McKinsey & Company

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McKinsey & Company was founded in Chicago in 1926 by accountant James O. McKinsey, who applied accounting rigor to business strategy and treated management as a professional discipline. After McKinsey died in 1937, Marvin Bower — who joined in 1933 and renamed the firm McKinsey & Company in 1939 — rebuilt it on a law-firm model, prohibiting advertising and conflict-of-interest engagements and articulating an “obligation to dissent.” Bower institutionalized the “One Firm” policy, under which all global offices operate as a single profit-sharing entity, and the “up or out” promotion pipeline, in which revenue generation is the criterion for advancement. By 2002, BusinessWeek noted that partner count had roughly doubled (from 427 to 891) and described a firm whose ingrained values had eroded. As Duff McDonald documents in The Firm (2013), the firm’s longstanding decision to keep its client and project lists secret “insulated the company from the disasters it was party to” — Enron being the paradigmatic case.

The documentary record places McKinsey’s frameworks across a striking range of clients. In Russia, bankruptcy-court filings and reporting by Walt Bogdanich and Michael Forsythe (New York Times, Dec. 15, 2018) document engagements with Kremlin-linked and state-owned enterprises including Sberbank, VTB, Gazprom, and Rosneft, plus ties to the defense conglomerate Rostec; the firm promoted having worked with “21 of the country’s 30 biggest companies.” McKinsey did not withdraw after Russia’s 2014 Crimea invasion; after the February 2022 full-scale invasion, its initial March 1 position (ending work only for “government entities”) was, per Bloomberg’s March 3, 2022 reporting, “roundly criticized” by current and former staff, prompting a March 3 announcement to cease work with state-owned entities. In Saudi Arabia, the firm ran 137 projects in 2016 — the year of its US-government work alongside MBS’s rise — earning the Planning Ministry the nickname “Ministry of McKinsey”; a December 2016 McKinsey report identified three Twitter users critical of austerity, one of them Omar Abdulaziz, a close associate of journalist Jamal Khashoggi, who was murdered in October 2018. Abdulaziz’s lawsuit alleges the report reached MBS’s agents and that identified users were subsequently arrested or harmed; McKinsey says the report was prepared “for internal use” and disputes proximate cause.

The firm’s opioid and detention work produced legal consequences. Between 2004 and 2019, McKinsey completed 75 contracts with Purdue Pharma, advising it (in a 2013 project) on how to “turbocharge” OxyContin sales to “High Value Prescribers,” and in 2017 modeling a per-overdose rebate Purdue could offer distributors — work that overlapped with 76 FDA contracts the firm held between 2008 and 2022. Senior partner Martin Elling, who directed roughly 30 Purdue engagements, pleaded guilty to felony obstruction of justice on January 10, 2025, after deleting Purdue-related files; he was sentenced to six months in federal prison. McKinsey reached a $573 million settlement with 49 state attorneys general, five territories, and DC (February 2021, per the Minnesota Attorney General) and a $650 million federal settlement in December 2024, with opioid-related settlements totaling over $1.2 billion. Separately, ProPublica’s December 3, 2019 investigation (drawing on 1,500 pages of FOIA documents) found that on an ICE engagement begun in 2015 and redirected under the Trump administration, McKinsey proposed cuts to spending on detainee food, medical care, and supervision; ICE billings exceeded $20 million, and the firm ended the engagement under staff pressure in 2018. The firm has said it is “deeply sorry” for its Purdue work.

Sources

1. Walt Bogdanich and Michael Forsythe, When McKinsey Comes to Town: The Hidden Influence of the World’s Most Powerful Consulting Firm (Doubleday / Random House, 2022).
2. Duff McDonald, The Firm: The Story of McKinsey and Its Secret Influence on American Business (Simon & Schuster, 2013).
3. Walt Bogdanich and Michael Forsythe, “How McKinsey Has Helped Raise the Stature of Authoritarian Governments,” New York Times, Dec. 15, 2018.
4. “McKinsey Staff, Alumni Pushed Firm to Cut Ties to Russia After Ukraine Invasion,” Bloomberg, March 3, 2022.
5. Ian MacDougall, “How McKinsey Helped the Trump Administration Detain and Deport Immigrants,” ProPublica, Dec. 3, 2019.
6. “Justice Department Announces Resolution of Criminal and Civil Investigations into McKinsey & Company’s Work with Purdue Pharma,” US Department of Justice, Dec. 13, 2024; and “Attorney General Ellison joins $573M multistate settlement with McKinsey & Company,” Minnesota Attorney General, Feb. 4, 2021.