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An associate is typically a recently graduated MBA or an analyst who gets promoted after three or four years. You will usually stay an associate for three years or so. An associate still has to do a lot of grunt work and may even have an analyst to call on. Your hours will still be miserable and you haven't really become a human being yet. Like a good analyst, your job is to make your boss look good and to understand what's going on. Your boss may abuse you from time to time and you aren't supposed to complain really. This is a job where you can really start to shine. If you add value to transactions or help get things done in some other meaningful way, you can expect to be paid a reasonable bonus and have a shot a promotion to AVP.

Associate level pay in New York firms runs roughly $90,000 in your first year (including bonus). If you are good and stay awhile, expect to go up to roughly $130,000 to $150,000 before you hop up another level. In London expect a salary of roughly 60,000 to 80,000 Sterling (all-in). >

Key Skills

In investment banking / corporate finance / M&A, key associate skills include:

• the ability to do DCF valuations
• the ability to use Excel in your sleep
• the ability to arrange client meetings and get the logistics right
• the ability to deal with horrendous egos
• the ability to find comparable companies
• the ability to network within the firm and befriend key people like librarians, IT gurus, messengers, lawyers, compliance etc.

In debt and equity capital markets positions, key associate skills include:

• the ability to massage league tables
• the ability to price up new deals (e.g. bonds, convertibles, preferreds)
• pretend that you know what's going when clients call in and the boss is not around
• the ability to track past deals and pricing to sense where the market is going
• check and generate weekly newsletters (weeklies)
• the ability to fill in silences in meetings with insightful comments (while making sure your boss controls things)
• coordinate due diligence
• prepare document on debt and equity deals
• make sure analysts get burgers from the right place
• generate pitch books with your eyes closed while talking to clients and screaming at syndicate

In sales and trading positions, key associate skills include:

• the ability to watch your bosses blotter
• the ability to know where prices are
• the ability to work options pricing models
• the ability to bluff a little when needed
• the ability to eat endless fattening food without getting fat
• the ability to golf, play tennis, drink and joke around with clients
• the ability to make clients feel comfortable with you

Success Factors

Key success factors include (i) getting your job done well, (ii) getting many things done in a chaotic environment, (iii) dressing well, (iv) having a beer and a good time every once in awhile, (v) always making your boss look good, (vi) being a total whiz with computers, (vii) being able to spin bad news into ok news and (viii) network within the firm. Other good things to do include figuring out when a job could be done better and going out and doing it. For example, create a database to track the results of an equity tender offer. Initiative is key. Also, getting to know clients is very important since you will be using those relationships later on.

Assessment

As an associate you are in. Your job now is to prove you have what it takes to make in investment banking. You may not always like the environment and culture you are in, but your job is to survive and eventually excel. You are only a few years away from getting your own clients, initiating your own deals and making some good money.

Play your cards right and you'll be happy you did the time. Big time.

Recommended Books

• Applied Corporate Finance: A User's Manual, by Aswath Damodaran. Walks you through how to do corporate finance in detail with extensive examples. Read this for an investment banking job.
• Barbarians at the Gate: The Fall of RJR Nabisco, Bryan Burrough and John Helyar, Harper Collins Books, 1993. Describes the rather crazy life of one corporate executive. Lots of juicy personality conflict. If you liked the movie you will definitely enjoy the book. Good background for an M&A job.
• Fast Track: The Insider's Guide to Winning Jobs in Management Consulting, Investment Banking, and Securities Trading, by Miriam Naficy. A recent Stanford Job and former employee of Goldman Sachs provides a highly practical overview of what it takes to get a good finance job. Highly recommended. 
• Handbook of Fixed Income, Frank Fabozzi (editor). This is the bible for any job involving fixed income sales, trading, underwriting or derivatives. Should be required reading in every MBA program.
• Tim Crack's Guide to Quantitative Questions from Wall Street Job Interviewers. If you are interviewing for a job in derivatives or other relatively quantiative area you should get this book. This is not so important to go through for a plain vanilla i-banking job, although it couldn't hurt.
• Valuation: Measuring and Managing the Value of Companies, by Tom Copeland, Tim Koller and Jack Murrin. Valuation delivers more potent strategies for measuring and enhancing the bottom-line value of any company. Also walks you through how to do a valuation. The diskette is also quite valuable given that you get a ton of spreadsheets to play with. Great background for any job involving M&A or investment banking.