Investment Banking Hours: Will “Protected Weekends” Save You, or Will You Still Toil Away for 80-100 Hours per Week?
Tell anyone outside the finance industry that you work in investment banking, and they’ll ask you the same few questions each time:
- Why have you destroyed the economy multiple times?
- Why are you stealing money from poor people?
- Why are you not in jail?
- Oh, and why do you work so much?`
For decades, investment banking and other finance jobs have had a reputation for brutal, 80-100-hour workweeks.
But then banks realized that this practice was killing people – remember what happened to that intern in 2013?
As a result, the large banks began to implement “protected weekends” and mandatory time off for junior bankers.
So, should you still expect to work 80-100 hours per week?
Or will you get to have (a bit) more of a life?
The Short Answer
Initiatives like protected weekends have shifted the work around, but they haven’t changed the total amount of work that must be completed or your total time in the office.
You might not have to work on Saturday, but you may work all day on Sunday and even more on weekdays.
These policies haven’t changed banks’ business models, which is the reason for long hours in the first place.
But these policies also haven’t changed the fact that you won’t be doing “real work” for much of your in-office time.
What Do “Long Hours” Mean?
When people start bragging about their long hours, you should be skeptical.
It is not possible to do challenging, productive work that requires high levels of mental energy for 100 hours, 80 hours, or even 60 hours per week.
When bankers talk about “their hours,” they mean their time in the office regardless of whether or not they are doing real work.
For example, if a banker “goes to work” from 9 AM to 2 AM, that’s 17 hours in the office.
But was he/she working or doing productive work that entire time?
No, not by a long shot.
For example, many days go like this:
- 9 AM to 12 PM: Read news and wait for the client to send financial information. The client is late.
- 12 PM to 3 PM: Do some mindless work processing NDAs for another deal or updating company profiles or public comps.
- 3 PM to 5 PM: Start working on a valuation for a pitch next week.
- 5 PM to 7 PM: Client still hasn’t sent the information. Get food.
- 7 PM to 2 AM: Client finally sends the financial information, but it’s horribly formatted. Your VP tells you to fix it and update the CIM and management presentation, which takes several hours.
In that 17-hour day, you did only ~12 hours of work, and only a few hours of work that required mental energy, but you still had to be in the office and “on call” the entire time.
So, if you “work” 80 hours per week, yes, you’re in the office from 9 AM to 1 AM on weekdays, or from 9 AM to 11 PM on weekdays with a 10-hour day on Sunday.
But you’re also spending a good chunk of that time waiting for information or assignments or doing tasks that don’t require much mental energy.
Why Are You in the Office So Much?
The in-office hours are insane for three main reasons that haven’t changed since the 1980s:
- Huge Clients Pay Your Bank Huge Fees: When a company is paying your bank $50 million, $10 million, or even $1 million to advise on a deal, you have to do whatever it wants at any time of the day.
- Unpredictable Work Demands: Unlike with engineering projects – or even audits at Big 4 firms – it’s almost impossible to use “project planning” for deals in investment banking because the process is random and unpredictable.
- Division of Labor Failures: And banks can’t hire more people to reduce the workload because one person has to “own” each aspect of a deal. Multiple people writing a CIM or building a model at the same time would be like writing a novel with multiple authors (i.e., a bad idea).
You could add a fourth reason to this list as well: The culture.
Working long hours to “pay your dues” is deeply embedded into the culture of financial services firms.
Even if banks’ business models were to change, long hours in the office might continue because… well, you have to work a lot. Just because.
Here’s a bit more detail on each factor above:
Huge Clients Pay Your Bank Huge Fees
If a single executive at a client company gets upset over something, he/she could immediately cancel the deal, resulting in millions of dollars in lost revenue for your bank.
Bankers sell their time and attention – not a tangible product – and they need to provide it, even if a client calls at 1 AM on Christmas with an urgent request.
If a bank did 1,000 deals per year and earned $50,000 per deal, service standards would decline.
But that business model would also be far less profitable; it’s why you earn much less in Big 4 advisory.
Unpredictable Work Demands
When you work on an M&A deal, much of the work happens in the beginning (creating marketing materials, presentations, and financial projections) and at the end (negotiating the definitive agreement, arranging financing, resolving last-minute disagreements, etc.).
But in the middle of the process, random events, requests, and problems always come up.
You might get an acquisition offer from a buyer who dropped out but then came back at the 11th hour.
Or maybe your client just missed its earnings, and you need to revamp your 10,000-row financial model.
Or maybe the CEO is having a bad day, and he wants to see unnecessary analysis, just for fun.
Other firms that deal with unpredictable work demands, such as web hosting companies and oilfield services companies, handle these issues by hiring teams to work in shifts.
One team works from 8 AM to 4 PM and fixes a website that just crashed; another team works from 4 PM to 12 AM and replaces a part of an oil pipeline.
But that approach doesn’t work as well in banking.
Division of Labor Failures
The problem is that each deal is different and requires client-specific knowledge.
You normally set up financial projections one way, but you had to modify rows 95-110 for one client because of an issue that came up in an email exchange with the CFO last year.
Or, there are 17 versions of the company’s internal projections, and you’re using each version in different slides of the management presentation – and only you know the logic behind the sequencing.
There’s no “instruction manual” because so much of the process is ad hoc.
You can come up with rough guidelines, but you can’t describe all the steps universally and comprehensively.
There might be thousands (or tens of thousands) of documents in a single deal, and it’s impossible to “learn” everything quickly.
That’s why the person responsible for the original analysis and marketing documents tends to keep working on the deal.
Senior bankers also want to ensure accountability by designating one “go-to person” for each part of a project.
If a VP wants to change a model, he/she does not want to ask 2-3 Analysts; he/she wants to ask the one person who’s in charge of it.
OK, But Really… 100 Hours per Week?
Nothing above means that bankers necessarily have to “work” (AKA “be in the office”) for 80-100 hours per week.
The fact is, plenty of all-nighters and long hours come from poor planning and poorly managed teams – and there are concrete ways to improve the process.
For example, bankers could avoid many all-nighters if they did a better job qualifying the work requirements.
Do you need a 100-page pitch book for an initial meeting?
Or would a 10-page summary work?
Do you need to scrub the numbers and adjust for non-recurring charges by 8 AM tomorrow?
Or will the client not even look at the appendix that explains your work?
Exceptions, Carve-Outs, and Special Cases
You do not always work 80-100 hours per week in investment banking.
Hours tend to be lighter in groups like Equity Capital Markets since deals and workflow are more predictable.
You won’t have much of a social life on weekdays, but you also won’t be staying at the office until 2 AM all the time.
More broadly, in-office hours are a bit more predictable in “public markets roles” (equity research, hedge funds, asset management) where you follow companies instead of advising on large transactions.
Also, even if you’re in a “deals role,” the hours are often lighter when the deals are less complex (e.g., early-stage funding deals in venture capital).
As you advance, your hours improve because the nature of the work changes.
A Managing Director or Partner won’t stay in the office until 4 AM editing font sizes in a presentation; he/she might still work 60 hours per week, but most of that time is spent in meetings, on calls, or traveling to meet clients.
Finally, some boutique banks offer significantly better hours.
This one is the exception rather than the rule, but there are some small banks where bankers work 40-50 hours per week and still close multiple deals per year.
They do that by using existing contacts and relationships, working on only inbound deals, and avoiding all pitches.
They still have to complete marketing documents for clients in sell-side M&A deals, but they avoid pointless administrative work.
The senior bankers at these firms don’t necessarily care about maximizing revenue; they aim to earn enough without killing themselves 24/7.
So, Will the Hours Ever Change?
To their credit, banks have acknowledged the ridiculous hours and attempted to improve working conditions for junior bankers.
But junior bankers have criticized these schemes for several reasons:
- Some policies are a joke. You get “2 hours of personal time per week?” What are you supposed to do with that?
- When a live deal heats up, these policies go out the window.
- These policies have shifted more work to the Sunday-Thursday period.
- Being free from Friday night to Sunday morning isn’t a real “weekend off.”
These criticisms are valid, but they also miss the point of these policies.
The point of a “protected weekend” isn’t to reduce the total hours you work, but to make your schedule more predictable.
To see the difference, take a look at some of my articles about investment banking from a long time ago: Stories of being pulled away from dinner on a Saturday night or being asked to stay late on a Friday night, for example.
These incidents are less likely as a result of these new policies.
And that does make a difference: Having an entire day to rest and recharge – even if it’s just once a month – helps a lot.
Even if you’re just responding to questions and emails, being “on call” 24/7 wears you down and leads to burnout.
So, even though banks haven’t reduced the total number of hours you work, they have still made positive changes.
You’re less likely to work consecutive 130-hour or 110-hour weeks now, and you’re less likely to die on the job.
With better management, banks might be able to reduce the average “in-office time” in the future.
But keep your expectations in check: It will never be a 40-50-hour-per-week job.
You couldn’t even call that “banking.”
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