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GUEST COMMENT: Don’t give up hope

14 October 2008

Stephen Lockley

As I watched the television pictures of bemused and worried staff leaving Lehman Brothers’ offices on the day it collapsed, I was struck by a comment one senior banker made to me: “They won’t know it for a while yet, but for a lot of them, this will turn out to be the best thing that’s happened to them.”

What could have prompted him to say such a thing? His own personal experience for one thing. Being part of a large firm that collapsed several years ago caused him to re-evaluate what he was doing and, as a result, he has ended up in a smaller firm where he is much happier.

So, is there light at the end of the tunnel for the many financial services workers being impacted by today’s problems? I believe the answer is “yes”. Experience of previous bear markets and economic downturns has shown that these times when the world seems to change beyond recognition often throw up new opportunities. The period that followed 9/11, for example, saw many investment bankers who had specialised in small and mid cap stocks lose their jobs as the major houses withdrew from this market. Within a short space of time, however, the gap had been filled by the rise of a large number of smaller, independent broking houses and M&A boutiques, all keen to hire good quality talent.

Turbulent times such as these will also bring opportunities in related areas. A range of organisations will need to think about hiring staff with relevant experience as they grapple with the consequences of what we are seeing – organisations such as regulators, litigators and insolvency practitioners, for example.

I wouldn’t want to understate the trauma that many employees will be suffering as a result of the recent events in financial markets, but the message is “Don’t give up hope”. You may need to think laterally about your career direction and be patient, but experience shows that new opportunities will arise at some stage. For some of you, the end result may be a decision that your future lies outside financial services – but if you end up being happier in the long run, is that necessarily such a bad thing?

Stephen Lockley is a partner at the corporate finance advisory firm, Wyvern Partners. In a career spanning almost 30 years, he has witnessed at first hand many economic and market downturns, as well as the subsequent recoveries.

Comments (15)

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• Steve, this is seriously good prose. Were you still working in 1929 ??? Something similar has repeated. Nobody has been through this before. Spare the well-meaning advice please.

  Dude 14 Oct 2008

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• Overly optimistic. The train is not just off the tracks – it has derailed, dropped down a gorge and smashed to pieces. Any industry not recruiting is an industry in decline, any industry losing it’s experienced talent to other industries is in serious decline. The irony is that things will still be bad in 2009 and those made redundant next year will see that parallel opportunities, available now, will have dried up, so to be employed in IB now, may actually be worse than looking for work now. The experienced talent is going elsewhere because they have to and quality graduates will be naturally reluctant to enter a severely damaged industry with falling remuneration packages, but growing workloads. As I have said before, there will be a talent drought in 18 months, but this time the regulators won’t be pulling their punches and Banks will have to raise remuneration packages to attract their experience back.

  Wizard of EC1 14 Oct 2008

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• "Banks will have to raise remuneration packages to attract their experience back."
  
  I don't think so. The business just isn't going to be there for some serious  M&A / corp fin work. Even if there is, salaries and bonuses will be capped which means bankers might actually start givng decent advice instead of pushing deals just to get commission.

  Disbelief 14 Oct 2008

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• How can the words talent and IB can still appear in the same sentence without a little shameful blushing.

  Roberto 14 Oct 2008

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• Disbelief - I agree regarding M&A/ corp fin work but I was commenting more on strategic change management types, no doubt we will see Basel III soon enough ! Change people are more likely to be needed after the dust has settled and the regulators start demanding better risk, control, compliance. Perhaps there will be a re-balance between front office comp and their enablers?? Thing is, change people are more mobile than most front office roles and this may just lead to a talent squeeze.

  Wizard of EC1 14 Oct 2008

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• Think the notion of 'not giving up hope' has truly sank. If you are working in IB during times of an economic boom and for example a  bank restructures and you were laid off, yes for these people something better will come along.  The market is flooded with talented people right now, and this will only get worse as we approach year end as banks such as ML, HBOS, MS etc that have annouced mergers or buyouts will lay of excess staff in Dec. before their year ends.
  
  I have been hit by the credit crunch twice already this year. Was made redundant in Mar and took on a short term contract until July (all seems ok). The difference in fnding work in Mar compared to now is tremendous (i've just found temp work at 50% below what i was earning to stay afloat)...good times ahead? think positive? lets all reevaluate shall we!!!!!

  miss d 14 Oct 2008

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• Banks have paid too much for too long to too many people!

  Walter 14 Oct 2008

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• Think it is an good article from someone who has been around the bloack and has experienced a lot. Don't think of this as the end of the world but use it to find something that you truely love to do. Most people in finance were in it merely for the money and perhaps there is more to life than banking!

  A 14 Oct 2008

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• Stephen Lockley is merely trying to offer hope to the few who see none, and I laud his noble, albeit mortal efforts. My kudos to Stephen!
  
  If you recall the news of a few weeks ago, a successful American Indian owner of a fund management house gunned himself and his entire family down, when he perceived his situation as a "no way out" quandary.
  
  In raising comment as you have, Stephen; you may have saved more lives than you can estimate. At the same time, you have demonstrated there is heart yet in the generally cold and calculating world of IB.
  
  At day's end, the current experience has offered I-bankers an opportunity to reassess lives, values and the PURPOSE of their lives.
  
  The same talent which I-bankers possess can for instance, be unlocked to benefit the underpriviledged; e.g. venture philanthropy and/or microcredit schemes a la Professor Mohd Yunus' Grameen Bank.
  
  It is time we re-examined our personal lives and the stewardship of our human gifts, dear I-bankers. Dig deep and hard, and you may rediscover the soul within; and perhaps, realise also that, there is the alternative life of entrepreneurship which may offer you the infinite wealth you crave.

  Hope 14 Oct 2008

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• Regulation is not going to kill the banking business. It is going to make it go back to what it is supposed to do in the first place. If you have been in the industry from 2003 to 2007, DONT COMPLAIN because you are the lucky ones especially if you earned chunky bonuses. And Above ALL, banks are not the prime value creators so there is no justification of earning those salaries. Deregulation has allowed some people to earn incredible money legitimately, this will never be possible anymore.
  I am sorry for those bank employees because they forgot they were employees and not founders of businesses because they earned too much money.
  NOW remember you are employees.

  David 14 Oct 2008

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