MBB Partner? Easier than the rest?
Particularly in the US but around the world, Morgan Stanley might pitch for a deal but they'll have other BBs, EBs and rainmaker kiosks. These EBs and kiosks will also have lots of inbound as well because of the relationships of the top people. Yes there is differentiation between these firms but let's be honest its much of a muchness, pretty talented people across the board and the differentiation touted is much less than the reality, a bank is a bank and people know this.
This seems to be the case with big law firms as well. Yes you have the big names, but there are many of them, CSM, Millbank, Fried Frank, K&E etc - again yes some will have specialties but again let's be honest all of these firms will cover all the practice areas of their competitors very well so again differentiation from the client perspective seems down to the personal relationship.
This also seems to be somewhat the case with Private Equity. There are thousands of funds, yes again yes you have the big names. But there are quite a few mega-funds, probably 10-20 depending on how you slice it. Yes because your KKR, you will probably get a lot of institutional allocation but you're still competing against all the mega-funds and all the solid MM/UMM firms that also get great returns. You're also personally liable for the investments fucking up because you'll be obliged to co-invest a significant amount of your personal wealth to ensure alignment.
In consulting however, there seems to be a ridiculous gulf that is self-perpetuating between MBB and the rest. Yes I know all the T2 consultants at Strat& will get angry saying they do the same quality work, I'm sure you do but that's not the point, its the self-perpetuating reputation that counts in a line of work that is qualitative and not "quant results" driven. Obviously you need to be very very talented as a partner but it seems that the brand here carries you far more than in nearly any other industry and that your competition is often just the other 2 and when its not, you have quite the head-start.
Thoughts? - Happy to be corrected just my 2 cents as an outsider
This is inaccurate. Beyond it being factually incorrect that MBB are only or even primarily competing against each other or that they only lose bids when competing on price, I think it might be more helpful to provide a few ideas that explain why that's the case:
Overall, I'm not saying that MBB are not the pretty clear leading firms when it comes to strategy consulting, but (a) they're not the only firms and they lose bids just like everyone else (if they didn't then the T2 firms wouldn't get any high profile strategy work, which they do), and (b) there is lots of work beyond strategy consulting where they are not always the clear leaders
Hope this helps in your understanding of the industry. It can be extremely challenging to get a read on how the industry works until you're working in it and participating in trying to sell work
I used to be an MBB partner. Being an MBB partner is HARD -- it's a grind, it's up or out, and it's hard work. Not to say it isn't rewarding, but you don't get to cruise on the basis of your reputation. And the reality is I lost to tier 2 regularly. Not on quality -- justified or not, MBB has a certain reputation -- but just on breadth of offering. When we were proposing to develop international M&A strategy and someone asked "what's the tax implication of structuring the deal that way" and the best I could do was say "call an accountant" it wasn't super compelling.
I'm now a B4 partner, and it's a way easier life. When I finish an M&A strategy project and the client is like "I'd like to approach these 3 companies" instead of saying "good luck, let me know how it goes" I can say "well, you know we actually own an investment bank, let me set you up with a banker." I make more cash (less total comp with lower ceiling, but far far less of it is deferred and my cash flow on a month-to-month basis is way higher). My staff are every bit as good. The firm just has far more reach than my old firm did -- there are still a lot of people in the world who have never heard of the MBB firms, no one who works in business doesn't recognize the names of the B4 firms. I sell the same thing I used to sell for less than half the price. Almost all the obstacles I face now are self-inflicted ones caused by the size and reach of the huge firm I'm a partner in now (it's a double-edged sword -- we have reach into so many companies, but we also are restricted from doing consulting work for the folks we audit, there's bureaucratic idiocy to navigate, etc). My days are generally spent figuring out how to respond to inbound business and organizing a partner team around that, rather than going out into the market and knocking on doors.
This is not to say MBB isn't great -- I started my consulting career there, I have plenty of good things to say about those firms, and they are untouchable in the part of the market they focus on. But that's a small slice of the market, and the fact that all three are trying to diversify beyond where they have historically focused is clear evidence.
Genuinely curious why a company with an internal corp strat/dev team would need to hire out for an international M&A strategy project. Are these small companies without these internal teams or is MBB/Big4 bringing some visibility that an internal team wouldn’t have? No hate at all genuine question.
edit: to your original point on companies asking tax questions - all F500 companies would have a tax group too so just curious
Great comment. This thread is a classic example of how narratives can be perpetuated online that don't align with reality.
devildog2067 First of all, just wanted to say thank you for your post. People like you are what makes WSO such a good learning environment. You are providing a rare perspective that most people have little / no access to, hence why OP was so misguided.
One other data point to add is that a friend of mine's Dad was a partner at MBB growing up, and always worked 6 AM to midnight. As a partner, he consistently grinded harder than most people do in their 20s. No part of being an MBB partner is easy, and you are also competing against some of the most successful people in consulting. There is a reason most folks don't last more than a couple years in consulting (myself included). Yes, it is not banking, but it is still brutal and soul sucking.
As devildog2067 stated, it is always up or out at MBB, even at the partner level.
Also, when you are one of the best firms, you have to charge a rate that reflects that, and this can sometimes make it harder to rationalize why your SOW comes in at 1.5x firms like S&, LEK, and OWs (I am not saying this is consistently the case, but it can be the case). Do not underestimate how much your rate impacts your ability to sell work. Many MBB competitor consulting firms offer top priority clients like leading PE firms DOGSHIT rates in order to develop a relationship or to maintain one. Smaller fish in consulting can be a much bigger thorn in MBBs side than you would think (source: I was a smaller fish and we would sometimes work in parallel with MBB, but they would have 1-2 consultants on a project where we would have 40+). Overall, their rates were much higher, but we generated far more revenue off the same project. Yes, the MBB consultants did the "sexiest" work, but our partners created far more income from the same M&A transaction.
Lastly, when clients are paying an arm and a leg for top strategy consultants, they want a lean team that can execute efficiently and quickly. From my understanding of the MBB teams, they are almost always lean. This means more work (even at the partner level), and scrutiny with every proposed team member. Less team members means less revenue for the partner, which in turn makes his or her job harder.
Refreshing to read these comments. Hope analysts and freshly minted undergrads with no experience nor clear visibility on the industry will find this enlightening and maybe one day the endless chase of prestige will end
Yes and also depends on the market. e.g. Middle East or parts of Europe where specific T2s shine above certain MBB firms. If they do good work, they get repeat work and so on.
I went from BB IB to MBB. In a word, no, it's not all a bed of roses.
I can't speak as eloquently about the partner experience as devildog2067, but I can certainly tell you: having worked with MBB partners, I had zero desire to one day have their job.
Gotta be quick so banging out some observations:
TL;DR - no, MBB partner is the opposite of coasting on glamour and reputation.
+1 to all of this
yeah, in both consulting and banking, if you wanna be an MD/partner, it's much better to be in a big name company (BB, MBB, Big4 - yes, Big4 as well). you don't need to convince potential clients as much when they all know the name of your company.
Having been in several bond/loan ad hoc groups picking advisors during restructurings, the name brand NEVER matters, no one discusses brand. Its typically relationships driven, same goes for attorneys. Brand is something people on this site tend to think is a driver, its not. That said, of course often times better people will be at better firms and thus top firms will get more work, so somewhat of a circular reference. Also larger firms can have greater breadth of services/distribution, which can matter in particular situations. But regardless, its almost always relationship driven and brand does not matter.
On the F500 side - this was not always the case. For CEOs at big firms, name brand is often huge. They'll never get grief from the BOD when hiring McKinsey.
exactly. id even go as far to say, e.g., this was a reason why Peloton's hiring of McKinsey is public knowledge
going against the grain a bit here (and taking this with a grain of salt, i am but a lowly MBB analyst)
- I think it's pretty much true that, within the realm of strategy consulting, across most major industries and functional areas, MBB comes out on top in both breadth and depth of services
- strategy consulting is a tiny piece of the overall consulting market, but it has by far the best margins. the platform that MBB has created for its partners is unparalleled in this sense
- an MBB partner can make much much more money than their peers at B4/T2s by putting in maybe 10-20% more hours (if we're saying a B4/T2 is 50-55hrs/week, and MBB is 55-65) because the margins are so good
- these days "up or out" just means you have to be average at MBB to make it. this is not trivial and plenty of people get transitioned, but it's a much more clear and well-defined path to the top than at B4/T2 (ie, if you have the chops, you will make partner in 8-10 years for sure)
The career earnings are not nearly as different as you think they are. There are T2 partners who make more than MBB partners. There are B4 partners who make less but will have lifetime 7 figure pensions that will ultimately net them more. Yes, on average MBB partners make more TC, but the devil is in the details.
certainly, the highest performing B4/T2 partners out earn an average MBB partner. but assuming equal performance, say, bringing in $xxM of revenue at MBB vs T2 vs B4, the MBB partner will in most cases be the best compensated
im not going to pretend to know how the pension works at B4, but I do know that id rather be making an avg of 2-2.5M/year over my partner tenure at MBB vs 1-1.5M/year at B4. it also doesnt take into account exit opps at the partner level, e.g., exiting to C-1, C-2 roles at F500s is much more common at MBB than at B4
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