I recently lateraled from a "no-name" boutique to a top MM and wanted to share some of the knowledge that I gathered and wished people had told me when I went through the process. I also have several friends who also went through this process. Hopefully this will help someone.
My background: I graduated from a non-target with a business degree. I had completed a few boutique IB internships while in school, but failed to close anything during FT recruiting. I ended up at a "no-name" boutique where I worked for as an analyst for a year before lateraling to the MM where I am at now.
Banking is a very small world and the skills gathered at any bank are highly transferable. Because of this, even if you are at a "no-name" boutique, it is very possible to move between banks. After all, you are doing the same work that analysts at GS/MS are, just on a much smaller scale. So, if you graduate and have no MM or BB offer, it is not the end of the world.
Lateral positions tend to pop up all the time, but most will show up towards the end of June/beginning of July after bonuses have been paid out. I highly suggest checking Indeed.com (it is a job posting aggregator) every day for postings and signing up for email notifications. You can narrow it down by city, but I would just search "investment banking analyst", unless you absolutely have to work in one particular city.
The lateraling process is very unstructured. You will still have your typical phone interview followed by a superday, but the process may only take a week, it may take several months, you may be the only one at the superday, etc.
Your first step should be getting your resume in order. You really need to highlight your deal experience, or if you are not in banking, anything that is transferable. I used WSO's investment banking resume review service for this and highly recommend it. (//www.wallstreetoasis.com/wso-finance-resume-review)
Unlike with SA and FT recruiting job postings, lateral recruiting job postings are not black holes. Most of my interviews actually came from blindly applying online. For the offer that I ended up accepting, I had no contacts at the bank and just applied online. If you networked a lot in undergrad, definitely leverage that network. Not every bank will be looking for analysts, but if your network knows that you are looking, they will keep you in mind should anything pop up.
Another thing that I really found worked well was to apply to a position and then shoot out two to three emails to associates and senior bankers in that group the day after I applied asked to learn more about group culture. Some may say this is too aggressive, and I can respect that, but when many banks post a job, they need it filled ASAP, so it really separates you if you take the time to reach out. Make sure to prepare for the calls, though, because they are always interviews.
I honestly found that lateral interviews were much easier than FT interviews and probably on par with SA interviews in terms of difficulty. Lateral interviews just seemed less predatory in nature, and it seemed more like banks wanted to learn more about your deal experience, as opposed to drilling you with technical in the hopes of whittling down their resume pile. You still need to be prepared, though. I found that the M&I interview guide and basic modeling course were more than enough. The boutique that I worked at did zero modeling, so I was behind from the get go, but M&I prepared me well.
The first step is the phone interview. Some banks do an initial HR screen that focuses on why you want to join that bank. You should obviously have some reasons why, but make sure to also mention what you can contribute. For example, if you are interviewing for GS FIG and have a lending background, mention how that knowledge can be used at GS FIG. The phone interviews with bankers all varied. I had a few that were highly technical, while others involved nothing more than talking about one of my interests on my resume.
Next up is the superday. These again vary by bank, as I had some that were very technical, while others involved no technical questions at all. At this stage, fit is more important. If you make it to the superday stage, you are qualified enough from a technical standpoint, but the bank still needs to see if you would make a good fit. Just be yourself, but try to be buttoned-up. I cannot believe this still happens, but I have seen everything from kids spitting food out during the superday dinner to kids bashing accounting careers when one the bankers is a CPA.
The most important thing about lateral interviews after fit is deal experience. Know your deals cold. Company revenue and EBITDA, selling price, reason for selling, deal complexities, buyer search process, your role on the deal, etc. are all things that you need to know like the back of your hand.
Since the process is so unstructured, the general WSO rule of "if you do not hear back the next day" does not apply. The bank may call you as you are heading out of the building, while others may take a month. The bank whose offer I finally accepted took a month from the superday to extend me an offer. So, do not sweat it if you do not hear back right away. It is definitely nerve-wracking, though.
You will most likely not have the opportunity to select between multiple offers since the process is so unstructured and since banks generally need analysts ASAP. Unless you are lateralling from a top MM or BB, chances are that you will lose a year in the process (e.g. I lateraled in as a first-year, even though I already had worked for a year). This can actually be beneficial if you are looking to get involved more early in PE recruiting.
I hope this is helpful, but I am sure that I am forgetting something, so feel free to ask any questions. Please try avoiding PMing me questions, so that everyone can benefit from them.
Mod Note (Andy) - as the year comes to an end we're reposting the top discussions from 2015, this one ranks #28 and was originally posted 6/21/2015.