Headhunting and outplacement firms, which profit handsomely from bank mergers and restructurings, are benefiting in another way from the consolidation trend: They're hiring bankers.
The boom in mergers is giving them plenty of money to do it with. Outplacement companies took in $1.2 billion in revenues last year, up from a mere $25 million in 1980.
Executive search firms reported annual revenues of $4.4 billion in 1995, about double the take 10 years ago, according to New Hampshire-based Executive Recruiter News.
"It's not as if there's enough room for hundreds of bankers to come into the industry," said John Platte, managing director of Russell Reynolds Associates Inc., an executive recruiting firm based in New York that has a large financial services practice. "But selectively there are opportunities."
Certainly, the salaries are comparable. According to Executive Recruiter News, headhunters and outplacement counselors can make anywhere from low six-figure salaries to $1 million annually.
Mr. Platte, a 10-year veteran of Chemical Banking Corp., has been an executive recruiter since 1981. He's not the only ex-banker at Russell Reynolds. The company was founded by bankers, he said, and former bankers run its offices in Atlanta, Boston, Chicago, and London.
When banks look to an executive recruiter, they generally want someone who understands the industry, said Kevin Connelly, a director at headhunter Spencer Stuart's Chicago office.
Mr. Connelly, who joined Spencer Stuart three years ago spent 12 years in the banking industry. He worked in several areas at Harris Bank of Chicago, including commercial banking, corporate finance, and credit cards, before joining a manufacturing company in 1989.
"Having a technical understanding of how to do the job helps," he said.
The same holds true for outplacement executives. Robert S. Wilson, a senior vice president of Midwest client services for Clarke, Poynton & Associates in Chicago, said he "can use the language" with displaced bankers.
"I've been there and done that," Mr. Wilson said. "I can point to the bullet holes in my hide."
Mr. Wilson spent 19 years in banking, most recently with Banque Indosuez, where he was managing director for merchant banking in London until 1990.
After leaving the bank, he moved to Chicago. "I looked around, and the banking industry was flat on its butt," he said. So he became a consultant, and later became interested in the outplacement business.
His firm now works with senior executives displaced by such mergers as the one between First Chicago Corp. and NBD Corp.
Mr. Wilson said bankers make good counselors because they're analytical, they usually have management experience, and they're conservative - a trait he considers essential to the outplacement business. "That's important," he said, "because you're playing with someone else's career."
Mr. Wilson's firm usually gets hired by a company that is laying off employees. Such companies, including banks, usually counsel low-level employees themselves, Mr. Wilson said, but retain firms such as Poynton to help out senior officials who've been down sized.
Specialization has become crucial in outplacement and recruiting, and the financial services industry has provided a lot of business to both.
Executive Recruiter News said 140 search firms specialize in banking and financial institutions, while 374 specialize in the broader category of finance.
For that reason, Kenneth Rich, a former Citicorp banker, said firms such as his, Fort Worth-based Paul Ray Berndtson Inc., are recruiting bankers to become recruiters.
"Clients are asking for more expertise," said Mr. Rich, who works in New York. "So we're out there recruiting some of the best and brightest bankers."
