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Degree of Uncertainty

A master's from a big business school used to guarantee a ticket to Wall Street and an immediate six figures. Now it's a ticket to uncertainty — and new opportunity.

(Globe Digital Illustration / Josue Evilla)
By Robert Weisman
March 29, 2009
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Goodbye, yellow brick road.

Graduates of elite business schools long toted freshly minted MBA degrees to six-figure starting salaries and eye-popping bonuses on Wall Street. This spring, many will begin venturing down very different paths.

Some will be starting companies. Others will be taking corporate jobs, shifting to more stable professions like consulting, or gambling on emerging fields such as clean energy. Even those bent on finance are scouting out jobs at boutique firms or in niches like private equity rather than the investment banking goliaths that have crashed and burned, shedding tens of thousands of employees in recent months. "Wall Street's not going to be a great place to work for the next couple of years," says Chad Lovell, 29, a second-year student at MIT's Sloan School of Management. Lovell interned at Barclays Capital in New York last summer but passed on a full-time job offer there in favor of a strategic planning post at industrial conglomerate Emerson Electric Co. in St. Louis after he graduates in June.

The ripsaw economy has left candidates for master of business administration degrees reassessing their options and tossing out old assumptions in ways that would have been inconceivable even a year ago. Lovell thinks he can make a faster impact in the corporate world today than at an investment firm clawing its way out of the post-bailout pit. He also believes the energy field has the potential to become what technology was not so long ago: a key driver of the US economy.

He's not the only one. "We've seen a massive shift in the focus of students," says Ted Wilson, 28, a graduating student at Dartmouth's Tuck School of Business who cofounded Dartmouth Energy Collaborative, an organization that runs student projects in wind turbines and biofuels. Wilson worked at the San Francisco investment bank Seven Hills Partners before enrolling at Tuck, but interned last summer at Kleiner Perkins Caufield & Byers, a Menlo Park, California, venture capital firm that bankrolls energy start-ups.

Behind the migration to clean energy is, for many, an idealistic desire to help wean the nation from oil and fuel a new economic boom.

Even before the market meltdown last fall, Harvard president Drew Gilpin Faust said she was struck by the number of MBA candidates questioning the bullet-train ride to Wall Street. Faust's advice to them: "You ought to be making a difference in the world."

Jana P. Kierstead, managing director for MBA career services at Harvard Business School, says 44 percent of the school's graduates went into finance last year. This year, she expects that share to be much lower. Even at Harvard, job postings are down 25 percent from a year ago -- and 40 percent for financial positions. "If students were on the fence, they're saying, 'This may not be the right time. I'm not ready for the uncertainty' " in finance, Kierstead says. "They're looking at energy and clean tech, they're looking at boutique investment banks, they're looking at restructuring consulting. Entrepreneurship is very popular, and so are nonprofits."

One student who entered Harvard weighing a career on Wall Street but did an about-face is Allison Floam, 25, who earned an undergraduate degree from the Wharton School at the University of Pennsylvania in 2004 and worked on Wall Street before coming to Harvard. Now she's starting a digital media company with Lindsay Jurist-

Rosner, another MBA student she met at Harvard. "We're in launch mode," Floam says. "It's a really great time to start a business. And there are fewer exciting opportunities on Wall Street."

Shifting gears for Justin Griggs, 29, a second-year student at the Tuck School, meant accepting a job as a strategy consultant in Atlanta for Bain & Co., the Boston-based consulting firm. Griggs, who interned for the now-defunct Lehman Brothers investment bank in New York last summer, concluded that consulting was a safer path.

"My target coming into business school was to be on a fixed income trading desk," recalls Griggs, citing his fascination with arcane financial instruments like asset-based securities and collateralized debt obligations. "But there was a recognition at the start of the recruiting season last fall that this was not going to be a watershed year for financial services. Two weeks after I finished my internship, I saw people on CNBC walking out of Lehman Brothers with boxes."

That, he says, was impossible to ignore. "People are coming into it this year with a sense of having to hedge their bets."

Robert Weisman is a business and technology writer for the Globe. E-mail him at weisman@globe.com.

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