How to Email Someone Again Investment Banking

I never thought I would write about investment banking hours yet once again.

We've covered this topic multiple times in the past, including in the articles on IB Analysts, Associates, VPs, MDs, and so on.

But every few years, a new controversy goes viral on social media, and the world at large says, "Look, do you really work that much in investment banking? How are those hours legal?!!"

In case you have been offline for the past week, an "internal presentation" based on survey responses from 13 Analysts at Goldman Sachs made the rounds last week.

The headline numbers in the presentation for one^st Yr Analysts were every bit follows:

• Average Hours Worked in the By Week: 105
• Average Hours Worked per Week Over the Past ~two Months: 98
• Average Hours Slept per Dark: 5
• Average Time to Sleep: 3 AM

The unstated merits here is something like: "Yes, investment banking hours are e'er bad, and nosotros knew that going into the chore, but work-from-dwelling policies during the pandemic have made the hours unbearable and inhumane."

I'm going to start with my quick take on the presentation, explicate why IB hours, even in "normal times," are bad, then propose a few possible solutions to the current problems:

My Quick Have on Investment Cyberbanking Hours in Pandemic Times

The curt version here is:

1. Yes, investment banking hours, especially in your showtime year or ii, are always bad (think: lxx-80 hours in the part per week).
2. But junior bankers also tend to exaggerate their hours, often past not subtracting downtime or breaks during the day.
3. And contrary to expectations, working from home has made the hours worse than usual, to the point where many people are getting burned out and leaving.
4. But you should keep in mind that this "presentation" is based on responses from only 13 Analysts. For context, Goldman Sachs hires hundreds of IB Analysts each twelvemonth, and there are several chiliad IB Analysts at all banks worldwide.

Going into the current crisis, some people expected that work hours would improve because in that location would be less "face fourth dimension" (i.eastward., force per unit area to stay in the office late for no reason).

Unfortunately, "Zoom fourth dimension" and "24/7 availability" take replaced "confront time."

Since you're ever at domicile, you're expected to respond to messages and work requests right abroad.

There'south no such thing equally "taking a interruption" or "going out to eat" because many governments have eliminated normal human activities, and banks have fully embraced the restrictions.

But a few other factors have too made the hours worse:

1. Non-Cease Zoom Pitching – Since MDs no longer travel to deliver pitches, they can exercise 10+ remote pitches per twenty-four hour period. That ways Analysts and Associates need to grind out even more presentations and coming together materials, even if the clients or potential clients barely look at them.
2. Lack of Variety and Socializing – If yous become to an part every day, you change your surroundings, socialize a flake, and encounter the man side of your co-workers. It's easier to tolerate long hours when you tin chat casually with your bosses in betwixt assignments. But if you lot're in a tiny apartment all twenty-four hours, working from ix AM to 3 AM is a flake similar a prison with internet access and better food.
3. Difficulty Coordinating Presentations – Since multiple people piece of work on most presentations, coordination is challenging when the team is remote. Problems that might take 15 minutes to resolve in an in-person meeting could drag on for hours when everyone is emailing or texting. Video calls may help, only they also create other bug, such as abiding interruptions.
4. Non-Stop Scam SPAC Deals – SPACs have go the equivalent of dot-com IPOs, and they involve a lot of copying and pasting of templates. You demand to grind out many documents, but the work is really wearisome. Even something like a standard 3-statement model is more interesting because it's dissimilar for each company, requiring some thought.
5. Existent Deal Activity Has Not Slowed Downward – Finally, existent M&A and capital markets deals are still taking place, largely considering fundamental banks turned on the non-stop press press, and money is cheaper than ever before (though that may be changing).

Putting these factors together, it's like shooting fish in a barrel to see why banking has become so miserable over the past year.

I exercise not think that every single 1^st Year Analyst is working 105 hours per week, but I do retrieve the hours have worsened significantly.

Many Analysts might exist working more like 80-ninety hours per week rather than seventy-fourscore.

That may not sound significant, but it's the difference between 12.5 hours per day for 6 days with ane solar day off and 12.one hours per mean solar day with no days off.

I'll advise a few possible solutions, but let's outset review why the hours are so bad even in normal times:

What Do "Investment Banking Hours" Mean?

Bankers (and about cognition workers) typically measure their hours based on their time in the office. For case:

• ix AM: You arrived at the office.
• 1 AM: You left the office. That was 16 hours! You lot worked 16 hours!

But this is not quite authentic because this person was not "working" this entire time.

They were probably waiting around for a client or a senior banker and reading the news.

They probably went to get food or java at some point.

And they probably spent some time chatting with co-workers about non-work topics.

Even if yous subtract that time, the boilerplate workday is still long.

Only it'southward not quite as insane every bit it sounds because 80 hours in the role might equate to lx hours of "real work" due to meaning reanimation.

There are exceptions, and some firms and groups do more than "existent work" than others.

Investment banking hours are much longer than those in other jobs because of four main reasons:

1. Huge Clients Pay Your Bank Huge Fees: When a company is paying your banking company $50 one thousand thousand, $10 meg, or even $ane million to advise on a deal, y'all have to do any information technology wants at any time of the day.
2. Unpredictable Work Demands: Unlike with engineering projects or audits at Big 4 firms, it's difficult to use "projection planning" for investment banking deals because the processes are more than random and difficult to predict.
3. Division of Labor Failures: Banks tin't necessarily hire more people to reduce the workload considering one person has to "own" each aspect of a bargain. Multiple people writing a CIM or building a model simultaneously would be similar writing a novel with multiple authors.
4. Civilization: Since senior bankers all worked long hours on their manner upward the ladder, they assume that new entry-level bankers must endure through the same rituals, similar to hazing in a fraternity.

Banks have tried to improve the piece of work environment by offer "protected weekends" to inferior bankers (i.eastward., no work from Friday night through Sunday morning).

The results of these policies were mixed, at best, as most people reported that the full number of hours did not change.

Yes, it was nice getting a free Saturday each calendar month, merely your hours on Lord's day – Friday commonly got worse as a upshot.

Here's a fleck more detail on each factor higher up:

Huge Clients Pay Your Bank Huge Fees

If a single executive at a client company gets upset over something, they could immediately abolish the deal, resulting in millions of dollars in lost revenue for your bank.

Bankers sell their time and attending – not a tangible product – and then they need to provide it, even if a client calls at i AM on Christmas with an urgent request.

If a bank did 1,000 deals per year and earned $50,000 per deal, the service requirements would reject.

But that business model would also exist far less profitable; it'southward why you earn much less in Large 4 Transaction Services.

Unpredictable Work Demands

When you piece of work on an M&A bargain, much of the work happens in the beginning (creating marketing materials, presentations, and financial projections) and at the end (negotiating the definitive understanding, arranging the financing, resolving last-minute disagreements, etc.).

But in the centre of the process, random events, requests, and bug e'er come up upwardly.

You might get an conquering offer from a buyer who dropped out simply and so came back at the 11th hour.

Or maybe your client merely missed its earnings forecast, and you need to revamp your 10,000-row fiscal model.

Or maybe the CEO is having a bad mean solar day, and he wants to see unnecessary assay, just for fun.

Other firms that deal with unpredictable piece of work demands, such every bit web hosting companies and oilfield services companies, handle these bug by hiring teams to work in shifts.

One team works from 8 AM to 4 PM and fixes a website that just crashed; some other team works from iv PM to 12 AM and replaces a part of an oil pipeline.

But that arroyo doesn't piece of work well in cyberbanking because it's more hard to divide the labor (encounter below).

Segmentation of Labor Failures

The trouble in IB is that many deals are unlike and require customer-specific knowledge.

You normally gear up up fiscal projections 1 way, but y'all had to modify rows 95-110 for one client because of an outcome that came up in an email exchange with the CFO last twelvemonth.

Or at that place are 17 versions of the company'due south internal projections, and yous're using different versions in different slides of the management presentation – and only yous know the logic.

You tin come with crude guidelines, merely you can't draw all the steps universally and comprehensively.

In that location might besides be thousands or tens of thousands of documents for a single deal, and so it's incommunicable to "acquire" everything quickly.

Senior bankers also want to ensure accountability past designating one go-to person for each office of a projection.

If a VP wants to change a model, they do not want to enquire two-3 Analysts – merely the one person in charge of it.

Cultural "Quirks"

Finally, there is enormous cultural gravity in favor of long hours because many senior bankers view them as "paying your dues."

Plenty of bankers introduce more work or terminal-minute requests not because they're necessary, but because they want extra assay "just in example."

Most meetings do non require 100-page pitch books; many clients barely fifty-fifty read the full presentations.

And most changes requested at iii AM for a 9 AM coming together are non important – or they would have been requested much earlier.

Investment Banking Hours by Position and in Regions Outside the U.South.

In general, the hours tend to improve as you move up the ladder (though, once again, work-from-abode has upset this dominion).

Investment Banking Associates volition work a bit less than Analysts, VPs volition work a bit less than Associates, and MDs fifty-fifty less.

A Managing Managing director still does not have a 40-hour workweek – it might be more like l-lx hours per week – but information technology is more manageable.

Some groups, such as Equity Capital Markets, accept also been known for reduced hours and meliorate work/life balance (well, at to the lowest degree until SPACs came along).

Exterior the U.Due south., people ofttimes contend that hours are "amend" in London and other European locations and "worse" in Hong Kong and other parts of Asia.

There may be some truth to these claims, but they tend to be a bit exaggerated. Yeah, your life volition be marginally amend or worse in some places, but it'southward still investment cyberbanking.

Overall, working in a smaller, regional financial center (eastward.g., Houston in the U.S.) and at a regional boutique bank rather than an aristocracy bazaar or bulge bracket depository financial institution brand more of a divergence.

What'south the Solution to Investment Cyberbanking Hours During the Pandemic?

Equally you tin see, even in a normal environment, it'south difficult to "improve" the hours in investment banking because of these cultural, work, and business model issues.

The pandemic has fabricated it fifty-fifty more challenging, and I don't think at that place'due south a great solution until people finally return to the office.

A few partial solutions might be:

1. Limit the Number of Pitches or the Materials Required for Pitches – Not every meeting needs a pitch book with dozens of slides, and the materials don't need to exist unique for each meeting. And not every Md needs to deliver 10+ Zoom pitches per day, equally most of them will get nowhere.
2. Gear up a "Hard Finish" for Each Day'due south Work and Dedicated Intermission Times – For instance, setting the cutoff at xi PM or midnight would requite inferior bankers at least a bit of guaranteed free time. Creating shifts for fourth dimension to run errands, become nutrient, etc., during the 24-hour interval would too salvage some of the monotony.
3. If Truly Necessary, Hire More Analysts – If an Md feels it is necessary to evangelize 10 Zoom pitches per twenty-four hours, each with unique materials, make them responsible for finding and hiring more than Analysts to do the work. If these pitches eventually generate advisory fees, the new hires will pay for themselves. And if not, the MDs will pitch less.

Ordinarily, "hiring more people" is not a feasible solution considering deal work is unpredictable and difficult to carve up.

Simply much of the added workload this past year has come from speculative pitches, not deals – or nearly identical deals, similar SPACs.

Pitch work is easier to separate, and a pitch does not necessarily crave one dedicated Analyst because it's more than of a "one-time event."

Banks seem to be hinting that they'll hire more junior bankers to address these problems, only they also like to make their employees suffer, so who knows.

There is no perfect solution, but implementing one or more of these points might make investment cyberbanking hours more bearable.

And in the meantime, you tin wait for "work from home" to end in approximately 567 years.

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Source: https://mergersandinquisitions.com/investment-banking-hours/