By Jen Saarbach & Kristen Kelly, Co-Founders of The Wall Street Skinny
A member of our social media community recently asked us about banks that have had some seriously bad headlines.
“Do these impact the firm’s deal flow? And, if so, how badly?”
Some have speculated that negative press will spark cries of outrage, scare away clients, and lead corporate clients to stop hiring investment banks with reportedly poor working conditions.
Our take?
It’s not so simple.
At the end of the day, companies are beholden to their shareholders. Clients want what is best for THEM. And when hiring a corporate advisory team, the client mostly just cares about THEIR bottom line. So if there’s nothing illegal going on, clients rarely change their behavior off of qualms over how a service provider is treating their employees.
They’ll hire whoever gives them the best outcome.
Moreover, while we believe that culture does start at the top, investment banks are large institutions. Within all the different banks where we worked, there was dramatic variation in the lifestyle, culture, and hours worked from group to group and desk to desk. Good or bad work culture can be hyperlocal and confined to individual groups, or perhaps even single department heads, Managing Directors, or staffers.
Just because one group is behaving badly doesn’t mean that the whole firm is rotten.
Instead, the real impact of articles like these is they lead incoming talent to reconsider joining particular firms.
Just because one group is behaving badly doesn’t mean that the whole firm is rotten.
Instead, the real impact of articles like these is they lead incoming talent to reconsider joining particular firms.
If you’re the world’s best candidate choosing between offers from two elite institutions, and firm A has bad press about how it treats its analysts, you’ll likely choose firm B.
If that selection process happens consistently enough that the overall talent pool becomes depleted, leading to inferior production, THEN the bank may then see a decrease in fees.
But the scary truth is that these roles are so competitive, firms could fill their analyst classes multiple times over with highly qualified candidates. Even their second, third, and fourth choice candidates in recruiting are likely incredibly talented. With such a deep bench to choose from, most firms have not been meaningfully held to task for bad behavior.
Which is unfortunately why we continue to see these types of articles.
If you’ve been offered a role at a firm with some bad PR, do your homework on the individual groups. See if you can talk to junior bankers and get their honest take.
Even better? Talk to bankers who have recently left and ask them what their experience was like. The more concrete data points you can get from trusted sources, the better equipped you’ll be to make the right decision for yourself.