On the other hand this behavior also selects for candidates who are driven more by (the hope of) success and money, than by health, social/family life etc.
You basically have two workdays: the client-facing workday, and the preparation-for-the-next-day workday. Client-facing workday goes roughly 9am-6pm. Preparation workday goes from 6pm to anything from midnight (on a good day) to 5am (on a bad day).
During the client-facing workday you're spending about 1-2 total hours having meetings with clients, usually on conference calls, occasionally in person; the more senior you are, the more personal interaction you have with clients. The remainder of the time is spent reviewing the materials you generated the previous night, talking about what needs to be done, etc -- basically a constant planning / execution workflow around multiple concurrent streams of deliverables.
In the evening, managing directors go home around 6pm and vice presidents go home around 8pm. That's when you become really "free" to hunker down and start jamming out work. It's a lot harder to be productive when your time is hacked into 30-minute chunks the way it is during the client-facing day.
It is quite common to have nothing to do for hours at a time, both during the day and evening, while you wait for people to get back to you with further instructions on what to prepare and/or instructions for changing what you've already made. So, a 16-hour workday isn't usually a full 16 hours straight. You usually have time to go to the very nice on-site gym, for example.
The deliverables you're making are usually PowerPoint presentations with a lot of model-driven Excel outputs in them. Occasionally the underlying models are intellectually interesting, but they usually are pretty monotonous to put together....you're building something to a clear spec, and the challenge is being 100.000% certain you did it without errors, not figuring out how to do it.
To answer the question about whether you're productive working such long hours: the time commitment and the stress certainly don't foster creativity, happiness, or high productivity, but they really don't need you to be doing inspired work. At a junior level they're looking for people who can follow defined processes at a high level of throughput with a low error rate, while contributing occasional flashes of original thought -- for example, when you have to build a new model based on a unique client situation. Those situations are actually really exciting (especially when you're working on a big problem for a big client) but the flipside of the excitement is the stress around the consequences of fucking it up -- e.g., if the client just got a "bear hug" letter from a competitor expressing interest in a merger and you have to model out whether it makes financial sense.
The downside is that it's a miserable and unhealthy way to spend a couple of years. The upside is that you ride an incredibly steep learning curve and gain a ton of knowledge on valuation models, the inner workings of various industries, corporate governance, and how to run merger / fundraising / hostile-defense processes.
Hope this was helpful.
Parts of that actually seem really fun, but mainly the learning about industries and the model-building. I suspect I'd be a bad IBD intern.
(I've been talking with some people about a technology-focused turnaround firm; capital is cheap, but being able to do PE/etc. turnarounds by buying existing failing companies and replacing tech, rather than building a startup to disrupt the industry, might be interesting in certain sectors where distribution, IP, etc. really matter.)
I found it very interesting. Thank you for the write-up!
Hazing might be a part of it but I see it more like boot camp than anything else. Weed out those who don't have the fortitude and drive. They don't want employees who value family time over the company, for example. Forcing people to work insane hours will self select for the "right stuff".
It's not about productivity, it's about cultivating a specific culture.
And we wonder why the financial industry keeps finding new ways to profit at the expense of others.
It's essentially grind work (which also includes bringing coffee/lunch or if you really are up to it, walking the boss' dog). It makes me wonder if they ever get to learn anything at all, but I guess making presentations and creating good first impressions matter a lot in the long run. But what do I know.
It's exactly this in I-banking, from what I understand. A lot of the day is spent tweaking/waiting. Towards the end of the day, you get feedback from clients/managers, and that's when the "real work" starts.
From an external perspective, it's always struck me as horribly inefficient.
How is hazing reasonable? Most seem to find it to be an abhorrent tradition.
An entire summer of 17h days is difficult to imagine as a productive way to work.
"It's just hazing" is a reasonable answer, but surely that would create a market opportunity for some alternative entity, or at least would mean the hazing has to be limited in duration.