12. Six Dark Years

I had six dark years. Six years during which my professional prospects and my earning power were diminishing relative to my personal responsibilities. That’s a long time.

(This will be an overview post – the only one in this series; I think it’s more interesting for you and more challenging for me to try to put you into individual scenes in which tough decisions were made, but this post seems necessary as a connect-the-dots bridge between some of the older vignettes and the more recent ones).

Beginning in 1987, facts began to emerge about the deal described in Troubles that cast a long shadow over my career at the bank. A deal that had briefly enhanced my reputation as a leader instead came to make me look stupid or worse. Adding to those shifts in perception, the assignments that didn’t result in closed deals described in Never is Almost Forever and A Failed Deal, which took place in 1987 and 1989 respectively, made me look even worse.

In those years I closed some smaller deals for clients not central to the thread of these posts, but the fees that I generated thereby were not enough to restore the shine to my reputation within the bank. Nor were they enough, in the aggregate, to justify the kind of compensation that I had earned in my peak year (which, admittedly, was more than was the norm among my contemporaries at the bank).

A man in his late twenties with a growing family doesn’t expect to earn less each year than he had made the year before, but that was my new reality. In the late 80s, I even began to worry that I might be fired. The Beloved Spouse had recently stopped working – with my encouragement – when pregnant with our third child, so the possibility of me being unemployed was scary. The Beloved Spouse didn’t worry about it; she was sure I would be able to handle whatever came along.

I always figured that I could find another job – but what? The big investment banks would never hire someone they would see as just another corporate lender; going to another commercial bank to be a lender again would seem like I was going backward from my challenging new role as a paid advisor. I was too young and inexperienced for non-financial companies to look at giving me the kind of job that would be a step up in responsibilities and/or money.

Two or three years earlier, the thought of leaving the bank – of my own volition or otherwise – would never have crossed my mind. I had loved the institution, and it had loved me back. I had loved being  a lender – which I had found, to my surprise, to be a noble and interesting role. Now I was in a very different place relative to both the institution that employed me, and the kind of role I wanted.

In 1990, convinced that the damage to my career at the bank was irreparable, I took another job, walking away from many close relationships and ten years at an institution that had taught me everything I knew about business. It was a loss.

I went to work for the US subsidiary of a British merchant bank. A fine old name, if faded. I figured that prospective US middle-market clients – the kinds of companies I knew – would see the firm’s centuries-old name as prestigious; it would lend an air of credibility to my efforts. I also hoped and expected to meet – and do serious business with – US subsidiaries of European clients of the firm. Changing employers would give me a fresh start in the investment banking business. That was the theory, anyway.

My first discovery was that whereas with my former employer I had been seen as family (other than by my boss in the investment banking group, that is, with whom, as you know, I didn’t get along; it turns out that his career at the bank wouldn’t long outlast mine). I knew all the top people at the bank, and they knew me. The big boys at the new institution – the partners in England – saw me not as a recently wayward and underperforming son, but as a second class citizen. Maybe even third class, since I obviously wouldn’t have taken the job if I had been doing terribly well at my American bank.

They didn’t want me to get anywhere near their clients, that’s for sure. They just wanted me and a couple of other locals do as we were told. We were allowed to have clients, you understand, but only clients that we had independently cultivated. I kept working with my friend the entrepreneurial CEO and a couple of other US companies that I had grown close to in my time at the bank, but other than with such clients, we Americans were strictly staff.

It took me all of a month or two to realize that I had made a big mistake in moving – at least to that particular institution, and maybe at all. I was good and stuck with it for the time being, though; there’s no going home again. At least I had a job and a title that might’ve looked like progress from the outside. And I was being paid a bit better than I had been in my last couple of years at the bank. I felt no risk at all about losing my job – they needed a few locals who were at least presentable.

I still believed in myself; so did the Beloved Spouse – and my friend the CEO. I just needed to figure out a way to get my career back on track.

While at the British firm from 1990-1993, I did do some deals – nothing enormously profitable, but then, my employers’ expectations of us locals were as low as our expectations regarding possible compensation increases. The most exciting of these deals from my perspective was that I helped the CEO finally buy a company in Los Angeles. It was a magnificent transaction from my client’s perspective, and would prove enormously profitable over time, but the fees I earned from it weren’t big enough to change my circumstances in any way. I’m not at all sure my circumstances would have been much changed if the fees had been enormous.

Even so, I was thrilled to have helped my friend, and to see that his business was continuing to grow in size and value. I began to urge him to buy out his elderly partner, who not only wasn’t working much, but sometimes actively getting in the way of the CEO’s efforts. “You work incredibly hard, and every year the company’s value grows,” I told him, “and every year you make it more expensive to buy him out.” The CEO listened, and thought about my words. He wasn’t ready to make that decision yet, but he didn’t mind my pointing out the obvious.

There was one person at my new firm that I did like: my boss. He was a native Brit – and accepted as one of their own by the English partners of the firm – but also a naturalized American, fully comfortable in both cultures; more so in ours, actually. He and I worked on a few deals together, and got on well. He was always candid with me about how we were seen by our English colleagues, and how we should play our cards to do as well as we could.

He seemed like my only real colleague. Once in a while we would muse about setting up our own shop; it seemed to us that given the absence of any real support from England, our clients were hiring us, more so than the name on the door.

In 1993, our employer’s parent company was acquired by a larger overseas firm. The buyers decided to merge our little business with their pre-existing US trading operations. My boss and I decided, instead, that we would quit and start our own company, a NASD-registered broker-dealer, on a 50/50 basis. He had some long-standing English clients; I had a handful of US middle-market companies that I thought would give us work. We figured it was now or never. With that streak of entrepreneurialism, he really was an American.

When my boss went to quit, his new bosses tried to talk him out of it. When that failed, they offered me his job, i.e., to be head of US advisory services. I can’t say that it wasn’t an attractive offer – much more money and prestige, no risk, at least in the short run; also, the new bosses were more straightforward executives, as compared with the airs-of-empire toffs who had preceeded them.

I was never tempted to take their offer. My soon-to-be-former boss and I had a deal, and that was that. We were going to pursue our own dream. It was time to be entrepreneurs.

Thus ended my period of darkness. Oh, as previously recounted my former boss (and now partner) and I would proceed to lose money for the next fifteen months, during which time I nearly went broke; but if you were to ask the Beloved Spouse today, she would tell you that even when we were losing our shirts at our little company, I was happier than I had ever been. I was finally in charge of my own destiny – all we needed now was clients.


M.H. Johnston



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