oneforship wrote:Those of you who have gone through the hiring process, is there a certain leverage ratio that you tried to stay away from, or were less enthused about, or is it something that only becomes more relevant when looking at the financial well-being of the firm, and chances of going through lay-offs at some point.
I want to know if my intuition to shy-away from higher leveraged firms compared to similar firms with lower leverage is correct, or if there is a certain point where this is probably digging in a bit too much.
*Sorry if my question is a bit unclear, kind of working through train of thought here.
I mean, there's a trade-off: more highly-leveraged firms generally have larger summer classes, making jobs easier to come by (where do you think all of those associates come from?), whereas less leveraged firms usually have more resources to devote to mentorship/formal associate training programs and are more financially stable long-term, but their practice groups simply take in fewer associates each year. Furthermore, a large summer class size and low leverage isn't a great sign, either, because it often points to other negative factors: low offer rates, actively forcing out young associates, a culture that the vast majority of people can't handle.
So, yes, all things equal less leverage is generally a good thing, but just keep the consequences of bidding on low-leverage firms in mind.