Lateral Recruiting in Finance: How to Move Between Firms at the Same Level

You're two years into your banking analyst role. The work is fine, but you want to switch to a different bank—maybe a better group, maybe a different culture, maybe just a fresh start.

Or you're a VP at a PE fund and a competitor has an opening that would accelerate your path to Principal.

Lateral recruiting is how finance professionals move between firms at the same level. It's different from entry-level recruiting: less structured, more relationship-driven, and with higher expectations about what you bring.

Here's how lateral recruiting actually works—when to do it, how to approach it, and how to maximize your chances.

---

What Is Lateral Recruiting?

The Definition

Lateral recruiting means joining a new firm at approximately the same level you currently hold. An analyst moves to analyst. A VP moves to VP. A Principal moves to Principal.

Contrast with:

Entry-level recruiting: Campus hiring into analyst or associate programs.

Promotion-based moves: Joining at a higher level than you currently hold (harder, requires clear justification).

Step-down moves: Joining at a lower level (sometimes necessary for industry or role changes).

Why People Move Laterally

Common motivations for lateral moves:

Culture fit: Your current firm isn't right for you. The hours, the people, the values don't match.

Group change: You want different deal exposure. Your current group is slow or not aligned with your interests.

Geographic preference: You want to move cities and your current firm can't accommodate.

Opportunity timing: A specific role opened that's perfect for your profile. Right place, right time.

Relationship issues: Conflict with a manager or team that makes staying untenable.

Compensation: Another firm offers better pay, though this alone is rarely sufficient reason.

Career acceleration: The new firm offers faster path to promotion or better exit positioning.

---

Lateral Recruiting by Level

Analyst Laterals

Timing: Usually after 1-2 years. Enough experience to be valuable; not so late that you've missed your window.

Why firms hire lateral analysts:

• Replace departures
• Staff up for increased deal flow
• Add specific skills or experience

What they look for:

• Solid technical skills
• Good deal experience
• Professional reputation
• Clear reason for wanting to move

Process: Often less formal than entry-level recruiting. May involve direct outreach or recruiter introduction.

Associate Laterals

Timing: Can happen at any point, but most common in years 1-3 of associate tenure.

Why firms hire lateral associates:

• Same reasons as analysts, plus:
• Specific sector expertise
• Client relationships
• Leadership experience

What they look for:

• All analyst criteria, plus:
• Ability to manage down
• Client interaction skills
• Greater independence

Process: Mix of headhunter-driven and direct networking. More interview rounds than analyst laterals.

VP and Above Laterals

Timing: Varies widely. Can happen throughout career.

Why firms hire lateral VPs/Directors/MDs:

• Build new capability
• Acquire client relationships
• Add sector expertise
• Replace departures

What they look for:

• Track record of deal leadership
• Existing relationships (clients, bankers, sponsors)
• Management capability
• Cultural fit

Process: Primarily relationship and headhunter driven. Extensive interviews, often including partners/senior leadership.

---

The Lateral Process

How Opportunities Surface

Headhunters: Recruiters specialize in lateral placements. They know what firms are hiring and match candidates to opportunities.

Direct networking: Someone you know mentions an opening. You reach out directly to the hiring manager.

Inbound interest: A firm reaches out because they know your work or reputation.

Job postings: Less common for senior roles but exists, especially at larger firms.

Working with Headhunters

How to engage: Build relationships with recruiters before you need them. Take calls. Be helpful even when you're not looking.

What recruiters provide:

• Access to opportunities you wouldn't find otherwise
• Market intelligence on compensation and culture
• Interview preparation and feedback
• Negotiation support

What to know:

• Recruiters are paid by the hiring firm
• They have incentives to close deals, not necessarily maximize your outcome
• Use them as a resource, but make your own decisions

Direct Approaches

When direct works:

• You have a specific firm and role in mind
• You have existing relationships at the target firm
• The opportunity isn't publicly known

How to do it:

• Identify the hiring decision-maker
• Get a warm introduction if possible
• Express interest clearly and specifically
• Be prepared for an informal conversation

The Interview Process

First round: Usually with the hiring manager or a senior team member. Assessing fit, motivation, and baseline capability.

Technical rounds: Expect technical interviews appropriate to your level. Analysts face modeling tests; senior people face strategic discussions.

Team interviews: Meeting multiple team members to assess fit. At senior levels, this includes partners and other stakeholders.

Final rounds: Often with firm leadership. More about cultural fit and commitment than technical skills.

Timeline: Faster than entry-level recruiting but still takes weeks. 2-4 weeks for analyst laterals; 4-8+ weeks for senior hires.

---

Positioning Yourself

The Narrative

You need a clear story about why you're moving.

Good narratives:

• "I want to work in healthcare, and your firm has the strongest healthcare practice."
• "I'm looking for a culture with more collaboration and your firm has that reputation."
• "I want to be in San Francisco long-term, and you have the best platform there."

Weak narratives:

• "I'm just exploring options." (Shows no commitment)
• "My current firm is terrible." (Raises red flags about you)
• "I want more money." (Everyone does—not differentiating)

Managing Your Current Role

While actively looking:

Don't check out: Performance at your current firm affects your candidacy. Interviewers will reference-check.

Be discreet: Don't broadcast your search. It can affect your standing and create awkwardness if you stay.

Time your interviews: Take calls during appropriate times. Don't let your search obviously interfere with work.

Have a plan if discovered: If your firm learns you're looking, be prepared for the conversation. Honesty is usually best.

Reference Management

Who will they call:

At senior levels, backdoor references are common. Hiring firms will ask around about you.

How to manage:

• Be aware that your reputation precedes you
• Build good relationships throughout your career
• Know who might be called and whether they'll speak well of you
• Offer formal references who will be strong advocates

---

Evaluating Lateral Opportunities

What to Assess

The role:

• What will you actually be doing?
• Who will you work with directly?
• What's the deal flow like?
• What's the growth trajectory?

The team:

• Who are your potential colleagues?
• What's the team dynamic?
• Who will you report to?
• How does the team fit within the firm?

The firm:

• How is the firm positioned competitively?
• What's the culture like?
• How do people progress?
• What's the firm's trajectory?

The economics:

• Total compensation
• How compensation grows over time
• Partnership or promotion economics
• Benefits and other factors

Due Diligence

Talk to people who've worked there: Current employees have incentives to be positive. Former employees may be more candid.

Understand the context: Why is the role open? Was someone fired? Did they leave for a better opportunity? Is the group growing?

Assess the manager: You're not just joining a firm—you're joining a team with a specific leader. Evaluate that person.

Consider the transition: How hard will the move be? What will you lose by leaving? What ramp-up is needed?

---

Negotiating Lateral Offers

What's Negotiable

Base salary: Usually some flexibility within bands. Research market rates.

Bonus: First-year bonus guarantee is often negotiable, especially for senior hires.

Title: Sometimes flexible. If you're between levels, you may be able to push for the higher title.

Start date: Usually flexible. Don't start until you're ready.

Sign-on bonus: May be available to offset deferred compensation you're forfeiting.

Leverage and Timing

Your leverage:

• Other offers (real ones, not fabricated)
• Strong interview feedback
• Specialized skills or relationships
• The firm's urgency to fill the role

When to negotiate: After you have a written offer. Not before. Negotiating too early signals you're not committed to joining.

How to negotiate:

• Express enthusiasm for the opportunity
• Be clear about what you're asking for and why
• Don't bluff—they may call it
• Be prepared to accept or walk away

Handling Counteroffers

If your current firm counteroffers:

Consider carefully: Counteroffers often don't solve the underlying issues. You were looking for a reason.

The statistics: Most people who accept counteroffers leave within 18 months anyway.

Your reputation: Accepting a counteroffer can damage trust. You've signaled you were leaving.

The right answer: If your concerns are addressable and genuine, consider it. If not, proceed with the move.

---

Common Mistakes

Moving for the Wrong Reasons

Escaping problems: If you're running from something rather than toward something, you may recreate the problem at the new firm.

Chasing compensation: Marginal pay increases rarely justify disruption. Only move for meaningful improvement.

Grass-is-greener thinking: Every firm has problems. The new place won't be perfect either.

Process Mistakes

Broadcasting your search: Discretion protects your current position and your candidacy.

Burning bridges: Finance is small. How you leave matters. Don't torch relationships.

Moving too quickly: Rushing decisions leads to regret. Take time to evaluate properly.

Not doing due diligence: Learn about the specific team and manager, not just the firm's reputation.

Negotiation Mistakes

Over-negotiating: Pushing too hard can create bad dynamics before you even start.

Under-negotiating: Not asking for what you deserve leaves value on the table.

Lying about alternatives: Fabricated leverage backfires when discovered.

---

When Not to Move

Stay If:

You haven't given it enough time: New environments take time to evaluate fairly. Don't move after 6 months unless there's a serious problem.

You're about to be promoted: Moving right before promotion may require starting the clock again at the new firm.

Your reasons are temporary: Bad deal, bad quarter, bad project—these pass. Don't make permanent decisions for temporary frustrations.

The new opportunity isn't clearly better: Lateral for the sake of lateral is disruption without benefit.

The Opportunity Cost

What you lose by moving:

• Accumulated relationships and reputation
• Knowledge of how things work
• Vested compensation
• Tenure toward promotion
• Certainty about the environment

The switching cost: These losses should be offset by meaningful gains at the new firm.

---

Key Takeaways

Lateral recruiting is how careers progress across firms in finance.

When to consider:

• Clear improvement in opportunity, culture, or economics
• Specific role that's right for you
• Addressable problem at current firm that's genuinely better elsewhere

How to approach:

• Build recruiter relationships before you need them
• Network proactively across the industry
• Maintain discretion during active searches
• Develop a clear narrative for why you're moving

What to evaluate:

• The specific team and manager, not just the firm
• Why the role is open
• What you'll lose by leaving
• Whether the new opportunity justifies the disruption

How to execute:

• Negotiate from a position of genuine interest
• Handle counteroffers thoughtfully
• Transition professionally—don't burn bridges
• Give yourself time to evaluate and decide

Lateral moves can accelerate careers, improve quality of life, and create opportunities that wouldn't exist otherwise. They can also be disruptive, risky, and disappointing if poorly conceived.

The key is moving toward something, not just away from something. A lateral should represent genuine improvement—in opportunity, fit, or trajectory—that justifies the inherent costs of change.

When that's true, lateral moves are powerful career tools. When it's not, staying put may be the smarter choice.