,EHMAN"ROTHERS

7ET&EET)NSIDER'UIDE
%DITION

4HE7ET&EET2ESEARCH-ETHODOLOGY
<RXKROGLQ\RXUKDQGVDFRS\RI WKHEHVWTXDOLW\UHVHDUFKDYDLODEOHIRUMREVHHNHUV:HKDYH
GHVLJQHGWKLV,QVLGHU*XLGHWRVDYH\RXWLPHGRLQJ\RXUMREUHVHDUFKDQGWRSURYLGHKLJKO\
DFFXUDWHLQIRUPDWLRQZULWWHQSUHFLVHO\IRUWKHQHHGVRI WKHMREVHHNLQJSXEOLF:HDOVRKRSH
WKDW\RXOOHQMR\UHDGLQJLWEHFDXVHEHOLHYHLWRUQRWWKHMREVHDUFKGRHVQWKDYHWREHDSDLQ
LQWKHQHFN
(DFK:HW)HHW,QVLGHU*XLGHUHSUHVHQWVKXQGUHGVRI KRXUVRI FDUHIXOUHVHDUFKDQGZULWLQJ:H
VWDUWZLWKDUHYLHZRI WKHSXEOLFLQIRUPDWLRQDYDLODEOH2XUZULWHUVDUHDOVRH[SHUWVLQUHDGLQJ
EHWZHHQWKHOLQHV:HDXJPHQWWKLVLQIRUPDWLRQZLWKGR]HQVRI LQGHSWKLQWHUYLHZVRI SHRSOH
ZKRDFWXDOO\ZRUNIRUHDFKFRPSDQ\RULQGXVWU\ZHFRYHU$QGDOWKRXJKZHNHHSWKHLGHQWLW\RI 
WKHUDQNDQGILOHHPSOR\HHVDQRQ\PRXVWRHQFRXUDJHFDQGRUZHDOVRLQWHUYLHZWKHFRPSDQ\V
UHFUXLWLQJVWDII H[WHQVLYHO\WRPDNHVXUHWKDWZHJLYH\RXWKHUHDGHUDFFXUDWHLQIRUPDWLRQDERXW
UHFUXLWLQJSURFHVVFRPSHQVDWLRQKLULQJWDUJHWVDQGVRRQ:HW)HHWUHWDLQVDOOHGLWRULDOFRQWURO
RI WKHSURGXFW:HDOVRUHJXODUO\VXUYH\RXUPHPEHUVDQGFXVWRPHUVWROHDUQDERXWWKHLU
H[SHULHQFHVLQWKHUHFUXLWLQJSURFHVV)LQDOO\HDFK,QVLGHU*XLGHJRHVWKURXJKDQHGLWRULDOUHYLHZ
DQGIDFWFKHFNLQJSURFHVVWRPDNHVXUHWKDWWKHLQIRUPDWLRQDQGZULWLQJOLYHXSWRRXUH[DFWLQJ
VWDQGDUGVEHIRUHLWJRHVRXWWKHGRRU
$UHZHSHUIHFW"1REXWZHGREHOLHYHWKDW\RXOOILQGRXUFRQWHQWWREHWKHKLJKHVWTXDOLW\
FRQWHQWRI LWVW\SHDYDLODEOHRQWKH:HERULQSULQW3OHDVHVHHRXUJXDUDQWHHEHORZ:HDOVRDUH
HDJHUWRKHDUDERXW\RXUH[SHULHQFHVRQWKHUHFUXLWLQJIURQWDQG\RXUIHHGEDFNERWKSRVLWLYHDQG
QHJDWLYHDERXWRXUSURGXFWVDQGRXUSURFHVV7KDQN\RXIRU\RXULQWHUHVW

4HE7ET&EET'UARANTEE
<RXYHJRWHQRXJKWRZRUU\DERXWZLWK\RXUMREVHDUFK6RLI \RXGRQWOLNHWKLV,QVLGHU*XLGH
VHQGLWEDFNZLWKLQGD\VRI SXUFKDVHDQGZHOOUHIXQG\RXUPRQH\&RQWDFWXVDW
-2%RUZZZZHWIHHWFRPDERXWFRQWDFWXVDVS

Insider Guide

Lehman Brothers
2004 Edition

Helping you make smarter career decisions.

WetFeet, Inc.
101 Howard Street
Suite 300
San Francisco, CA 94105
Phone: (415) 284-7900 or 1-800-926-4JOB
Fax: (415) 284-7910
Website: www.wetfeet.com

Lehman Brothers
ISBN: 1-58207-319-8
Photocopying Is Prohibited
Copyright 2003 WetFeet, Inc. All rights reserved. This publication is protected by
the copyright laws of the United States of America. No copying in any form is
permitted. It may not be reproduced, distributed, stored in a retrieval system, or
transmitted in any form or by any means, in part or in whole, without the express
written permission of WetFeet, Inc.

Table of Contents
Lehman Brothers at a Glance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
The Bottom Line . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Industry Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Organization of the Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

On the Job . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Investment Banker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Salesperson. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Trader. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Research Analyst . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

The Workplace . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Lifestyle and Hours . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Culture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Workplace Diversity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Travel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Vacations and Perks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Career Path. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Insider Scoop . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Getting Hired. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
The Recruiting Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
The Interviewers Checklist . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Interviewing Tips. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Grilling Your Interviewer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

For Your Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Recommended Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
The Numbers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Et Cetera . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

At a Glance

Lehman Brothers at a Glance

Headquarters

Lehman Brothers
745 Seventh Avenue
New York, NY 10019
Phone: 212-526-7000
www.lehman.com
Key Differentiating Factors

Historically, Lehmans strength has been in fixed income, but the firm has
successfully shifted its business toward higher-margin areas such as M&A and
underwriting, and the acquisition of Neuberger Berman makes it a player in
asset management as well.
The firm employs what it calls a Best Operator Strategy, building high-margin
businesses, growing European business, and streamlining back-office and
corporate functions.
Management has been together for more than 20 years.
Primary Competitors

BofA Securities, Citicorp, Credit Suisse First Boston, Deutsche Bank, Goldman
Sachs, Merrill Lynch, Morgan Stanley, JPMorgan Chase
In the Recruiters Words

Were looking for people with distinctive problem-solving and analytical

abilities. Theres equal weighting on peoples leadership skills. Were looking for
a proven track record of leadership. Well look at peoples backgrounds and ask
them to give examples of significant leadership roles. Another area is initiative.
Another aspect is, absolutely, were looking for people who work effectively
with others to achieve a goal.
We want to have an environment where the team comes first. . . . We have one
P&L at the firm. If theres a trade or a business or something to do for a client,
as long as overall its positive for the firm, well do that.

At a Glance

In the Interview

Show evidence of leadership. Lehman hires individuals who will be future

leaders at the firm. Think about your background and how you have
demonstrated this ability, and be ready to talk specifically about that.
What Insiders Say

Ive noticed Lehman goes more for the well-rounded candidate rather than
the one with straight A-pluses. It makes the firm more personable. I dont
meet too many people who strike me as bookworm-type people.
If you can take constructive criticism, Lehmans willing to take people from
zero to 60.
Lehmans pretty technology-savvy, which eliminates a lot of the grunt work.
That means that analysts here start at a much more advanced level. Im not
sure thats true at all firms.
The Career Ladder

Undergraduates enter a two-year analyst program.

MBAs enter as associates.
Anticipated Hires, 200304

Lehman does not release information about anticipated undergraduate

or MBA hires.

Estimated Compensation, 200304

Analysts

$50,000$60,000 plus discretionary bonus

Associates

$80,000$90,000 plus discretionary bonus

Source: WetFeet estimates.

The Firm

The Firm
Overview
The Bottom Line
Industry Position
Organization of the Firm

Overview
The Firm

While Lehmans roots go way backthe firm started off as a dry goods store
in 1850 and founded the New York Cotton Exchangeits modern history
begins in 1994 when its stormy marriage to American Express ended in
divorce. American Express had bought the bank to create a financial supermarket, combining it with Shearson, a brokerage business run by Sanford Weill
(now of Citigroup). The underlying economics looked good, but many Lehman
employees couldnt adjust to Shearson-Lehman and vice versaand many left
the firm. AmEx spun Lehman off to the public in 1994.
Those early years as an independent, public company were tough, but so were
the management skills of CEO Richard S. Fuld, Jr., who reined in expenses,
broadened the firms business mix, and ultimately undertook a major restructuring that put the daily operation of the company in the hands of a management committee.
Results have been very positiveeven during troubling times. After 9/11,
Lehman was forced to evacuate its headquarters in the World Financial Center
adjacent to the Twin Towers, scattering 6,400 employees among 42 different
sites, including a hotel. The years results were the second-best ever in terms of
revenues. On the business side, we put up strong numbers out of a hotel, an
insider told us in 2002. What people feel now is that [our success] is not about
our brand-new headquarters. Its about people. Lehman has since moved into
a 32-story tower in Rockefeller Center.
Lehmans strategy is to focus on strong relationships with select companies. It
calls this the Best Operator Strategy, using revenue and costs to drive decision

making, targeting high-margin products, applying technology to all areas of its

operation, and creating value by broadening the categories in which it competes. Unlike its competitors, however, it isnt trying to be all things to all
people. Our aspiration is not to be the biggest, but to be the best in those

The Firm

markets in which we choose to compete, says a senior recruiter.

The strategy continued to pay off in 2002. Despite a tough market, Lehman
continued its ascent up the rankings in equity research, from 13th a few years
ago to second; saw fixed income produce a record $2.6 billion in revenues; and
reported its third-best year in terms of revenues, despite unfavorable market
conditions. The firm also dramatically expanded its asset management capabilities by acquiring Lincoln Capital Management, forming a partnership with
women-owned Milestone Capital Management, and, in August 2003, more than
doubling total assets under management with the acquisition of Neuberger
Berman, a 1,200-employee firm founded in 1939. The deal is expected to close
in the fall.
Acquiring Neuberger sort of completes one of the areas thats been a high
focus areawealth and asset management, says an insider. We think
Neuberger brings assets which we can integrate and grow further. [The deal]
gets us to the revenue mix that we feel is very diversified across businesses and
across borders. Analysts say that Lehmans stock and bond research will
provide Neuberger a bigger net for customers and that the acquisition will
reduce Lehmans reliance on bond trading.
Insiders stress that despite this growth, the culture hasnt changed. To be big
for the sake of being big doesnt make sense, CEO Fuld said in a BusinessWeek
Online interview after the acquisition. Then youre an elephant. And elephants
spend 98 percent of their time eating. We dont do that. We spend 98 percent
of our time running the business.

Insiders say the firm doesnt need the bureaucracy

other firms require because management has been

The Firm

Titles exist because

we need them, but
they are meaningless
when it comes to
our day-to-day
interaction.

together for so long (more than 20 years in many

cases) and knows the business so well. From a
business point of view, it allows us to get things done
very quickly, one tells us. The management structure
is flat: Titles exist because we need them, but they are
meaningless when it comes to our day-to-day

interaction, says an insider. This should be good news to enterprising recruits,

who want to join a bank that gives them room to stretch. You hear people say
they have plenty of rope to run with, but not so much to hang themselves,
says an insider.
Lehman looks to campus recruiting to fuel its momentum. The firms success
in equity research is a case in point. Those people who got us from fifth [in
2001] to second [in 2002] have been home-grown people, says an insider.
Wed much rather hire in people and train them ourselves than go out and hire
somebody from another firm.
Unlike many of its competitors, Lehman offers its bankers opportunities to
move laterally within the organization and considers this cross-fertilization a key
to its success in staying focused. The firm has a strong practice in Europe (27
percent of overall revenues) and the United States and is targeting Asia
(currently 10 percent of revenues) for growth.
Insiders dont feel that the size of the bank gets in the way of developing
relationships. Even though its a pretty large bank, each department feels pretty
small, says an insider. I dont feel like Im at a large place where I dont get to
know people well. Rotations help people build networks throughout the
organization. And when you come to work, expect to work. Were very hard
working, says an insider. People dont slip out and go to the gym or put their

feet up on the desks and tell jokes. While we do have lighthearted moments, we
grind it out with a healthy sense of competition. Employees own more than 30
percent of the bank, providing further incentive to work long, hard, and smart.

The Firm

The Bottom Line

Lehman has a strong culture that encourages people to take initiative. Lehman
insiders like that its a down-to-earth environment, focused on building market
share in the areas in which it competes, with plenty of opportunity to move
around. They look at the analysts and associates as the people who are going
to be leading Lehman in ten years, says an insider. The firm puts a lot of
faith in your judgment and maturity, and expects a lot in terms of your work
capacity and stamina, says another. Everyone is expected to perform and to
take on as much as they can handle, and the firm boasts that its people are the
most productive on the Street. The upside is that because you have more
responsibility, people have more reasons to get you up to speed fast, says an
insider. The pace is fast and the expectations are high. If youre looking to build
a long-term career at a bank, dont mind the added pressure of a smaller
balance sheet, and can handle the opportunities offered by a bank with a strong
franchise, lean operating environment, and a focus on teamwork, Lehman may
be for you.

Industry Position
The Firm

While Lehman consistently ranks in the top six on the league tables, its caught
behind the commercial bank franchises, with Citigroup and JPMorgan Chase
holding down the one-two spots in many categories. In 2002, Lehman saw its
market share surge in global IPO issuance, M&A, and leveraged loans, and also
gained market share in secondary trading and global issuance of common
stock, high-yield debt, and fixed income. Financial results for the first half of
2003 have been excellent, thanks in part to a strong bond market, but market
share has been tougher to gain. For the first half of 2003, market share gains in
U.S. asset-backed securities (1.5 percent) and global asset-backed securities
(1.8 percent) were offset by market share declines in U.S. high-grade corporate
debt (1.2 percent) and global bonds (3 percent). Lehmans rankings paint a
similarly mixed picture. The firm climbed from seventh to third in global assetbacked securities and placed second in long-term debt, for instance, but saw its
ranking in U.S. mortgage-backed securities fall from third to sixth. Over the
long term, however, Lehmans trend has been to gain market share even with
the economic downturn.

Lehman Brothers First Half 2003 Industry Rankings

Rank
----------------2003* 2002*

Category

2003*
------------------------------------------Amount ($B) % of Market Top Firm

146.2

8.4

Citigroup

U.S. long-term straight debt

62.2

9.7

Citigroup

U.S. long-term debt

128.9

9.0

Citigroup

U.S. high-yield corporate debt

5.6

8.4

Citigroup

U.S. high-grade corporate debt

34.4

9.8

Citigroup

U.S. mortgage-backed securities

40.3

8.2

UBS

U.S. asset-backed securities

25.0

9.1

Citigroup

Global bonds

27.4

10.0

Citigroup

All municipal bond issues

13.8

6.9

Citigroup

Global debt & equity

166.9

6.1

Citigroup

Global asset-backed securities

26.2

8.3

Citigroup

Global high-yield corporate debt

5.8

8.2

Citigroup

The Firm

U.S. debt and equity

*First six months of the year. Source: Investment Dealers Digest, 7/7/03.

Other Rankings and Awards

2002 All-America Fixed-Income Research Team

Institutional Investor named Lehman Brothers the top firm for the third year in a

The Firm

row. Lehman ranked first with 35 analysts, including 12 on the first team and
ten on the second, with CSFP and JPMorgan Chase tying for second with 31
analysts.
Source: Institutional Investor, www.institutionalinvestor.com.

2002 All-America Research Team

Lehman jumped from fifth in 2001 to tied for second (with Merrill Lynch) in
2002 in Institutional Investors annual ranking, trailing Citigroup. Lehman took 52
positions; Citigroup took 53. Fourth-place CSFB had 44 positions.
Source: Institutional Investor, www.institutionalinvestor.com.

International Financing Review Bank of the Year, 2002

Project Finance International Bond House of the Year, 2002
WetFeets 2003 Student Recruitment Report

In WetFeets 2003 Student Recruitment Report, students (MBAs and undergraduates)

ranked Lehman the number two on-campus recruiter overall and number one
among investment banks.

10

Organization of the Firm

The Firm

View from the Top

Lehman Brothers is a public firm, with employees holding a little more than a
third of its stock. CEO and Chairman Richard S. Fuld, Jr., works closely with
Lehmans executive committee and board of directors. The executive committee, composed of head bankers and traders, manages the firms day-to-day
operations. The executive committee guides Lehmans strategic direction. In
2002, Lehman expanded its executive committee from six to nine members.
Despite criticism from industry observers, Fuld has steadfastly maintained that
Lehman is dedicated to management by committee, reiterating that teamwork is
a key ingredient of Lehmans successand hes practiced what hes preached.

View from the Middle

The firm divides its businesses into three areas:
Investment banking, which includes equity underwriting, debt underwriting,
M&A, and private equity
Capital markets, which includes equities and fixed income
Wealth and asset management, which provides services to private clients
Lehman hires MBAs into the investment banking, fixed-income, equities, and
wealth and asset management divisions. Undergraduates join the investment
banking or capital markets divisions or come into corporate as members of the
information technology, operations, or finance teams. Unlike some other banks,
equity research at Lehman is part of capital markets and not a stand-alone

11

division. Lehman stresses its organizations integrated nature, as all divisions

work together to develop and market products to the firms clients. Each
business division comprises smaller teams that focus on specific industry

The Firm

groups, financial products, or markets.

View from the Bottom

At the ground level, Lehman is structured with teamwork in mind. Lehman is
much less hierarchical, much less regimented in terms of what they expect
from you, says an insider. Its not all based on titles here. At Lehman, your
career path is about responsibility. Another insider counsels newcomers to
meet as many people as possible. One thing that is asked over and over again
is, Find this info. Youve got to find the people in the bank who have what you
need. Meeting people across the firm is key.
Groups from each of Lehmans major divisions overlap to form project teams
made up of everyone from analysts to managing directors. For example, a highyield underwriting for a health care company might bring together professionals
from the firms high-yield (product) and health care (industry) groups in
investment banking, plus representatives from debt, capital markets, fixedincome research, high-yield trading, and private-client services. According to
insiders, deal teams at Lehman tend to include no more than four or five
people, so team members have to pull their own weight. Lehmans deal teams
are much flatter than at some firms on the Street, says one insider. Because
the teams are so much flatter, everyone has a lot of responsibility and has to
pull together to make a deal happen. Youre not just a cog in the wheel.

12

On the Job
Investment Banker
Salesperson
On the Job

Trader
Research Analyst

13

Investment Banker
The investment banking division is organized around industry coverage groups
and product groups. The industry coverage groups maintain Lehmans client
relationships and partner with the appropriate product group to execute each
deal. For example, the health care group (industry coverage) will work with
equity capital markets (a product group) to execute a biotech companys IPO
and then work with the M&A group to advise the company on a merger. The

On the Job

primary businesses in investment banking are mergers and acquisitions,

underwriting of debt and equity, and private equity. In creating deals,
investment banking projects combine the number crunching required in
accounting and finance with the verbal skills necessary to create cogent,
comprehensive marketing documents.

Typical Projects
I-bankers typically work on four to six deals simultaneously. Both analysts and
associates provide research, analytical support, coordination, and some client
relationship management for these projects. One insider says, The difference
between an associates work and an analysts work can be very gray. It depends
more on personality than a strict delineation of responsibility. In general,
analysts focus on a deals prosaic aspects, such as creating public information
booklets (PIBs) and running comparative analysis reports (comps). Associates
tackle both analyst- and associate-level projects in their first year, but they have
more bottom-line responsibility than analysts do. Also unlike analysts, associates
interact extensively with a client companys financial officers, lawyers, and
accountants. Typical tasks include:

14

 Creating PIBsinternal documents that

consolidate all the relevant information for
a deal, such as SEC filings, research reports, The
trading history, and press mentions.
Running comps, which involves dissecting
the 10-Ks and 10-Qs (the annual and
quarterly reports that companies file with
the SEC) from eight or so companies in an
industry, describing trends in the financials,
and analyzing how the clients financial
status stacks up to that of the competition.

difference between
an associates work and
an analysts work can
be very gray. It depends
more on personality
than a strict delineation
of responsibility.

On the Job

Writing a fairness letter for an acquisition in progress. This letter is a legal

document that states the firms opinion that a deal is fair to the target
company. The document is often lengthy and can require an enormous
amount of number crunching by analysts and associates to produce the
supporting data.
Building spreadsheet financial models, such as pooling- or purchase-analysis
models, for an M&A deal.
Structuring deals for clients and helping companies determine how large a
debt or equity offering should be, when to initiate a stock buy-back program,
or whether to pay for an acquisition in stock or cash.
Performing due diligence.

15

A Day in the Life of an I-Banking Associate

7:45

Decide four snooze alarms are enough. Out of bed, grab a bagel, and
head for work, picking up a copy of The Wall Street Journal on the way.

8:45

Arrive at work and check voice and e-mail messages. Pull up intranet to
check stock prices of client firms.

9:00

Dive back into last nights unfinished project, a sales memo for a new
medical device companys equity offering. Since this memo helps the
sales force answer investors questions about why they should buy the
stock, its important to provide lots of good, big picture info and handy
numbers. Call the library for stats on the diabetes market.

On the Job

10:00 Study the new materials and integrate statistics into the sales memo.
Proof the memo for errors and typos.
11:55 Rush the finished memo to the VP on the deal. Need to get it to him
before lunch.
12:00 Grab a sandwich from the cafeteria downstairs and bring it back to the
desk to eat.
12:20 Start working on a purchase model for a pharmaceutical merger in the
pipeline. Go through the proxies for similar transactions, looking for
discrepancies in numbers that will help determine some of the
assumptions.
3:00

The VP returns the equity-offering memo with corrections and

commentsnothing too extreme. Spend the next few hours
incorporating the VPs comments and finalizing the sales memo.

6:00

Take the sales memo, complete with all of the necessary appendices,
down to production. Ask them to prepare 100 copies for the sales team
by tomorrow.

6:30

Brisk walk outside. Got to do something to keep that blood flowing to

the brain!

8:00

Back at desk, call for a pizza delivery, because its going to be another
late night. Start working on a discounted-cash-flow (DCF) analysis for
another M&A deal, this time for a managed care company.

12:00 Enough is enough. Turn off the computer and head home.

16

Salesperson
A Lehman salesperson acts as the relationship manager for a particular client
base. As the middleman between the client and the firm, the salesperson is
responsible for developing a relationship, marketing the firms products, and
making sure that the client has access to the firms products and services.
Institutional salespeople work with institutional clients; private-client services
salespeople work with high-net-worth individuals. Both groups cultivate their

On the Job

client bases, using the firms research and breadth of product offering to attract
new business.

Typical Projects
The main business of the sales department is to manage client accounts. A
sales-persons responsibilities include making sure trades are executed, delivering
research products to provide timely investment advice to clients, and keeping
clients inform-ed about market dynamics. Depending on the product group,
typical projects may include providing clients with general economic forecasts,
analyzing the perform-ance of individual stocks, or marketing a new stock or
debt offering to a client. Salespeople often accompany clients to the industry
conferences and road show presentations that Lehman sponsors to sell
particular securities. Often, salespeople act as company spokespeople and
facilitators, putting the client in touch with trading, research, and investment
banking. Typical tasks include the following:
Developing and maintaining relationships with clients.
Apprising clients of market performance and fluctuations.
Reviewing research analysts ideas to identify new deal possibilities for clients.

17

 Presenting deal options to clients.

Attending road shows for client companies initial public stock offerings.
Responding to client calls during market hours.

On the Job

A Day in the Life of a Salesperson

6:00

Stumble out of bed and hit the road. Burrow into The Wall Street Journal
on subway.

6:45

Get to work on the floor amidst hundreds of edgy traders. Pull up

Bloomberg screens to check out trading in London and Tokyo markets.
So far, so good.

7:15

Attend the morning sales division meeting about the markets performance.
Research news since closing time yesterday. Nothing earth-shattering.

8:15

Return to desk and leave voice mail messages giving clients performance
estimates based on this mornings meeting. Tailor each call to include
only those companies relevant to the clients particular business.

9:30

Opening call.

9:45

Grab some breakfast en route to a morning meeting with a research

analyst and a client.

10:45 Call accounts to let them know how their stocks are trading. For once,
everyone is happy.
12:00 Attend a road show lunch at a midtown hotel for a biotech firm hoping
for an IPO. Dont think the markets going to be that receptive. Hope
the I-bankers in charge know enough to wait.

18

2:00

Return from meeting. E-mail sales memo on new convert deal to

managing director whos on the road.

2:30

Meet with a Lehman research analyst and a corporate-client team to

push some new health care offerings in pipeline. Review stock
possibilities with the client and then answer questions. These managers
are sharp. All the right questions.

3:15

Practice cradling three phones on my neck and talking into the right
one. Still got a way to go on this one. (Never did like headsets.)

4:00

Finally, the market closes. The thrill never seems to wear off when it
opens; ditto the relief when its over. Attend a meeting with sales team
to preview next weeks new deals.

5:20

Days done. Time to head home!

Trader
On the Job

The trading division is made up of traders, market makers, and sales traders. A
trader will buy and sell stocks for a client or, in the case of proprietary trading,
for the firms own account. A market maker buys and sells securities for the
firms account in order to ensure a liquid market for a given security. A sales
trader in equities or fixed income acts as a liaison between the institutional
salesperson and the trader. The sales traders task is to help clients buy and sell
large quantities of securities.

Typical Projects
Unlike in investment banking, there are no strictly defined projects in trading.
Titles have less importance, too. Your responsibility is based on your experience, not on your position in the desks hierarchy. Its what you can handle,
not what degree you have, says one insider. In general, traders execute trades.
The projects are much shorter than in banking, and they vary according to a
traders specific function. A trader may receive an order to sell a large chunk of
stock and then work the order over several days, persuading salespeople to shop
the order to potential buyers. Market makers are responsible for setting the

19

price of a particular security according to the market. A preoccupied Nike

market maker who fails to recognize that the companys stock has dropped four
points, for example, is still obliged to honor his or her obligation to buy shares
at the older, higher price. This kind of oversight reduces Lehmans gains, as
well as those of the trader and his or her team (remember, one firm). In
particular, fixed-income traders must keep abreast of economic data, Treasury
bond yields, political trends, and information about companies that might affect
the price of a bond.

On the Job

A Day in the Life of a Trader

6:00

Monday, Monday. Thats reason enough to catch a cab instead of taking

the subway. Read The Wall Street Journal on the way.

6:45

Gulp down extra-super grande coffee on way to desk. Check out

Bloomberg to see whats happened in Thai corporates overnight. Scan
CNNfn for more news.

7:45

Turn on squawk box to listen in on the global fixed-income division

meeting. Lehmans chief European and U.S. economists give overviews
of fixed-income markets. Once the big stuff is done, theyll break out
into smaller meetings to discuss individual markets like corporates or
treasuries.

8:15

Back to the desk. Call up Thai client to update him on market news of
the day.

9:30

Market opensstart watching that screen.

10:00 Phone starts ringing with salespeople looking to get more information
on specific bonds. Throw a couple of big fish their way.
10:45 Get call from brokers who are selling securities between Lehman and
Bear Stearns. Sell position to broker for a cut of the profits when retail
buys it.
12:00 A fellow analyst has pulled duty to place the desks lunch order. Vote for
Chinese. Majority votes for deli. Order a roast beef sandwich.

20

12:30 Answer calls coming in from trading wire while sneaking bites of
sandwich.
Sit in on meeting for new deals and market indices.

1:30

Call back broker from earlier this morning. Lift an offer on (buy)
100,000 shares of stock at market price for a client in Boston. Take the
opportunity to exchange information with a broker on best deals hes
seen.

2:00

Call client to inform him of the completed transaction. Convince him to

buy new swap product the desk has. Good work. Hope it gets noticed.

2:45

Hit a bid on (sell) 200,000 shares of stock in computer software firm.

Make a juicy profit. Report back to the client.

3:00

Call some clients to look for new deals. Check market prices to see
whats feasible.

3:45

Make several calls to confirm the GTC (good till cancel) orders. Execute
smaller buy and sell orders.

5:00

Take a tour of the floor. Chat with some guys at the desk about the
days business.

6:30

Head out. Everyone in the elevator is making plans to go out. Its still
early, so why not?

On the Job

1:00

21

Research Analyst
Providing support for all of Lehmans other divisions, the research department
is divided into fundamental and overview research:
1. The fundamental group is the larger of the two and focuses on specific
industries and industry groups.
2. Overview research consists of a handful of strategy and political analysts

On the Job

who study general market trends around the world.

Fixed income and equity each have separate research sub-units or product
groups. Within fixed income, the groups include high-yield debt (junk bonds),
high-grade debt (investment-grade bonds), mortgage-backed securities,
government market and Federal Reserve securities, and strategy research, which
advises clients on the hottest sectors for investment. Within each product
group, researchers analyze specific industries. For example, high-yield
researchers study casinos, television, cable, and telecommunications. They also
coordinate with the high-yield group in corporate finance and with traders and
sales. Equity is broken down into industry groups, each covering its own
universe of stocks trading on the New York Stock Exchange and NASDAQ.

Typical Project
Specialists in fundamental research focus on long- and short-term opportunities
with clients from specific industries. They often juggle information from three
or four companies at a time. The overview generalists do not report directly to
customers but rather provide a longer perspectivethe big picture in global

22

market trends for sales, trading, and investment banking. MBAs are typically
hired as associate analysts. (Unlike those in other I-banking divisions, almost all
professionals in research are called analysts.) Their primary function is to help
senior analysts keep track of market trends, specific industries, or developments
within individual companies. Whereas senior analysts divide their time between
examining company documents, talking to clients, sharing research with sales
and trading, and helping corporate finance bring new issues to market, associate
analysts spend a lot of time crunching numbers and gathering documents.
Qualified associate analysts usually get promoted to senior positions within a
couple of years. Research tasks can include:

On the Job

Digging through Bloomberg for industry and product developments in the

fixed-income market.
Contacting or visiting clients to present estimates on a markets or stocks
performance and to make buy or sell recommendations.
Tracking performance of client companies.
Writing up summaries of internal meetings, industry trends, and market
trends.
Drafting formal research reports for review by senior analysts.

23

A Day in the Life of a Research Analyst

6:45

Rise and shine! Time for a healthy breakfast of powdered donuts and
scalding-hot coffee.

7:30

Elevator up. . . . Smile while walking past traders and salespeople into
the little world of research.

8:00

Attend the morning meeting of research and sales. The research staff
goes over new earnings releases and acquisitions of companies, letting
the sales force know how these will affect the price of bonds.

9:00

Write up a one-page summary of meeting and the general consensus

regarding bonds. Post it on the intranet so the sales force can read it,
and post another copy for electronic delivery to clients.

On the Job

10:45 Take a call from the CFOs office at a major supermarket chain
reporting new information. Interim period results are out! Examine stats
to determine the effect on bond prices.
11:15 Write up summary of findings. Hand it over to a senior analyst, who will
contact institutional clients who own shares in the supermarket. Her
opinionsand the clientsneed to be incorporated into a more formal
draft.
11:45 Listen in on a conference call with a senior analyst to discuss client
findings with traders and then with sales.
12:30 Lunchtime. Ride down in elevator with senior analyst on her way to a
client lunch. Detour at the cafeteria, pick up a chicken enchilada, and
shuttle back up in the elevator.

24

1:15

Wipe food stains off a companys financials and get to work on those
numbers.

3:00

Another senior analyst from the consumer group cruises by looking for
the new ROE figures for Company X. No one here but us chickens.
Hop to and get him the info before hes turned the corner.

4:30

Sit in on a meeting with banking to discuss whether the timing is right

for a big retailing client to do a high-yield deal. Instinct says the market
wont be that receptive now. Suggest waiting till the first quarter.

5:15

Write up a summary of the meeting. In this job, you need to secretly like
being a court reporter. Theres a lot of writing. Circulate copies to senior
analysts.

6:00

Senior analyst takes off. Pull up your screen and begin some serious
number crunching, making spreadsheets for Wednesday morning
meeting.

8:30

Call it a day. Head to the gym for an hour, and then go home.

On the Job
25

The Workplace
Lifestyle and Hours
Culture
Workplace Diversity
Compensation
Travel
The Workplace

Vacations and Perks

Training
Career Path
Insider Scoop

27

Lifestyle and Hours

Insiders at Lehman tend to downplay the long hours, but they do so only in the
context of banking: Expect to average 85 to 90 hours regularly and 100 or more
during crunch times. Your hours depend on the type of work youre doing, your
group, and your team members, says an insider. For instance, M&A work can be
very time intensive because its so unpredictable, often requiring last-minute
scrambling. Financings, on the other hand, follow a fairly set schedule, which is
easier to plan for. For those who work on the trading floor, expect to come in
around 7 a.m. and leave between 5 and 6 p.m. During that period, You have
zero privacy, says a trader. I have no free time between 7 a.m. and 6 p.m. during
the week. I dont have a lunch break. I eat lunch at my desk. Adjusting to that was
a little difficult. All-nighters and weekend stints are far less common in sales,
trading, and research than they are in investment banking. I think the perception

The Workplace

is that a new hire in banking may necessarily have more of an intense and
stressful day than sales and trading. Theyre both intense and stressful, says an
insider. When youre in front of a bunch of screens, its very, very intense. When
youre working on a sales or trade with millions at stake, those moments are
extremely intense.
Across the board, bankers are expected to have the clients interests as their first
priority, which often means that sleeping and living are a second, third, or fourth
priority. The schedule will be aggressive and variable, says a recruiter. One
insider asserts that having a life is realistic, but this will certainly depend on what
you consider having a life: I have three children and manage to make time for
them each month. For the most part though, Im gone well before they wake up,
and theyre asleep when I get home. But I make allowances so that there is a day
here and there where we can maintain that connection with home.

28

Culture
Insiders at Lehman say its fast paced and intense, with plenty of opportunities
to move around and take on projects. Teamwork is essential. People who have
done extremely well here know how to work with other people. Its an absolute
requirement and not something you learn, says an insider. The firm is leaner
than competitors, with a relatively flat structure. As a result, theres a built-in
incentive for those with experience to bring those coming into the bank along
quickly. Its a small organization that has to compete against bigger ones, so
theres an underdog mentalityevery win is a big win. And everyone is hungry.
There are great opportunities for growth, says an insider. Many enjoy the
down-to-earth attitude that pervades the office. As one insider describes it,
Theres a lot of mutual respect among all levels, but its not a blind faith thing.
You are allowed to question someone above you. Says another, That
question-asking is really rewarded, and so are persistence and adaptability.

The Workplace

We have gone to a BlackBerry society, says an insider, referring to the handheld, wireless e-mail device. Most bankers have gone from 20 to 30 voice
mails a day to one or two. The dress code is formal. Within the headquarters,
The floors are very light. There are tons of windows. The cubicles are smaller
than at a lot of other buildings. A lot of things are very high tech. Theyve got
vending machines on every floor, says another insider. Another says, We have
a great support staff. Theres a lot of stuff thats taken care of, and its done
right. I feel I can really trust the people I work with. I feel the people are really
generous. People are generally working with people they like. That enhances the
supportive environment. People want to be there. Another says, I consider
the people I work with, 99 percent, friends. We dont go out often together, but
theres such a mutual respect. I like the people I work with.

29

Sharing work with others is a familiar theme among insiders. We always try to
make sure other groups are referred to for opportunities. People are pretty
selfless, says an insider. Says another, On the banking side, for us, its about
all-the-time, year-round, roping in other teams around the client. Its not about
protecting a client for yourself.

Workplace Diversity
Lehman has a chief global diversity officer and a global manager for diversity
recruiting. It formed a Diversity Council in spring 2001, which is chaired by the
firms COO. The firm has five employee networksone each for Asian, Latin

The Workplace

American and Hispanic, female, African American, and gay and lesbian
employees. These networks conduct mentoring programs, panel discussions on
career development, and other programs, and each is developing an interactive
website. The firm targets diverse populations, recruits at historically black
colleges, and participates in conferences for the National Society of Hispanic
MBAs and the National Black MBA Association. The firm offers domestic
partner benefits for same-sex couples. Its a very difficult industry for women,
says an insider. I dont think that has anything to do specifically with Lehman.
That said, the firm has a womens initiative. Lehman is actively trying to
support women who aspire to senior management roles, and it offers a very
generous three months of maternity leave.

30

Compensation
Compensation at Lehman is competitive with that of other firms on the Street.
We dont want anyone to join because were paying a little more, or because
were playing a little less, says a recruiter. Well be very competitive. Wed like
to take the compensation piece out of the decision-making process. An insider
adds: Theyre not going to pay you the most, and theyre not going to pay you
the least. Theyll pay you the average.
We estimate Lehman will start analysts at $50,000 to $60,000 in 2003 to 2004 and
associates at $80,000 to $90,000. Bonus amounts depend on the firms success
and vary by performance; recruiters indicate that bonuses will be similar to those
at other firms on the Street. Associates receive a percentage of their total
compensation in stock, depending on seniority. Lehman offers a 401(k) but does
not match employee contributions. The company also has a flexible spending

The Workplace

plan that allows employees to use pretax dollars for day care, elder care,
transportation, and commuting expenses and for nonreimbursed health care.

31

Travel
Travel demands vary widely, depending on division, industry group, and
financial product. According to insiders, analysts in investment banking travel
10 to 20 percent of the time, more frequently in the second year of the
program than in the first. Road shows, which analysts and associates usually
attend a couple of times a year, require visits to numerous clients in several
cities on a very tight schedule. During such a trip it would not be unheard of to
have an early-morning meeting in Chicago and an afternoon meeting in Los
Angeles, followed by a red-eye flight to Europe. In general, the smaller the deal
team youre on, the greater your chance of travel, as there may not be anyone
else available to go.
The amount of travel for sales analysts and associates is substantial but
depends on where their clients are based. In research, senior analysts travel

The Workplace

quite a bit, but travel time is modest for junior analysts, especially at the
beginning. Traders rarely travel.

32

Vacations and Perks

Management considers it very important for people to take vacations at all
levels, a recruiter tells us. Lehman offers most of its employeesincluding
analysts and associates but excluding upper managementthree weeks of
vacation a year. Insiders say they dont feel managers are counting the vacation
theyve taken or looking over their shoulders when they miss time for being
sick. However, few people in the industry make use of all their vacation time,
and when they do, they dont expect to stray too far from a phone. If
something comes up when youve planned your vacation, youre expected to
use your judgment, and your judgment better be in favor of the client. That
applies across the boardanalyst, associate, or managing director, says one
insider.
Lehman counts a subsidized fitness plan among its perks. It has partnered with

The Workplace

New York University on a part-time MBA program, fully paid for by Lehman.
It does not have a specific tuition reimbursement program, but it pays for jobrelated courses. If you work after a certain time, youll get dinner and can take a
cab home for free. The Lehman Brothers ID gives employees free or
significantly discounted admission to many of New Yorks museums and
cultural centers, and those working at company headquarters at Rockefeller
Center receive a discount at pretty much every retail establishment there, says
an insider.
Maybe the best perks are those that just pop up, says one insider. The
managing directors get tickets to a lot of the events going on in the city and
will throw you a bone every once in a while. So you can go to Lehmans box at
the U.S. Open or at the Knicks game.

33

Training
Training for analysts and associates is conducted at Lehman headquarters in
New York City. Lasting anywhere from three weeks to several months, training
introduces analysts and associates to the firms management and philosophy and
teaches basic financial, analytical, and networking skills. Insiders cite Lehmans
training program as one of the best in the field: Simply completing Lehmans
training program makes you more marketable. In addition to training, Lehman
assigns each new hire, including summer interns, a junior and a senior mentor.
As you continue with Lehman, your training continues, too. As a sign of the
firms commitment to leadership development, Lehman implemented a
leadership training program in 2001 for managing directors, senior vice
presidents, vice presidents, and assistant vice presidents. The firm also offers
additional training opportunities outside the formal programs. Each group I

The Workplace

know does periodic trainings for people all the time, says an insider.

Training for Undergraduates

Analysts joining investment banking, private equity, and public finance start
with five weeks of training and are then placed in product or industry groups.
Analysts joining the equity and fixed-income divisions enter a two-year program
called START (the Sales, Trading, and Research Training Program), which
begins with a four-week classroom course that covers accounting, financialstatement analysis, bond math, and computer programs. START analysts then
participate in rotation programs that expose them to various product groups
within the division. After several weeks, program managers work with the
analysts to match them to a specific product group where they remain for two

34

years. Analysts joining the operations, finance, information technology, and

credit-risk management groups receive training specific to their functions. Once
placed, its up to the groups in how they will train you, says an insider.

Training for MBAs

Associates entering investment banking, sales, trading, research, and privateclient services receive four to five weeks of initial classroom training followed
by a series of rotations. After the rotations, associates are placed in groups
based on their preferences and the firms needs. Insiders tell us that this
opportunity to get practical experience in several areas before joining a group
permanently is an invaluable part of the training process.

The Workplace

Career Path
Opportunities for Undergraduates
Analyst programs last two to three years for sales, trading, and research and
investment banking. The firm has a special program with New York University
that enables exceptional candidates to continue to work at the firm while they
get MBAs. Candidates in the START program gain exposure to sales, trading,
research, and structured finance within equities and fixed income, and they play
a role in choosing where they end up. The fact that theyre so accommodating
of individual interests is a really nice feature of Lehman. You dont find that

35

everywhere on the Street, says one third-year analyst. At the same time, you
wont have total control over which job you getand if youre one of those
who doesnt get his or her first choice, you may grow frustrated.

Opportunities for MBAs

Associates are recruited heavily on campus and join for the long haulthe firm
is looking for its future leaders and will groom associates to climb the executive
ladder as assistant vice presidents, vice presidents, senior vice presidents, and
managing directors. The firm has tracks where associates can specialize and
tracks where they can rotate. We believe in a generalist program, says a
recruiter. The firm does allow for some preplacements in areas looking for
specific skill sets, but Lehman thinks a generalist program is more beneficial to
candidates overall. Promotions to vice president usually occur after three to
four years based on performance.

The Workplace

Opportunities for Summer Interns

Undergraduates will find summer opportunities in all geographies in investment
banking, private equity, fixed income, and equities and in corporate functions,
including operations, finance, information technology, and credit-risk
management. The analyst program lasts ten to 12 weeks and gives interns a
head start in landing full-time jobs at Lehman after college. Ditto MBAs, who
also find that an internship at Lehman is a good way to get a full-time job after
graduation. The firm believes this is the best way for you and the firm to get to
know each other. Lehman offers ten- to 12-week programs in the United States,
Europe, and Asia in investment banking, private equity, fixed income, equities,
public finance, and private-client services. During the summer program,
classroom training and social events bring the groups together for fun and

36

learning. Regardless of their division, summer

associates are sure to be wined and dined and offered
extensive contact with senior management.

Opportunities for Midcareer Candidates

Although Lehman Brothers relies heavily on traditional campus recruiting of analysts and associates, its
certainly possible to be hired in the midst of your
career. Those with particular industry or product
expertise are becoming more and more valued on the

People who have

done extremely
well here know
how to work with
other people.
Its an absolute
requirement and
not something
you learn.

Street. Were hiring everywhere, a recruiter tells us.

Insiders say that job opportunities in global markets are also increasing as
investment banking becomes more international.

International Opportunities
Lehman offers opportunities in Europe and Asia. Asia will be a very important

The Workplace

part of World Capital markets soon. China getting into the WTO will be an
important first step. Were not in a rush. We see more opportunity in Asia than
in Latin America. Weve had that view for awhile. The firm also continues to
build in Europe, where it has a robust practice. The firm has a centralized
system for letting people know about opportunities elsewhere. No one should
be afraid to put their hand up and say theyd like to do something else, says a
recruiter. Lehmans philosophy is that success in one place leads to success in
another place.

37

Insider Scoop
What Employees Really Like
Carve your niche. Lehman is a scrappy competitornote its Best Operator

Strategyand offers an entrepreneurial environment, which sets it apart from

the more established, entrenched firms on the Street. Insiders tell us that if
youre enterprising and enthusiastic, you can make a meaningful impact. At
Lehman, says one insider, you can develop your own niche or expertise in an
industry and be the go-to person. Another, referring to the responsibility given
to young bankers on project teams, says, As a junior banker at Lehman, youre
shepherding the process.
Opportunity. Insiders feel that climbing the corporate ladder at Lehman doesnt

mean climbing a regimented organizational chart. You get to step up earlier in

The Workplace

your career. Youre not a cog, says an insider. If you work hard and perform
well, you will be compensated for it, says another insider. I dont feel like Im
hitting my head on any ceiling, says another, adding, If you can step up so
that youre talking to clients and doing the advanced modeling work, you can
have a significant impact. You dont have to be a gofer.
Mobility. Unlike some of its competitors, Lehman wants its employees to move

around and considers the resulting cross-fertilization a competitive asset. Ive

never heard of a firm where you are moved around so much if you want to
be, says an insider. And when you move, youll have opportunities to make a
difference. As one insider who transferred to the London office says, I knew
Id be part of generating ideas from the very beginning.

38

Experience. Insiders say learning the basics of finance is one of the best aspects

of working at Lehman. Lehmans well known for having one of the best training programs on the Street, says an insider. Insiders also report that working at
Lehman opens doors. Theres no way Id have the job I have now without
having been at Lehman, says one former insider. Employees also say
investment banking is great preparation for anything from trading on your own
account to starting your own business. In this industry, youre privy to so
much information, says an insider. Its a real education.

Watch Out!
Lean and mean. Though its compensation is competitive, Lehmans strategy

means you might not get some of the perks its competitors might offer. The
firm is pretty careful with costs in comparison with other banks. Some
people would rather work at a bank that pays for your lunch every day, says an
insider. The way that translates to your life as an analyst is youve got a lot
more responsibility from an early stage, says another insidermeaning more
opportunities to learn, but also more opportunities to work harder than your

The Workplace

peers elsewhere.
Formalwear. In February 2002, Lehman returned to a formal dress policy.

Nobody likes it, says an insider. I almost cried when I heard we were going
business formal, but Ive adjusted. What really annoys me about it is that Dick
Fuld, at the quarterly earnings announcement, was wearing his shirt and tie, but
wasnt wearing his jacket.
Lehman first. Lehman stresses its team culture. As one insider puts it, Theres

a saying at Lehman: one team, one dream. And its true. They really mean it
when they say, Be a team player. Candidates interested in their reputations
rather than the good of the firm or client wont find a big stage at Lehman.
This isnt a star system like that at Morgan Stanley. Were a strong company

39

that does not let the personal interests of the individual supersede that of the
firm; thats not acceptable, says an insider.
Political influence. According to a report by the Center for Responsive Politics,

which tracks campaign contributions, Lehman Brothers was President Bushs

second-biggest contributor among investment banks (after Merrill Lynch) as of
July 2003 with $152,500 in individual and PAC contributions. If youre a
Republican, you may not be bothered by these contributions, but Democrats

The Workplace

might be.

40

Getting Hired
The Recruiting Process
The Interviewers Checklist
Interviewing Tips
Grilling Your Interviewer

Getting Hired
41

The Recruiting Process

When reviewing rsums and interviewing, Lehman recruiters look for clear
evidence of problem solving, leadership, initiative, personal presence, and the
ability to work on a team. In making hiring decisions, We think about peoples
intrinsic smarts, intrinsic leadership abilities, and their presence, says a
recruiter.
At the undergraduate level, Lehman looks for distinctive candidates. The firm
recruits on campus at core schools (e.g., the Ivy League), but it actively looks
for candidates from noncore schools as well. The firms goal is to find the best
candidates in North America, period. Lehman claims that it has an infrastructure for recruiting at many undergraduate schools that its competitors dont
have. At the graduate level, Lehman recruits at the top business and law schools
and PhD programs. Qualified candidates submit their rsums and, if chosen,
move on to a half-hour, first-round general interview on campus. A secondround interview takes place either at Lehmans offices or on campus. We have
different structures depending on the division, says a recruiter. There are
many times we make the [hiring] decision on campus. Sometimes it makes
sense to do interviews on-campus. Other times it makes sense to fly people
back to the office. Expect to talk to one person at a time during the

Getting Hired

interviews.
Although the vast majority of analysts and associates in the United States end
up in New York, a limited number of positions are available in Chicago, Los
Angeles, and San Francisco. These offices can be desirable because they permit
a lifestyle slightly more relaxed than the New York grind. Lehman also hires a
lot of people into its offices in Europe and Asia.

42

On-campus interviews consist of a half-hour meeting. If a trip to New York is

deemed appropriate, youll go through a days worth of meetings with employees who range from associates to senior vice presidents. (By the end of a full
day, candidates have often been interviewed by as many as ten or 12 professionals). Offers are usually made within the week. Those seeking positions
abroad will interview for a specific office, but if hired may spend an initial
period of time in New York. You can find recruiting contacts for specific
schools at www.lehman.com/careers/americas/contacts/school.shtml.
If Lehman Brothers does not recruit at your school, your best bet is to send
your rsum to the recruiting department. The firm has a list of names on its
website (see Recruiting Contacts, in the next chapter).

Special Information for Undergraduates

Lehman recruiters say that the firm looks at candidates holistically. The
analyst program is a two- to three-year, up-or-out program depending on
division. In 2003, one insider estimates that on the banking side, half of this
years class are happy, 25 percent are okay with their jobs, and 25 percent are
disappointed. I think thats something you take a chance on when youre hired
into the generalist program. You know youre going to have a job. You just
dont know if youre going to have a job you like. Youre taking a chance.
Maybe 30 percent of people dont get their number one choice.

Special Information for MBAs

Getting Hired

Lehman actively recruits at the top business schools. An insider advises MBAs
to enroll in one of these schools, attend a Lehman one-firm presentation and
on-campus workshop, talk to second-year summer associates, and seek out
recent alumni for informational interviews. For MBAs who are new to

43

I-banking, the best way to get experience is through Lehmans summer

associate program. At the end of the program, Lehman extends full-time offers
to all summer interns who are deemed exceptional performers.

Special Information for Midcareer Candidates

According to insiders, the best way for midcareer professionals to get into
Lehman Brothers is by focusing on the important industry and product groups
at the firm. A high-tech or telecom specialist who speaks fluent Cantonese has
a much better shot than a finance generalist does. But any previous experience
at a bulge-bracket firm, private equity shop, or other markets-based business is
generally a strong selling point. Top talent is always in high demand across

Getting Hired

divisions.

44

The Interviewers Checklist

Insiders say they are looking at five specific areas in hiring:
1. Problem-solving and analytical abilities, such as intelligence, common
sense, business sense, and good judgment
2. Leadership, as in the ability to motivate others, head a team, and promote
an idea
3. Initiative, such as energy, work ethic, and a drive to excel
4. Teamwork (Its critical to understand youre part of a team)
5. Personal presence, or self-confidence, assertiveness, humility and the
ability to understand ones own strengths and weaknesses
A recruiter says, Were looking to bring in the future leaders of the firm. Were
trying to take a much longer view.
Several hires tell us they joined Lehman because of the firms open-minded
approach to candidates with varied backgrounds and interests. As one insider
puts it, They were very accepting of my liberal arts background; I didnt feel
like I had to hide it. At the same time, insiders say that Lehman does value
candidates who know how to network and play the political game. According to

Getting Hired

insiders, recruiters recognize those who talk the right way and who can
shake hands with the right people naturally, without having too much
attitude. One insider has this advice for new recruits: You should focus on
making yourself and your name very evident in the bankers lives. Dont make a
nuisance of yourself, but dont make the bank make all the effort. Says another

45

insider: I think its important to relax [in your interview]. The interviews are
personality searches. . . . If you get your interviewers to like you as a person, if
you show youre curious, eager, interested, inquisitive, youll do wellI think
thats what got me in the door.

Interviewing Tips
1. Insiders insist that you must know why youre going into investment
banking before you walk into your interview. Once on the job, there is no
time for soul searching. When youve slept two hours a night for the last
two nights, you do start thinking, Why am I here? says one insider.
2. Know Lehmans history. Understanding where the firm came from, such
as its relationship with American Express, and what its faced in the last
few years, such as moving out of the World Financial Center, indicates an
interest in the firm that interviewers want to see.
3. Prepare clear answers to basic questions about your academic and work
experience that demonstrate your problem-solving ability, team

Getting Hired

orientation, leadership, initiative, and analytical ability.

4. Understand why you want to work at Lehman, and come prepared with
questions that are genuine and demonstrate a desire to learn more about
the firm.

46

5. Take some time to look through Lehmans website. The site was
redesigned in 2002 and has a lot of good information, including day-inthe-life profiles of bankers, anatomy of a deal, and testimonials. Theres
even a financial glossary (a good way to make sure you can talk the talk) at
www.lehman.com/careers/americas/glossary.shtml.

Grilling Your Interviewer

Recruiters expect good questions from top candidates. While youll want to
create your own, here are some sample questions that will put you a step ahead.
Why did you choose Lehman Brothers over the other firms on the Street?
Describe the type of mentorship new analysts and associates receive.
What are the key differences between the training programs in sales, trading,
and research; corporate finance; and public finance?
What are currently the hottest product areas at Lehman?
How open is the firm to letting junior employees implement new ideas or
products?
How has Lehman had to reposition itself when competing for business with
mega-firms like Citigroup and BankAmerica?

Getting Hired

How concerned are you about SEC inquiries into the potential spinning of
IPOs?

47

For Your Reference

For Your Reference

Recommended Reading
The Numbers
Et Cetera

49

For Your Reference

Recommended Reading
Review of the Year 2002

This report by International Financial Review (IFR) is excellent for anybody

interested in banking as it explains market conditions in 2002 and singles out
award winners. Those applying to Lehman should read the section on Bank of
the Year (Playing by its own rules), which covers Lehmans strategy, the
strength of its culture, its recent success, and, briefly, its history to explain why
IFR named it Bank of the Year. We highly recommend that aspiring bankers
read other sections of the report as well, which discuss issues many banks are
struggling with, such as the ethical crises in investment research and increasing
regulation.
Source: www.ifrmagazine.com/ifr/roy2002two.html.

Lehmans Fuld on Why He Made a Deal

In an interview, CEO Richard S. Fuld, Jr., describes why the firm bought asset
manager Neuberger Berman for $2.63 billion after years of going it alone. We
have embraced a philosophy of growing organically, says Fuld. Thats why
this acquisition is momentous in itself.
Source: BusinessWeek Online, 7/23/03.

Lehman to Buy Neuberger in Deal Worth $2.6 Billion

Analyzes and explains the Neuberger deal, including how the acquisition will
help Lehman diversify its revenue stream (by increasing its fee-based business
revenue) and reduce costs (by merging back-office operations).
Source: Landon Thomas, Jr., The New York Times, 7/23/03.

50

For Your Reference

Trio to Thrive on Market Rally; Goldman, Morgan, Merrill Stand to Gain, while
Bond Houses Could Falter

This article provides great background on the dynamics of Wall Street, arguing
that Lehmans success during the bear market could turn if the bull market of
2003 continues, thanks to the domination of Goldman, Morgan, and Merrill in
the IPO and M&A business.
Source: Aaron Elstein, Crains New York Business, 6/30/03.

The Streets No. 1 Obsession

A strong article about how the League Tables are manipulated; Lehmans
mentioned because it got League Table credit on the sale of PwC, a deal
for which it didnt offer any real advice.
Source: Andy Serwer, Fortune, 5/26/03.

Why Lehman Needs a Strategy for Asia

Though a little old, this articles focus on Lehmans strategy in Asia provides a
great overview of the firm, with sidebars that cover its history in Asia and the
United States.
Source: Fiona Haddock, Asiamoney, 4/02.

After the Darkest Year, a Changed Wall St.

Though Lehman gets barely a mention, this review of how events in 2001 and
2002, from 9/11 to accounting scandals, transformed Wall Street provides a
useful background on Wall Street today.
Source: Patrick McGeehan, New York Times, 9/8/02.

51

For Your Reference

The Numbers


Lehman Brothers Financial Highlights

1st Half 2003
($M)

1st Half 2002

($M)

Change
(%)

Net revenues

4,000

3,269

22

Non-interest expenses

2,937

2,393

23

738

594

24

$2.96

$2.23

33

Net income
Earnings per share (basic)

Source: Lehman Brothers quarterly report; WetFeet research and analysis.

Revenue by Business Category

Net Revenues
---------------------------------------------------2003* ($M)
% of Total
Change (%)

Investment banking
Capital markets
Client services

792

20

913

2,803

70

1,945

407

10

411

*First half of 2003. Source: Lehman Brothers quarterly report; WetFeet research and analysis.

Personnel

Total number of employees, 2003: 13,247

Source: Lehman Brothers quarterly earnings report. Number as of 5/31/03.

52

For Your Reference

Et Cetera
Key People
Richard S. Fuld, Jr., Chairman and Chief Executive Officer
Jonathan Beyman, Chief of Operations and Technology
David Goldfarb, Chief Financial Officer
Joseph M. Gregory, Chief Operating Officer
Jeremy M. Isaacs, CEO, Europe and Asia
Bradley H. Jack, Chief Operating Officer
Herbert H. McDade, Head of Global Fixed Income
Robert S. Shafir, Co-Head of Global Equities
See www.lehman.com/who/bios/index.htm for biographies of senior
management.

Recruiting Contacts
Recruiting contacts for each of the departments are listed on Lehmans website:
www.lehman.com/careers/americas/contacts
www.lehman.com/careers/europe/contacts
www.lehman.com/careers/asia/contacts
Lehman also lists recruiting contacts for specific schools:
www.lehman.com/careers/americas/contacts/school.shtml.

53

For Your Reference

Major Offices
New York

World Headquarters
745 Seventh Avenue
New York, NY 10019
United States
London

European Headquarters
One Broadgate
London EC2M 7HA
United Kingdom
Tokyo

Asia Pacific Headquarters

Aki Mori Building
12-32 Akasaka 1-chome
Minato-ku, Tokyo 107-6036
Japan
Locations for all of Lehmans offices can be found at
www.lehman.com/who/offices/index.htm.

54

WETFEETS INSIDER GUIDE SERIES

JOB SEARCH GUIDES

Getting Your Ideal Internship

Job Hunting A to Z: Landing the Job You Want
Killer Consulting Resumes!
Killer Cover Letters & Resumes!
Killer Investment Banking Resumes!
Negotiating Your Salary & Perks
Networking Works!
INTERVIEW GUIDES

Ace Your Case: Consulting Interviews

Ace Your Case II: 15 More Consulting Cases
Ace Your Case III: Practice Makes Perfect
Ace Your Case IV: The Latest & Greatest
Ace Your Case V: Return to the Case Interview
Ace Your Interview!
Beat the Street: Investment Banking Interviews
Beat the Street II: I-Banking Interview Practice Guide
CAREER & INDUSTRY GUIDES

Careers in Accounting
Careers in Advertising & Public Relations
Careers in Asset Management & Retail Brokerage
Careers in Biotech & Pharmaceuticals
Careers in Brand Management
Careers in Consumer Products
Careers in Entertainment & Sports
Careers in Human Resources

Careers in Information Technology

Careers in Investment Banking
Careers in Management Consulting
Careers in Manufacturing
Careers in Marketing & Market Research
Careers in Nonprofits & Government Agencies
Careers in Real Estate
Careers in Supply Chain Management
Careers in Venture Capital
Consulting for PhDs, Doctors & Lawyers
Industries & Careers for MBAs
Industries & Careers for Undergrads
COMPANY GUIDES

Accenture
Bain & Company
Boston Consulting Group
Booz Allen Hamilton
Citigroups Corporate & Investment Bank
Credit Suisse First Boston
Deloitte Consulting
Goldman Sachs Group
J.P. Morgan Chase & Company
Lehman Brothers
McKinsey & Company
Merrill Lynch
Morgan Stanley
25 Top Consulting Firms
Top 20 Biotechnology & Pharmaceuticals Firms
Top 25 Financial Services Firms

7HO7E!RE
:HW)HHWLVWKHWUXVWHGGHVWLQDWLRQIRUMREVHHNHUVWRUHVHDUFKFRPSDQLHVDQGLQGXVWULHVDQG
PDQDJHWKHLUFDUHHUV:HW)HHW,QVLGHU*XLGHVSURYLGH\RXZLWKLQVLGHLQIRUPDWLRQIRUDVXFFHVVIXO
MREVHDUFK$W:HW)HHWZHGRWKHZRUNIRU\RXDQGSUHVHQWRXUUHVXOWVLQDQLQIRUPDWLYHFUHGLEOH
DQGHQWHUWDLQLQJZD\7KLQNRI XVDV\RXURZQSULYDWHUHVHDUFKFRPSDQ\ZKRVHSULPDU\PLVVLRQ
LVWRDVVLVW\RXLQPDNLQJPRUHLQIRUPHGFDUHHUGHFLVLRQV
:HW)HHWZDVIRXQGHGLQE\6WDQIRUG0%$V*DU\$OSHUWDQG6WHYH3ROORFN:KLOHH[SORULQJ
RXUQH[WFDUHHUPRYHVZHQHHGHGSURGXFWVOLNHWKH:HW)HHW,QVLGHU*XLGHVWRKHOSXVWKURXJKWKH
UHVHDUFKDQGLQWHUYLHZLQJJDPH%XWWKH\GLGQWH[LVW6RZHVWDUWHGZULWLQJ7RGD\:HW)HHWVHUYHV
PRUHWKDQDPLOOLRQMREFDQGLGDWHVHDFKPRQWKE\KHOSLQJWKHPQDLOWKHLULQWHUYLHZVDYRLGLOO
IDWHGFDUHHUGHFLVLRQVDQGDGGWKRXVDQGVRI GROODUVWRWKHLUFRPSHQVDWLRQSDFNDJHV7KHTXDOLW\
RI RXUZRUNDQGNQRZOHGJHRI WKHMREVHHNLQJZRUOGKDYHDOVRDOORZHGXVWRGHYHORSDQH[WHQVLYH
FRUSRUDWHDQGXQLYHUVLW\PHPEHUVKLS
,QDGGLWLRQ:HW)HHWVVHUYLFHVLQFOXGHWZRDZDUGZLQQLQJZHEVLWHV:HW)HHWFRPDQG
,QWHUQVKLS3URJUDPVFRP:HEEDVHGUHFUXLWLQJWHFKQRORJLHVFRQVXOWLQJVHUYLFHVDQGRXU
H[FOXVLYHUHVHDUFKVWXGLHVVXFKDVWKHDQQXDO:HW)HHW6WXGHQW5HFUXLWPHQW6XUYH\2XUWHDP
PHPEHUVZKRFRPHIURPGLYHUVHEDFNJURXQGVVKDUHDSDVVLRQDERXWWKHMREVHDUFKSURFHVVDQG
DFRPPLWPHQWWRGHOLYHULQJWKHKLJKHVWTXDOLW\SURGXFWVDQGFXVWRPHUVHUYLFH

!BOUT/UR.AME
2QHRI WKHPRVWIUHTXHQWTXHVWLRQVZHUHFHLYHLV6RZKDWVWKHVWRU\EHKLQG\RXUQDPH"7KH
VKRUWVWRU\LVWKDWWKHLQVSLUDWLRQIRURXUQDPHFRPHVIURPDSRSXODUEXVLQHVVVFKRROFDVHVWXG\
DERXW//%HDQWKHVXFFHVVIXOPDLORUGHUFRPSDQ\/HRQ/HRQZRRG%HDQJRWKLVVWDUWEHFDXVH
KHTXLWHVLPSO\DQGYHU\OLWHUDOO\KDGDFDVHRI ZHWIHHW(YHU\WLPHKHZHQWKXQWLQJLQWKH0DLQH
ZRRGVKLVVKRHVOHDNHGDQGKHUHWXUQHGZLWKVRDNHGIHHW6RRQHGD\KHGHFLGHGWRPDNHD
EHWWHUKXQWLQJVKRH$QGKHGLG$QGKHWROGKLVIULHQGVDQGWKH\OLQHGXSWREX\WKHLURZQSDLUV
RI %HDQERRWV$QG//%HDQWKHFRPSDQ\ZDVERUQDOOEHFDXVHDPDQZKRKDGZHWIHHW
GHFLGHGWRPDNHERRWV
7KHOHVVRQZHWRRNIURPWKH%HDQFDVH"/RWVRI SHRSOHJHWZHWIHHWEXWHQWUHSUHQHXUVPDNH
ERRWV$QGWKDWVH[DFWO\ZKDWZHUHGRLQJDW:HW)HHW

#AREERS*OB3EARCH

/HKPDQKDVFRPHDORQJZD\VLQFHLWVEHJLQQLQJVDVD
GU\JRRGVVWRUHLQWKHV7KHILQDQFLDOVHUYLFHVILUPQRZVWDQGVDVDSUHPLHUEXOJH
EUDFNHWSOD\HURQWKH6WUHHWDQGFRQWLQXHVWRERRVWLWVUDQNLQJVLQHTXLW\UHVHDUFKIL[HGLQFRPHDVVHW
PDQDJHPHQWDQGRWKHUNH\DUHDV/HKPDQVSRUWVDIODWPDQDJHPHQWVWUXFWXUHWKDWDOORZVQHZUHFUXLWV
VRPHURRPWRVWUHWFKRXW)RUWKRVHZKRDUHQWDIUDLGWRZRUNKDUGDQGDUHORRNLQJIRUDORQJWHUP
FDUHHULQILQDQFLDOVHUYLFHV/HKPDQLVDJRRGSODFHWREH

4URNTOTHIS7ET&EET)NSIDER'UIDETOEXPLORE
 +RZ/HKPDQVWDFNVXSDJDLQVWWKHFRPSHWLWLRQ
 $W\SLFDOGD\LQWKHOLIHRI D/HKPDQLQYHVWPHQWEDQNHUWUDGHUDQGUHVHDUFKDQDO\VW
 +RZWKHILUPLVRUJDQL]HGIURPWRSWRERWWRP
 :KDWHPSOR\HHVORYHPRVWDQGOLNHOHDVWDERXWZRUNLQJDW/HKPDQ
 $YHUDJHVWDUWLQJVDODULHVIRUXQGHUJUDGVDQG0%$VERQXVHVSHUNVDQGWUDYHOH[SHFWDWLRQV
 /HKPDQVRSHQHQGHGFXOWXUH
 :KDWWKHUHFUXLWLQJSURFHVVHQWDLOVZKDWUHFUXLWHUVDUHORRNLQJIRUDQGWLSVIURP/HKPDQLQVLGHUV
IRUDFLQJWKHLQWHUYLHZ

:HW)HHWKDVHDUQHGDVWURQJUHSXWDWLRQDPRQJFROOHJHJUDGX
DWHVDQGFDUHHUSURIHVVLRQDOVIRULWVVHULHVRI KLJKO\FUHGLEOH
QRKROGVEDUUHG,QVLGHU*XLGHV:HW)HHWVLQYHVWLJDWLYHZULWHUV
JHWEHKLQGWKHDQQXDOUHSRUWVDQGFRUSRUDWH35WRWHOOWKHUHDO
VWRU\RI ZKDWLWVOLNHWRZRUNDWVSHFLFFRPSDQLHVDQGLQ
GLIIHUHQWLQGXVWULHVWWW7ET&EETCOM