Investment bankers’ idea of what is normal is distorted

All the studies show that more than half the deals bankers have talked clients into undertaking destroy rather than create value

Working 14 hours a day is ruinous to your health, your family, your relationships, your personality and your temper. It's also thoroughly inefficient. We know all this, but the sad case of Moritz Erhardt has reminded us of it, all over again.

Even if it turns out that the death of the Bank of America intern had nothing to do with the long hours he worked, the story still makes me marvel over one of the greatest mysteries of office life. Why is it that a way of working that is both unpleasant and unproductive is common practice in the most sought-after and successful corner of the economy?

Why do young investment bankers put up with it? They know that they will be working round the clock, but they appear not to mind. This year Goldman Sachs had 17,000 applications for 350 opportunities to spend the summer working far harder than is healthy or wise.

I’ve been playing a game I loved as a child when I considered horrifying counterfactuals such as: under what conditions would I eat a bowl of sick?


This time I’ve been pondering something even less appealing: what would make me regularly work 14 hours a day? I’ve come up with three possibilities. First, if I were being paid by the hour and my family was barefoot and hungry. Second, if it were my own business and I had become unhealthily obsessed with it. And third, if the work was a matter of life or death. If I had been a nurse behind the lines in the first World War, I would not have been clocking off at 5.30pm.

None of these situations applies to young investment bankers. They are under no financial pressure. Anyone who has been hired by Bank of America could surely have got a more civilised job elsewhere. The work of a banker in M&A (where Erhardt was posted) is hardly the sort of thing that spreads human happiness: all the studies show that more than half the deals bankers have talked clients into undertaking destroy rather than create value.

So why do they tolerate the hours? I’ve just cross-questioned two novice investment bankers, one of whom was so flushed with triumph at having landed the job all his friends wanted that he seemed to welcome the amount of work as further confirmation of his own worth to the organisation – and to the world at large.

The other young banker shrugged: everyone works late. This gets to the heart of the mystery. Investment bankers surround themselves with other investment bankers and so their idea of what is normal is grotesquely distorted. Just as anorexics may think it’s normal to have a lettuce leaf for lunch, young bankers think it’s normal to spend 14 hours at their desk. This guy did not even consider it weird that a colleague of his restricts how much he drinks during the day so that he hardly ever goes to the loo and therefore reduces time away from his desk. The novice was considering emulating it.

The second mystery is why the banks inflict a working day on employees that exhausts them and renders them good for nothing.

I suspect it’s the same reason that the old “fagging” system endured for so long at British public schools. When you’ve been a fag yourself you can’t wait to become a fag-master and do the same to someone else.

Senior bankers claim long hours are the result of never-ending demands by clients. A partner feels obliged to promise a client he can produce a report in the twinkling of an eye, which means an underling must be up all night writing it. When the junior sends it to his boss, it invariably gets sent back with a thousand petty corrections – meaning another all-nighter.

The greatest stupidity in this thoroughly daft system is how badly it serves the client’s interests. Whenever I’ve listened to presentations by investment bankers, what impressed me most was the scale of the waste. Bound copies of slides are handed around on paper so thick it would do for wedding invitations. There are too many show-off facts and diagrams; the presentation is too long and given by too many people. The main message: we are busting a gut to justify the king’s ransom we are charging you.

Whatever the coroner’s verdict on Erhardt, it probably isn’t going to change how young investment bankers work. The interns aren’t going to go on strike. And older bankers aren’t going to stop wanting to lord it over younger ones.

The best hope for change is if clients sling these over-glossy, over-researched reports that have been written by under-slept teenage scribblers into the bin, and say – just like Shania Twain – "That don't impress me much".
– (Copyright The Financial Times Limited 2013)