An entire summer of 17h days is difficult to imagine as a productive way to work.
"It's just hazing" is a reasonable answer, but surely that would create a market opportunity for some alternative entity, or at least would mean the hazing has to be limited in duration.
On the other hand this behavior also selects for candidates who are driven more by (the hope of) success and money, than by health, social/family life etc.
You basically have two workdays: the client-facing workday, and the preparation-for-the-next-day workday. Client-facing workday goes roughly 9am-6pm. Preparation workday goes from 6pm to anything from midnight (on a good day) to 5am (on a bad day).
During the client-facing workday you're spending about 1-2 total hours having meetings with clients, usually on conference calls, occasionally in person; the more senior you are, the more personal interaction you have with clients. The remainder of the time is spent reviewing the materials you generated the previous night, talking about what needs to be done, etc -- basically a constant planning / execution workflow around multiple concurrent streams of deliverables.
In the evening, managing directors go home around 6pm and vice presidents go home around 8pm. That's when you become really "free" to hunker down and start jamming out work. It's a lot harder to be productive when your time is hacked into 30-minute chunks the way it is during the client-facing day.
It is quite common to have nothing to do for hours at a time, both during the day and evening, while you wait for people to get back to you with further instructions on what to prepare and/or instructions for changing what you've already made. So, a 16-hour workday isn't usually a full 16 hours straight. You usually have time to go to the very nice on-site gym, for example.
The deliverables you're making are usually PowerPoint presentations with a lot of model-driven Excel outputs in them. Occasionally the underlying models are intellectually interesting, but they usually are pretty monotonous to put together....you're building something to a clear spec, and the challenge is being 100.000% certain you did it without errors, not figuring out how to do it.
To answer the question about whether you're productive working such long hours: the time commitment and the stress certainly don't foster creativity, happiness, or high productivity, but they really don't need you to be doing inspired work. At a junior level they're looking for people who can follow defined processes at a high level of throughput with a low error rate, while contributing occasional flashes of original thought -- for example, when you have to build a new model based on a unique client situation. Those situations are actually really exciting (especially when you're working on a big problem for a big client) but the flipside of the excitement is the stress around the consequences of fucking it up -- e.g., if the client just got a "bear hug" letter from a competitor expressing interest in a merger and you have to model out whether it makes financial sense.
The downside is that it's a miserable and unhealthy way to spend a couple of years. The upside is that you ride an incredibly steep learning curve and gain a ton of knowledge on valuation models, the inner workings of various industries, corporate governance, and how to run merger / fundraising / hostile-defense processes.
Hope this was helpful.
Parts of that actually seem really fun, but mainly the learning about industries and the model-building. I suspect I'd be a bad IBD intern.
(I've been talking with some people about a technology-focused turnaround firm; capital is cheap, but being able to do PE/etc. turnarounds by buying existing failing companies and replacing tech, rather than building a startup to disrupt the industry, might be interesting in certain sectors where distribution, IP, etc. really matter.)
I found it very interesting. Thank you for the write-up!
Hazing might be a part of it but I see it more like boot camp than anything else. Weed out those who don't have the fortitude and drive. They don't want employees who value family time over the company, for example. Forcing people to work insane hours will self select for the "right stuff".
It's not about productivity, it's about cultivating a specific culture.
And we wonder why the financial industry keeps finding new ways to profit at the expense of others.
It's essentially grind work (which also includes bringing coffee/lunch or if you really are up to it, walking the boss' dog). It makes me wonder if they ever get to learn anything at all, but I guess making presentations and creating good first impressions matter a lot in the long run. But what do I know.
It's exactly this in I-banking, from what I understand. A lot of the day is spent tweaking/waiting. Towards the end of the day, you get feedback from clients/managers, and that's when the "real work" starts.
From an external perspective, it's always struck me as horribly inefficient.
How is hazing reasonable? Most seem to find it to be an abhorrent tradition.
Spoiler alert: you create an insanely complicated funnel to weed through huge quantities of candidates. And if talent isn't the primary determiner of success (remember that the job isn't that hard), how do you distinguish people? Simple, you work them nearly to death and see who comes out alive.
I'm not saying that is exactly the situation here, but I think as a mental model it's not that far off.
Very sneaky, Goldman. I guess weekends are wide open to work as much as needed, right? Gotta prep that big PowerPoint for Monday morning's meeting.
This all reeks of polishing the optics and nothing to do with treating their interns with any respect.
It is stupid that the new rule makes people go home from midnight-7am. It would be a lot more aligned with the working hours of investment bankers if that were changed to a 2am-9am embargo. However, the optics would probably look bad; "midnight" sounds a lot more wholesome than "2am". So instead, summer analysts are going to have to be waking up at 5:30 or 6 to make it in by 7am sharp, which is going to absolutely suck for them.
Having been a junior banker myself (and with friends at most banks across wall street) I can tell you that virtually no one is being taken to events or spending days socializing as an intern, let alone as an analyst or associate. You spend your days preparing pitchbooks (to pitch companies on why you should be the bank representing them), building financial models and putting together management presentations (in addition to any one-off requests your senior people or the client have). Can go into more detail but it's covered pretty well in comments above.
(Also there's no such thing as shadowing a manager in investment banking - just doesn't exist. There are mentorship programs that the banks run, but the vast majority of the time they consist of getting coffee at most once a month)
https://www.gov.uk/maximum-weekly-working-hours/weekly-maxim...
But then again I do find that what clothes I'm wearing does affect my code. When I wear a bowtie, for instance, I find I use more curly-braces! (facepalm).
The Irish Times allows current articles to be read publicly but anything that gets archived (a few days old) must be payed for to be read. I prefer and pay for this model - would be nice if WSJ adopted it.
Visiting via google removes the paywall.
Edit: also, they do that with intern/entry-level banking jobs. Internships pay well, but it's nothing like what higher-level bankers make. Same with entry-level analysts.
OR
You could create 3 shifts at $66,667 (total compensation $117,000 each) and have true around-the-clock coverage!
Its the same logic as why PhD programs don't simply double their size when there are plenty of people with enough credentials to pass entrace exams. Its a people-management issue, and maintaining the incentives of the rank-higherarchy. It has nothing to do with talent levels.
These positions are only loosely meritocratic. The higher-order filtering is almost always based on some form of social privledge. Its not dysfunctional, at least in a litereal sense. Privledge opens doors and changes the economics (ie, productivity) of the industry materially. That is why it is selected for very heavily.
Many large companies are able to maintain a large number of server operators and perform essential functions without needing one person to do everything. With sufficient communication you can avoid the "too many cooks" problem. I've personally lead highly-communicating teams which avoid this problem. In short what you do is put one of the 3 in charge of different work as it comes up, load balance and collaborate.
But maybe it's cheaper and easier to pay one person a huge amount of money, and beat them up, than to create a highly-communicating organization of people (including email, IM, ticket system, face-to-face time, regular meetings, bridge calls, etc). It certainly looks simpler.
I think a huge part of it is that the tools do not lend to a very collaborative workflow. Excel and Powerpoint do not exactly have a robust version control system or any great way of leaving any useful comments so that alone makes things difficult.
And honestly, it's probably around the same amount of money if not more expensive to keep a leaner crew but for the type and nature of the work, it's probably more efficient.
And don't get me wrong, there is some outsourcing going on, just not on some "well if all they're doing is powerpoint and excel, why don't they outsource the whole thing" level.
To which others counter: "The lazy person will just not do the job." And you're describing something closer to the ideal of only doing the important part of the job, and being able to discern the important work from the unimportant.