What’s so special about $800,000? It appears that whether you’re a bond counsel, public finance banker or even a series 7 financial wealth advisor; the requested amount of business the firm wants or expects you to move is $800,000. It does not matter if it’s a bulge bracket, a super-regional, or a regional firm. In my experience of recruiting public finance professionals, everyone wants $800,000 in portable business to determine if a candidate is a good fit for the new firm.
But how likely is this?
The truth of the matter is that no one is assured how much revenue they’re going to bring when transitioning to a new firm. I have seen people make projections and hit them. I have also seen people make projections and miss the mark significantly their first year. However, their second year they more than made up for that. We are seeing that it takes more time for people who have been consistently making the $800,000 to transfer that business on day one. Through the years of recruiting public finance professionals, I have been trying to convince my clients that the $800,000 is only a number. It’s more important to look at the person, his or her contacts, past business dealings, as well as realistic future projections. Do not be overly concerned about hitting the $800,000 in portable business. Many of the firms that I’m fortunate enough to work with are starting to see that the immediate $800,000 coming in the door their first year may not be as attainable as it was in years past. This is due to obvious reasons such as: lower takedowns, greater competition on smaller deals, and the loyalty that issuers have to the firm rather than to the banker/attorney.
The Magic Number Vs. Reality
From my years in the industry and recruiting public finance professionals, I know this might not sit well with many of the firms out there; however, this is becoming a new reality. Firms must look at individuals more as individuals rather than candidates expected to move over substantial dollars in their first year. Clients must look toward the big picture two and three years out to get the return on investment that they so want. Candidates must be able to demonstrate, with a large degree of accuracy, what they can do in years two and three and be held to that standard. They should be allowed the opportunity to build a base in year one, and not necessarily have to hit that magic number of $800,000.
I personally believe that if the condition of hitting $800,000 is removed, more and more qualified candidates will come to the table on a regular basis. Working with law firms trying to transfer laterals and enticing a Partner, Senior Counsel, or even Past Partners to make a move (knowing they have to hit the $800,000) is inhibiting them from simply interviewing at a new firm, even though they know they want to move. When recruiting public finance professionals, public finance bankers are stating that they would rather under promise and over deliver in years one and two. They do so because they are not as likely as they were in the past to hit the magic number of $800,000 in their first full year.
What are you, as a candidate, to do? Here’s what I know from recruiting public finance professionals for years:
First, build projections that are realistic when putting together a business plan for a prospective new firm. In addition to realistic projections, quantify how you came up with those numbers. Don’t just state them, show the mathematics behind them. Also, include a marketing plan that includes how to transition existing business and where new business is going to come from. Being vague because of concern that a new firm is going to go after your business if you are not hired must be alleviated. If you do not trust the firm with your data, then it is probably not the right firm for you to be considering. In almost ten years of recruiting public finance professionals, both bankers and attorneys, I have never had a candidate come back and tell me that their data was compromised in any manner.
If you would like to discuss your options, please reach out to me for a confidential conversation at 760-477-1284 or email me at email@example.com.
About Harlan Friedman, JD & Founding Member, H. Friedman Search LLC. Harlan is a thirty-year veteran Public Finance Banker turned recruiter who specializes in the placement of all level Public Finance Bankers, Health Care Bankers, Municipal Financial Advisors, Compliance Officers, Issuers, and Bond Counsels. He can be reached on LinkedIn, at firstname.lastname@example.org or 760-477-1284.