7 ms·

How Our Professional Elites Are Hired

88 points by tortilla 16y ago

ctkrohn 16y ago
I've been on the other side of this as a Wall Street trading intern. As a college senior in 2007, my future employer hosted a party in NYC for all those who had accepted their job offers. Keep in mind, this is for people who had already agreed to take the job -- not for potential candidates. Still, they flew us to NYC from our respective colleges, put us up in a really nice boutique hotel, reserved a very nice restaurant for the night, paid for our drinks, drove us around in limos, served us brunch, and flew us back to NYC the next day. It was totally outlandish. Potential employers wine and dine their candidates because, well, that's how THEY would want to be treated if they were applying. Wall Streeters are quite status conscious, so of course they'll try to appeal to candidates' materialism and sense of status. Law firms are no different, though they're probably a bit more modest than your average investment bank. It's the same thing as Google bragging about their massages and catered sushi. Google is just showing that they have what their candidates care about. Your average tech employee probably wouldn't care, and would maybe even be a little put off if their employer took them to an exclusive club. Wall Street banks are big on expensive dinners and bottle service, but many of them don't even have gyms or subsidized cafeterias, much less free food. My firm didn't even have napkins in the pantry!
- _delirium 16y ago
  I think it even works to some extent, even among people who don't officially care. Here in academia we're not supposed to care about materialism, and many people actively make an effort not to. But conference organizers still put in things like lavish conference banquets, not because they enjoy wasting money and raising already-high registration fees, but because they've noticed it seems to make a difference in what kind of paper submissions and attendance numbers they get. I'm not sure what part of it is cynical versus subliminal, but it seems to work either way. I imagine some professors actively like the opportunity to spend an extra $100 on "conference registration" if it means they get it back in an off-the-books lavish banquet, while others grumble at the extra $100 of their already-tight grant money being wasted. But either the latter category are outnumbered, or the wining-and-dining subconsciously works on them anyway, by making them remember the conference more positively. Possibly there's just something to lavish entertainment making people well disposed to you, even if they know that's what's going on.
- enjo 16y ago
  I published a technical book at the age of 21. While I didn't make much money, the publisher (who has since been bought and sold 3 times I think) certainly wined and dined me at every conference and event that I went to. Great meals and all the free booze I could drink. Not to mention the chance to flirt with the always really attractive editors they sent out to work these things. It sure made an impression on 21 year old me. There didn't seem to be a lot in it for the publisher (other than keeping their writers happy I suppose). It wasn't like my book was very successful. Hell it wasn't very good at all. At 21 I had the knowledge, but lacked the work-ethic to really put the time into it. I always wonder if that's all this really is. Folks who have the money looking for an excuse to spend it (and make some kids year). I'm not sure it's a big plot to make them dependent on the job. I really think that people, generally, like to throw money around.
- gaius 16y ago
  What you are also seeing there is HR departments competing with each other for rankings in "best graduate programme" tables in the press. Which they may be incentivized to do by their own bonus system. I totally agree about Google - they are basically the same model as a law firm, highly talented fresh graduates working long hours, but with one glaring exception: it's still possible to be made partner in a law firm. Google isn't minting any more millionaires this long after its IPO.
learningtobuild 16y ago
A few random thoughts from long time lurker, first time commenter (I finally have some value / expertise to add): The biggest thing that these interviews are testing is structured assimilation. Banks look for someone who can convincingly discuss their unremitting passion to enter finance as a lifelong career without seeming either passionate or betraying an interest in the money. Consulting firms structure 'case interviews' designed to test 'problem solving' when they are really laying out a regimented structure which can be most easily mastered through having a successful network of already-hired junior consultants. Again, it's not that there isn't a desire to hire creative, talented people, but the profile has to fit along certain metrics.
- gruseom 16y ago
  What experiences led you to this assessment?
sasare 16y ago
It's the same thing as Google bragging about their massages and catered sushi. Google is just showing that they have what their candidates care about. Your average tech employee probably wouldn't care, and would maybe even be a little put off if their employer took them to an exclusive club... My boyfriend thinks the same as I do. He is eight years older than me, lol. We met online at agegaplove``.com a nice and free place for younger women and older men, or older women and younger men, to interact with each other. Maybe you wanna check out or tell your friends.
tomsaffell 16y ago
I worked at one such firm for five years, and did a lot of recruiting of undergraduates in that time. This is a mostly fair summary, but I take exception to the following: Even getting an interview often requires attending an Ivy League professional school or a very few top tier equivalents Anyone could apply. All applications were taken seriously, and I worked with several excellent people from non-Ivy-League schools. It would be much more accurate to say: Even _knowing_ about such business consulting firms often requires attending an Ivy League professional school or a very few top tier equivalents I always found this regrettable. It boils down to the fact that most undergraduates have never heard of most business consulting firms (or the industry at all), so a lot of work (consultants' time) and money go in to on-campus awareness marketing. That doesn't scale well at all. So we ended up doing it where we had the biggest bang for the buck (in the UK, this was just Cambridge and Hull... err, I mean Oxford). We would sometimes send one new hire to the careers fair at a few other universities. Bottom line: anyone could apply; every application was taken seriously; 99% of students outside Oxbridge had never heard of us, and that was too expensive for us to fix.
- silverlake 16y ago
  This is true. I went to a state school and had never heard of management consulting until everyone I met from MIT went into it. I remember a dinner in Boston where I kept asking them, why would a company pay a 24 yr old with no experience for advice on anything? I still haven't heard a good explanation.
  - astrofinch 16y ago
    http://www.overcomingbias.com/2010/04/consulting-isnt-about-advice.html http://www.overcomingbias.com/2010/04/consulting-isnt-about-... How about having someone to blame?
    - _delirium 16y ago
      It might be one of those apocryphal engineering war stories, but one I've heard a few times: a consulting company is brought in by management with a pretty obvious goal of ratifying something management already wanted to do. The in-house engineers know what's going on, and what management wants ratified, but they're supposed to work with this consulting firm. The engineers at the consulting firm know that they're probably being asked to ratify some already-made decision, and their job is basically to find out what it is and recommend that. Early on, the in-house engineers just spill to the beans to the consulting firm's engineers, and both groups more or less take it easy for three months, short-circuiting the usual charade while management on both sides thinks that some sort of consulting dance is going on.
grellas 16y ago
The Big Law model (in which I worked for four years some time back and with which I have dealt repeatedly over the years from one angle or another) depends heavily on highly leveraged relationships within the firm, typically with something like a 1 to 3 ratio between the equity partners and the young associates who do the bulk of the actual hourly billing. It also depends on the firm's having the capacity to do highly sophisticated legal work while consistently adhering to standards of excellence. Finally, it depends upon the firm's ability to induce the associates to adhere to wildly oppressive work hours as part of their normal schedule, such that, for example, when FB broadened its disclosure of user information there came popping out a whole series of attorneys who had (in the former cover of darkness) described themselves as "Slaves of xxx," or some variation thereof (which FB automatically designated as company names). These firms will pay the associates anywhere from $165K/yr to start up to the high $200s, often with large bonuses tacked on to the base salary. Why? Because it is basically a vast money-making machine for the partners who lead and manage those firms and who pull in multi-million dollar annual incomes. And the key to it is to have lots of talented bodies consistently pulling all-nighters on major pieces of litigation and major deals that such firms handle. Thus, whenever you read about a headline deal ("Skype to offer shares in IPO at $1B valuation"), you can assume that there is a small legal army at work in the background doing an orgy of billing. For their part, the associates toil and slave in such systems for as much as 8 to 10 years in hopes of making partner so that they can one day be on the receiving end of this money-making machine. This system works well only if highly talented young attorneys can consistently be recruited to handle the vast bulk of the billable hours involved in such work. Thus, the most precious asset belonging to such firms is precisely this pool of young talent, and they will pay dearly to get it. What is more, such associates are paid in lockstep, meaning that if one of these large firms "adjusts," the others will be quick to follow. For a nearly unbroken period over the past 25 years, those adjustments have consistently been upward. The craziness peaked in the bubble years of the late 1990s, during which the associates themselves set up "greedy associates" websites and compared notes on every dollar paid and every perk provided by their respective firms. Of course, if any firm began to be seen as out of step with what these young lawyers came to see as their entirely legitimate demands, this would be suicide for the firm involved because the top talent would no longer go there. Thus, one saw the spectacle of the most elite law partners in the nation cravenly bowing and scraping to green new grads, all for the purpose of continuing to curry favor with them for recruiting purposes. It goes without saying, then, that the firms would easily shell out for the sorts of things described in this piece - for expensive and luxurious flights, hotel stays, cab fares, dinners out, etc. It was all part of the game, and not a particularly costly part given what the firms would ultimately derive from this labor-pool asset within their business models. During their summer internships, they would be wined and dined as law students and would be repeatedly told what a great place to work the firm was. Once recruited as associates after graduation, they were introduced to the "slave system" in spades, and the naive perceptions they had as students would often be deflated in light of a sometimes harsh reality of endless, long hours and of often harsh taskmasters who drove them with an unkind hand. A significant part of this has to do with grabbing the students from the elite schools but the real goal was to grab the talented attorneys from each graduating class (this meant those from top schools and those from the top 10% or so of second-tier schools). The practice of law in such environments is truly demanding, and the goal was to find attorneys who worked hard, who knew how to think, and who comported themselves with the highest standards of discipline and excellence. Very few young attorneys can do all this consistently, and they are in great demand. In one sense, however, this piece reads like it must have been written a couple of years ago. In reality, Big Law is still reeling from the latest economic collapse and the latest crop of 3Ls is still largely unemployed, with no serious prospects for improvement in sight for this particular labor market. Even the Harvard 3Ls have largely had to settle for the types of positions that, until recently, they would not even have begun to consider. This truly is an artificial world and there is some doubt today whether it can continue to operate in its accustomed manner. Time will tell on this. I personally doubt it.
rdtsc 16y ago
I think it basically comes down to a status signaling mechanism. They are selling a dream to these candidates, so later they can sell these candidates to their clients. And selling is just that -- appearances. I doubt other schools don't have the candidates with the appropriate knowledge. However, I am sure, they do not have candidates that are in $200K+ student dept, and who expect to drive a Porsche bought with the signing bonus from their first job after college, who know the tastes of various types of caviar, and spend their vacations on private islands. One needs exactly these kind of people for your customers to interact with. They exude class, luxury, superiority, and confidence. So it is about signaling a certain status position and it is about giving your client the best ass cover they can imagine. Anyone hiring these consultants can always point to them and say "Look, we had all the best people. If they can't solve the problem, nobody can". These firms tap into that market -- the market for golden scapegoats. And the funny thing is, if the golden scapegoats fuck up, it is not a problem -- on the contrary, bonuses still roll in. The firm doesn't lose reputation. Because, after all, if these guys and gals can't do it, nobody can. The fuck-up is just a demonstration of impossibility of solving the particular problem.
known 16y ago
Management strategy while hiring a Consultant is Heads I Win. Tails You Lose

88 points by tortilla 16y ago

I've been on the other side of this as a Wall Street trading intern. As a college senior in 2007, my future employer hosted a party in NYC for all those who had accepted their job offers. Keep in mind, this is for people who had already agreed to take the job -- not for potential candidates. Still, they flew us to NYC from our respective colleges, put us up in a really nice boutique hotel, reserved a very nice restaurant for the night, paid for our drinks, drove us around in limos, served us brunch, and flew us back to NYC the next day. It was totally outlandish. Potential employers wine and dine their candidates because, well, that's how THEY would want to be treated if they were applying. Wall Streeters are quite status conscious, so of course they'll try to appeal to candidates' materialism and sense of status. Law firms are no different, though they're probably a bit more modest than your average investment bank. It's the same thing as Google bragging about their massages and catered sushi. Google is just showing that they have what their candidates care about. Your average tech employee probably wouldn't care, and would maybe even be a little put off if their employer took them to an exclusive club. Wall Street banks are big on expensive dinners and bottle service, but many of them don't even have gyms or subsidized cafeterias, much less free food. My firm didn't even have napkins in the pantry!

_delirium 16y ago
I think it even works to some extent, even among people who don't officially care. Here in academia we're not supposed to care about materialism, and many people actively make an effort not to. But conference organizers still put in things like lavish conference banquets, not because they enjoy wasting money and raising already-high registration fees, but because they've noticed it seems to make a difference in what kind of paper submissions and attendance numbers they get. I'm not sure what part of it is cynical versus subliminal, but it seems to work either way. I imagine some professors actively like the opportunity to spend an extra $100 on "conference registration" if it means they get it back in an off-the-books lavish banquet, while others grumble at the extra $100 of their already-tight grant money being wasted. But either the latter category are outnumbered, or the wining-and-dining subconsciously works on them anyway, by making them remember the conference more positively. Possibly there's just something to lavish entertainment making people well disposed to you, even if they know that's what's going on.
enjo 16y ago
I published a technical book at the age of 21. While I didn't make much money, the publisher (who has since been bought and sold 3 times I think) certainly wined and dined me at every conference and event that I went to. Great meals and all the free booze I could drink. Not to mention the chance to flirt with the always really attractive editors they sent out to work these things. It sure made an impression on 21 year old me. There didn't seem to be a lot in it for the publisher (other than keeping their writers happy I suppose). It wasn't like my book was very successful. Hell it wasn't very good at all. At 21 I had the knowledge, but lacked the work-ethic to really put the time into it. I always wonder if that's all this really is. Folks who have the money looking for an excuse to spend it (and make some kids year). I'm not sure it's a big plot to make them dependent on the job. I really think that people, generally, like to throw money around.
gaius 16y ago
What you are also seeing there is HR departments competing with each other for rankings in "best graduate programme" tables in the press. Which they may be incentivized to do by their own bonus system. I totally agree about Google - they are basically the same model as a law firm, highly talented fresh graduates working long hours, but with one glaring exception: it's still possible to be made partner in a law firm. Google isn't minting any more millionaires this long after its IPO.

learningtobuild 16y ago

A few random thoughts from long time lurker, first time commenter (I finally have some value / expertise to add): The biggest thing that these interviews are testing is structured assimilation. Banks look for someone who can convincingly discuss their unremitting passion to enter finance as a lifelong career without seeming either passionate or betraying an interest in the money. Consulting firms structure 'case interviews' designed to test 'problem solving' when they are really laying out a regimented structure which can be most easily mastered through having a successful network of already-hired junior consultants. Again, it's not that there isn't a desire to hire creative, talented people, but the profile has to fit along certain metrics.

gruseom 16y ago
What experiences led you to this assessment?

sasare 16y ago

It's the same thing as Google bragging about their massages and catered sushi. Google is just showing that they have what their candidates care about. Your average tech employee probably wouldn't care, and would maybe even be a little put off if their employer took them to an exclusive club... My boyfriend thinks the same as I do. He is eight years older than me, lol. We met online at agegaplove``.com a nice and free place for younger women and older men, or older women and younger men, to interact with each other. Maybe you wanna check out or tell your friends.

tomsaffell 16y ago

I worked at one such firm for five years, and did a lot of recruiting of undergraduates in that time. This is a mostly fair summary, but I take exception to the following: Even getting an interview often requires attending an Ivy League professional school or a very few top tier equivalents Anyone could apply. All applications were taken seriously, and I worked with several excellent people from non-Ivy-League schools. It would be much more accurate to say: Even _knowing_ about such business consulting firms often requires attending an Ivy League professional school or a very few top tier equivalents I always found this regrettable. It boils down to the fact that most undergraduates have never heard of most business consulting firms (or the industry at all), so a lot of work (consultants' time) and money go in to on-campus awareness marketing. That doesn't scale well at all. So we ended up doing it where we had the biggest bang for the buck (in the UK, this was just Cambridge and Hull... err, I mean Oxford). We would sometimes send one new hire to the careers fair at a few other universities. Bottom line: anyone could apply; every application was taken seriously; 99% of students outside Oxbridge had never heard of us, and that was too expensive for us to fix.

silverlake 16y ago
This is true. I went to a state school and had never heard of management consulting until everyone I met from MIT went into it. I remember a dinner in Boston where I kept asking them, why would a company pay a 24 yr old with no experience for advice on anything? I still haven't heard a good explanation.
- astrofinch 16y ago
  http://www.overcomingbias.com/2010/04/consulting-isnt-about-advice.html http://www.overcomingbias.com/2010/04/consulting-isnt-about-... How about having someone to blame?
  - _delirium 16y ago
    It might be one of those apocryphal engineering war stories, but one I've heard a few times: a consulting company is brought in by management with a pretty obvious goal of ratifying something management already wanted to do. The in-house engineers know what's going on, and what management wants ratified, but they're supposed to work with this consulting firm. The engineers at the consulting firm know that they're probably being asked to ratify some already-made decision, and their job is basically to find out what it is and recommend that. Early on, the in-house engineers just spill to the beans to the consulting firm's engineers, and both groups more or less take it easy for three months, short-circuiting the usual charade while management on both sides thinks that some sort of consulting dance is going on.

grellas 16y ago

The Big Law model (in which I worked for four years some time back and with which I have dealt repeatedly over the years from one angle or another) depends heavily on highly leveraged relationships within the firm, typically with something like a 1 to 3 ratio between the equity partners and the young associates who do the bulk of the actual hourly billing. It also depends on the firm's having the capacity to do highly sophisticated legal work while consistently adhering to standards of excellence. Finally, it depends upon the firm's ability to induce the associates to adhere to wildly oppressive work hours as part of their normal schedule, such that, for example, when FB broadened its disclosure of user information there came popping out a whole series of attorneys who had (in the former cover of darkness) described themselves as "Slaves of xxx," or some variation thereof (which FB automatically designated as company names). These firms will pay the associates anywhere from $165K/yr to start up to the high $200s, often with large bonuses tacked on to the base salary. Why? Because it is basically a vast money-making machine for the partners who lead and manage those firms and who pull in multi-million dollar annual incomes. And the key to it is to have lots of talented bodies consistently pulling all-nighters on major pieces of litigation and major deals that such firms handle. Thus, whenever you read about a headline deal ("Skype to offer shares in IPO at $1B valuation"), you can assume that there is a small legal army at work in the background doing an orgy of billing. For their part, the associates toil and slave in such systems for as much as 8 to 10 years in hopes of making partner so that they can one day be on the receiving end of this money-making machine. This system works well only if highly talented young attorneys can consistently be recruited to handle the vast bulk of the billable hours involved in such work. Thus, the most precious asset belonging to such firms is precisely this pool of young talent, and they will pay dearly to get it. What is more, such associates are paid in lockstep, meaning that if one of these large firms "adjusts," the others will be quick to follow. For a nearly unbroken period over the past 25 years, those adjustments have consistently been upward. The craziness peaked in the bubble years of the late 1990s, during which the associates themselves set up "greedy associates" websites and compared notes on every dollar paid and every perk provided by their respective firms. Of course, if any firm began to be seen as out of step with what these young lawyers came to see as their entirely legitimate demands, this would be suicide for the firm involved because the top talent would no longer go there. Thus, one saw the spectacle of the most elite law partners in the nation cravenly bowing and scraping to green new grads, all for the purpose of continuing to curry favor with them for recruiting purposes. It goes without saying, then, that the firms would easily shell out for the sorts of things described in this piece - for expensive and luxurious flights, hotel stays, cab fares, dinners out, etc. It was all part of the game, and not a particularly costly part given what the firms would ultimately derive from this labor-pool asset within their business models. During their summer internships, they would be wined and dined as law students and would be repeatedly told what a great place to work the firm was. Once recruited as associates after graduation, they were introduced to the "slave system" in spades, and the naive perceptions they had as students would often be deflated in light of a sometimes harsh reality of endless, long hours and of often harsh taskmasters who drove them with an unkind hand. A significant part of this has to do with grabbing the students from the elite schools but the real goal was to grab the talented attorneys from each graduating class (this meant those from top schools and those from the top 10% or so of second-tier schools). The practice of law in such environments is truly demanding, and the goal was to find attorneys who worked hard, who knew how to think, and who comported themselves with the highest standards of discipline and excellence. Very few young attorneys can do all this consistently, and they are in great demand. In one sense, however, this piece reads like it must have been written a couple of years ago. In reality, Big Law is still reeling from the latest economic collapse and the latest crop of 3Ls is still largely unemployed, with no serious prospects for improvement in sight for this particular labor market. Even the Harvard 3Ls have largely had to settle for the types of positions that, until recently, they would not even have begun to consider. This truly is an artificial world and there is some doubt today whether it can continue to operate in its accustomed manner. Time will tell on this. I personally doubt it.

rdtsc 16y ago

I think it basically comes down to a status signaling mechanism. They are selling a dream to these candidates, so later they can sell these candidates to their clients. And selling is just that -- appearances. I doubt other schools don't have the candidates with the appropriate knowledge. However, I am sure, they do not have candidates that are in $200K+ student dept, and who expect to drive a Porsche bought with the signing bonus from their first job after college, who know the tastes of various types of caviar, and spend their vacations on private islands. One needs exactly these kind of people for your customers to interact with. They exude class, luxury, superiority, and confidence. So it is about signaling a certain status position and it is about giving your client the best ass cover they can imagine. Anyone hiring these consultants can always point to them and say "Look, we had all the best people. If they can't solve the problem, nobody can". These firms tap into that market -- the market for golden scapegoats. And the funny thing is, if the golden scapegoats fuck up, it is not a problem -- on the contrary, bonuses still roll in. The firm doesn't lose reputation. Because, after all, if these guys and gals can't do it, nobody can. The fuck-up is just a demonstration of impossibility of solving the particular problem.

known 16y ago

Management strategy while hiring a Consultant is Heads I Win. Tails You Lose