Expert View: At Goldman, you're either a hero or you're history

This week 100 lucky people will get a call offering them partnership
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The Independent Online

Do you work for Goldman Sachs? If so, I bet you're not sleeping right now - just from sheer excitement. Because this week we have the investment bank's version of Ascension Day, when 100 or so lucky individuals get that personal telephone call from chief executive Lloyd Blankfein offering them partnership. It is a gilt-edged invitation to lead the industry's greatest money-making machine.

Since Goldman was founded in 1869, the exact way in which partners are chosen has been clouded in secrecy. But since going public in 1999, it has become increasingly hard for the bank to conceal its secrets, including just what a passport to riches partnership is. (That event, in itself, generates an average of £30m each). In the past 10 years the bank has produced revenues of some $125bn (£66bn), a large chunk of which is distributed among the partnership elite. For those 300-odd people, it's a bit like owning Switzerland.

Central to the process is something called cross-ruffing. This phrase derives from a strategy in bridge in which partners work together to win the most tricks. What it means at Goldman is that while candidates are nominated by a division head, decisions are always made by the "vetting captains" working elsewhere in the business - who particularly take into account team-playing, cross-selling and cultural fit.

This process began back in April. By last week each candidate had a white binder containing a colour photo (some beauty contest) and cross-ruffing feedback. All candidates have been divided into As, Bs and Cs - the definites, the possibles and the maybe-next-times.

On Thursday I flew to New York, where Wall Street was buzzing with rumours of who was on the list. That morning, apparently, Mr Blankfein had met Gary Cohn and Jon Winkelried to choose the anointed. In the coming days there will be a flurry of activity.

A less well-known aspect of all this is that apart from opening a door to riches, this will also be the week when many have that door slammed in their face. While anything up to 100 partners are created every two years, the overall number increases by a far smaller number. For some partners, the party will be over.

This is also apparently true of the many Bs and Cs who don't make the cut. Rumours are that some are simply asked to leave - a strange bonfire of talent. Others, who miss out on Ascension Day, inevitably look elsewhere. This will also be a bumper week for headhunters.

Wall Street will scour the final list of the chosen ones for what this may tell about the direction Goldman is heading in. The talk is that it is at a crucial turning point - evolution from old-style "Wasp" investment bank to a slash-and-burn trading house. Mr Blankfein is a former gold trader, and one or two Goldman ex-partners have suggested he is simply turning the bank into J Aron, the commodities trader acquired in 1981 (and where Mr Blankfein started out).

To quieten down such talk, this year's partnership list may well be a judicious list of all the talents from across the firm. But the rumours seem overplayed anyway. As anyone working in finance knows, the game has changed radically in the past 10 or 15 years. The old models have had to take into account the explosion in trading instruments and the globalisation of all businesses. Risk appetite has also changed. As Zoe Cruz, the co-president of Morgan Stanley, observed: "Not taking enough risk is the biggest risk of all." Goldman's increased emphasis on trading is simply part of an industry-wide evolution.

Friends of mine have gone through this week in the past with all it means for careers in either direction. For those of you hoping for a call from Mr Blankfein, good luck.

Christopher.walker@tiscali.co.uk

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