You can generally assume that the associates are a happier lot than the analysts, since they have both the institutional backing and the ability to ease their own misery by heaping agony onto the analysts. Therein lies the beauty of the heirarchy. Since the investment banks are in the aforementioned practice of regularly paroling virtually the entire third-year analyst class, which class would have included any analysts with the potential for promotion to associate, the recruitment of associates and the replacement of these departing third-year analysts becomes a full-time process.
For the associates in an investment bank, there is no corresponding get-out-of-jail-free program to avail oneself of at the end of a two-to-three-year stay. There is no light at the end of the proverbial tunnel. The associates are recruited under the expectation that they know what it is they’re signing on to do, and that once on board, they’ll dutifully climb the corporate ladder to the top of the golden pyramid. Vice president, senior vice president, managing director. The path is clear. In reality, the attrition level for associates is fairly high. They leave for competing investment banks. They leave to work for clients of the investment bank. They leave when they realize that sex with themselves is becoming the norm. Whatever the reason, between the moles brought on board to climb the ladder, and those helicoptered in to replace the departing lemmings, the flood of fresh-faced associates is constant.
The Others—
Vice President to Managing Director
Above the associates are the vice presidents, the senior vice presidents (or junior managing directors, depending on the firm), and the managing directors. The associates all have the same goals. They want to make vice president in three to four years, senior vice president in five to seven years, and managing director in seven to nine years. They all hope to be making seven figures by the time they hit managing director.
Sometimes, though, from the associates’ perspective, it seems like there are just three levels in the banking hierarchy: analysts, associates, and everybody else. After all, anybody senior to an associate has the institution’s divine sanction to shit on the associate’s head, and if you’re the one getting shit upon there isn’t usually much reason to further subdivide the hierarchy of those doing the shitting.
The Breeding Ground—Business Schools
The most fertile grounds for the associate recruits are the nation’s graduate business schools. Due to the sheer number of recruits now requisitioned by Wall Street, the preferred hunting grounds have broadened from their original select subset of only the most arrogant Ivy League institutions of the East (i.e., Wharton, Harvard, Columbia) to include other marginally less pompous institutions. As distasteful as this decrease in the overall level of enlistees’ arrogance has been for the old-line bankers, it has been driven by necessity.
The business school students, for their part, are in no way gullible victims of the evil capitalist pigs. Most have returned to business school with a sole objective: to further their career goals through exploitation of the recruiting opportunities that the business schools provide. In all fairness, it should probably be acknowledged that a small minority of the graduate business school students do in fact return to school with the accumulation of knowledge as a primary objective. Those that do, however, are swiftly enlightened and made to see the error of their ways.
The indoctrination into the money culture and the transition to job-search mode begins long before the arrival of the MBA-to-be on campus. Following the receipt of the school’s acceptance letter, which goes to great lengths to assure all budding MBA candidates of their status as members of an academic aristocracy, a large packet follows in the mail.
At Wharton and Harvard, the packet was similar. It was filled with policy manuals, health care application forms, and sundry other administrative delights. The most important enclosure in the Wharton packet, however, was a pamphlet titled The MBA Placement Survey. The placement survey was a gold digger’s delight. Every imaginable statistic on the recruiting success, or lack thereof, of the prior year’s business school denizens was broken down and reported: percent taking jobs in given industries, percent taking jobs with given employers, percent taking jobs in given geographic regions, it was all in there. There was only one overriding statistic that really mattered to the budding MBA, though: average starting salary by industry.
The first time I saw these figures, my ticker skipped a beat. I was a guy who was coming out of the advertising industry making $17,500 a year and eating black beans and rice four nights a week. There were salaries in The MBA Placement Survey with six figures, and that wasn’t counting any decimal places.
We were entering the land of the obscene here. If the starting figures were up on into six-figure range, where would the madness end?
A somewhat closer look at the heavily laminated pages should have yielded another clue as to the goals and mind-sets of our future business school classmates. The two job categories snaring the highest percentage of the graduating class, management consulting and investment banking, also happened to have some of the highest starting salaries. A coincidence? I think not. Troob and I were about to jump into a velvet-walled cage with some of the greediest bastards this side of Ebeneezer Scrooge. Unfortunately, at the time, we were both wrapped up in a Richie Rich fantasy of our own. We were about to start a frenzied two-year race with America’s most prized business school graduates, blindly thrashing our way toward the almighty dollar.
At Wharton, the official start to this seminal marathon was the “Welcome to Wharton” seminar during orientation week. Whatever delusions I may have had prior to this cozy little gathering were quickly dispelled. Surrounded by 750 other hearty young business schoolers in a massive auditorium, all feelings of being part of something elite, something special, began to melt away. When the progression of second-year students took the podium and began describing, in lurid detail, exactly what awaited everyone on the job-search front, the essence was laid bare. We were there for a two-year mating dance with the recruiters. What the Wharton name would get us was a shot at the best of those recruiters. Given that opportunity, though, it would be up to us to distinguish ourselves from the sea of equally qualified candidates in the seats all around us. We’d have to be willing to climb over these people while wearing golf shoes with sharpened cleats to get where we wanted—no, needed—to be. Fuck camaraderie.
What I didn’t realize at the time was that not everybody in that auditorium was reaching these same wrenching realizations that day. Something between a sizable minority and a majority of my new classmates that day already knew exactly what game was being played. There were bastards there who knew what awaited them, and had voluntarily come back to subject themselves to the process, all for the sake of professional advancement and the accoutrements that accompanied it.
The phenomenon, mind you, was in no way peculiar to Wharton. In fact, 350 miles to the north, at that most venerable of all institutions—the Harvard Business School—a like scene was being played out. And among the 750 dandy young recruits there was one of those bastards who knew the game. A stocky little former investment banking analyst whom I’d later come to love as we wallowed together in our collective misery paying our dues as investment banking associates at DLJ. Peter Troob.
Later, after we got to know each other, Troob would confirm my suspicion that things at Wharton and Harvard were just about the same.
Yeah, I was going through the same mating dance at Harvard Business School. However, I had a big advantage: I’d worked in investment banking before going back to business school. I’d been an analyst at Kidder Peabody. I knew the pain, I knew the long nights and the late dinners eaten in the office six nights a week.
The thing was that I had sworn off investment banking. The sixteen-hour days, the people who had institutional authority to kick my ass, the extra ten pounds I had put on since college, and
my nonexistent social life. The investment banking life as a junior guy sucked and I knew it. It paid me well for a twenty-two-year-old snot-nosed brat from Duke, helped me get into Harvard, and taught me how to break out a company’s financials with my eyes closed, but as I sat in Harvard Business School I promised myself that I wouldn’t go back. No way. I promised myself that I would find a more rewarding career, one that made me feel good about myself. One that cleansed my soul instead of soiling it.
So why was I willing to jump right back in? That’s a good question. I remember sitting with one of my good friends, Danny, in the steam room at the beginning of the school year discussing that very question. We had both come from a two-year boot camp at Kidder Peabody and we were both at HBS. Danny asked the question first.
“Troobie, are you gonna go back to banking?”
“No fucking way, man. Are you kidding me? Kidder sucked and my life was hell. Fuck banking. I’m gonna do something else.”
“What?”
“I don’t know, consulting or some shit like that.”
“Consulting? Making all those two-by-two charts and matrices and being shipped to some buttfuck place like Biloxi, Mississippi, to help consult some manufacturing company for two months? No thanks.”
“Yeah, maybe you’re right, Danny Boy. Not consulting. I’ll try to get a job in a buyout fund.”
“Yeah, right, Troob. Tommy Lee is only taking two guys this year and KKR is taking one. You’re good, but either your dad has got to be loaded or you’ve got to get the managing partner laid if you want that job.”
“Well, maybe I’ll look at the banking jobs again.”
“What! Troob, are you fucking insane?”
“Where else am I going to make that kind of money? Anyway, it’s a stepping-stone to a better job. It’ll open up opportunities for me in the future. It’ll help me get to the buy-side.”
“Jesus, man, I don’t know.”
“Look, I can’t discuss this anymore, Danny. I’ve got to get out of this steam room. My balls look like raisins.”
Danny and I ended up interviewing at all the investment banking houses. We were sucked in even before the whole recruiting process began. We had fallen into the trap of money, prestige, and security. We were about to start the selling of our souls. We entered the Harvard Business School fray and away we went.
Presentations and Cocktail Parties
At Wharton, the highly scripted mating dance during which the recruiters first made contact with the recruits corresponded, by no great coincidence, with the first few weeks of classes. Rolling updates of scheduled recruiter visits were distributed to all the students on a weekly basis, and a prominent announcement heralded each day’s corporate arrivals: “Coming today, Merrill Lynch in Room 1, Booze Allen in Room 2, and Johnson & Johnson in Room 3.”
Subliminally, what was being said was, “Those interested in the big money will head directly to rooms 1 and 2, and anybody with a yen to learn how to market rubber nipples and non–petroleum-based sexual lubricants will kindly report to room 3.” The daily routine was nothing if not consistent. The last classes of the day ended at 4:30 P.M. The first corporate presentations of the day began at 4:45 P.M. For Troob at Harvard, or for me at Wharton, it was all the same.
The recruiters’ presentations were no small-time affair. More often than not, the big guns themselves came out to make the sales pitch. CEOs and presidents of America’s Fortune 500 regularly swallowed their pride, pressed their suits, and shuffled past the rows of Formica-topped desks to go to the head of the class. Once there, they described in gushing terms how incredibly honored they were to be standing in front of America’s finest business school students, and why their diamond-encrusted clubhouse was truly the only one to consider becoming a member of.
John Chalsty, then president and head of the Banking Group at DLJ, described just how fortunate he’d been to be able to spend the last twenty-five years of his career at DLJ. DLJ was the hottest firm on Wall Street. It employed a lot fewer bankers than Goldman Sachs, Morgan Stanley, or First Boston, but when it came to salaries, bonuses, and sexy deals, it was the big time. It was a swank firm full of young, aggressive bankers, many of whom were ex–Drexel Burnham Lambert employees. These were the guys who’d defined Wall Street in the eighties, and they had a flair for the adventurous. They were deal makers, and junk bonds (or, in the 1990s’ cleaned-up lingo, “high-yield bonds”) were their forte. DLJ was the home of the high-yield bond, and high-yield bond sales were on a rapid rise.
Chalsty, dressed like we imagined a banker would be—Hermès tie, handmade suit, Ferragamo shoes, and a monogrammed shirt—exhorted us in his regal South African accent:
“Just go out and do what makes you happy. It’s so important to be happy in this life, I implore you, just go out and find what it is that makes you happy and really, truly satisfies you, and then don’t stop until you’ve made all your dreams come true.”
He spoke on, telling tales of his trip to Russia as a member of a governmental delegation sent to provide advice to the Russian economic and political chieftains on opening the markets to capitalism. He spoke of the professional opportunities that awaited us at DLJ, the camaraderie, the ability to realize our potential. By God, this man sounded like a genius! You could see the eager MBAs pleading, “Where do I sign? I’ll polish shoes! I’ll scrub toilets! I’ll bugger a billy goat! I’ll do anything, as long as it’s with John Chalsty at DLJ!”
And then, in a moment of subtle biting wit so perfect for the moment that it made the whole room feel faint, Mr. Chalsty handed the podium over to Lou Charles, at that time head of the Equity Research and Trading Group: “I’d like to introduce Lou Charles, the head of our Equity Research and Trading department. Good God, Lou, where on earth did you get that tie? It looks like the tablecloth at the Mexican restaurant I dined at two evenings ago.” The walls of the classroom literally shook with laughter. An unprecedented level of mirth! Amazing! Unprecedented hilarity! They’re such good friends that they’re making fun of each other right here in front of everybody! Everyone in the room was begging, “Tell me, HOW CAN I GET A JOB HERE?”
Lord, help the foolish. Within a two-year period we would have heard the identical “do what makes you happy” speech, an indistinguishable rendition of the governmental delegation to Russia story, and the very same Mexican tablecloth tie introduction line for Lou Charles a total of no less than four times. But that was later. This was the present.
In general, the recruiting presentations lasted for about an hour. A question-and-answer session usually followed. The Q&A sessions were an opportunity for the sycophants of the student body to shine. It was their opportunity to show the corporate chieftains how smart and well informed they really were, and to vie for entrance to the International Pantheon of Brownnosers.
“Sir, could you tell me whether you’re planning to generate any new revenue streams through international diversification? Will the emerging markets provide an important strategic opportunity for you?”
“That was an absolutely fascinating presentation, but tell me, does your firm provide the entrepreneurial atmosphere which is so important to today’s top MBA candidates?”
“I’m wondering, what competitive advantage are you able to exploit to maximize the economic value added with respect to both human and economic capital at your company?”
MBA-speak filled the air. Teamwork, mission statement, top-down approach, information age, global view, downsizing, it went on and on.
Fortunately, these sickening ass kissers represented only a minority of the entire business school population, but the antipathy that they engendered among their classmates was far-reaching. Most of the other students made no attempt to disguise their loathing for this human detritus. The reassuring element, and the one that we weren’t privy to until we were on the other side of the recruiting table (sadly enough trying to cajole others into our misery as associates in banking), was that the recruiters—without exception—hated
these sniveling little dogs as well.
The recruiters, after being asked one of these imbecilic questions, would generally respond with something akin to “That’s an excellent, excellent question…” What was really going through their mind, though, as they proceeded to answer the questions, was generally more along the lines of “Come on up here, Doughboy, so I can jam this Gucci loafer so far up your ass that the tassels bounce off your tonsils.”
Unfortunately for most of the recruiters, the question-and-answer session was only the second step in the entire wretched experience. A recruiter reception at which the mutual ass kissing reached even more nauseating levels generally followed the Q&A session. At these receptions, the complimentary food and booze flowed as freely as the bullshit. It was a golden opportunity to get a full stomach, a swelled head, and a skewed sense of reality all in one place. The orgy of backslapping would have made Hulk Hogan proud.
There was a widely held misconception among the student body that going to the receptions and meeting the recruiters actually increased one’s chances of later being granted an interview. However, what really mattered was experience. And so it was that something of a chicken-and-egg situation existed for those people who didn’t have any relevant banking experience but who wanted to try to make the transition to becoming career bankers. Without experience, you couldn’t get experience. It made life difficult. There was really only one route to redemption. That was to land a banking job during the summer between the first and second year of business school. If you were lucky enough to do so, you would have the requisite experience to land all the necessary interviews for full-time positions during your second year, and you would then be in a position to ride that gravy train straight into the sunset.
