The following reflects current conditions in the investment banking lateral market as observed through active search mandates, candidate conversations, and offer negotiations across bulge bracket, elite boutique, and middle market platforms. This update covers the AS1 through VP3/Director level.
What You Need to Know
The market is genuinely active. It is also genuinely surgical. Those two things are not in conflict — understanding both at the same time is what separates candidates who get great jobs from candidates who spend six months in conversations that go nowhere.
- The AS1 (1+ years of IB M&A) through VP2 lateral pipeline is the deepest it has been in several years. New mandates are real, firms have budget, and the conversations are serious.
- Banks are not hiring out of urgency. There were no substantial reductions in force driving this wave. Firms are busy and well-staffed. They are waiting for the right fit, not filling seats to stop the bleeding.
- Elite boutiques and bulge brackets want demonstrated $1B-plus public-to-public M&A experience. Middle market shops want closed sponsor-backed deal reps. Neither is settling for close enough.
- Banks are not hiring with promotion guarantees attached. Do not expect to negotiate a title bump as part of a lateral offer and do not expect to skip a level. The AS3 level deserves specific attention — it is the most difficult level to place and the one where expectations most frequently diverge from reality. Repeating a year to retrack is very much on the table and more AS3s should be seriously considering it. Sometimes it may be better to wait one you receive the VP promote.
- No Associate-level guarantees. Full-year bonuses — not prorated — are the most important term to secure, but only if you are currently employed. Do not resign until you have something else lined up.
- Sign-ons are not a given. When they exist they are light and come with two-year clawbacks. Banks will buy out reasonable deferred comp and existing clawback obligations, but what they cover comes back in with its own two-year clawback on a separate clock. Map your total exposure across every component before you sign anything.
- VP3s and Directors: no one is actively recruiting execution-focused candidates at that level right now. The path forward requires a different approach, addressed below.
- New analyst classes, MBA associates, and summer programs start within weeks. If you are in process, keep moving.
What the Market Is Commanding: Compensation Terms
Full-year bonuses, not prorated — if you are on payroll at your prior firm when bonuses pay.
This is the most important term to secure. A well-structured lateral offer will include a commitment to pay your first-year bonus on a full-year basis, not prorated for the months you were actually at the new firm. The mechanics are critical: you must be employed. If you resign, you have surrendered your leverage.
No guarantees at the Associate level.
The guaranteed bonus structures that existed in 2021 and into early 2022 are gone. This is not a negotiating failure — it is simply not on the table.
No promotion guarantees. Do not expect to skip a level.
Banks are not hiring laterally with promotion commitments attached. Firms are hiring you for the seat they have open, at the level they have determined is appropriate, and they are not negotiating a promotional pathway as part of closing an offer. Candidates who make a level-skip a condition of accepting are losing the offer. This is a clean lateral market — same level, better platform, better deal flow — and that is what it is producing.
Sign-ons are not a given, and when they exist they are modest with two-year clawbacks.
Sign-on bonuses are not standard at the Associate and VP level in this market — not every offer includes one and candidates should not expect one as a default component of a competitive package. When they do exist they are light relative to prior cycles. Nearly all carry two-year clawback provisions. The structure varies and the difference matters: cliff provisions subject the full amount to clawback if you leave before the two-year mark regardless of tenure; prorated structures step the obligation down over time. A cliff clawback is a hard constraint on your mobility for the full two years. Know which structure you have before you sign.
Banks are willing to buy out reasonable deferred comp and existing clawback obligations.
If your current firm has unvested restricted stock, deferred cash, long-term incentive plan balances, or an existing clawback from a prior move, the current market is supportive of covering those. Put it on the table. The operative word is reasonable — bring clean, documentable numbers with documentation to support them. Banks will engage seriously on a verifiable balance. They are not writing checks against speculative valuations.
What the bank buys out comes back in with its own clawback.
Whatever the bank covers is typically structured as an additional sign-on with its own independent two-year clawback. The result is that you can begin a new role carrying two distinct clawback obligations simultaneously, each on its own clock, each with its own structure. Before accepting any offer with multiple components, map the total exposure in writing — what is the aggregate number, is each provision a cliff or prorated, and when does each clock start and end. The total can be significant in ways that are not obvious when evaluating each piece individually. Know the full number before you are committed to it.
Moving allowances are available and worth asking for.
For candidates relocating, most firms will provide a moving allowance when asked directly. It is not always offered proactively but it is a standard negotiable item and among the lower-friction components of the conversation.
Two-year clawbacks are now the standard across all components.
One-year provisions, common in 2021 and 2022, have been largely replaced. When you make a lateral move in this market, you are making a financial commitment to a minimum two-year stay across every variable compensation component. Evaluate the fit accordingly before signing.
Why the Market Is Active
Deal flow recovered meaningfully through 2025. The share of transactions above $1 billion has grown, meaning the work coming in is more complex, not just more plentiful. Banks that spent 2023 and most of 2024 in a defensive posture are running live mandates and feeling a genuine execution gap at the VP and senior Associate level.
The supply side is equally important and less discussed. The 2022-2023 downturn structurally thinned the AS2 through VP2 cohort in the market today. MBA associate hiring was cut at most major banks during the freeze. A meaningful portion of those who left during that period did not come back. The pool of qualified mid-level candidates who are actually moveable is smaller than it appears.
There is also a direct mechanical connection between the lateral MD hiring spree of 2024-2025 and current Associate and VP demand. Every external MD who landed at a new platform came without a team. They brought origination capacity. They did not bring the associates and VPs who execute the work. Those seats opened the moment the MD signed, across multiple banks and multiple coverage groups simultaneously, and that dynamic continues to drive mandate volume.
What This Market Is Not
Firms are busy and well-staffed. The reductions over the past eighteen months were targeted and performance-driven — individual underperformers, thin deal sheets, people who ran out of goodwill. There were no substantial reductions in force. Banks are running deliberate searches for specific profiles with enough qualified inbound to hold a high bar without urgency.
Elite boutiques and bulge brackets are targeting demonstrated $1B-plus public-to-public M&A experience. Not $300 million. Not a supporting role on a larger deal. They mean substantive involvement in the board process, the fairness opinion, the proxy, the regulatory timeline. They can probe for what that experience actually looked like in thirty minutes and they will.
Strong middle market shops want sponsor-backed deal reps — transactions where you ran a process with a named financial sponsor on the other side of the table and can walk through the sponsor, the structure, the timeline, and your specific role. Neither category is settling for close enough.
The AS3 Problem
The AS3 level is the single most difficult to place in the current market and the one where the gap between candidate expectations and reality is widest.
Banks hiring at the Associate level generally want AS1s and AS2s — enough experience to execute, enough runway to develop. Banks hiring at the VP level want someone ready to step in immediately. The AS3 sits in an uncomfortable middle: too senior for a straightforward Associate hire, not yet ready for VP-level responsibility, in a market that is not offering promotional bridges between the two.
The instinct most AS3s have is to push for a VP1 title as part of the lateral move. The market is not supporting that. Banks are not hiring AS3s into VP seats unless the deal experience is genuinely and specifically VP-caliber — not almost, not in a different vertical, but demonstrably ready for that level of responsibility at that firm. Candidates who make the VP title a condition of accepting an offer are frequently the ones who end up with nothing.
What is very much on the table — and what more AS3s should be seriously considering — is repeating the year. Landing at a new firm as an AS3, resetting the clock, and retracking toward VP from a better platform with better deal flow and stronger MD sponsorship is a legitimate and often optimal outcome. It is not a step backward. It is a deliberate repositioning that puts you in a stronger internal promotion conversation than the one you are currently in. A VP promotion earned twelve to eighteen months into a strong lateral start at a firm that respects the trajectory is worth considerably more than a VP title negotiated reluctantly into an offer at a firm that gave it under pressure and considers the conversation closed.
The question AS3s should be asking is not how to get the VP title in the offer. It is which platform gives them the best realistic path to VP once they are inside — and whether repeating the year in the right seat gets them there faster and more cleanly than anything else available.
Uptiers Are a Hard Conversation
If you are at a middle market or regional firm targeting an elite boutique or bulge bracket, the path is harder than in prior cycles. Banks at the top of the market have qualified candidates from peer institutions in the pipeline. Extending benefit of the doubt in two directions simultaneously — less prestigious platform and potential execution ramp — is a risk they do not need to carry right now.
Uptiers happen, but the candidates who land them have a specific and demonstrable reason: a genuine internal advocate, deal experience that maps directly to the group’s mandate, or a coverage angle the firm is actively trying to build. A motivation to work at a better platform is understood by everyone in this market. It moves no one.
The One Guy Problem
There is a version of the uptier conversation that comes up constantly and is worth addressing directly. It goes like this: someone at a middle market or regional firm knows of a colleague — or a colleague of a colleague — who made the jump to Goldman, or Evercore, or Lazard. One person. One move. And that one data point becomes the mental framework for what is possible, what is realistic, and what the market will support for everyone else at that firm.
It is the wrong framework.
That one person exists. The move happened. It is not fabricated. But what is almost never visible from the outside is the full picture of why that specific person landed that specific seat. There was usually a direct relationship with someone inside the firm — not a networking coffee, but a genuine professional connection built over years. Or the deal experience was an unusually precise match to an active mandate the group was trying to staff immediately. Or the candidate had a background element — a prior firm, a specific transaction, a coverage angle — that was genuinely differentiated and directly relevant in a way that most people at that level cannot replicate. Or some combination of all three.
The move was real. It was also the exception, not the template. For every person who made that jump there are dozens of equally qualified, equally motivated candidates from comparable platforms who ran the same process, had the same conversations, and did not get the offer. Those stories do not circulate. The one that worked does.
This matters because the one-guy story has a specific effect on how candidates approach the uptier search — it calibrates expectations around the outcome rather than around the conditions that produced it. The right question is not whether someone from your firm has made it to Goldman. The right question is whether you specifically have the relationship, the deal experience, and the coverage angle that made that one move possible. If the honest answer is yes, the conversation is worth having. If the honest answer is that you are drawing confidence from someone else’s outcome without the underlying conditions that drove it, the search will teach you that lesson more slowly and more expensively than hearing it now.
Jumpy Resumes Are Getting Screened
Two years, two years, currently eight months. That profile is not landing right now regardless of the deal experience in between.
Banks are reading for trajectory. Short tenures may be entirely defensible — group eliminations, firms that over-hired in 2021, performance cuts that were about the cycle rather than the individual. But with no urgency to hire and a cleaner candidate in the adjacent folder, the default is to move past complexity rather than through it.
If your resume has pattern risk, the work is in the framing before the process starts. Each move needs a narrative logic that connects to the one before it and points toward the one you are making now. Vagueness does not survive a thirty-minute screen with a senior banker who has seen every version of this story. A coherent, honest account usually does.
The VP3 and Director Reality
No one is actively recruiting execution-focused VP3s and Directors in the current market. Banks hiring laterally need execution capacity at the AS and VP1-VP2 level. Candidates at the VP3 and Director level approaching the market the same way they approached prior lateral moves will find the conversations thin and the closings rare.
At this level, banks are not buying execution capability — they assume it. The only thing generating real interest and real offers is origination potential. Not plans. Not potential. Evidence that the work of building revenue has already started: a company covered for years approaching a transaction event, a sponsor relationship owned at the decision-maker level, an introduction that became a mandate.
The subvertical is not optional here — it is the strategy. A VP3 or Director presenting as a strong generalist is presenting as an expensive execution resource the bank does not currently need. One presenting as someone who owns a specific and defensible corner of the market — with genuine relationships and a developing origination story — is presenting as something the bank might actually pay for.
Start with an unsentimental audit of your real relationships: the founders, CEOs, CFOs, and private equity partners who would take a meeting based on your ask alone, independent of your firm’s brand. Where are they concentrated? That is your subvertical. Build the search around it. Then start acting like an originator before you leave your current firm — not as a political maneuver, but because a new platform cannot manufacture the story for you. The platform amplifies what you bring. If the story is not ready, the search is not ready.
The Clock Has a Date on It
New analyst classes, incoming MBA associates, and summer intern programs are starting within the next few weeks. Right now, coverage groups know exactly where their gaps are and feel them daily. A lateral hire arriving in June fills a real hole in a team actively working around it.
Once the new class lands, those gaps become less acute and less visible to the people making hiring decisions. Searches that have genuine urgency in May can quietly lose momentum in July as groups conclude they can manage through the summer. Those mandates do not always formally close — they slow down, go on hold, get deprioritized. Some reopen in the fall. Some do not resurface until the following year.
The incoming classes also do not represent new lateral supply. They are arriving into locked programs with their own clawback obligations. The fresh cohort is not moveable. If anything, their arrival tightens the available pool.
If you are in late-stage conversations, keep moving. If you have been sitting on early-stage conversations waiting for the right moment, the moment is now. The better moment was last month. The second-best moment is right now.
The Candidate Who Gets the Offer
At AS1 through VP2, three things have to be true simultaneously: a clean story that reads like intentional choices, a trajectory that has moved consistently in one direction, and deal experience that maps directly to the open seat — not adjacent to it, not transferable with ramp time, but directly to it. One or two gets you into the conversation. All three gets you to an offer.
At VP3 and Director, those three things are the floor. The candidate who gets the offer has all of that plus a genuine origination story, a defined subvertical with real relationships behind it, and the credibility to present as someone who has already started doing the work.
The window is open. In a surgical market with a timing constraint closing in, it will not be this wide for long. No one is going to hand it to you — at any level, but especially at this one.