Monkey Business (2 page)

In general, the only way for a young associate to survive the investment banking gauntlet is either to buy into it hook, line,
and sinker or to maintain some sense of humor about what it is that he or she is doing. Keeping one foot grounded in reality,
though, doesn’t necessarily dictate the maintenance of any mental equilibrium. After all, if you’ve got one foot on a block
of dry ice and the other on a red-hot stove, the average temperature may be pretty comfortable but you’ll still end up with
two blistered feet at the end of the day.

Our first full-year compensation after signing on full-time at DLJ following business school was about eight times what the
average college graduate earns at his first job, and we could expect that compensation to double every two years. We traveled
the country by private jet, stayed in the best hotels, and ate in the best restaurants. Eventually, though, we realized that
the compensation levels and the perks weren’t in place because being an associate in investment banking was a great job. They
were in place because the job sucked. The one immutable
truism that exists for bankers is that any problem can be solved by throwing enough money and time at it. The implication?
The banker’s greatest enemies are those people whose souls are not for sale, and those who realize that time is a nonrenewable
commodity.

Our intent here is not to judge. Lots of our friends are still bankers. They’re still out there crossing that burning-hot
sand with the sun beating down on their heads, and some of them really like what they’re doing—just like a throng of wandering
Bedouins. As some malcontent once said, it’s a dirty job but someone’s got to do it.

When we talked about writing a book about our time as associates in investment banking we asked each other, “What will we
say?” And then we immediately answered, “How we got there. What we did and how we got out. How we lost our balance. Everything,
man.”

Well, as our favorite boxing referee, Mills Lane, always proclaims, “Let’s get it on!”

I
n the middle of Times Square, at the intersection of Broadway and Forty-third Street, sits what was once the United States
Armed Services’ premiere recruiting office. The office, built almost fifty years ago, was conceived as a shining testament
to the unlimited promise of a military career, positioned as it was in the middle of the Crossroads to the World. Today, though,
it is only a vague reminder of what it once was. Vagrants use the back of the building to provide some relief from the summer
sun, and occasional relief from a bottle of Boone’s Farm. On a good day, a few listless teenagers
may wander in to find out exactly how much they’ll get paid to be all they can be.

With the decline of the military’s once-venerable institution, however, has come a concomitant rise in another recruiting
institution: the Wall Street Investment Banking Machine. From lower Manhattan to midtown, the well-oiled device hums around
the clock and around the calendar. Its serpentine tentacles are rooted in nearly every well-regarded undergraduate institution
in the country and all of the top business schools. The machine’s sole objective: to fill the conduit with as many analysts
and associates—the serfs and indentured servants of the investment banking world—as it can find.

Ultimately, as we would find out, a large part of any investment bank’s success becomes a function of how many bodies it can
throw at a given piece of business, or, even more important, a potential piece of business. The effort to fill the pipeline
with these bodies, therefore, is never ending.

At the lowest level of the investment banking hierarchy are the analysts. To find this young talent, the I-banks send their
manicured young bankers out to the Whartons, Harvards, and Princetons of the world to roll out the red carpet for the top
undergraduates and begin the process of destroying whatever noble ideals these youngsters may still have left. For the recruiting
banker, the ideal analyst candidate is somebody with above-average intelligence, a love of money (or the capacity to learn
that love), a view of the world conforming with that of the Marquis de Sade, and the willingness to work all night, every
night, with a big grin on his face, like the joker from
Batman
.

The analysts are at the bottom of the shit heap. They are the algae under the rim of the public toilets at the Port Authority
bus station, the scum below the scum at the bottom of a beer keg. They’ll spend two to three years being mentally, emotionally,
and physically abused, and for that benefit they’ll be well trained and extremely well compensated. No matter how bad things
get, they’ll never have anybody
lower
on the corporate totem pole to whom they can off-load their misery.

Following their two- to three-year stint, the vast majority of the analysts will either strike out for any of a handful of
graduate business schools, depart the firm for other opportunities within Wall Street’s financial community, or regain their
sanity and elect to pursue other interests entirely. There’s very little upward mobility from the analyst programs into the
higher echelons of the investment bank. Analysts quickly learn, in no uncertain terms, that their days as analysts terminate
after three years. To the uninitiated this may seem, at best, shortsighted and, at worst, akin to infanticide. Why jettison
these young minds with two to three years of hardcore financial training? The answer is simple. The analysts have been tortured
and abused for three years. They’ve reached the point of being dangerous. To keep them on would be to institutionalize sure
seeds of discontent within the investment bank.

A majority of the analysts leave the job pissed off and with a deep-seated hatred of the investment banking institution.
They learned a lot and enjoyed being paid more money than they ever thought they could make, but they also despised the work
and the people that made them do it. However, amazingly, it seems that about 50 percent of those analysts who hated what they
did go back into investment banking after two years in a graduate business school program. Somehow, absence makes the heart
grow fonder. As with a bad injury, they tend to forget how terrible the pain was. They know it was horrible, but they just
can’t remember exactly how much it hurt. So these analysts go back into banking thinking that life as an associate will be
different. Basically, they reinjure themselves. Troob was one of these injured veterans who decided to return for a second
tour of duty.

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.

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 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.