So I am a management consultant but working a lot on sell and buyside processes for PE funds. In every process we typically have one large BB involved. Have worked with the majority of BBs but not so much the EBs.
What baffles me: clients seem to treat the bank always absolutely horrendous, particularly the working team. I saw it coming for myself being a consultant (we literally are slave/service providers) but in the majority of cases, the clients (particularly on sell side/VDDs) were much much nicer to our team (even had personal relationships as we were on-site more often) while treating the banking team like trash and actively disliked them.
My prior view of this master-of-the-universe type of advisory service, with the bankers actually running the show and giving advice what to do, drastically change since I observe how a bunch of controllers from middle-market firms actually scold around the JPM/MS VP for not updating the numbers in front of an all-hands call is actually mind boggling to observe. They treat them like extended labor. Even much worse than us consultants.
Because bankers ultimately are - they only get paid after success, and never bill hourly or have a retainer or a minimum guarantee or any of the other money-making functions that are standard in other industries like law, consulting, and even in other finance roles.
This then creates a dynamic where the bankers value is only realized until the end, and it is within a clients (or even a potential client for a pitch) to milk the bankers worth for all they have, especially if they are a company the bank would like to do business with strongly.
Incentive wise, it makes sense with the fee structures of 90% of banks.
It pretty much all boils down to this.
When I was an M&A lawyer in biglaw, I thought we were the bitches. The bankers seemed to more or less run the deal, and were way more knowledgeable about how it all fits together, and it felt like as a lawyer there was always my obscure little deliverable that isn't really central to the process and the real players on the field (bankers, buyer, seller) are on my ass to do my stupid little thing so they can get on with it.
Then I went to IB and it looked totally different. The lawyers all of a sudden seemed like this precious and expensive resource that we should never bother, and we bankers are the grunts.
Now on the PE side I legitimately feel like the bankers are often assigning me the work. Had a call with a bank recently about a difficult debt structure we want to do, and he asks me in front of my boss to put together a deck for him to explain it better LOL.
One takeaway is that the grass is always greener on the other side. We tend to under-estimate how much stress everyone else is under because part of their job is to hide it.
But the bigger takeaway is your point: incentives yield outcome. Hourly/retainer folks will always get more respect for their time because the arrangement limits the ability to pile on them. And success fee folks will always take it in the ass, hopefully for a bigger reward in the end.
It’s definitely eye-opening to see how differently the banking teams are treated compared to consultants, especially considering the high prestige that investment banks are often associated with. From what you’re observing, it seems like there’s a dynamic at play where banks, especially large bulge-bracket (BB) firms, are seen as both a resource and a scapegoat, particularly in high-stakes sell-side processes.
A big part of this comes down to the power dynamics between the clients and the banks. Banks are often brought in to provide advisory services, but at the end of the day, the clients are the ones paying the bills and driving the deal. In the sell-side process, especially in the context of a VDD (Vendor Due Diligence), the clients are under a lot of pressure, and it seems like they view the bankers as external service providers, not the “masters of the universe” that some of the bank’s own marketing might suggest. The consultants are typically more ingrained with the client, being on-site more and getting involved in the details, which leads to stronger relationships and often better treatment.
Bankers, particularly at larger BBs like JPM or Morgan Stanley, often have to deal with clients who expect them to have all the answers, but because bankers are typically more removed and work on multiple deals simultaneously, they can’t always provide the level of constant attention and detail that clients may desire. This mismatch in expectations leads to frustration, which can sometimes get projected onto the banking team.
It’s also worth noting that in a lot of these situations, the clients may see the banking team’s work as more transactional in nature. They’re working on specific deliverables, like numbers and materials, that can be scrutinized and critiqued in real-time. The client might feel like they can be tough on the bankers because, at the end of the day, it’s the bankers’ job to “get the deal done,” and if they aren’t doing it to the client’s satisfaction, frustration can easily bubble up.
In contrast, the consultants, who are usually working more in the weeds with the client on an ongoing basis, often get more leeway to build trust and provide strategic advice. That can help create a more collegial, almost partnership-like atmosphere, where bankers are seen more as ‘order-takers’ compared to consultants.
It’s a tough position to be in, but what you’re seeing is a reflection of how different roles are perceived in the process. While it’s not easy for the bankers, it sounds like you’ve gained a lot of insight into how different professionals handle the pressures of a deal, and how those dynamics play out in real-time.
Lmao
lol is this Deepseek?
Lmao when did IB (or any advisory service) get this "master of universe" view. I only ever heard that for top hunchos on the buyside. Also bankers dont bill by the hour they only get paid if the process goes well. Consultants get paid by the hour.
I'm not sure if it is necessarily lke that. What I commonly observed was a "us vs. them" mentality, even with buyside advisors. As consultant, of course, it takes time to warm up with the client as well. Especially on VDD it helps that we are often sitting shoulder to shoulder and create some sort of "in-this-together" vibe.
I literally had countless of situations where some of the most senior clients were "don't share this with the bankers, they should do some work themselves, etc." and super weird alignment calls with all advisors involved where the bank regulary was called out.
It is just a very weird dynamic to observe overall.
Yes because most PE investors were former bankers, so they feel comfortable fking the bankers up. Consultants are strangers to them so have to be cordial. Generally funds that hire MBB are also much nicer to external parties as well. Funds that are banker only like Apollo are brutal
Always regret not going to law school —you work just as hard, but the firm bills by the hour, and (at least on the surface/externally) you are treated as the smartest one
No one likes bankers. They're a necessary evil for most entrepreneurs, and they have to deal with them, but bankers suck and aren't worthy of respect by many entrepreneurs. The perception a lot of entrepreneurs have of bankers is entrepreneurs are out here taking risks, putting their dreams on the line, solving problems, and trying to change the world. Then you have a bunch of bankers who aren't half as smart or courageous trying to judge them, tell them what to do, and say what they can and can't do based on their projections and timetables focused on their wants and needs and not the needs of the company which they could care less about. Have you ever seen that video of Elon completely shitting on bankers on an earnings call?
Which call was it
you get paid well and none of it is that serious at the end of the day. feel worse for those grunts working for some mid market shitco controller getting compensated poorly and treated like dog.
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