tier structure in consulting

Certainly, the divide exists, but I really think that students make it out to be a lot greater than it is.

Monitor/LEK/Parthenon/BAH all compete with MBB for the big strategy projects, and you probably know from classmates of yours that analyst quality at all of those firms are very similar.

....consulting and now ibanking, I will compare some of the consulting firms to ibanks in the prestige department, keep in mind this is my opinion and very general, and as with banks there are always offices/groups/etc. which will be exceptions.

Goldman = McKinsey (the pinnacle)

Merrill/JPM/Citi/MS = Bain/BCG (the top tier)

CS/Lehman/UBS = BAH/Monitor (just a hair below)

Lazard = Mercer/Deloitte (great but different in one way or another)

Piper Jaffrey = Accenture (on a different playing field)

Keep in mind that as with boutique banks, there are lots of smaller consulting firms that will span across this spectrum from top to bottom.

patrick bateman - that really helps alot as i am in banking now. could you elaborate on why you left consulting for banking? and besides monetary reasons, could you give a pro/con of your decision? reason i am asking is i am considering consulting after a year of banking, and any advice on experience and type of skills you can gain from each would be greatly appreciated.

also, do you guys think a slowing economy will greatly impact the non-MBB firms? i can it in banking already about how deal flow has come to almost a standstill, esp talking to the 2nd year analysts in my group.. wondering if it's just as dramatic in consulting

thanks

The economy has much less of an impact on consulting overall. Also the strategy shops are equally hit by any recessionary impacts in my opinion, no real data to back it up though.

The factors that go into choosing a consulting firm for an engagement are extremely varied, and not as simple as "Oh Mckinsey>Parthenon, let's take them." Everything from alumni networks, partner relationships, overloaded staff creating a bad proposal, not adequately addressing the RFP, taking a gamble on proposing a radical hypothesis, etc. I have personally seen some extremely no-name shops beat out the big boys; on one specific proposal, a three-man shop beat out Mckinsey, BCG and Monitor for a C-level growth hypothesis workshop, real high impact stuff.

I think the ACTUAL difference in client work is negligible, as is the talent level; the difference is largely created by type-A undergrads and MBAs.

have worked at 2 consulting shops, one of them MBB, and now in a PE fund hiring these guys

ranking provided above by patrickbateman pretty much correct, except that:

• mercer / deloitte pretty much down to Accenture level as far as mgmt/strat consulting is concerned, i.e. not very credible. They may have strong specialized areas (HR, IT) etc. where they would compete, but that's a bit different. there are hundreds of very good specialized consulting outfits, but they don't really offer similar career paths / exit ops than mgmt consulting

• there are other very good, smaller mgmt consulting shops, like LEK, Katzenbach, Parthenon, Roland Berger / OC&C in Europe etc.

now, as to quality of work delivered, that's a tough question. My own feeling is that while firm culture / proprietary IP / methodology has some impact, results are 90% dependant on quality of the individual team members. There is quite a defined pecking order as discussed above in consulting, and it transfers into recruiting - few candidates would chose monitor over mckinsey, and my guess is that bain vs. accenture would be 99% in favor of former or something. Quite a rational decision by the candidates, as the more prestigious firm you go to, the better the pay, training and benefits (they charge higher fees), the better exit opps (rep of firm and strength of alum network), the better colleagues you work with, etc. etc.

Now, even with case interviews the recruiting process is pretty random, and doesn't yield a clear and precise ranking of all candidates (who by and large apply to all consulting firms without distinction). So in the end, i would say that the higher ranked firms have on average better people, although the range is wide, and from one step to the next overlap will be so large as to make summary judgments (random mck guy A must be better than random bcg guy B) useless. However with large reputation gaps comes also larger quality gaps in the folks employed.

Last point, I would argue that the talent gap is widest at the junior levels. At MBB, most of the best people actually leave pretty early, for jobs like top mgmt tracks at big corps, PE or whatever, once they get the benefits of the training in consulting. The job is most selective at the pre-MBA analyst level, and gets progressively less so. The reverse is true at lower ranked firms, where teh best folks stay on as they have less appealing alternatives available. So at the senior level I would argue gaps are smaller...

just my (biased) 2 cents...

Have never posted before, but I am 1st year at Bain in NY and thought I'd make a (quick) point: true that top 3 vs. others' talent level is most different at AC/BA/Associate level. I had offers from all 3 MBB and chose Bain b/c at AC level, in NY office, opps after (given an interest in investing on my end) and quality of experience, seemed to be better than McK. Out of my class at Harvard, 7 people were offered Bain and McK NY--6 took Bain (the 7th took McK only after being promised he could do almost exclusively healthcare there). You're right, being a partner at McK is more prestigious/door-opening than Bain (probably), but being an AC at Bain opens up the same quality doors (better for buy-side, worse for management, prob) as BA at McK, and I can promise that Bain's quality of life is a whole lot better (have a good # of BA friends at McK who "wish they had my job"). I also got offers from two of the top-5 PE firms (BX/KKR/Carlyle/TPG/BainCap) after interviewing at only 3 of them.

As a second point: for campus recruiting, BCG is considered 2nd tier now (at least at Harvard)--it offers the same opps as Bain/McK in management, with nowhere near the same opps in investing (we're only talking entry-level positions here). This year, we had a few BCG interns apply to Bain AC position--to my knowledge, no Bain intern applied to BCG (and definitely none accepted a BCG offer).

Not that Bain is "clearly better" than McK by any means, but at the lower levels, Bain and McK seem to be on even footing (with Bain maybe edging McK out), at least in NY.

sorry, one more set of stats: -Bain and McK had competing offers for summer internships last Jan for 2 people in NY: both chose Bain (this is after 6/7 full-time competes chose Bain my year) -Though totals are not complete yet (still waiting on some people) Bain seems to clearly be edging out McK NY this year for recruiting again--I can't give specific ##s at this point, but suffice it to say that Bain already has significantly more accepts into its full-time class than it budgeted for, since the accept rate (# of accepted offers / # given) is markedly up from past years, particularly over McK...

hey consulting, quick question -- if you were interested in investing, why'd you choose bain over the two top PE firms that offered you a job? im just curious as to what went into your decision making process...

Sorry, yeah, you're right--he's 2+ years out of school (a year above me), and found out 2 yrs into his contract that he didn't get post-3rd year, so he's moving to middle mkt...I'm just used to thinking of extension of contract as "3rd year" because that's what it is at Bain.

Does anyone get post 3rd year? Don't they want you to go get your MBA and come back? A friend of a friend did Blackstone post-undergrad and he didn't stay past the third year either. They really aren't the direct-promote kind of firm, since after 3 years, you'd basically be an associate since you would have more experience than the post-IB/consulting crew (pre-MBA associates). Don't quite know why you mentioned him, but I just felt like chiming in since I'll be in a similar position (our partners don't seem intent on promoting me to Associate after 3 years). That said, I am guessing his chances of getting into a top B-school are pretty high.

This is something I've been wondering and perhaps you could shed some light on: what do people who go straight into PE after college (like myself) do after their 2 or 3 year program ends? How do they fare in B-school admissions? Do the Blackstone kids fare much better than others who are at good MM shops?

My take on the MBB thing:

at my target school, McKinsey is still the most sought after firm. Knew 3 cross-offers, all of them took McKinsey. Bain is well-regarded, but not exceptionally so. BCG is seen as equivalent to Bain.

1) I bet you'd be fine--b-school isn't ridiculously tough to get into, I think, if you have MBB consulting or PE experience, though I guess I don't know what your PE firm was. Going to a target prob helps you too. If you worked somewhere like Silver Lake, Audax, etc., you'd prob be fine. I know of some people who have moved up (from MM to bigger MM or large cap), some who have laterelled (MM to MM), and some who have looked into small hedge funds (if you're MM PE, it can be tougher to get an offer at a larger hedge fund, I think, though I'm not sure about that).

2) You're right about the BX kid--I think it is rare to be direct-promoted. I guess the point I was making was that if you go top-tier sell side (McK/Bain; GS/MS) those same buy-side optns are open to you after (assuming you do well) as an associate, perhaps with a better network/experience set/etc. going in. And perhaps, in the long run, BX guy would've been happier getting solid starting experience, then moving to PE after with the chance to stay at a larger firm (I do recognize that "a career at BX is not the end-all-be all and many would rather end up high up at a MM)...

3) Yeah, McKinsey is still "most sought after." I think that, given case mix and nature of office in NY btwn Bain and McK, and given Harvard kids' desires/backgrounds (many are tired of "impressing people" when actual experience might be better and exit optns similar, I think better within investing), at Harvard, Bain's been killing McK lately in NY hiring. And that has to mean something...If I were comparing McK and Bain anywhere in the country other than SF/NY, I'd have taken McK too, though, so yeah, I agree with the hierarchy above, but it's not as clear cut as GS vs. MS vs. LB--culture, connection, and case type mix are very important in consulting, and Bain is better for that stuff in NY if you want to do investing, I think.

1) I bet you'd be fine--b-school isn't ridiculously tough to get into, I think, if you have MBB consulting or PE experience, though I guess I don't know what your PE firm was. Going to a target prob helps you too. If you worked somewhere like Silver Lake, Audax, etc., you'd prob be fine. I know of some people who have moved up (from MM to bigger MM or large cap), some who have laterelled (MM to MM), and some who have looked into small hedge funds (if you're MM PE, it can be tougher to get an offer at a larger hedge fund, I think, though I'm not sure about that).

2) You're right about the BX kid--I think it is rare to be direct-promoted. I guess the point I was making was that if you go top-tier sell side (McK/Bain; GS/MS) those same buy-side optns are open to you after (assuming you do well) as an associate, perhaps with a better network/experience set/etc. going in. And perhaps, in the long run, BX guy would've been happier getting solid starting experience, then moving to PE after with the chance to stay at a larger firm (I do recognize that "a career at BX is not the end-all-be all and many would rather end up high up at a MM)...

3) Yeah, McKinsey is still "most sought after." I think that, given case mix and nature of office in NY btwn Bain and McK, and given Harvard kids' desires/backgrounds (many are tired of "impressing people" when actual experience might be better and exit optns similar, I think better within investing), at Harvard, Bain's been killing McK lately in NY hiring. And that has to mean something...If I were comparing McK and Bain anywhere in the country other than SF/NY, I'd have taken McK too, though, so yeah, I agree with the hierarchy above, but it's not as clear cut as GS vs. MS vs. LB--culture, connection, and case type mix are very important in consulting, and Bain is better for that stuff in NY if you want to do investing, I think.

@consulting,

You indicate that you were interested in fundamental investing. Why did you choose Bain over a research position at a well-known BB then? Do you think Bain would offer better exit options than research? (Is it just that you're not pigeonholed into a single industry?)

Right now this is a job. If I advance any higher in this company, then this would be my career. And um... Well, if this were my career, I'd have to throw myself in front of a train.

A couple points:

1) I should have been more clear--I wanted to have a role as an investor where I can play a role in corporate and financial strategy for an organization.  Fundamental investing comes in a lot of flavors, and my preference was PE, HFs that buy significant equity stakes in a company, or distressed investing.  Bain does well for that--the only places that are on-par for PE recruiting are GS and MS IBD, and McK  (also some specific groups at Laz/BX), and at the first two, group assignment (which you don't know going in) plays a huge role.

2) Research is generally considered a step below IBD for many HF--it might be more applicable, but getting into IBD is tougher, I think.  Same for Bain/McK: when avg GPA for northeast admits from schools like MIT, HYP, etc. is > 3.80, there's a lot of respect that goes with that.

3) Research is limiting.  What if I'm researching the textiles industry for 2 years and hate it?  Research has few exit optns into PE, I think, and exit options may be limited by industry.

4) I've never done research at a BB, so I can't compare offhand, but I do know that Bain's exits into investing, particularly PE, are pretty ridiculous, largely becuase of the success of funds started or run by ex-Bainies.  If you want to go into HF long term, Bain-->really good PE shop/VC-->really good hedge fund might be a better bet than BB reseach-->OK hedge fund...your skillset is probably more well-rounded, and you have a good sense of exactly where you want to be.

5) Bain is more fun.  The firm treats you well (they know there is a high probabilty that some ACs run big firms down the road, and they want those firms as clients, so having a connection to Bain for a long time is important).  I think that they give less "busywork" than at BBs (based on what BB banking friends say), and that a focus on "educating" ACs rather than working them hard for some output exists--Bain does want people to stay more than 2-3 years, so "human capital development" is important to them (think of Bain as a long term investor who needs to add value to get IRRs, BBs as investors with a shorter time horizon, who drive up output enought to get a quick refi and make IRRs, if you want).

good to see that bain acs still drinking cool-aid from the firehose... :-)

but seriously, don't sound so parochial, bain is just the first stepping stone in a long career. Other opportunities may be better or worse, 5 years from now nobody will care where you worked before. And some of the things you say about Bain and links to PE funds is stretching the truth / bordering on propaganda... Golden Gate and Baincap are the two only funds I know that hire _pre-dominantly_ from bain. Audax, HIG sure have lots of historical ties to bain (often indirectly through baincap), but i don't see that impacting who they hire nowadays that much... as for CVC and permira, you gotta be kidding me. how many bainies did they hire last year?

bain is a great company already, no need to twist the truth...

Haha, you're right...I guess we do "drink the coolaid."  I guess my point is that I don't know anywhere I would have rather started than Bain--sure it's a stepping stone, but so are basically all opps after college (and, after all, this board is focused largely on post college opportunitues, so I don't think it's a particularly non-sequitor comparison to make.  By that logic, many well-populated threads here are pointless because "5 years from now nobody will care where you worked before").

As for the "propaganda"...I think that my point was twofold.  First, that consultants' presence within PE has grown significantly in the past few years, and that (it seems to me at least) the performance of PE funds that come from this "consulting background" has been differentially strong, considering the relative population of PE/investing-interested folk at MBB vs. GS/MS (please correct me if I'm wrong, but I just don't feel like I see that many funds that are tiny or mid-level success rate started by Bain guys, but way more by BB IBD guys).  Second, Bain consultants seem to have done particularly well relative to the MBB cohort.  Is it a function of the fact that Bainies are smarter than everyone else?  I don't think so.  That the firm's PE presence correllates with a particularly high # of guys interested in PE/investing among MBB?  That may be part of it.  That Bainies are "favored" at some firms?  That could play a role (I know that you say Bain Cap and Gold Gate are the only 2 that seem to differentially favor Bainies.  I'd add Hellman Friedman and Berkshire Partners--HF obviously hires many non-consultants, but there are way more Bain guys than McK or BCG there.  Even assuming that 5-10 guys go to Bain Cap/Gold Gate, and another 2-4 Berkshire/HF, that's 25-40% of the total Bain population that seems interested in buyside, which seems like a high marginal number.  The firms that seem to favor McK guys are still great--General Atlantic, Francisco Partners, for e.g.--but I'd argue that a larger percentage of people would rather work at the four above.).  I agree with your point about CVC/Permira, though--I do take those out of context.  I think Bain uses their prevalence in upper management at such firms, even when their associate accepts aren't huge, as vindication for the importance of having a "management" skillset, but I shouldn't have cited those.

But here's the takeaway for me...it isn't immediately apparent to me that there is a place I could have started my career that would've been better than Bain for offering placement in a variety of investing options (specific groups or funds would've differentially improved my options in certain areas, of course), considering the denominator of # of people applying for associate positions.  An argument exists that, once in the PE world, Bainies are relatively likely to succeed, given the skillset they've built (you don't have to buy that though).  And I think that there are almost no places to start a career where people enjoy going to work every day, like what they do, and are happy, moreso than at Bain.  No, it's not the ideal ending up point for everyone by any means (why do you think I'm leaving after two years?).  But the options to buy-side after here are really strong, even compared to BB IBD, with a much better lifestyle, plus great bosses and coworkers, I think, making it a great place to start a career...which seems a relevant point to make on this board.

interesting read...question for you guys. If you had to take a post-MBA associate position at Bain or McK, in an international office, what do you do if your goal evntually is PE/HF?

1) Take McK in city you would really like to live in (Bain does not have an office there)

2) Take Bain in a city that you are indifferent about

Second question, how's BCG's exit opps to PE/HF? is it significantly worse than McK or Bain?

Aceman, given your prior posts I am going to guess that you are discussing McK in Houston versus Bain in Dallas. I could be way off here, but just thought I'd throw out a guess.

Having worked at MBB prior to PE it is my belief that neither office location nor MBB firm (especially at McK or Bain) will be a deciding factor for PE opportunities (to be quite honest though, neither place particularly well at HFs).

People will debate my last point to no end, but I do believe that BCG's exit opps are very similar (if not the same) as those from Bain or McKinsey. I saw the same groups of people during interview rounds and there were no shortage of alum success stories in PE from any of the three.

Smuguy, aceman referred to an international office. Also how many post-MBA associates really end up in PE?

Looks like I was in the office and posting a bit too late last night. I missed both the "international" and "post-MBA" parts of his post.

I don't know the exact figures of post-MBA placement in PE, but they would certainly be lower than for pre-MBAs.

smuguy, I've been told that office location matters only insofar as casemix--i.e. a Bain Dallas guy wouldn't be considered "2nd tier" in terms of having the name on his resume.  If he'd done a lot of PE/HF work when applying to those jobs, he'd be just fine.  But Bain NY has way more hedge fund and PE retainers/casework than any other office (Boston is close).  Plus, this may be biased, but I think the guys in NY tend to be smarter/more qualified based on "non-Bain" resume items--they have higher GPAs, SATS, "better" schools that they came from, and maybe more applicable previous experience, on average (so that's not the office "getting" the job for them, but the people who join that office being smarter to begin with).  Would you agree with that?

What about Oliver Wyman? I have heard the Financial Services practice beats out both Bain and McK FS practices pretty consistently in winning big projects and even charges more. What do those guys have in terms of exit opps? What's the chances of breaking into PE? I have heard they have ridiculously high acceptance to HBS.

\

One more thought, smuguy...I had the same observation as you going through the process, with lots of BCG guys interviewing.  I sort of had a different takeaway, though: if a large number interview, and few of them are at top places (relatively few, to my knowledge), that implies to me that they must be doing worse in the process somehow, right?  I'd actually have been more impressed if I'd seen fewer BCG guys interviewing, since that would imply to me that the % that get the job out of those that want it is the same there.  As it is, a low numerator and high denominator don't really seem to work in BCG's favor, in my mind...am I missing something?

lot's of good points being made here. do agree that bain historically has placed better than Mck/BCG, and also agree that some Bain offices are more selective than others (BOS, SF, NY, CHI, DAL I think was sort of pecking order back in time). London in Europe also is good. Quality in other offices, particularly internationally, probably a notch lower on average.

As for post-MBA transition to PE, I've only met one example so far that made the switch before hitting partner level, an MD at Audax if I remember right. And if you have to slave away for 7-8 years before making the transition it's really not worth it. So generally I would discourage people from going that route.

Then again, PE recruiting has exploded in past few years, so funds are looking for folks from pools they didn't tap before, so maybe market is changing.

 Also, OW is a step down.  Financial services is different than PE/HF work...

1) The order of selectiveness is a) NY b) SF c) Bos d) Chi e) LA/Dal/Atl in some order for the US.  I know from experience that NY has done ridiculously well for PE the past 2 years, but I don't know if that's a function of NY having "better people" in terms of interview skills and "non-bain" quality of resume, having more prestige in the eyes of recruiters, or having an optimal case mix. 

2) There have been several that have made it to Bain Cap, I know, but yeah, it's a ton tougher after being an AC.  I'm actually wondering...I feel like more McK guys make the jump later on (from engagement manager, for e.g.) and was wondering if anyone knew if/why this type of  is more prevalent from McK to Bain.

to consulting

were you in the peg group as a bain ac?

do you start off fulltime as a generalist then u choose to join peg or you start as it?

could you elaborate on it a bit and how selective it is?

or would normal bain ac in ny office be enough for the top PE shops?

thanks!