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Investment bankers work long hours because they want to. Well, not the individual analyst, but it’s not a demand issue. The client (ie the CFO, possibly an few less lazy directors and a few corporate development or treasury depending on what it is guys who actually halfheartedly read (skim) the pitchbooks) doesn’t care whether that pitchbook is 20 slides or 300 slides. The modelling is bullshit anyway because it’s designed to produce a specific output that the client wants, and again everybody knows it. Everybody also knows that all the banks are interchangeable and that for any big normal M&A or E/DCM every major player is capable of achieving exactly the same result, and that in the end they will pick Goldman because nobody got fired for hiring them or Citi because the CFO plays golf with the vertical head or JPM because the CEO and the respective vice chairman went to boarding school together or whatever it is.
The reality is that investment banking is and has long been (probably since the late 1980s and the arrival of spreadsheets and digital data providers) hugely overstaffed. Analysts and associates shouldn’t even exist, they have a role in equity research and on the buy side, and maybe as job titles in sales and trading, but in actual advisory it’s a fake job. In 1975 the analyst was the guy who physically walked seven floors down to the corporate library and spent three hours finding the 1962 annual report for Philip Morris with the archivist so he could underline some figures and bring them upstairs and then spend four days building the most basic valuation model on paper spreadsheets that is vastly more simple and with more assumptions that whatever FactSet has already pre-generated today. The job is fake.
But everyone knows that clients have money and that you can’t bill $100m on a mega M&A deal if even the client knows you literally have a 5 man team on the job (that privilege is reserved for the Robey Warshaws of the world) , so it serves the industry to let juniors into the game in exchange for creating a hierarchy of fake-work make-work where cascading levels of VPs, associates and analysts invent pointless tasks to do.
Even reading this makes me go "yuck" at the whole business model of these places. Prop shops etc. manage to produce more value per employee by only working them 40-50 hours a week (notable exceptions excepted) than investment banks manage. All that talent which could be put to good use elsewhere to benefit humanity gets wasted in IB make work.
I know places like Jane Street etc. are expanding out into more traditional type banking and trying to eat the lunch of these dinosaurs billing $100m on something that can be done faster and better by smarter people running a leaner operation but providing a more complete service for under $10 million (while the employees still work something resembling a 9-5).
Similarly in the legal world I know there are now barristers who with their junior bill around £700-£800 an hour but as a one two team coupled with a very hands off instructing solicitor produce more robust documents with a faster turnaround than the overcharging magic circle firms but the MC firms still get a ton of business from clueless corporate charging more to produce worse results just because clients want to communicate with people that have "Clifford Chance" on their letterhead rather than "4 Stone Buildings" even though your average junior at 4SB is higher human capital than a partner at Clifford Chance.
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