The process, which Cohan believes was formalized by former Goldman banker and existing board member Stephen Friedman, continues even though the firm was floated on the stock market in 1999 and is no longer a partnership in the conventional sense. However, the idea of partnership was retained “to maintain various core aspects of the firm’s partnership culture among its leaders, including teamwork, client focus and a commitment to excellence.”
To those inside the firm, the status is much more than just a job title.
“The idea of having a partnership within a public company is quite literally brilliant,” said one partner, who has now left.
This year, 33 partners have departed, leaving the total at 407 before the new crop — or “class” as Sherwood describes them — are appointed this week. Those who leave the partnership — often only in their late 40s and early 50s — go on to other careers, retire or stay on as advisory or senior directors. Some even join the board, as is the case of Goldman’s outgoing chief financial officer David Viniar.
In 2010, Blankfein made calls to 110 new partners. This year he may not spend so much time on the phone: the precise number of new appointments is still being worked on, but at a time when the firm has been cutting staff to save costs, it is likely that this year’s “class” will be fewer than 100, with speculation that between 75 and 100 Goldman bankers will make the grade.
One aspiring partner described how the “process is intense.”
“It’s a brilliant process, but it is a reasonably odd one because as a candidate you don’t have an interview. No one talks about it, but everyone knows you are up for it. People are asking questions about you, but you are having zero involvement,” the aspiring partner said.
Cross-ruffing allows comparisons to be made. Rankings given to candidates by the department heads are cross-matched against those drawn up by the partners leading the assessment process. Differences are sometimes exposed. Sherwood stressed that it “is not about how you did any one year.”
If the process of being named a partner sounds grueling, getting a foot on the ladder lower down the firm is tough too. Even though many investment bankers are now often ashamed to say what they do in polite company and Goldman is often portrayed as the epitome of all that is wrong in the financial world, it is a still an organization that ambitious people scramble to join.
Goldman’s annual report reveals that almost 300,000 people applied for jobs in 2010 and last year. Fewer than 4 percent were hired “and though most had multiple offers, nearly nine out of 10 people offered a job accepted.”
Cohan wrote in his book that candidates can be subjected to 30 interviews and describes Goldman as a place that is not for “prima donnas,” but “stuffed to the gills with high-achieving alpha males.”
Each year there is a formal assessment process. Staff are subjected to a 360o review where they are rated and assessed by their peers, subordinates and superiors.
These assessments are resurfaced during the final selection process in the promotion to partner. Few are hired from outside at partner level, although these so-called “lateral” hires can hope for fast-track promotion.