The banking industry is going through a turmoil (WSJ Article on Lehman, Merrill and AIG) with marquee names filing for bankruptcy or being sold at fire sale prices due to the shaky credit practices and the demise of the credit based securities. Many bankers are fleeing to other industries, such as hedge funds and private equity. Any job opening these days in these industries are likely to receive hundreds of applications from bankers. Management and strategy consulting could be another viable and rewarding career path for bankers. Let me explain why:
Your experience as a banker is relevant
Management and strategy consulting firms help executives make critical decisions. The ultimate goal is to increase shareholder value. Bankers typically are value oriented and shrewd about the market reactions to any company decisions such as acquisitions, new product announcements. Hence, having the shareholder value lens is innate to banking profession. This point of view tends to develop later in consultants at higher levels in their firms, so your experience would be valued.
Management consulting is more robust business
Consulting business is more robust to economy cycles. Sure, the business is up when the economy is booming but it does not go down as much as banking during bust times; however, the mix of consulting work changes substantially. When the economy is doing well, most clients are in growth mode, looking for new markets, products. They use management consultants to support to create those strategies. When the economy goes bust, clients are in cost cutting, restructuring mode and guess what, they ask consultants to help with those initiatives. Most large consulting firms have practices and capabilities to do both, so their revenues are not impacted negatively.
You already have the credentials
Credentials to get into management consulting are similar to I-banking. You need top school education, top grades, good analytical judgment, willing to work long hours. Consulting firms value diversity, so your major is not important.
Make sure you have your story right
Consultants are usually suspicious of bankers looking to move to consulting. If you say “I got downsized from Lehman, and want to be able to pay my Manhattan rent”, chances are you won’t go very far. You need to have a good story around why consulting is a good next step for you, and how your background can be relevant. Also, make sure you do due diligence on the particular firm you are interviewing to tailor the answers to them. People do not expect you to commit staying in consulting until you make partner, but they want you to enjoy your stay.
Consultants usually complain about long hours and lack of work-life balance, but these are things people do not even talk about in I-banking, so you will probably have no issues with the lifestyle.