TL;DR: Some strategy consulting firms are notoriously long-lived. McKinsey and Kearney turning 100 gives us a reason to look at why that is. Fundamentally, it’s because of a well-designed partnership model. Clear sales targets, a talent-alumni flywheel and a finite pension cliff keep a consulting firm energetic and customer-focused. Conversely, the kiss of death to a consulting firm is when senior partners get to linger around for too long, hog the best client relationships and equity, and obstruct the upwards movement of ambitious junior colleagues.
The longevity strategy
This year, Kearney and McKinsey both celebrate 100 years1, with Arthur D Little even turning 140.
Few companies stay around for so long. For comparison, of the 500 companies that made up the original Fortune 500 list in 1955, only 10% remained on the list by 2019. The other 90% had gone bankrupt, merged, or lost relative importance. Even most consulting firms have "a good run": they turn profitable from the start, achieve some scale, and distribute profits. Then they go away, close shop, or merge with someone else. Yet McKinsey and Kearney remain two of the largest strategy houses globally, counting ~2,500 and 350 partners respectively, from Sydney to LA. They've both solved how to hand over the firm from its founders to the next generations.
These OG consulting firms have also been the launching pads for many other successful firms, with the house of Arthur D Little the most prolific seeder of firms (we show the largest in the table below).
Why is that?
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Put thine clients first, and the profits cometh
At McKinsey, we had what was called a “dual mission”. Put simply: be great for clients and be great for the people working there. Now, any strategy consultant knows there can only be one top priority. I made no illusions as to which one that was. I accepted it as a necessary part of the Firm. It’s a great place to work, because they’re obsessed with client impact. Accept it and you learn & earn.
If you’ve had enough - face it, and move on. I eventually felt that my senior partners were inspirational (because they worked so much), but not necessarily aspirational (because they worked so much).
Only later did I realize that this is an intentional feature, not a bug.
The virtuous cycle of a consulting firm
Consulting firms need a constant up or out movement. You hire ambitious youngsters, who move up the ranks or move out. The next internal step must be at least as attractive as the external opportunities, or everyone leaves. But promoting people to partners too quickly would dilute the bonus pool, so you need a pyramid structure (with finders, minders and grinders for selling, managing and doing the work). You only promote people to Partners when they’ve proven that they can sell new business - and keep them only for as long as they do.
When people do leave, you send them off with support. Alumni events plus the “trauma bonding” and parties of your (D)INK years makes for a solid network and future consulting projects.
Having an alumnus in the corporate buying committee is no guarantee for the consulting firm winning their projects, but it gets you invited to the RFP.
More projects means growth, allowing for more hiring, and the flywheel spins.
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Consulting firms fail when partners rest and vest
An alpha gorilla doesn’t leave the pack voluntarily; he gets chased off by a younger challenger.
The law of the jungle mostly doesn’t apply in consulting. Instead, the longevity of a firm relies on its senior leaders actively stepping back. If they’re willing to let go of their equity when they leave their job, the firm lives on. Otherwise, the next generation leaves for other firms. We’ve seen this break down multiple times. The most prominent examples of partners struggling to let go are:
Arthur D Little in the 1990s. A tax-exempt trust for senior partners and alumni owned the firm. They expected dividends and starved the company of investment and risk appetite. While the MBBs ballooned internationally, ADL struggled to retain talent and filed for Chapter 11 in 2002. After a MBO:ed fully financed by the partners, ADL has staged a strong comeback and is now a healthy, partner-led firm.
BDO USA in 2023. Bought out senior partners with $1.3 Bn of debt from Apollo at a shocking interest rate of 11.3% (later renegotiated to ~9%). Impossible to service with internal cash flows, BDO had big layoffs and cost-cuts already in 2025.
Monitor Group in the 2000’s. Michael Porter may have been a legendary strategist, but he failed to plan for his firm’s longevity. Leaving partners had to be bought out, which had to be partially financed by debt. Debt servicing costs soon consumed a material part of free cash flows that would otherwise go to the consultants generating those profits. The 2008 GFC market slump forced partners to inject $5 million just to keep the firm afloat. Monitor still defaulted four years later, and sold to Deloitte where it now operates as the strategy part of the wider group.
Roland Berger in 2013. Similarly to Monitor, Roland Berger wanted to pay off senior partners, many who were looking to retire in the early 2010s. Selling to a big-4 firm would have solved that need - but younger partners revolted and the firm lived on, with a €50 million (or was it €80 million?) cash injection from the eponymous founder. The bet paid off - the new RB leadership has grown it beyond €1 Bn in revenues.
The clients-first strategy
Now - as a wise consultant once said - let’s take a step back. Fundamentally, consulting is about helping your client get superior insights. Keep focused on that, and the firm lives on (while the team gets paid).
Sometimes, the best way to do so is holding up a mirror to the client - putting structure and words on what they’ve been thinking. Sometimes, you must get new information externally. Strategy consultants use Inex One to do that latter part more efficiently - so you can deliver more successful projects, climb the pyramid, and spin the flywheel of growth.
You're welcome to read the sales pitch, or just try it out here.
Footnotes:
1. Kearney’s centennial is a bit of a stretch. Its founder joined McKinsey & Company as partner in 1929, and started his own firm only a decade later. Even Kearney’s own website states this.
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2. There are so many quality strategy consulting firms, and this chart is already huge. We eventually had to narrow it down to firms that passed three tests:
a. Strategy consulting is the core business. Excludes firms heavier on financial advisory, restructuring, economics and litigation, and implementation-led IT consulting.
b. US or Europe HQ.
c. Either scale or lineage. 200+ consultants today (or at peak, for firms that no longer exist), or a position in the family tree: the firm was spun out or absorbed into another firm on the chart.
