Friday, March 16, 2012

Why I Am Leaving Pierce & Pierce

Editor's Note: The Op-Ed resignation of Goldman Sachs' Greg Smith has attracted a lot of attention, and even a few parodies. But a bit of research unearthed that this manner of quitting, while unusual, in not a Wall Street first. In fact, a similarly-worded letter was written over 20 years ago. We present that earlier letter of resignation here in its entirety.

Why I Am Leaving Pierce & Pierce

By Patrick Bateman

TODAY is my last day at Pierce & Pierce. After almost 12 years at the firm — first as a summer intern while at Harvard, then in New York for 10 years, and now in an undisclosed location far from the reach of the law — I believe I have worked here long enough to understand the trajectory of its culture, its people and its identity. And I can honestly say that the environment now is as healthy and morally upright as I have ever seen it.
To put the problem in the simplest terms, the interests of the client continue to be elevated in the way the firm operates and thinks about making money. Pierce & Pierces is one of the world’s largest and most important investment banks and it is too integral to global finance to continue to act this way. The firm has veered so far from the place I joined right out of college that I can no longer in good conscience say that I identify with what it stands for.
It might sound surprising to a skeptical public, but lack of culture was always a vital part of Pierce & Pierce’s success. It revolved around self-interest, venality, narcissism, and creatively screwing over our clients. The superior intelligence and ruthlessness was the secret sauce that made this place great and allowed us to rob our clients blind and have them thank us for it. It wasn’t just about making money; this alone will not sustain a firm for so long. It had something to do with ego and belief that you are the only person that matters.
But this was not always the case. For more than a decade I recruited and mentored candidates through our grueling interview process. In 1986 I managed the summer intern program in sales and trading in New York for the 80 college students who made the cut, out of the thousands who applied. Sixty-three survived to join the firm. I knew it was time to leave when I realized I could no longer look students in the eye and tell them I was about to decapitate them.
When the history books are written about Pierce & Pierce, they may reflect that the current CEO, Paul Owen, and the president, David Van Patten, disappeared under mysterious circumstances. I truly believe that this decline in the firm’s body count, and the consequent lack of leadership, is a serious threat to its long-run survival.
Over the course of my career I have had the privilege of destroying otherwise viable businesses in the United States, screwing over innumerable clients in the Middle East and Asia, and slaughtering countess prostitutes and homeless people. My clients had a total asset base of more than a trillion dollars before I went to work on them. I have always taken a lot of pride in convincing my clients to do what I believe will benefit me, even if it means less money for them, or the gruesome death of their loved ones. This view is becoming increasingly unpopular at Pierce & Pierce, and among the police who have been pursuing me. Another sign that it was time to leave.
How did we get here? The firm changed the way it thought about leadership. Leadership used to be about charisma, never admitting you are wrong, and committing unspeakable acts of violence to stifle the voices in your head long enough to complete your next deal. Today, if you make money for the firm the “right way” (and are not currently an ax murderer) you will be promoted into a position of influence.
What are three quick ways to become a leader? a) Execute on the firm’s “axes,” which is Pierce-speak, ironically, for not executing your clients with axes. b) “Hunt Elephants.” In English: preserve your clients’ money—and their lives—by finding big opportunities for asset growth. Call me old-fashioned, but I preferred it when “hunting elephants” meant chasing down a fat man at your secluded estate in the Hamptons and butchering him. c) Avoid prosecution for both securities fraud and homicide.
Today, many of these leaders display a Pierce & Pierce culture quotient of exactly zero percent. I attend meetings where not one single minute is spent asking questions about how we can bamboozle or massacre our clients better. If you were an alien from Mars and sat in on one of these meetings, you would believe that a client’s success or progress was our exclusive focus.
It astounds me how little senior management gets a basic truth: It is only worth getting clients to trust you if the end goal is to take their money or their life. Otherwise, why be bankers in the first place?
These days, the most common question I get from junior analysts about mergers is, “How’s the client feeling?” It bothers me every time I hear it, because it is a clear reflection of what they are observing from their leaders about the way they should behave. Now project 10 years into the future: You don’t have to be a rocket scientist to figure out that the junior analyst sitting quietly in the corner of the room hearing about “ethics,” “responsible stewardship” and “doing it right” doesn’t exactly turn into the next American psycho.
When I was a first-year analyst I didn’t know where the bathroom was, or how to kill a prostitute with a nail gun. I was taught to be concerned with learning the ropes, listening to Whitney Houston albums, understanding designer suits, getting to know our clients and what their blood tastes like when they’re afraid, learning how they defined success and how we could use that vision to scam them.
My proudest moments in life — graduating from Harvard Business School, getting the best table at Dorsia without a reservation, murdering dozens of people from all walks of life without ever being caught — have all come through hard work, with no shortcuts. Pierce & Pierce today has become too much about shortcuts and not enough about achievement. It just doesn’t feel right to me anymore.
I hope this can be a wake-up call to the board of directors. Make money and mutilation the focal point of your business again. Weed out the morally upright people, no matter how much money they make for the firm. People who care about anything other than making money will not sustain this firm — or the high mortality rate of its clients — for very much longer.
Patrick Bateman is resigning today as Pierce & Pierce’s director of murders and executions mergers and acquisitions. He is now going to work in a similar role at Goldman Sachs.

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