This post is dedicated to all the bankers, lawyers, consultants, private equity professionals and anyone else working in an up-or-out industry.
When the time comes, you’ll know the signs.
Your firm lands a plum mandate with a big fee – but somehow, despite having covered the space for years, you are not on the deal team.
All of a sudden, there’s a reallocation of coverage responsibilities within your group. You watch your colleagues get the best clients while you are left with the proverbial dregs.
You are now responsible for covering accounts that haven’t printed any revenues in years. It will be easier to squeeze water from a stone than to get them to start spending money.
On the way back from a client meeting, your boss starts extolling the virtues of going in-house and giving up on the grind of a front-office role. “That must be a sweet gig – just think of the work-life balance!”
And then, one day you get a phone call from the head of your group, asking you to pop by a conference room on a different floor.
If you’ve been around long enough, you know what to expect – so there’s little surprise when you walk through the door and see your boss together with an unfamiliar HR person.
What follows is a highly scripted conversation that minimizes any chance of a wrongful dismissal lawsuit. A couple of bones thrown your way in the form of a paid notice period, a redundancy payment and the ability to keep some of your deferred compensation.
Thirty minutes later, you are out the door, squinting in the sunshine while your assistant packs up your personal belongings in a cardboard box.
Climbing Up The Pyramid
When you join a large professional services organization as a graduate, the future is bright. It doesn’t matter whether it’s a bank, a law firm, a big four accountancy or a consulting shop, but you are at the very bottom of the pyramid.
And while it means everyone above you can (and will) try to crap on your head, you’ve got two massive advantages:
- Relatively speaking, you are cheap labour
- You don’t need to generate revenues
So as long as you are intelligent and hardworking – and the economy holds up, you’re in good shape. You will get promoted. Your pay will go up. More likely than not, your hours will go down (or at least they won’t get worse).
In other words, you keep climbing the pyramid. And the pyramid itself is wide enough to accommodate all the people who want to keep climbing it, despite the up-or-out system where if you don’t get promoted, you need to leave the firm.
But the closer you get to the top, the more complicated things get.
In the good old pre-crisis days, there was much more movement at the top of the pyramid. The most senior people were paid well – and mostly in cash. After a couple of years, they would typically peace out and do something more relaxing, freeing up spots for people below them.
And then the world has changed.
Ever since the crisis, economic growth has been muted – and is likely to remain that way. Fees are stagnating – or shrinking. And thanks to the stricter deferral or clawback policies, a couple of years at the top of the pyramid is no longer enough to retire and live happily ever after.
No matter how good you are at your job, there’s a chance that your journey may end well before you get to sit on the iron throne. And if you don’t want to be in for a rude awakening, this is what you need to do to prepare.
Have A Plan
As Mike Tyson’s opponents always found out, when things go south, they usually do so quickly.
Sometimes, it will only be a few weeks between the first time you see the ominous signs and the last time you are walking through the door. You need to be prepared.
It’s good to play out the worst-case scenario in your head every couple of months. If you were to be laid off tomorrow, what would you do?
Would you want to look for another job right away – or would you rather cancel your lease, put your stuff in storage and go traveling for a year?
And when you do come back to the workforce, what is it that you would want to do? Will you try your luck with a competitor? Go in-house? Get an advanced degree and try to reinvent yourself in a different career?
Or will you finally take the plunge and start your own business?
These are not easy questions to answer – and you don’t want to answer them overnight. Take the time to think them over. Visualize yourself in different roles. Write down the pros and cons. Talk to people who have made the switch before.
So as much as I respect Mike Tyson’s boxing ability, I disagree with him. Getting punched in the face is never pleasant. But having a preferred backup option is what differentiates people who land on their feet from the ones who don’t.
You may feel like an absolute master of the universe today, but remember this: at some point, you will fall off the tightrope.
After all, a big part of the reason you are making an outsize amount of money now is to compensate you for the inevitable pay cut – and the time it will take you to find a new role.
If you’ve started your career in the past 10 years or so, you may be forgiven for thinking that the good times will last forever.
But anyone who has been around longer than that knows – in a downturn, no job is safe. And the more money you make, the higher the risk of getting laid off.
The day before I started my investment banking career, my new employer cut 15% of the workforce. I remember that on my first day, people were walking around shell-shocked, trying to make sense of the carnage. Some people would automatically try to badge their way back into the building after being escorted out by HR.
With a six-figure student loan hanging over my head, I couldn’t take any risks – so kept my mouth shut, worked my butt off and saved up as much money as I possibly could. Thankfully, the steady stream of news about banking layoffs has kept me firmly grounded ever since.
The best approach you can take is to figure out how much money you’d make in your preferred backup career.
Then, pretend you are working your preferred backup career already – because, at some point, you will do just that. If you need to spend the entirety of the money you are making today, you are doing it wrong.
And if you feel that you must reward yourself, spend money on experiences, not material possessions. It’s much easier to turn the taps off on weekend trips than to have to sell your car or house because you can no longer afford it.
Most importantly, have an emergency fund. The more senior you are, the longer it may take to find yourself a new role. I have a couple of friends who have taken more than a year to find a job commensurate with their experience and qualifications.
Looking for a new job is stressful enough. Don’t make it any worse by worrying about the balance in your bank account.
When trying to rise up the ranks, you may be tempted (or encouraged) to specialize in a particular product or sector. Some degree of specialization is great – you don’t want to be the jack of all trades and master of none.
That being said, you need to be strategic.
Pigeon-holing yourself in a highly exotic corner of your industry can dramatically limit the universe of your exit options. You may be restricted to working in a very specific sector – or find that your skill set is only applicable in one country (detailed knowledge of the UK Takeover Code is a good example).
Specialization can be a fantastic way to advance your career. Do remember that in today’s world, you are likely to have more than one career. Find a way to keep your options open.
Sometimes, you’ll dodge the bullet. You may even end up the beneficiary of a restructuring – all while your colleague is heading for the conference room to collect his papers.
The way you behave yourself in these situations will say a lot about the kind of person you are. It will also have an outsize impact on what will happen when you are on the receiving end of bad news.
If you have colleagues who have been shown the door, please help them out. Introduce them to your network. Stay in touch – and help them with their job search. Make time for them, even if all you can offer is moral support.
There’s nothing worse than being stonewalled by your former colleague just because you ended up on the wrong end of a redundancy decision.
And if you can’t be convinced that being compassionate is simply the right thing to do, remember that one day, you may well end up following in their footsteps.
If you want to have an easier time when it happens, you need to learn from the experience of those before you.
You Are Not Special
When you are young, energetic and successful, its easy to feel invincible. And because your employer wants you to work as hard as possible, they will perpetuate the narrative of your bright future with the company – for as long as it suits them.
Of course, some people will go the full nine yards.
You may well be one of them. But do yourself a favour and look around the office. How many people are in their twenties or thirties? And how many are 45 and over?
And no, it has nothing to do with the demographic pyramid.
Nope, that’s not the answer
Remember – only a few people manage to go through their careers with a full degree of control. It takes a lot of skill, hard work – and pure luck. I hope you will be one of those people, but the odds aren’t in your favour.
So acknowledge the risks and start preparing today. When the time comes, you’ll be glad to have the opportunity to leave the front-office grind behind – and to do so on your own terms.