Hard Times for Wall Street's 'Sell Night' Recruits

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By paying for the sins of their forebears, the aspiring new guard of Wall Street has lost out on what once seemed a birthright. "Dinners these days, whether you're a young prospect or a client, are so few and far between," says Yanez. "The banks are so afraid of getting into trouble."

Wall Street's new sobriety has already had a pronounced effect on recruits. All of those interviewed for this story refused to give their names for fear it would cost them a job offer. With fewer openings than in years past, each spot is hotly contended. Even so, no one wants to be caught celebrating when their colleagues are left in tears without an offer—especially those who have served their second internship. While the situation may not be what it was, "it looks worse than ever to complain," says Yanez. "Trading and banking jobs are not easy to come by."

Consequently, interns and young traders are celebrating much more modestly. UBS hosted a trivia night at an Irish pub featuring free appetizers. One group from JPMorgan recently planned a celebratory trip to Philadelphia to play skee ball at arcade chain restaurant Dave & Buster's. They considered splurging on a Zipcar—until scrapping the idea when so few received offers.

Glocap's Seanor says sell night has morphed into the "sell drink" instead. Increasingly, young analysts, bankers, and traders—who make the endeavor cheaper, she says, because they prefer beer to hard liquor—take prospective hires out to make a take-it-or-leave-it case for their bank. Even the private equity shops and hedge funds that Seanor scouts for have largely scotched their spirited woo-fests. In better years, she says, a finance whiz playing the scene in Manhattan could schedule at least 20 such invitations. This year, she estimates, the average is barely five.

According to Sarch, there are two reasons for this demise. First, Wall Street's resurgent entrepreneurialism has led to the rise of investment boutiques, such as Fieldpoint Private Bank & Trust and HighTower, that have startup-like cost structures and expense policies. Second, bulge-bracket firms such as Goldman can recruit overqualified, recently laid-off bankers without overextending themselves. "People are anxious to get a job," he says. "You don't have to do the kind of wooing you used to."

Interns aren't the only ones losing out. To preserve remnants of a fleeting culture, many veteran bankers have resorted to "soft-dollar" solutions. One recent trend is including recruits on lavish steak dinners—hosted by the firm's clients.

Alas, for all the promise of Goldman's dinner at Ruth's Chris, only drinks and hors d'oeuvres were served, blindsiding the veteran traders who showed up to mingle with the recruits. After leaving the party, one candidate consoled himself with a $5 footlong sandwich from Subway on the train ride home. "You feel for the new hires," says Yanez. "It's gone from one extreme to another."

With Sommer Saadi and Alexandra Wolfe

Bloomberg Businessweek Senior Writer Farzad covers Wall Street and international finance.

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