I know a lot of people are saying that SA and first year analysts shouldn't be too concerned about job cuts and converting summer jobs to full time... what about summer associates and first year associates... how affected will they be this summer and into the next year?
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Just think an associate does similar work as an analyst but cost twice as much
As said above, a first year associate does the same work as an analyst, doesn't do it as well, costs more, and generally has a very high opinion of themselves. Associates in "the pool" are generally among the first to get cut as they aren't even in a group. Associates with prior banking experience, ie direct hires or ones who decided to goto b-school for some reason other than they couldn't get promoted directly out of the analyst program are more secure.
Associates can be very useless for the same reason that HFs don't necessarily like experienced hires, they have a lot of preconceived notions. B-school is not the best, or even a good way to prepare to work at a bank, especially at the first year associate level.
So, first year associates who are career changers are definitely gonna be easy to cut. As analysts find their exit options reduced, they will try harder to keep their jobs and get internal promotions, and they easily outrank any associate out of b-school in a bank these days. Attitudes do change over time as to whether or not b-school is worthwhile, so long term we will have to see.
The idea that analysts are more "valuable" than associates is a very common view held by experienced analysts, but my perspective couldn't be farther from this.
Associates are the most critical part of the deal team, in my experience. Why? Because they are the primary source of quality control. The buck begins and ends with them. If I present an error to the board, it's my fault and my problem. But you had better believe my VP or Director will get an earful. The analyst will get his ass handed to him. But at the end of the day, it's the associate who really gets it. Analysts make mistakes. They can't be trusted. That's why we have associates. VPs and MDs are busy. We can spot check and sanity check, but the associate is the lynch pin of the quality control process.
That's why I think the associate job is worst job in all of investment banking. You are responsible for everything. Your life is perpetual stress and fear, if you're doing it properly.
Part of my perspective is colored by the fact that I am accustomed to a huge bulge bracket M&A group. If I hadn't been the staffer, I might not be able to pick half our analysts out of a lineup. Our analysts do not talk to MDs -many of our MDs don't even care to talk to junior VPs.
I know that analysts like the idea of working directly with senior bankers. It's just not a very practical way to do the work, unless you plan to cut corners on quality. We have our staffing structure for a reason, and that's to ensure that we have adequate checks and balances. After the first day you've been deposed or forced to testify in litigation, you'll never consider doing otherwise.
Genghis my friend, I agree with you in regards to experienced associates. My post, as written, deals with first year and pool associates (usually first or stub year as well). An experienced associate, just like an analyst to associate promote, is a thing of beauty. These are the lynch-pins of any group that are supposed to do exactly what you say.
However, any analyst 2 weeks into the job is better than an associate out of b-school for their first year. It revolves around all of the points I made. Heck, last year a number of associates I knew (straight out of b-school) were very happy to be placed directly into groups because they feared the bubble.
In all, the associate straight out of b-school, or in that first year is easy to get rid of and quite expensive compared to an analyst. This associate can't quality control, they don't have a sanity check, they don't even know English or at least good grammar(broad generalization but I've found it to be true for the most part).
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