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Former lawyer, now i-banker, takes Qs 7/31/12 (Spacebanker)
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Date: July 31st, 2012 9:41 AM |
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Date: July 31st, 2012 9:43 AM |
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Date: July 31st, 2012 9:44 AM |
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Date: July 31st, 2012 9:46 AM |
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Date: July 31st, 2012 9:54 AM |
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Date: July 31st, 2012 9:58 AM
describe what happens in a pitch meeting. to whom do you normally pitch deals? biz dev VPs or C-level execs? how long does a pitch last? do you send the company materials prior to the meeting? is there ever a beauty contest among ibanks when a company is considering a financial transaction? |
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Date: July 31st, 2012 10:04 AM
I do lots of pitch meetings that are 1-2 hours, I fly out with a team and meet with a team of executives. But also a lot of calls and coffees with guys at the company to check in, keep them up to date etc. It's a sales/relationship business; if you only see your clients in formal 10-person 2-hour meetings you won't get a lot of business.
It's not unheard of to send materials before the meeting (some companies ask for it) but the preference is usually not to, if only because we're typically revising the night before.
There are beauty contests all the time. It is not the best way to get business - you'd rather trade on relationships and proprietary ideas than on pitching for something they're going to do anyway and are just picking the bank - but it's a fact of life and if you can't win at beauty contests you'll have problems.
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Date: July 31st, 2012 10:12 AM |
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Date: July 31st, 2012 10:18 AM
The *biggest* thing is all the stuff that you'd lump under "relationship." You don't get a merger assignment because you've reinvented how to do mergers. You get a merger assignment because: 1. You ping the company regularly with debt market updates saying "I know you talked about buying Company X last year, if you wanted to pre-fund that you could do a 10-year bond at 4% today because the market is desperate for IG chemical-manufacturer paper." 2. You call the biz dev guy regularly and say "hey, you were talking about doing a small acquisition; you'd really like the guys at Company Y and they're in your town next week, would you like me to arrange a meeting?" You give the client thoughtful ideas that are not about pressuring an immediate deal but about giving the client options, helping them run their business etc. 3. When the treasurer calls you and says "can you help me figure out the tax treatment of these hybrids my predecessor issued?," instead of saying "ask a tax lawyer" or "what's in it for me?," you say "of course" and quickly and responsively get specialists to give him a useful and correct analysis.
Basically you provide a lot of free service that impresses the client with your thoughtfulness, honesty, hard work, dedication to and understanding of his business, etc. And then when he stumbles across a merger target that wasn't pitched to him by a bank, he calls you because he thinks you'd do a good job and because he owes you for all that free work.
Also lending. Big companies particularly demand underpriced credit facilities in exchange for allocating capital markets and sometimes M&A fees to banks that are in those facilities.
And *sometimes* you do come with a novel idea - a complex structured transaction, or a private-company acquisition where you have a unique in with the target - that gets you an assignment from a company where your relationship otherwise isn't that strong. |
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Date: July 31st, 2012 10:40 AM *XOers discover being an alpha ibanker still involves sucking client dick and [gasp] NETWORKING* *XO aspie ibanker aspirants killself en masse* |
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Date: July 31st, 2012 10:41 AM but relationship maintenance of this type is easy. it's the law firm "land the whale" culture that makes BD difficult in this environment |
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Date: July 31st, 2012 10:42 AM |
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Date: July 31st, 2012 10:44 AM |
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Date: July 31st, 2012 10:41 AM |
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Date: July 31st, 2012 10:42 AM |
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Date: July 31st, 2012 10:43 AM
My analysts *hate* it when I say "let's run an analysis for Company X on a merger they'll never do." It's good business but it sure feels pointless. |
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Date: July 31st, 2012 10:56 AM I do not equate "alpha" with "arrogant" and never have. Leaving someone with the feeling that you're brilliant and important is alpha. I'm GC of a tech startup, and getting the job was all relationships. Keeping the job is a mix of doing good work and relationships. The human side of the legal business is a lot of fun; I'm kind of jealous that you have a job that requires even more skill at it - I think I'd have a blast, even if I sucked hard. |
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Date: July 31st, 2012 10:57 AM
But even the most alpha bankers do a lot of client grovelling. |
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Date: July 31st, 2012 11:01 AM I wonder if groveling can still be alpha. Like if you are only doing it to manipulate someone, that seems like it could be sorta alpha. Not sure though. Probably not. Honestly don't care - fiddling with the definition is just intellectual masturbation. Are you related at all to SpaceLaw? |
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Date: July 31st, 2012 11:03 AM |
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Date: July 31st, 2012 10:44 AM
i wouldn't mind a job requiring lots of client contact. i find it kind of fun actually. you get over the nervousness quickly, ime, even if you are kind of aspie. it's also way easier to talk to someone when you're offering expertise and can leverage institutional reputation. |
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Date: July 31st, 2012 10:45 AM |
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Date: July 31st, 2012 10:48 AM |
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Date: July 31st, 2012 10:41 AM |
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Date: July 31st, 2012 9:44 AM |
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Date: July 31st, 2012 9:46 AM
It's been a while since I've been very busy on live executions but some deals are happening and we're definitely not in sitting around waiting for layoffs mode. Most of my work is always pitching and that is fairly active these days. |
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Date: July 31st, 2012 9:47 AM |
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Date: July 31st, 2012 9:51 AM |
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Date: July 31st, 2012 10:24 AM |
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Date: July 31st, 2012 10:28 AM
Yes but I am continually surprised by how available the buy-side gigs are. From where I sit, seeing analysts leave, the recession seems to have dented the buy-side less than the sell-side. Very top name buy-side firms continue to pick up analysts who I thought were mediocre. |
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Date: July 31st, 2012 9:51 AM |
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Date: July 31st, 2012 9:53 AM |
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Date: July 31st, 2012 9:54 AM
analyst to assoc
assoc to veep
veep to md
md to director
and what is the base salary/bonus potential at each level?
sorry for making you my vault guide bro. |
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Date: July 31st, 2012 10:00 AM
Assoc to VP - pretty much automatic, you just have to not be fired, which you won't be if you do the work. Unless there are mass layoffs, which there frequently are.
VP to director or whatever the senior-VP title is - usually almost as automatic as associate to VP.
Director or whatever to MD - you need at this point to be commercially viable and producing good money for the firm. Social factors, etc., enter into it but it's a commercial decision. Probably a higher percentage of directors make MD than law firm associates to partner just because there's usually no strong up-or-out, you can linger at the sub-MD level for a while trying to make it.
I don't know about base/bonus at each level, use Vault. At VP level I make mid six figures all-in; most banks now pay pretty high base salaries compared to the boom years (associates make a little less than equivalent law firm associates, VPs a little more) and then you at least hope for a bonus of ~100% of salary though making multiples of your salary, at mid levels and in banking (as opposed to trading), is no longer as expected as it used to be.
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Date: July 31st, 2012 10:02 AM |
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Date: July 31st, 2012 10:07 AM
Associate - a lot, like 9-midnight regularly in busy periods
VP - sort of hard-professional work, 9-10am to 8pm and it's rare to see the office on a weekend (though you do calls, review materials, etc. from home)
More senior - you leave the office earlier and earlier when you're in New York, but you're travelling more and more. Being an MD is not an easy life exactly but it's not like being a lawyer. You almost never do "work" in the sense of sitting at your desk writing or reviewing documents, monkeying with Excel, etc. You just talk to people all day, often in person in faraway places. Successful senior bankers have hard lives. |
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Date: July 31st, 2012 10:13 AM
lol |
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Date: July 31st, 2012 10:08 AM |
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Date: July 31st, 2012 10:09 AM |
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Date: July 31st, 2012 10:17 AM |
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Date: July 31st, 2012 10:11 AM |
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Date: July 31st, 2012 9:53 AM |
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Date: July 31st, 2012 9:55 AM |
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Date: July 31st, 2012 9:59 AM |
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Date: July 31st, 2012 10:08 AM |
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Date: July 31st, 2012 10:09 AM |
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Date: July 31st, 2012 10:13 AM
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Date: July 31st, 2012 10:14 AM |
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Date: July 31st, 2012 10:20 AM |
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Date: July 31st, 2012 10:46 AM
same question but with a new company youve never heard of. do you just read their 10-k/financials (if available)? |
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Date: July 31st, 2012 10:53 AM
New company: yes, you look at some sort of public information packet (10-K, proxy, SharkRepellent etc.), you read research analyst reports, you see what your other industry clients think of them, and then you go meet them and say "hey, what do you want to talk about?" It's an advisory business, not a quiz: you don't get points for telling the company about themselves. You get points by listening to them and then finding something useful for them. |
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Date: July 31st, 2012 10:27 AM |
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Date: July 31st, 2012 10:29 AM |
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Date: July 31st, 2012 10:29 AM |
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Date: July 31st, 2012 10:32 AM
I mean, tell me what you're thinking. Do you want to go in-house, to banking, to some other area of finance? Why? What interests you? What skills do you have? |
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Date: July 31st, 2012 10:35 AM |
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Date: July 31st, 2012 10:40 AM
That is somewhat tongue in cheek. The buy-side pays better for better hours and more prestige, ceteris paribus, but on the other hand you're on the buy side: you're evaluated on making good investment decisions. Can you do that? It's hard to know, as a lawyer, and if you can't your buy-side career will be short and unsatisfying.
The sell-side has worse hours, money, travel, etc., but if you're great at talking to clients and pitching business it's a better fit. The question is where is your skill set: hard analysis and decision making or soft client-service skills. And again in distressed banking ex-lawyers are common; try restructuring boutiques and also debt-heavy groups at big banks (restructuring, liability management, maybe lev fin but that tends to be more model jocks than ex lawyers).
If you want to go into banking, network, talk to your banker contacts on deals, etc. It's a people business and talking your way in the door is the first test of your ability. |
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Date: July 31st, 2012 10:44 AM |
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Date: July 31st, 2012 10:45 AM |
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Date: July 31st, 2012 10:49 AM |
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Date: July 31st, 2012 10:50 AM |
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Date: July 31st, 2012 10:59 AM |
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Date: July 31st, 2012 11:01 AM |
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Date: July 31st, 2012 11:03 AM |
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Date: July 31st, 2012 11:04 AM |