Guide to Lateraling in 2021

Hey everyone - I've browsed through this forum for years, and finally thought it was time to give back and help out with what I've found to be one of the most confusing, unpredictable processes ever - lateraling. As someone who just successfully wrapped up a months-long lateral search, I've found WSO forums to be super outdated (especially now with COVID) and often just blatantly wrong. At the same time, it seems like the market for laterals has never been hotter. So, I wanted to use this post as a way to help prospective laterals learn 1) what these processes often look like today and 2) how to best navigate lateral processes to come out with the best offers. Hope people find this helpful - don't hesitate to ask questions in the comment sections and I'll try my best to respond!

My Context / Timeline

I graduated from a target (which definitely helped get foot in the door during lots of processes), and was working at a non-IB front office role. Don't want to give too much info beyond that, but I was in a role that was looked upon equally as favorably as other IB Analysts. For full transparency, I was super selective in my lateral process, which brings me to my first big tip - create a list of firms/groups you'd be willing to take before you start recruiting. I had about 10-15 very specific groups in mind that I targeted, based on a combination of factors like deal flow, firm reputation, exits, etc. This is because I really felt the switching cost associated with moving was too high to take an offer I wasn't super excited about.

As for my motivations for lateraling, it came down to the learning experience. I generally wanted a broader / more generalist experience than what I was getting at my old firm. Again, can't get into too many details here, but note that everybody's motivations are different for lateraling - as long as you can convey them clearly to interviewers you'll be fine.

I knew I wanted to lateral for a while, and set a specific date where I'd start testing the waters and putting myself into processes. I started sending out networking emails in Week 1 (~30-50 emails total, again being super selective here), was involved in a variety of early-stage interview processes (ALL of which came through networking) from weeks 3-8, did a bunch of modeling tests around Weeks 8-10, and had my superdays / offers come through around Weeks 11-14. I also applied online to about 30 different roles (was only interested in about 5 of them, the rest was just for shits and giggles) - literally heard back from none of these. 

In total, I actively reached out to about 20 groups (14 cold emails, 5 distant connections I rekindled, and 1 close connection). Of these, 15 or so got back to me and had some form of intro informational calls (keep reading to see how I got such an insanely high response rate - I was suprised too tbh), 7 of these amounted to first-round interviews at some point over the next 2-3 months, I got to the superday stage at 5 of them, and ended up with 3 offers, 2 post-superday rejections, and 1 process I dropped right before the superday.  

Processes at Different Firms

I've (somewhat) anonymized firm info below, but found the process to be drastically different at different firms. Again, I was super selective with my interviews so assume the more "top-tier" echelon of banks apply to the below.

EB #1 - specific industry group:  Got into the process from a referral with a person I networked with, though they also posted the job online. Had 1 behavioral phone screen with an Analyst, 1 difficult technical screen with an Associate, then a modeling test followed by a 2-3 hour superday with the rest of the team. The modeling test was done at the same time at the superday, and I think this is what dinged me - just didn't prep enough. Was an LBO, DCF, and some other shit all in 1 hour.

EB #2 - specific industry group / geography: Also a difficult process, but less structured. Pure referral through networking, no online posting. Had about 10 individual phone calls, 5 of which were super technical, 3 were somewhat technical. Also a challenging modeling test somewhere in there. Didn't end up going with this offer due to personal reasons / geography.

EB #3 - specific geography: No online posting, referral through networking got me into the process. A couple of first-rounds then a modeling test. Got dinged after the modeling test - honestly was super easy, I was just exhausted that day and made some stupid mistakes. Didn't care too much for this group either so that probably played a role too lol

EB #4: Ended up taking an offer here. Got in the process through a networking referral, again the job wasn't posted publicly. About 8-10 phone calls total, and there was a modeling test + technical non-modeling test mixed in there. They never asked me a technical question in a call which was great since I tend to choke on those, but the calls were focused largely on fit and general resume/deal questions

BB #1 (hint: it's Goldman Sachs): I'm gonna call out GS here since their lateral process is an absolute fucking mess. Got into the process through networking (again, no posting) and was invited to a Hirevue. Did the Hirevue, then got emailed 4 weeks later asking to do the exact same Hirevue again (lmao). Did it again, then got notified at 8pm on a Wednesday that I have a superday the following morning. Superday was three 20-minute behavioral calls and I still haven't heard back even though it's been 2 months. The entire firm seems to be ghosting me. The problem with GS's system is that they run their lateral IBD process as part of "Early Careers", which also encapsulates like Ops and Accounting shit across the country, so you've got these three overworked people in like Salt Lake City trying to coordinate literally every experienced hire process across the country ranging from IBD laterals in NYC to 35-year-olds looking to get into Compliance in Phoenix. Just a fucking disaster of a system - beware if you try to lateral here

BB #2 - specific industry group: Reached out asking to network, immediately got put into a process, had a total of 4 calls (only slightly technical) and got a verbal offer within a week of that first email. This group seemed to be insanely desperate to bring in laterals, but I didn't really vibe with the people I met there and have heard horror stories about the culture so decided to turn it down.

BB #3 - specific industry group: Noticed there was a posting online so emailed to network, got into the process but dropped before the superday after accepting my other offer. Like the other BB processes, wasn't technical at all and no mention of a modeling test

General Tips & Advice for Lateraling

While no two peoples' lateral experiences will be the same, below are some general things I discovered along the way which I found to be super crucial.

1. Network, Network, Network

I don't care what anyone else says - networking is the only way to have a successful lateral process. The only difference between networking for laterals vs. FT is that you need to place a bigger focus on making meaningful connections (i.e. ask interesting questions, be super engaged, follow up a lot) with people who can pull for you. It's essential to note that lots of one-off lateral openings don't get posted online. Why would firms deal with the hassle of setting up a Workday posting, screening hundreds of resumes, etc. for a single opening when they can just tap into the pool of connections their employees already have?

Of the ~10 processes I was properly involved in, I got into every single one of them through networking. I did a ton of applying online as well, but literally none of those applications amounted to anything. The reason is that online postings for most firms' lateral positions are literally just compliance protocols so that the people who get an offer through an informal referral can get set up into the firm's HCM system. Not making this up - I was often asked to apply online AFTER I got the offer or the superday at some firms, just for compliance reasons. 

I'd networked a ton for SA/FT as well, but came into this process with a different strategy. I reached out to a total of ~30 people in total, mainly across disparate groups, and had an email response rate of ~75%. I know, I was shocked too. I got this by networking with people who had lateraled to the groups I was interested in or people who are from less traditional backgrounds. I knew the dude from Harvard who interned at a tiger cub sophomore summer and then did an SA -> FT stint at the bank I was interested in had 0 chance of responding to me, but the guy from a semi-target who started off in a less traditional role and lateraled is more likely to empathize with my position and give me the time of day. More importantly, these people are more likely to actually help you out during the process / refer you, since they genuinely understand where you're coming from and know what it takes to lateral. Also, try to network with Associates instead of Analysts if looking for an Analyst role, since often Associates are the ones running point on the processes and can loop you right into the process if they like you. 

Final tip on networking - follow up, a lot. Lateral roles tend to just pop up out of nowhere, so there's no shame in checking in with connections every couple of months. Doing this out of the blue actually got me into 3 of the processes I was in.

2. Know Your Reason for Moving, and Know it Cold

You are going to get grilled on why you want to make a move. This is the critical question for laterals, both when you're networking and interviewing with anybody from Analysts up to Partners. Have a very clear, concise reason for lateraling written out verbatim - soon, it will become second nature. And be prepared to answer any questions that might come up, making sure there are no holes in your story. 

The standard "oh I'm at a bank with bad deal flow and want to go to a top-tier bank to do bigger and cooler shit" reason isn't often gonna cut it. Geography/Industry are also common ones, and can be compelling in some cases but often just fall flat if not backed up enough. Come up with something creative that you can back up effortlessly and defend to death. Don't lie, just try to give a nuanced, well-reasoned illustration of your reasoning that nobody will bother arguing with.

3. Become a Technical God

Banks don't want a lateral to come in and spend 4 weeks ramping up and training just to barely scrape by for their first year. They want an Analyst who is better than their current Analysts and can hit the ground running. Doesn't matter if you haven't touched a model since starting your FT gig - you better start learning. I really like the WSP modeling courses and found that plus Macabacus and BIWS guides to be the most helpful for both modeling tests and technical Qs. At EBs especially, technicals are going to be hard and won't be coming from the guides. Spend as much free time as you have going through modeling tests, reviewing any concept you're not 100% confident in, and make sure you truly understand all the standard technicals and beyond. This isn't a "bonus" for lateraling, it's an absolute necessity. Technicals were always my weakest point in recruiting, but I dedicated a couple months of my life to perfecting this shit and it thankfully paid off.

4. Demand > Supply (at least in 2021)

There has truly never been a better time to lateral. People are moving around all over the place, nobody seems to enjoy remote work, and Analysts are quitting at alarming rates. Banks have also realized that driving Analysts to literal depression in their childhood bedrooms isn't a great approach, so are looking to bulk up Analyst classes. There are jobs appearing left and right, you just need to make sure you position yourself through networking and technical prep such that when an opening does come up, you'll be first in line to get an interview and will be prepared to crush it.

5. Trust the Process

I resonate with the feeling of wanting nothing more than to leave a role you're in to join a new firm. It sucks. It often feels like you're trapped - your quality of work starts declining, you become impatient with your processes, and motivation just starts to sink. In most people's lateraling journey, there will definitely be a point where you start to consider if it's even worth all the effort.

The key here comes back to Tip #2 - know your reason, and stick to it. Stay committed, keep reviewing technicals every week, make sure your modeling skills stay flawless, and don't stop networking / following up with connections. Sometimes, it's the leads and opportunities you least expect to work out which end up pulling through at the point where all hope seems lost.


Hope everyone finds this helpful! Lateraling can be a grind and certainly isn't as formulaic as SA/FT recruiting, but there's no reason you shouldn't be able to pull it off!

 

Thank you for this! I'm going to be interning at a small boutique this summer, so it's good to have this guide in my back pocket in case I don't vibe with the firm.

 

Great post, loved the clear formatting.

You mentioned how EB modeling tests were much different than written guides, was wondering if you could share your approach when preparing for these modeling tests? I'm currently in a spot where modeling isn't intense and am worried that modeling guides won't cut it for lateraling.

 

Hey, glad you enjoyed the post.

Honestly you should make sure you understand the mechanics of a simple LBO, DCF, and Acc/Dil model. LBOs came up most often for me personally, but I've heard anecdotally some firms focus more on M&A modeling. Generally these modeling tests were only 1 hour long at most, so you won't have to do a crazy operating build or anything. 

For an LBO, just understand how to make a very straightforward S&U, how to build out assumptions, and memorize the debt schedule formulas. Then it's just a matter of putting all into an intuitive template you should have mastered in your prep and maybe building out some sensitivities.
Also if you have friends in PE, reach out to them for their LBO modeling tests - these will generally be much harder than the ones a bank will provide, but if you understand them then a banking LBO test will be no problem.

 

hey, thanks for all of this. Btw, are the modeling tests "live" during the interview or does use the interviewer send you an email and give you a deadline (like 1 hour). I am asking because that would be a lot of pressure to do it "live" on a zoom call.

 
Most Helpful

People should pay attention to the structure and style of this post -- it's crystal clear, and structured in a logical, coherent and easy-to-follow way. It's no wonder OP got 3 offers, because I'm sure he presented his background, expertise and reasons for lateralling in an equally impressive way.

I nominate this for Most Helpful Post of Year. 

 

Excellent thread. I've been in a similar process over the past couple months and we both have approached it the same way. Thankfully the sector I'm targeting is red hot, lot of people moving seats thus opening up room for me.

I want to emphasize #5. It's been a roller coaster, getting superdays with top groups and funds. It really is a numbers game and you need to keep your head up and just fucking grind through it. The amount of anxiety I had for a short period 1 month ago was nothing like I've experienced before. 

Relationships are key, most of the interviews I've gotten were from cold emailing/linkedin, but the one's I've got from my network have done me well. One of the companies I was even interviewing at referred me to another firm and my first round there was a superday. If your interview goes well and you click with them, but they are candid about taking another candidate, don't be afraid to ask nicely to tap into their network.

Go all the way
 

Fantastic post. I made a lateral move from Canada to the US a while ago and agree with everything that was said. On the other side of the table now, interviewing laterals, I agree with all the points (especially #3). It's one thing to be a little shakey on technicals for entry level, but for experienced hires? You HAVE to know your sh*t. We don't want to hire away other people's problems/weak team mates. +1

OP: would be interested in your view on recruiters in this environment. Noticed it was absent from your post above.

 

OP here. Personally found recruiters to be absolutely useless for the roles I was considering. I was in contact with a few headhunters (the common lateral HH firms are Selby Jennings, Weatherly, SG), but they only had opportunities at very niche boutiques that I wasn't too interested in. 

I had one case where a HH actually told me that an EB wouldn't consider me given my short tenure so far, but then I had a contact at the firm get me an interview no problem. I think established firms with solid junior classes just generally realized it's not worth it to use a recruiter just for a one-off opening, especially when they can be pretty confident in the fact that their very own Analysts/Associates have friends and college roommates who are miles ahead of any random person a recruiter might bring in.

 

Yep, also keep in mind: what kinds of firms will actually value hiring headhunters? Usually smaller ones because they don't have fully built out HR teams. Basically if you see headhunters trying to recruit for BBs, it means they're trying to shoehorn themselves into a process rather than leading it.

Maybe if you see a smaller EB like CVP/PJT, they MIGHT add some value but generally, it'll be much better to reach out to junior bankers directly

 

This is incredibly helpful, thank you for your post. Cannot resonate more with point #2 - I've been interviewing for lateral opportunities since November, having completed over 50+ interviews, both technical and behavioral, and received 9 super day invites to date, ranging from boutique shops to MM to BB. Unfortunately haven't converted any of the super days but have learnt a lot in regards to the process and the importance of knowing your story cold on why the move. Nonetheless, great point about trusting the process as I appreciate the insight. 

Congrats on your new role and thanks again for sharing your insight. 

 

Thank you for doing this! I did want to mention 1 thing, hopefully others will take away. I absolutely agree with your comments about GS. I had the same process with them recently. Absolute disaster and they are VERY unorganized, to say the least, got the offer, but turned it down to say the least.
 

 

Thanks so much for this post, it was very insightful. I was curious about how much of a factor undergraduate GPA was in lateraling? I went to a target, but didn't do as well as I would have liked in class. I sometimes just want to know that if my GPA might potentially hold me back from working at a BB / EB, is it even worth trying?

 

Thanks for your time! Had a couple of questions

1) Can you please post a link of all the modelling courses you found helpful? 

2) When is the best time to lateral as an analyst? 

3) Did you just do cold outreach to people with similar backgrounds over linkedin then? 

 

Hey, OP here.

1) Not gonna post links since last time I did that WSO banned me lmfao, but I like Wall Street Prep (Premium Package) and Macabacus (free online)

2) No real answer here, but I've found Jan-March and June-August to be the best time since that's usually when bonuses hit and people quit. That being said, lateral hires are literally always happening (especially now) so you should be reaching out throughout the year

3) Nope lol, just standard IB networking - find on LinkedIn, guess the email format and email. Nothing out of the ordinary here

 

Can you talk about when a lateral move is worth it? I'm at what's considered a stronger BB group (in the CS/BAML/Citi tier) and I've gained some solid deal experience thus far. Things could be better in that I want to be exposed to more of the nitty gritty of M&A deals from a buyside and sellside perspective (I'm not in an M&A group), but I'm having trouble justifying leaving, especially since I've established myself well within my current group and think I've developed a solid reputation. I've always had intentions on leaving for the buyside and I know the optics of being in M&A is better.

I know you might not be the right person to ask, but figured I might as well throw the question out there.

 

Yeah it's a good question. I guess placement could always be better. Getting MF / UMM is pretty rare out of my group, but then again, my understanding is that it's basically rare everywhere outside of a very small handful of groups and those are a crap shoot to get into. During SA recruiting, I felt like I got burned in that I interviewed at many of the tippy top banking group but never landed. I think I'm up to snuff with the analysts in those groups if I get a shot.

That leaves me wondering how much the group will make impact my recruiting. At the end of the day, I'm not MF / UMM or bust and I'd be happy at the funds that the individuals in the classes above me have placed in. But I always have this grass is greener mentality and this insecurity to be optimizing these things...

 

Thanks so much for the post - hugely helpful. When do you think the right time to lateral is after beginning your first role? I am starting FT this summer with the bank I interned for and I already know I want to lateral. Should I start networking now to build up as many connections as I can? Should I wait a year before making a move? Curious what your thoughts are surrounding this.

 

Flagging that you definitely should not walk into a new role planning to lateral - at least get a feel for the group, see how you like it, then decide. 

That being said, you won't get any serious looks until ~6 months in. Most common time is 1 year in. Can start networking ~3 months in but don't tell people you already know you want to leave, just phrase it as wanting to explore options for a potential future career shift or something

 

Thanks for the post, super helpful. I've been interested in jumping at the associate level from a product group, looking to stay debt focused but hopefully at a better bank as I don't really care for M&A. However, I've gotten a few looks for coverage groups which goes to say how much of a hiring market it is right now. Traction has definitely picked up since the new year, and believe it or not a good amount of my interviews have come from just blindly applying online.

Just a quick question on your process, when you're reaching out to people is it completely cold and just based on knowing that that their group is hiring from a listing on their site? And mainly email over linkedin? Also, what did your timeline look like from initial phone screen to when the offer was communicated? I'm trying to get an idea of how quickly things are moving now since everyone is slammed with work, not sure if hiring falls lower on the priority list.

 

100% email, LinkedIn is basically useless for IB outreach.

I reached out to banks even if they weren't hiring actively just for pure networking and to keep in touch for potential future openings. E.g. the firm I got an offer for I chatted with somebody there about 2 months before anything opened up, then when they had a spot he happened to hit me up because I kept in touch and had followed up a few times

As for process length, it totally varies. Some were 2 weeks, others 2 months. These processes are much less structured than SA/FT, so be mindful of that when timing around your current contract and bonus

 

Great post - thanks again. 

What do you mean when you say LinkedIn is useless? As in random messaging?

How would you cold email people? I'm assuming you would get names from LinkedIn then email the fuckers right 

 

Huge thanks for the post! One question I’m having is how to balance lateral recruiting with current job. How do you take times off constantly? And what mindset do you have regarding approaching your current work? Thank you OP!

 

Just blocked off times on my calendar for private appointments whenever interviews came up, otherwise tried to schedule them for later in the afternoon/early evening when meetings weren't as common. Didn't find it too bad, just spent lots of my downtime and evenings prepping and was very careful to schedule calls in windows I could reliably assure I'd be free. I think I made up a doctor appointment once when I had a modeling test but otherwise nobody at my firm brought it up or cared

 

Some quick questions if OP (or anyone else) doesn’t mind answering:

  • Does this also apply to London? Especially the networking component (always felt networking was a bigger thing in the US) and technicals intensity.
  • How early should I start looking for lateral opportunities / exit ops (AN1 in June, IBD BB)?
  • Do you have any sort of bargaining power if you secure two offers? Negotiate salary / early promotion?

Thank you!

 

No clue about London, sorry.

I think it's fine to start testing the waters 3 months in, expecting to have more serious traction 8-12 months into the job. I'm a big proponent of the idea that networking is always a positive thing to do though, so imo you cant really start prepping too early.

Nope, only thing multiple offers might do would be to expedite one process due to an exploding offer

 

Can someone make one of these for FT Recruiting as a SA? Which level of banker should I be reaching out to? When should I start reaching out? Do I explicitly say that I’m interested in FT opportunities at their bank?

 

Analysts, maybe associates. Reach out right before your interview asking how to crush your internship, follow up later in summer to try to get in process. Alternatively, reach out in mid-lateish summer

 

Were you ever concerned your current firm would learn about you're lateraling? How did prevent leakage? 

 

Good question - no, I was even interviewing in some groups where my interviewers were good pals with my current boss lol, but there was never any leakage. It's just not in anybody's best interest to screw you over by telling your firm that you're recruiting, and everyone understands that they should be hush-hush about it. 

The only way your firm might find out is if you're the one who lets it slip somehow. Pretty avoidable, especially in WFH where you can take calls and interviews without anybody noticing you're gone.

 

For lateraling from outside of IB - would you recommend targeting experienced analyst or first year analyst roles? I'm coming from a highly acquisitive Corporate Development job which I took straight out of undergrad. I haven't started networking with IB contacts yet, but I don't really want to come in as a 1st year in my 3rd year out of school so wondering what the sentiment is like for "outsiders"