Minimum Time Before Lateralling?

I know people say that a firm cares about you as much as what you can do for the firm, but I honestly believe that relationships you build go beyond just a number that appears on the P&L. My question is for those that have made a move at some point in their careers.

  1. How did you approach the conversation with your boss, mentor, or friends within the firm? How did they take it? Do they take it personally if you did something completely different from what you mentioned in an interview? Did you stay in touch with them after you left?
  2. What is the shortest time you would recommend before considering a lateral? You don't leave your significant other the minute a better looking one comes along, and I feel like a similar perspective should be applied for work.
  3. How much of a pay bump(or other factors that enticed you, please describe) did it take for you to leave, assuming you were happy with the people/culture/work at the old firm?

Looking forward to hearing your thoughts.

Mod Note - make sure to see the comment below by APAE

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Comments (59)

Feb 3, 2018

bump

Jan 28, 2018

bump

"I'm going to make him an offer he can't refuse."

Jan 28, 2018

Made a lateral move to a more competitive group within my firm. You can probably guess which one.

1) Personally left after ~1.5 years in the original position. Timing felt right. Started with reaching out to HR to make certain that they would even entertain me as a candidate. Then approached my Boss with the open position and simply said that I would like to express interest and explained why (more interesting transactions, wider footprint, etc.). Boss took it well and thought it made him look good. We had another analyst leave for a less competitive group but for greater pay. That was sort of looked down on and the kid will never be able to lateral back. A good boss won't take it personally, but there are a lot of crappy bosses out there. Mentors were very supportive and encouraged it. Who cares what "friends" think? You'll be surprised how easy they come and go. Still stay in touch with most mentors, bosses, friends, though not nearly as much as I used to.

2) Anything less than a year is frowned on. Anything over that is mostly fair game. Meaning one full year in a full-time position though. Not including any time you spent in training. I don't necessarily agree with your analogy. If the career opportunity of a lifetime comes along, tell your firm to shove it and move on. You're more replaceable/forgettable than you think. Generally, wait the year though.

3) Experience was #1 factor, as I knew the pay would come at some point either way (i.e. leaving) with the type of position I was lateralling to. Only really needed the pay bump to adjust for the cost of living from switching cities. Had to keep in mind that I couldn't outprice myself, as I didn't have experience in the position previously. I was very happy with my previous group/culture, but was feeling complacent and unchallenged.

    • 3
Best Response
Jan 29, 2018

I haven't ever lateraled. Here is the conventional wisdom.

1) This is stickier if you're trying to transfer internally. A lot of people actually avoid internal options solely because of the predictable politics you can fall foul of.

It's a conundrum. If you apply internally before checking in with your direct manager, you run the risk of your current job blowing up on you. This could mean you get fired, although the more common outcome is that everyone is just salty with you / your ranking (and/or bonus) gets hammered at the end of the ear / your promotion trajectory in that role flatlines.

If you broach the conversation before you apply, you face much of the same outcome set as above. It really requires a lot of finesse (and pure luck where your boss is a decent human) to have this go well.

For these reasons, a lot of people look externally for lateral opportunities. In this case, the best practice is to recruit discretely, making sure to get an airtight offer that is signed and a signing and/or relocation bonus that is wired before you tender your two weeks notice.

Once you've tendered, invest as much time as you can in sealing off all your work to leave the position as ship-shape as possible for whoever your replacement winds up being. This could mean writing some how-to-guides, a checklist of recurring responsibilities (client calls you coordinate, memos you distribute internally or externally, etc.), or a skeleton of where to find all critical files on the share-drive.

Make sure you bring your A-game in the exit interview if your firm conducts it. Seriously. Small things often end up mattering the most in life, and it blows my mind how people miss the easy low-hanging fruit. Treat the exit interview as seriously as you treat entrance interviews for prospective jobs. You're essentially interviewing for your future reputation. Shave, wear a tie and your best suit, and do the homework in advance that enables you to be articulate about what you learned in the role, what you contributed, process points that you feel could be improved, and actual reasons why you wanted to leave. Don't be rude, but be concrete. If you felt there weren't enough resources dedicated to professional development, say so. If you felt there was ambiguity or a lack of clarity in how reviews translated to compensation or promotion, say so.

If you are someone who leaves in a thoughtful, mature way, people will think back on you fondly like a lover they lost - the amicable breakup ("He left, but I wish he never did.") You'd be surprised how many times people rejoin a firm they previously worked at and skip a level or two in seniority. You can't do that unless they think the world of you.

2) Best practice is one year. This holds true across all industries, but particularly finance. The general thought is that if you couldn't even make it one year in your first job out of school, you have some concerning personality traits. You couldn't honor a commitment, you failed to do enough homework on the job in advance, you're a flighty person whose interests change too quickly, or any of a dozen other things.

In finance there's a particular strain of masochism that's really interesting. The logic is that "if I went through it, you have to too" - which is why the banking analyst experience hasn't improved at all in decades despite a dozen key factors that could improve it immeasurably. In practice this means that if some guy sees your resume with a six or nine-month stint before you bounced, he's going to frown on it because he ground it out when he was your age and thinks you should have too.

3) My advice is that compensation should never be the primary motivating factor if this is one of your first two jobs out of school. From what I know of the banking analyst market today, a $30,000 difference is about as much as could reasonably be expected (except in the case of extreme outliers like Centerview, for instance). After tax you're looking at ~$18k, or about $700 in every biweekly paycheck. That is not enough of a cash difference to base a decision on.

Experience should be the motivator. If you're at a true boutique (I'm talking one of those places that has less than 30 staff) or a lower MM bank or a bigger bank's regional office or a product group like ECM/DCM and you have a really articulate and informed opinion that a specific coverage sector or particular bank with a particular strength is a much better fit for your long-term goals, that makes sense.

I'll offer two examples to prove my point.

The first was a guy I know who started at JEGI (look it up). I didn't know him well, we met at one of those BB underclassman introductory programs (think UBS Sophomore Symposium, GS Spring Insights Day, etc. - the names may have evolved by now, I am far enough removed that I don't even know if they still exist at all) and ran into him infrequently.

He fretted a lot about his career prospects and was obsessed with getting a BB name on his resume. I can't say which without identifying him personally, but he ended up brute-forcing his way to a mid-tier BB product group. He left at the 10-month mark and thus forewent his first-year bonus. He was forced to 'reset' his analyst clock, meaning they worked him for three months and then stuck him in the first-year analyst pool with people who graduated a year later than he did.

He was in a capital markets role at a bank that isn't considered elite and thus has corresponding exit opportunities, so he ended up doing a third analyst year there (bringing him to four years as an analyst total!) before begrudgingly accepting the A2A promote. I haven't seen him in a couple years but I have heard from two people how miserable he is.

The second is a kid who was one of two roommates cramming into a 2-bedroom with a guy I graduated with and visited every now and then because they had a sick (albeit cramped) view in the Gehry building.

He started at a real no-name boutique focused on consumer; I'm talking 20 employees total including admins. It was founded by two guys who were BSDs in their day but presumably sucked at or got tired of the politics at the senior level in a big bank, so they did few deals but every analyst basically finished with at least one deal they could claim they were point on.

He had a really strong interest in renewable energy. It's not a field I know much about, but the genuine passion this dude oozed day and night for the fuels of tomorrow was actually pretty captivating. He knew everything from front-page energy M&A to what SWFs were doing with principal investing in emerging markets to exciting Series A startups doing cool things with agtech, desalinization, and biofuels.

He moved after two years to a BB energy team (they made him do a third analyst year but told him the A2A promote was guaranteed). Six months later he left to join this family office that had been a client of his group for years and was trying to set up a principal investing function focused on energy and real assets. It was hilarious listening to him recount the story, like a dream come true. His MD was starting to get mad at how dynamic and energetic he was in meetings pitching them on some really out-there stuff (think Shia LaBeouf in Money Never Sleeps with that fusion deal), but it turns out they loved it, took him to dinner, and literally asked what he would do if he had to spend a billion from scratch.

He didn't even need paper, he just went straight from the dome right there at BLT Prime and mapped out how he thought about allocation. They hired him and now he oversees a $2b real assets and renewables sleeve for a third-generation family office with about $10 total; half of it is positions he inherited from the current CIO who deployed a lot of money into timber and ag assets, but half he has free reign over. I talk to him often (the family office world is small and it really pays to stay in touch); they've already told him if he sticks around he can replace the CIO when that guy retires within a decade.

I share these vignettes to paint the picture that you should be strategic (thesis-driven), not mercenary (economically-driven) in how you think about where to move. Try your best to have a sharp idea of where you ultimately want to be, then invest heavily in preparing yourself today for tomorrow's ideal. As part of that, identify where you can best move from your current position to get closer to your goal. Life isn't as linear as most people believe.

Good luck.

    • 61
Jan 29, 2018

I want to meet that second guy.

    • 2
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Jan 29, 2018

That man is a tank and we are going to do a deal together probably sometime next year; it's one of the ones I look forward to most. It's really rare when you both feel like you're lucky to know each other.

Feb 1, 2018

This second guy is like if WS2's Jake Moore was really likable and someone you want to root for... and not Shia LeBeouf, who you'd wished took a trip to the subway track instead of his boss.

Feb 2, 2018
APAE:

That man is a tank and we are going to do a deal together probably sometime next year; it's one of the ones I look forward to most. It's really rare when you both feel like you're lucky to know each other.

Hey APAE, would you mind I PM you? Thanks.

Jan 29, 2018

someone really compile everything you're writing and putting it into a PDF...maybe a project for me over the summer.

Jan 29, 2018

I never finished the script, but sometime I will get around to publishing a website that is a simple auto-feed in reverse chronological order of all my comments here.

    • 1
Jan 29, 2018

at some point maybe Patrick can set up pateron accounts for some of the select members here...

Feb 2, 2018
Array
Jan 31, 2018

Any time is good. You got a better deal? Take it.

As long as you don't do this on a routine basis, it's not hard to explain away.

Just remember....your company doesn't care about you AT ALL. Do what's best for you.

    • 1
    • 1
Feb 3, 2018
UFOinsider:

Any time is good. You got a better deal? Take it.

As long as you don't do this on a routine basis, it's not hard to explain away.

Just remember....your company doesn't care about you AT ALL. Do what's best for you.

Harsh reality.

Jan 31, 2018

asap

Feb 1, 2018

Do you think the firm would have any issue firing you tomorrow if it suited their needs? Treat them the same way they would treat you.

Feb 2, 2018

Is someone really gonna judge your character for switching from J.T. Marlin to Morgan Stanley M&A early in your career? It's only if you're continuously jumping for no apparent reason that it looks suspect as to why you couldn't find a place to dig in and do work at.

    • 1
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Feb 3, 2018

Having seen 20% of the floor at my bank fired in a day - and another 20% over the next 3 years I believe people are suckers to display ANY type of loyalty to their employer (this apply to any large organisation, I never worked in a small company).

The large BB will make you think they are doing you a favour by having hired you, and should therefor pay you less. My boss used to tell me that to sit in my sit it costs them $1m a year just to have me there, and I should be thankful for it. When I got paid a shit bonus post Lehman another boss told me I was lucky to have a job etc...

I work on the buy side now, and I am just amazed at the people around me thinking that their employer will treat them "fairly". No one gives a fuck about you and you are as replaceable as anyone. True, it's annoying if you leave. Means late nights for the rest of the team for a couple of months, but the big bosses won't be doing those late nights and they don't care.

I am diverging a bit now - but long story short is fuck off when ever you want.
You don't want to be changing jobs every year, otherwise people will wonder why you can't seem to hold a job for more than a year. What is wrong with you?

My advice to all junior people is always wait for a promotion before jumping. If you got promoted you are proving to any future employer that you were good enough for a promotion in your old job and if you left it was of your own accord. Now if you don't get promoted after 3 years and you hate your job that's another problem I hope I'll never have.

I jumped ship once, never looked back. All the guys who were VPs at the time when I was an analyst are now the big MDs at the bank. I used to shoot shit with them and we used to get along like a fucking house on fire. When I hit a rough patch recently, my mate who still works there told them about my issues - they said that if I ever wanted to come back the door was open (i didn't take them on their offer as I was looking to go buy side and didn't want to go to my old BB anymore). Then again, I liked all the people I used to work for, spent five hours saying goodbye to everyone. If you are an unlikeable ass hole, your life will be miserable regardless of when you switch jobs. It's all about who you are and how you quit. We are all mercenaries in finance, and everyone understands why you switch jobs. Bosses will bull shit the young juniors to keep them fearful and employed.

Realised the above post is a long mumbo jumbo of rambling. I am tired with a screaming child that won't let me sleep so my apologies for the typos etc...

    • 11
Jan 29, 2018

I have missed your salt-of-the-earth wisdom, wish you made it on here more often. Hope everything is great and the kid is healthy.

    • 1
Feb 3, 2018

Very kind of you - thank you

Feb 4, 2018

Also curious about this topic. What if you are trying to lateral from A nonIB role to to IB (ER, Lev Fin, etc) within same firm? How should you handle it? Should you go under the radar and apply to positions within the firm?

Feb 9, 2018

Curious about different approaches on this as well

Feb 5, 2018

As someone who has been laid-off twice, you should leave whenever the heck you want, they (in every sense of the word) do not care about you. However, like someone above said, don't hop 15 times in 2 years, but logical moves will be understood.

Feb 9, 2018

bump

Feb 9, 2018

You need to wait at least six months, but will most likely have to wait a year. Banks are going to see you wanting to move after only a few months and assume you don't like IB. Take a look at my lateraling guide.

Feb 9, 2018

Yes, you have about 0 experience right now. I would stay for a year and see what kind of dealflow and exp you get.

Feb 9, 2018

..6 months

I'm making it up as I go along.

Feb 9, 2018

I don't think a year is necessary. I would hold out and work hard for at least 3 months, but 6 or so would be better if you can make it work. Realistically, right now you just have a job - haven't done much and would have to seriously explain why you're leaving without even giving it a chance. In 4-6 months, you can really start putting forth the effort to move, after building, hopefully, a bit of experience, and with a better understanding of the group and what you/don't like.

Check out this for a bit more on switching groups:

http://www.bankonbanking.com/2010/07/01/i-got-plac...
and

http://www.bankonbanking.com/2009/07/27/making-the...

Feb 9, 2018

bump

Feb 9, 2018

a year minimum

Feb 9, 2018

year min or 2 if you're nice. A year is a bit harsh though.

Feb 9, 2018

1 year after u collect the bonus check

Feb 9, 2018

1 year diplays a lack of character

Feb 9, 2018

actually at the analyst level, 1 year is pretty much the time to lateral unless you plan on staying in banking beyond the 3rd yr analyst stage. generally banks want you to stay for 2 years when you lateral. an exception might be if you were knocked back a year if you moved from a MM to a BB. there are not too many banks that hire 3rd yr analysts just for the year unless they are desperate for bodies.

Feb 9, 2018

Do a lot of people move into PE after a year too ?

Feb 9, 2018

i know some analysts who went PE after a year, but it was to small shops.

Feb 9, 2018

Would you look like your job hopping if you lateraled in like 6 months?

Feb 9, 2018

I know one guy who lateraled from MM to BB after 5 months. I know many other that made a jump between 12-18 months. I would argue that after 5 months you have not developed sufficient skillsets to make you stand out (how different are you REALLY since you initially interviewed at BB level banks, presuming you did?).

The guy who lateraled after 5 months was a special situation since he was non-target, never went was given the chance for BB, and had a close family contact at the group he eventually jumped to. Other than that I'd say your minimum is 12 months.

Feb 9, 2018

Yeah, that's smart. You get how many job changes in banking before you're unemployable? Yeah, let's use up one of them as an ANALYST. Real smart.

Feb 9, 2018

I know a kid who lateraled from one of the 2nd tier BB's to a very well regarded 2nd Tier PE shop after one year. Good move if you ask me.

Feb 9, 2018

Yeah, that's smart. You get how many job changes in banking before you're unemployable? Yeah, let's use up one of them as an ANALYST. Real smart.

It's true to some extent that moving around a lot doesn't look good. If you worked at all of CS, MS and LEH in a 2 year period it will look terrible.

But no one will fault you for moving from CIBC to LEH.

Feb 9, 2018
Rickets:

Yeah, that's smart. You get how many job changes in banking before you're unemployable? Yeah, let's use up one of them as an ANALYST. Real smart.

It's true to some extent that moving around a lot doesn't look good. If you worked at all of CS, MS and LEH in a 2 year period it will look terrible.

But no one will fault you for moving from CIBC to LEH.

Dude, finish your two years then go.

Feb 9, 2018
BB.MnA.Analyst:
Rickets:

Yeah, that's smart. You get how many job changes in banking before you're unemployable? Yeah, let's use up one of them as an ANALYST. Real smart.

It's true to some extent that moving around a lot doesn't look good. If you worked at all of CS, MS and LEH in a 2 year period it will look terrible.

But no one will fault you for moving from CIBC to LEH.

Dude, finish your two years then go.

In an example where someone moves from an almost non-competitor (i.e. MM to BB) to another bank, noone cares from each end, as long as you go about it the right way. Noone will fault you for pursuing a better opportunity, at the end of 2 years you are supposed to do one year at your new bank?

Feb 9, 2018

heres the deal with lateraling - only move after 1year if you either dislike your group/bank or are trying to lateral to a BB from a MM - keep in mind that a lot of BB's will discount you a year so if you lateral after 1 year, you basically start fresh as a 1st year analyst. like i said earlier, most banks want at least 2 years from you otherwise its not worth it to them. lateraling after 2 years is worth it if its from MM to BB (getting knocked back a year) or from 1 BB to another if you want to become an associate.

Feb 9, 2018
ibanalyst:

heres the deal with lateraling - only move after 1year if you either dislike your group/bank or are trying to lateral to a BB from a MM - keep in mind that a lot of BB's will discount you a year so if you lateral after 1 year, you basically start fresh as a 1st year analyst. like i said earlier, most banks want at least 2 years from you otherwise its not worth it to them. lateraling after 2 years is worth it if its from MM to BB (getting knocked back a year) or from 1 BB to another if you want to become an associate.

Most banks won't hire new analysts on as third years and only get one year out of them. And they definitely will not give out guaranteed associate promotes. The only bank I've seen that does this is GS, and they do exclusively at the analyst level and basically only hire laterals form other BB's (i.e. know someone who went for her 3rd year from a 2nd tier BB to Goldman because she knew she wanted to stay in banking long-term).

Feb 9, 2018
GameTheory:
ibanalyst:

heres the deal with lateraling - only move after 1year if you either dislike your group/bank or are trying to lateral to a BB from a MM - keep in mind that a lot of BB's will discount you a year so if you lateral after 1 year, you basically start fresh as a 1st year analyst. like i said earlier, most banks want at least 2 years from you otherwise its not worth it to them. lateraling after 2 years is worth it if its from MM to BB (getting knocked back a year) or from 1 BB to another if you want to become an associate.

Most banks won't hire new analysts on as third years and only get one year out of them. And they definitely will not give out guaranteed associate promotes. The only bank I've seen that does this is GS, and they do exclusively at the analyst level and basically only hire laterals form other BB's (i.e. know someone who went for her 3rd year from a 2nd tier BB to Goldman because she knew she wanted to stay in banking long-term).

thats why i said you get knocked back a year - i.e., you would repeat your 2nd year. and i never said the associate spot was guaranteed - nothing is in this industry

Feb 9, 2018

How does the lateraling process work? Do you go through a HH, contacts, recruiters..etc

Feb 9, 2018

All of the above.

Feb 9, 2018

depending on the firm i'd say at least 1 year...although there is a good chance that you may burn some bridges in doing so...i'd say that a lot depends on your situation, personal goals, etc.

Feb 9, 2018

All depends, if GS comes knocking, then you go, no one will think it's wrong to go grab the brass ring.

Feb 9, 2018

Staying at your current job for at least 12 months should be the base plan, but would definitely try to put yourself in the process if the right group comes along.

If you're performing well and have good trx experience, then I would try to be selective with your next move. You want the next jump to be meaningful enough to justify the move, which could mean waiting for an opening within a top group at a top bank.

If your profile isn't quite as strong and/or you do not like your current group, then would suggest a broader more active search.

Feb 9, 2018
Feb 9, 2018
Feb 9, 2018