Most of the conversation around investment banking recruiting focuses on undergraduate and MBA internship pipelines — and for good reason, since that is how the majority of analysts and associates enter the industry. But there is another path that thousands of professionals use every year: lateral hiring. Whether you are an analyst looking to move from a middle-market firm to a bulge bracket, a consultant pivoting into banking, or someone in corporate finance making a career switch, understanding how lateral hiring works is essential to making a successful transition.
In this guide, we will cover everything you need to know about lateral hiring in investment banking — who laterals, when lateral hiring happens, how the process works, and how to maximize your chances of landing a lateral offer.
What Is Lateral Hiring in Investment Banking?
Lateral hiring refers to the process of joining an investment bank outside of the traditional on-cycle recruiting pipeline. Rather than coming in through a structured internship program, lateral hires are brought on to fill specific openings — often because an existing analyst or associate has left the group, or because the group’s deal flow has increased and they need additional headcount.
Lateral hiring can happen at virtually any level — analyst, associate, VP, and above — though it is most common at the analyst and associate levels. The process tends to be less structured than on-cycle recruiting, which creates both opportunities and challenges for candidates.
Who Laterals Into Investment Banking?
Lateral candidates typically fall into a few categories:
Bankers Moving Between Banks
This is the most common type of lateral move. An analyst at a middle-market bank might lateral to a bulge bracket or elite boutique to get better deal experience and stronger exit opportunities. Or an associate at a bulge bracket might move to a boutique for a different culture or better exposure to senior bankers. These moves happen frequently because turnover in investment banking is high, and banks are constantly looking to backfill positions.
Consultants Pivoting Into Banking
Management consultants — particularly those at MBB firms (McKinsey, Bain, BCG) and other top strategy firms — sometimes lateral into investment banking. The analytical skillset translates reasonably well, though consultants will need to build up their financial modeling and valuation skills. This move is more common at the associate level, often in conjunction with or shortly after an MBA.
Corporate Finance and Accounting Professionals
Professionals in corporate finance (FP&A, treasury, corporate development) or at Big 4 accounting firms sometimes make the switch to investment banking. This path tends to be harder than bank-to-bank or consulting-to-banking moves because the day-to-day work in corporate finance is quite different from banking, but it is possible — particularly if you are early in your career and willing to come in at the analyst level.
Professionals From Other Finance Roles
People in equity research, credit analysis, commercial banking, or even some buy-side roles occasionally lateral into investment banking. Equity research professionals in particular may find the transition smoother because they already have strong valuation and financial analysis skills.
When Does Lateral Hiring Happen?
Unlike on-cycle recruiting, which follows a predictable (if increasingly early) timeline, lateral hiring is driven by need. Banks open lateral positions when:
- An analyst or associate leaves the group (for private equity, hedge funds, business school, or another bank)
- Deal flow has picked up and the group needs more capacity
- A new group is being built out or expanded
- A senior banker joins and brings additional headcount with them
This means lateral openings can pop up at any time during the year. That said, there are seasonal patterns. Attrition tends to spike after bonus season (typically January through March) and after PE recruiting cycles conclude. Many lateral openings therefore become available in Q1 and Q2, though you should be prepared to act on opportunities year-round.
How the Lateral Hiring Process Works
The lateral process differs from on-cycle recruiting in several important ways.
Sourcing Opportunities
Lateral openings are often not publicly posted — or if they are, the posting comes after the group has already been quietly looking. This means that networking is even more critical for lateral hiring than it is for on-cycle recruiting. Many lateral hires happen because someone in the group knew the candidate, a headhunter brought them the opportunity, or the candidate reached out directly to bankers in the group.
Headhunters play a significant role in lateral hiring, particularly for associate-level moves and above. Building relationships with a few reputable headhunters who cover investment banking can give you access to opportunities you would not otherwise see. That said, headhunters work for the banks — not for you — so do not rely on them exclusively. Your own network should be your primary source of leads.
The Interview Process
Lateral interviews tend to be less structured than Superday interviews for on-cycle recruiting. You may have a series of one-on-one conversations over a few weeks rather than a single all-day event. The process might involve 3 to 6 interviews, starting with a phone screen from HR or a junior banker, followed by interviews with VPs, directors, and MDs in the group.
In terms of content, lateral interviews cover much of the same ground as on-cycle interviews — technical questions, behavioral questions, and deal experience discussions. However, lateral interviews tend to place more weight on:
- Your deal experience: Interviewers will want to walk through the deals or projects you have worked on in detail. Be prepared to discuss the strategic rationale, valuation work, and your specific contributions.
- Technical depth: Since you already have professional experience, interviewers will expect you to demonstrate solid knowledge of comparable company analysis, precedent transactions, and DCF analysis. You may be asked to work through a mini case study or modeling exercise.
- Why you want to move: This is arguably the most important question in a lateral interview. Banks want to understand why you are leaving your current role and why you want to join their specific group. You need a clear, logical narrative that does not badmouth your current employer.
Timeline and Offers
The lateral process tends to move faster than on-cycle recruiting — sometimes as fast as 2 to 4 weeks from first interview to offer. Banks filling lateral positions often have an immediate need, so they are motivated to close quickly. That said, the process can also stretch out if the group is not in a rush or if there are multiple candidates in the pipeline.
Compensation for lateral hires is generally in line with what other professionals at the same level and seniority receive at the bank. If you are lateraling as a second-year analyst, you will typically come in at second-year analyst compensation. There can be some room for negotiation, especially if you have competing offers or are giving up a guaranteed bonus at your current firm.
How to Position Yourself for a Lateral Move
Build Your Network Before You Need It
The best time to start networking for a lateral move is well before you actually want to make one. If you are an analyst at a middle-market bank thinking about moving to a larger bank in a year, start having coffee chats with analysts and associates at your target firms now. Use your networking skills to build genuine relationships, not just transactional connections. When a spot opens up, you want to be the person they think of first.
Sharpen Your Technical Skills
Even if you are already working in banking, lateraling to a more competitive firm means facing tougher technical questions. Make sure you are sharp on WACC calculations, LBO mechanics, merger model concepts, and enterprise value vs. equity value. If you are coming from consulting or corporate finance, you will need to invest significant time studying technical concepts that may not come up in your current role.
Craft a Compelling Narrative
Your “why” story needs to be airtight. Banks are skeptical of lateral candidates who seem like they are running away from something. Instead, frame your move as running toward something — a specific sector you are passionate about, a type of deal work you want more exposure to, or a culture that better fits your long-term career goals. If you are moving from a non-banking background, your narrative should explain why banking is the right next step and how your prior experience makes you a stronger candidate.
Work With Headhunters Strategically
Reach out to 2 to 3 headhunters who specialize in investment banking placements. Be transparent about what you are looking for and your timeline. Provide them with an updated resume and be responsive when they send you opportunities. But remember that headhunters are presenting you to many banks simultaneously — you need to be able to articulate clearly why each specific opportunity interests you.
Be Ready to Move Quickly
Lateral processes can move fast. When an opportunity comes up, you may have only a few days to prepare for an interview. Keep your resume updated, stay sharp on technicals, and have your deal experience talking points ready to go at all times. The candidates who win lateral offers are the ones who are prepared when the call comes.
Common Challenges in Lateral Hiring
Level reset: If you are coming from a non-banking background, you may need to accept a lower title than what you currently hold. A VP in corporate finance might need to come in as an associate or even a senior analyst in banking. This can be a tough pill to swallow, but it is often necessary if you want to build credibility in the industry.
Culture fit concerns: Banks worry about whether lateral hires will integrate smoothly into the group. Be prepared to demonstrate that you are collaborative, adaptable, and willing to learn the specific way things are done at your new firm.
Notice periods: If you are currently employed, your new bank will typically want you to start within 2 to 4 weeks. Check your current employment agreement to understand any notice period requirements and plan accordingly.
Forfeited compensation: If you lateral before your annual bonus is paid, you may forfeit that bonus. Some banks will offer a signing bonus to offset this, but not always. Time your move carefully and be prepared to negotiate.
Lateral Hiring vs. On-Cycle Recruiting: Key Differences
The table below summarizes the main differences:
- Timeline: On-cycle follows a fixed schedule; lateral is ad-hoc and driven by need
- Structure: On-cycle has Superdays and standardized processes; lateral is typically a series of informal interviews
- Competition: On-cycle has a large, defined applicant pool; lateral competition varies widely by opening
- Networking importance: Important for both, but arguably even more critical for lateral since many roles are not publicly posted
- Technical depth: Similar for both, but lateral interviews place more emphasis on deal experience and practical knowledge
Final Thoughts
Lateral hiring is a real and viable path into investment banking, whether you are upgrading from a smaller bank or making a career pivot from another industry. The keys to success are strong networking, a compelling narrative, sharp technical skills, and the ability to act quickly when opportunities arise. If you are serious about making a lateral move, start building relationships now, keep your skills sharp, and be ready when the right opening comes along.
Want Personalized Interview Coaching?
If you are serious about breaking into investment banking, the best thing you can do is work with someone who has been through the recruiting process and knows exactly what top banks are looking for. At Wall Street Mastermind, we have helped over 2,500 students land offers at every bulge bracket and elite boutique bank on Wall Street. Book a free strategy call to learn how we can help you prepare for your interviews and maximize your chances of landing the offer.
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