Most of the time, personnel moves in investment banking are a fairly staid game of chess; one player moves at a time, looking for more money or seniority and each bank tries to build up its franchise piece by piece. Every now and then, though, somebody knocks the board off the table by coming in and taking out a whole team. The “team move” will always set off the industry gossip, as the hiring bank reveals itself to have a budget to match its ambitions, while the other employer involved now has to shore up its franchise quickly, and probably pay a premium to do so.
It’s a ticklish subject to talk about, because team moves are a grey area in legal terms. There’s no such thing as indentured servitude in modern capital markets: anyone can change employers for any reason that they like. But while you’re working for one employer, you generally owe that employer some duties of diligence and service, and one of those duties is that you shouldn’t be inducing your fellow employees to resign and go somewhere else. Not only would that be a breach of contract, but there would potentially be a liability for the new employer for enticing you to breach your contract. This means that every team move needs to keep enough legal pretence that it’s simply a series of five or six unrelated individual moves. And it makes the organisation of the whole thing entertainingly cloak-and-dagger.
The one team move that I was involved in began around this time of year. It basically came about – and resulted in the transfer of a franchise worth about $6m of salaries and maybe five times that in revenues – because somebody forgot to write a thank-you letter.
Just before Christmas, we carried out the biggest deal in recent history in our sector, at a time when our employer really needed some good news. We were waiting for the “well done” round-robin email that the head of division always sent around, but it never came. We started feeling a little bit unloved, and picked up rumours that the head was a bit jealous and thought we were getting above ourselves. Bad luck that this happened to be the case when the team leader caught up for dinner with an old friend from a different bank.
As Christmas was approaching, there was nothing particularly remarkable in the fact that the team lead went out for an individual lunch with all the members, one by one over the course of a fortnight. But those of us back in the office started noticing that the people coming back from the lunches did so with great big smiles on their faces and kept avoiding each other’s glance. If you’re any good in this industry, you notice what’s going on around you. I knew that something was up, but I didn’t know what.
When it came to be my turn for lunch, there weren’t many new details to be given. Just ... show up at this restaurant, at this time. And trust the boss. He explained something about the industry to me that I hadn’t previously understood.
“It’s a common fallacy on this team”, he said over his mineral water “that we work for [a big bank]. In fact, we work for a small syndicate, led by me and composed of me plus you lot. The bank just provides us with office space, computers and the equivalent of a billing system so that our clients can pay us. And they take a proportion of our revenue for doing so. If we get a better quote for those services ...”
Well, we did. On arriving at the restaurant, each one of us got whisked into a side-room, handed an envelope and then showed to a back door and told to leave quickly so that we didn’t bump into anyone we recognised on the way. After we had all got home and read our envelopes, the trap was set.
We resigned in order of seniority, which meant I was second last. And which, unfortunately for me, meant that by the time I walked into the head of division’s office, he was aware of what was in the process of happening. Possibly some of the other guys had been offered more money to stay – I’m certain that our team leader’s sidekick got offered the top job. By the time the food chain had stretched down to my level, though, all that was on offer was grumpy looks and fairly blunt threats of legal action.
That was the time that very much tested my nerve. We had our instructions – don’t say anything, don’t get drawn into a discussion of what anyone else has done, definitely don’t say which bank has hired us and keep it all as short as possible. Our new friend the employment lawyer had told us all that most of these threats are just bluster, and so it proved to be; banks generally don’t want to start a precedent by suing each other for poaching staff, because everyone does it and it’s never a good idea to wash the industry’s dirty linen in public. So with very bad grace, I said my goodbyes, handed in my card and went down to a pub far away from the City, to celebrate with half a dozen people who had coincidentally made exactly the same decision as me that day.
It wasn’t my most stressful job move – someday I’ll tell you about the bank that locked me in a room for six hours, and how I had to escape while pretending to go to the canteen. But it was the most exciting one. If your boss starts giving meaningful looks around the coffee machine early in the New Year, enjoy the ride.
Toby Browning is a pseudonym
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