by Brian DeChesare Comments (43)

Do Banks Create a Toxic Workplace Culture That Puts the Lives of Their Employees at Risk?

Investment Banking CultureSometimes, my timing for publishing articles on this site is horrible.

A few days ago, for example, I published our 2013 bonus recap and made a few comments about BoAML paying higher bonuses than other places… having just gotten off a 12-hour flight and not realizing the other big news involving that firm.

Assuming you’re not living under a rock, you’ve heard about it and have probably had friends forward you similar articles dozens of times by now.

A reporter (Liza Jansen in London) contacted me the next day and asked for my own views.

Normally, we don’t cover “current events” or news here but this story made such a splash in the mainstream media (and even made it to the front page of the Drudge Report) that I wanted to share a summary of my conversation with her.

This format is a bit different from the normal Q&As and interviews here since I am the “interviewee,” but here are my own thoughts.

The Article

You can check out my quote in her article right here (NOTE: We spoke for around 30 minutes and this is not exactly the quote I would have selected – but you know how that goes).

There are a few quotes from other people in the industry, other finance website owners, and my favorite: a sleep therapist who carries out “corporate health assessments at large investment banks” (They do that? Really? Since when?).

Liza’s basic argument in the article is that the 2008 financial crisis was responsible for the intern’s death.

Fewer jobs, tougher competition, and less deal activity means that you need to work even harder to stand out… which sometimes leads to tragedies like this, right?

Personal Experience and Crashing Cars Into Trees

I have a bit of personal experience with this issue: back in 2007, I crashed my car into a tree on the side of the road after pulling multiple all-nighters in a silly attempt to impress my superiors.

And then I started this site later in the year when I decided to get out of the industry.

(OK, those two statements don’t sound great taken out of context – read Part 1 of my story if you haven’t already done so.)

The point is that I’m well aware of how easy it is to fall into the trap of working to death to impress everyone – because it almost happened to me.

I could have been that intern.

Has It Really Gotten Worse Since 2008?

This one’s harder for me to answer because I left the industry around this time.

But I have conducted 100+ interviews with readers over the past 4-5 years, and my sense is that things haven’t changed by all that much.

It’s easy to look at an incident like this and say, “Aha! It’s all because of recent trends! People never used to work themselves beyond what was humanly possible.”

But it happened all the time – you know about my own experience in 2007, and even before that analysts at places such as UBS LA worked crazy hours due to the deal flow and office culture, plus everyone aiming for PE opportunities at the mega-funds.

The difference, in my view, is that much of the “crazy work hours” culture back then was less about impressing people and more about doing what had to be done.

Recently, it may have shifted into more of a “Do anything possible to get ahead and win the offer in the first place, even if you have to abuse yourself to get there” mindset.

But before I go on, let’s skip to a summary of my conversation with the reporter (Lisa):

Has It Gotten Worse Lately?

Reporter: Start from the beginning. Can you explain why exactly the hours in IB / finance in general are so bad?

Brian: I can try. The short version: clients pay banks so much money (millions of USD / Euros / GBP) that they can ask for whatever they want, whenever they want it. And banks feel compelled to cater to their every demand.

Meanwhile, it’s very difficult to “distribute” work or to predict the workload because you need to be intimately familiar with a company to answer last-minute urgent requests, and because it’s hard to predict when something will “heat up.”

So if banks hired twice the number of junior-level people, for example, those junior bankers would work at full capacity only half the time, and the other half of the time they’d have nothing to do.

For more, see my article on why you work so much as an investment banker no matter what the market is like.

Note: I’ve received some questions from readers asking, for example, why you don’t see those crazy hours at normal companies or on huge projects such as building oil refineries or pipelines at Exxon Mobil.

The key difference is that that’s not client work – it is internal, and the company can finish those projects whenever it wants (within reason). It does not have to answer last-minute demands at 3 AM from paranoid clients paying millions of dollars for a specific deliverable.

Oh, and you actually do see those crazy hours at normal companies sometimes – see the “crunch time” phenomenon in the videogame industry, for example.

Reporter: Since the crisis erupted in 2008, do you think the notion that you need to work whenever the client wants you to work has grown significantly in the finance industry?

Brian: In some sense, yes, but the truth is that notion has always been there.

There is more competition now, there are fewer job openings, and candidates are much better prepared than they were in, say, 2005 or even 1998.

Given the environment, yes, some professionals are compelled to work non-stop to get ahead and preserve their jobs.

And it is especially bad with interns since banks tend to be disorganized and do not always have great assignments for them.

Reporter: How have the IBD working hours and culture changed compared to pre-crisis times? Were these 100-hour workweeks less common before 2008?

Brian: No, not really. I think people are sometimes “short-sighted” when they discuss this topic and they forget how it has been like this for a very, very long time.

Here’s a story for you: Back in the late 1990’s during the dot com bubble, tech companies were going public and being acquired at massive valuations every day. Tech bankers were raking in the fees. Some equity research analysts got paid upwards of $10 million USD.

One Managing Director I knew from back then worked his analysts so hard, often keeping them at the office for days/weeks at a time, that he sent them all to Cancun for a week at the end of each “cycle.”

He gave them his corporate credit with no spending limit and told them to go wild, rest, and come back in one piece (believe it or not, most of them did come back rather than running away to somewhere else in Mexico).

So yes, it has gotten more competitive and people are far better-prepared and gung-ho in 2013 than they were in 1998 – but the long hours and sacrifice have always been there.

Reporter: So do you think hiring standards have also gone up over time?

Brian: I think the better way to phrase it is: “Banks pay a lot more attention to their new hires when the economy isn’t great and deal activity is down.”

Another story for you: Also in the late 1990’s, I heard a story of one “poorly considered” analyst hire who was given a simple task by his superiors: create TTM (Trailing Twelve Month) financial statements for a company.

This is not terribly difficult if you understand the concept… take the most recent fiscal year, add the most recent interim period, and subtract that same interim period from the year before.

He made one small mistake: he tried to TTM the Balance Sheet.

This makes no sense because the Balance Sheet is a snapshot at a specific time – it doesn’t show the change over time, so “trailing” numbers are meaningless.

You see more people like that getting hired whenever there’s a bubble, whether it’s the late 1990’s or the mid-2000’s.

Reporter: When do you think this culture of working non-stop, working weekends, and completely sacrificing your life first kicked in?

Brian: I’m too young to know what happened in the 1960s-1980s, so I can’t say for sure.

But compensation in finance was NOT much different from what you were paid in other industries (only about 10% higher) until the 1980s (Source: see this study from the Oxford Journals).

So that might have been part it – with deregulation and higher pay, the demand for these jobs went way up and you were expected to sacrifice more and more to “make it.”

By the mid-to-late 1990’s, a similar culture to what we see now existed at most banks in the US. So that could have been the “starting point.”

Reporter: Do you think this tragedy will have an impact on how banks allocate their work and manage interns going forward?

Brian: I certainly hope so. Banks are notoriously bad at giving interns “real work,” and they are often so disorganized that they invest a ton of time and energy into recruiting star interns, only to waste their talents on administrative work and other nonsense, or nothing at all.

And sometimes some interns end up doing all the work, and others end up bored to tears.

I expect there will be some sort of change or more sensitivity to this topic, at least in London, and perhaps at the bank where it took place.

Back when I had my near-death experience, I even managed to get a weekend off out of the incident…

Reporter: But will it last beyond this next summer / next year?

Brian: That’s the question. As I mentioned, unfortunately people tend to be short-sighted and forget what has happened in the past.

Often, these types of changes tend to take effect at the specific bank or office location for a short period, but are then not enforced properly over time.

But I certainly hope that any changes do last – even if they end up paying interns / full-time employees less because they hire more of them, I don’t think anyone would object.

Reporter: It sounds like you’re skeptical.

Brian: Yes. This mentality is so ingrained in the culture that I don’t see it changing anytime soon.

There would have to be a business model change at banks to support this as well – for example, if the model shifted and banks started charging lower fees but doing more deals or advisory assignments, you might see clients’ expectations decrease.

Don’t hold your breath, though, because the mega-deals with mega-fees are the most profitable, by far, and there’s too much pressure from the top to change the focus of most firms.

Reporter: Any final thoughts or words?

Brian: Yes. My thoughts and prayers are with his family, and I really do hope that banks will monitor their employees and staffing levels more closely in the future.

And if you’re reading this right now and wondering about the wisdom of entering the industry, it’s the same thing I’ve been saying for years: yes, you do want to impress… yes, you will work crazy hours and sacrifice your social life…

But you also have to take a measured approach and learn when to slack off, how to give the appearance of working hard even when you’re not, and how to make people like you so you feel less pressured to out-perform.

Do that, and this will not happen to you – even if you crash into a tree or two along the way.

M&I - Brian

About the Author

Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys memorizing obscure Excel functions, editing resumes, obsessing over TV shows, traveling like a drug dealer, and defeating Sauron.

Break Into Investment Banking

Free Exclusive Report: 57-page guide with the action plan you need to break into investment banking - how to tell your story, network, craft a winning resume, and dominate your interviews

We respect your privacy. Please refer to our full privacy policy.


Read below or Add a comment

  1. Do not blame others for your own misfortune. If incompetent management is forcing you to work 110 hours per week, it’s your responsibility to find a new job as soon as bonuses are paid (or your internship ends).

    1. Yes, agreed, but if banks themselves are fostering a culture where that type of work is encouraged, you can’t blame employees for 100% of it.

  2. It is the responsibility of the employee to refuse work that may affect his or her health. While I am saddened to hear of the death of this intern, the bank is not responsible. If the intern was unable to perform the assigned tasks without affecting his/her health, then he/she should have considered another field. Attempts to regulate working hours will take banking down the slippery slope of unionization and mediocrity, which our nation cannot afford. There are plenty of men and women who are willing to work 100 hours per week. These people belong in investment banking. Others should seek work in the back office or in academia.

    1. It’s easy to say that, but banks encourage people to work all hours even if it’s not explicit. A lot of it is embedded into the culture and is a result of poor management as well. I don’t think the industry will ever be unionized, but who knows.

  3. Brian,

    Just wanted to make an article suggestion- how about one on facetime / downtime? It’s huge as an analyst in investment banking since everything goes through a hierarchy, leading hours (sometimes days) of not doing any work and then getting slammed with work and so on and so forth.

    I’m kind of surprised there was no separate article on this. Would you mind publishing one? Would love to hear your insights (and the inevitable humor). Thanks!

    1. M&I - Nicole

      We have an article that touches on the topic “downtime”. You may find it useful:

  4. This kid completely brought it on himself. Nothing. Believe me Nothing. He would have been doing was useful enough for him to be pulling several all nighters in a row as an intern.

    His own fault honestly. BoAML would not have forced him into doing this kind of work or held a gun to his head. Worst case is he would not have gotten a full time offer and leveraged it into another position elsewhere. Not to mention the FACT he had already achieved several internships at other high profile companies.

    1. I have to condemn your statement and request you to take it back

    2. Do banks need to have a culture in which one thinks he must do something like this in order to succeed?

      I think you are making it a bit easy on banks while also sounding harsh considering someone died.

      Clearly banks do not put a gun to their interns’ (or even analysts’ and associates’) heads, but they still foster work cultures which lead to behaviour similar to this case. They seemingly don’t care to communicate that such commitment is not necessary to succeed in winning an offer. And they seemlingly also don’t care enough to send someone home after an extraordinary effort when further assistance is not necessary or crucial. (And yes, even in banking, an all-nighter should fall under this category.)

      They are not responsible for this unfortunate incident, but they are responsible for the culture which has led to it. And this culture is what should be questioned (and changed).

      If a government does not impose a limit on alcoholic influence in traffic, they are not responsible for people getting wasted and killing themselves (and others) on the road, after all they did not force anyone to drink. However, that does not mean that they should not consider implementing a limit in order to make traffic more safe.

      1. M&I - Nicole

        Good points.

        1. WEll banks like BOA,GS do create a rat race kind of culture.This american style globalization where being a mercenary seems the way to go forward.

          Treating your employees correctly , distributing work evenly , transparency , proper delegation are all aspects which should be looked at rather than just deals->money->bonuses-> type of model

          1. M&I - Nicole

            Thanks for your input. I have no comments on this front.

      2. This comment has the rancid smell of unionization. No one has any right to limit the effort an employee puts into his/her career. Apple, Google, Microsoft, or Tesla could not exist if their executives limited their working hours to less than their capabilities.

        The Allies would not have been able to defeat their enemies if soldiers had some arbitrary limit placed upon their efforts.

  5. You keep mentioning increasing the amount of bankers by 2x. Why not just increase it by just 20-25%? When the average workweek is 80 hours, 20% more people could lead to better hours. It is not like it varies by 40 hours a week where a 20-25% increase would be a waste of effort and energy.

    1. That is definitely an option. I mentioned 2x only because people usually say, “You work twice as much as normal people, so why not just hire twice as many people?”

      Banks may indeed start doing that to “hedge” themselves in the future.

  6. I interned at an American BB in Hong Kong this summer. And honestly my hour was even worse than the unfortunate German. And I did that not because I want to impress – but just because there were too many things to do. Everyday, fulltime analysts bounce at 12am and leave the rest work to interns.

    1. Wow, that is pretty bad. Guess it really is the same or worse in HK.

  7. I’ve recently read an interview with an ex head of M&A from Germany who stated that 9 out of 10 all-nighters did not occur because of clients’ crazy demands or rapidly developing deals, but rather were the result of bad staffing and nonexistent project planning. Thus, they were unnecessary and even counterproductive.

    If that is true, do the senior bankers think about coordinating their human resources at all? And what do the Staffers actually get paid for?

    1. Hah, I’m not sure about 9 out of 10 but a good portion could certainly come from bad planning. See some of the stories here for more on that.

      One issue is that senior bankers sometimes have a “lone wolf” attitude and do not coordinate well because they want to use the firm’s resources to win their own deals and don’t always like “sharing.” There are some exceptions e.g. for mega-deals it is more of a group effort. But that explains some of it.

      Staffers: who knows, in the current environment they really shouldn’t be paid any extra unless they’re actually managing someone… which they are usually not.

  8. I was reakky shocked when the new broke. Terrible, terrible thing.

    I certainly hope that banks will learn from this. I am sure that division of labour can be improved at banks. Not, not by hiring twice the number of analysts, but by adding a certain percentage. Yes, margins would decrease and the business would be less profitable, but the world has survived the abolition of slavery and the end of unbareable working conditions during the industrial revolution.

    Add a better organisation and staffing to this, and banks should be fine. They would have a slightly less, but sttill very profitable business, with healthier employees and most likely a better reputation.

    I am not very optimistic about this, but one can still dream, right? If nothing happens, this story might repeat itself one day.

    1. Yup, agreed. Maybe they can’t cut everyone’s hours, but at the very least they could supervise interns much more effectively and monitor staffing levels more formally (it’s very ad hoc at most firms, even the large banks).

  9. Magician named GOB

    Funny how just below the article title is a link to download your recruiting guide for getting into this industry

    1. Yes, unfortunately we cannot change the template for individual pages (easily). But that same thing appears in lots of other stories that are more negative as well.

  10. So is it true that bankers (both junior and senior level ones)in HK work A LOT more than their counterparts in Europe/US?

      1. Thanks Brian. Another kinda off-topic question: is UT Austin considered as a target school for banks? (for MBA level)

        What about Duke,U Michigan & Kellogg MBA?

        1. All of those would be at some level, but probably Duke and Kellogg more than the others. The state schools also have banks recruiting but sometimes it is more for regional offices I believe (e.g. UT Austin and energy groups in Texas).

    1. I think as an industry, bankers all work a lot…. as far as region or company specifically, I think the deal flow, the complexity of the deal, and how good the people are would play a big role in how much work the analysts or associate is given to work on

  11. Carl Icahn's beard

    What if I don’t want to use the 3, 6 & 9 months ended data Brian? What if I want to use MORE statements to calculate TTM?????

    “take the most recent fiscal year, add the most recent interim period[s], and subtract [those] same interim period[s] from the year before.”

    Good luck OP, please stay safe.

    Thank you.

    1. Then you’d be like the analyst who tried to TTM the balance sheet…

      1. Carl Icahn's beard

        It’s called initiative, Brian. Have to do something when I’m putting in all those face-time hours. My MD loves it when I try to re-invent the wheel or do some funky out the box thinking.

        Shout-outs to KKR, I’m coming for you.

        1. Ok, in that case you’ll definitely get the top bonus this year

          1. Carl Icahn's beard

            I’m just a beard Brian, beards don’t get bonuses.

  12. The underlying reason for this article is i guess the death at BOAML’s London office of an Intern, Moritz Erhardt.

    I dont know why it took the death of an intern for an article like this to come up?

    Plus it had to happen at an American Bank and it had to be BOAML where employees are treated like dogs

    This american investment banking toxic culture (filthy) is spreading like a disease , sit for days in your office like a Dodo(esp when u have no work) just to ‘impress’ your boss or be a ‘real’ analyst is just pathetic.

    Going by the posts , i think working for a couple of years in IB and then moving on to Corporate development or corporate finance seems justifiable , i may earn less but atleast i wont DIE

    1. I’m not sure I understand your question – this article was in response to an interview with a reporter and because this story was huge news this week.

      It is a discussion of how the culture has changed, if at all, if you look at the late 90’s vs. mid-2000’s vs. now (2013). My point is that there’s more to it than just wanting to “impress people” – part of it is inherent to the business model itself.

      1. I dont know why this article didnt come up a good half a decade ago

        Secondly why dont banks hire more people to reduce the burden per individual ? I know they might have to pay more in salaries but with better planning and work delegation this is achievable.Plus investment banks have alot of money to increase their headcounts and this obviously means to pay less bonuses to 23yr old novices

        1. Explained above and in the links:

          “So if banks hired twice the number of junior-level people, for example, those junior bankers would work at full capacity only half the time, and the other half of the time they’d have nothing to do.”

          It is the nature of the business. Work demands are unpredictable so “planning” is very difficult with clients paying that much money.

          1. “those junior bankers would work at full capacity only half the time, and the other half of the time they’d have nothing to do”

            So if the work is divided well and everybody finishes it neatly by working 8-9 hrs a day , you are working only half the time?
            And if you work say 16-18 hrs you are deemed to be working full time?

          2. I mean that if they hired twice the number of bankers, those bankers would work 9 AM to 5 PM for 6 months out of 12 months, and the other 6 months they would have no work to do.

            As a result, banks would not want to do that. Nor would any normal company even want to do that. Hence the current system where it is mostly crazy unpredictable hours with a lot of downtime, interspersed with a flurry of activity.

        2. on a live deal, the analyst is some type of “expert” at a piece of the deal process/model/work flow; therefore, the analyst is playing an important part on turning the data around and deliver the “work” to the MD and the client…..that said, having many analysts on a deal would potentially create problems when a MD is looking for an answer to a specific question and not sure who to ask for an answer in a timely manner… hope this makes sense…at least that’s my understanding of why analysts work so hard for long hours

          1. Yes, exactly. Thank you.

          2. What they really should do is outsourcing the pitching part to the production center and raising their hourly rate instead. Not all pitching is model-heavy, especially in the ECM.

          3. I like your thinking…

Leave a Reply

Your email address will not be published. Required fields are marked *