The History of McKinsey & Company: A Century of Change

McKinsey & Company’s history began with an accountant’s approach to management. In 1926, James O. McKinsey established a Chicago practice that used budgets and financial analysis to help executives understand their businesses. The consultancy now bearing his name grew from that beginning, but its modern partnership took shape only after a complicated merger and a split that produced separate consulting partnerships.

Partners later built a common professional system, expanded across borders, and added industry research, digital tools, and artificial intelligence to their services. That long expansion sits alongside another part of the history: legal and regulatory resolutions that tested the firm’s publicly stated standards of independent advice and professional conduct.

A Quick Look at the History of McKinsey & Company

How a Management-Accounting Firm Became Two Consultancies

James O. McKinsey was a University of Chicago professor and accountant when he established his consulting firm in 1926. His approach connected accounting and budgeting to questions of executive management. Rather than offering the range of services associated with McKinsey today, the early business concentrated on analytical methods that could help clients understand and organize their operations.

Marvin Bower entered the New York practice in 1933. Influenced by the organization of professional law firms, he advocated a model in which consultants would serve senior executives and maintain common standards instead of operating as loosely connected individual advisers. Bower’s influence would grow substantially, but he was not the founder of the 1926 business.

A 1935 combination with Scovell, Wellington & Company produced a management-consulting partnership known as McKinsey, Wellington & Company, alongside a related but distinct accounting partnership. The arrangement expanded the practice and connected its people and clients across locations, while also creating financial and organizational strains.

McKinsey’s death in November 1937 added to the pressures. The end of a substantial client assignment, worsening finances in 1938, and disagreements over the partnership’s operations contributed to a reorganization. In 1939, Bower proposed a separation. Bower, Guy Crockett, and F. Richmond Fletcher formed the East Coast McKinsey & Co. partnership; Tom Kearney led a separate Chicago consultancy, McKinsey, Kearney & Company.

The two businesses initially retained a relationship through their shared history and name. By 1946–47, efforts to reunite them had ended, the eastern partners secured exclusive use of the McKinsey name, and the Chicago organization became A.T. Kearney & Company. McKinsey also opened its own Chicago office in 1947. The firms’ paths thereafter were separate: the 1926 origin belongs to their shared history, not to an unchanged legal entity operating continuously through each reorganization.

Marvin Bower and the Professional Partnership

The 1939 East Coast partnership began with Guy Crockett as managing partner and Bower as his deputy. Building a durable firm required more than retaining talented consultants. The partners had to establish how engagements would be staffed, how offices would share resources, how new colleagues would be trained, and how ownership would pass to the next generation.

Bower set out much of his preferred professional approach in a 1940 statement, Supplementing Successful Management, prepared with partner consensus. The developing organization emphasized work for top management, rigorous recruiting, career advancement, and service standards. Over time, partners pooled profits and adopted increasingly firmwide recruitment and promotion practices, while ownership became tied to active membership.

National expansion proceeded alongside those internal changes. The eastern successor partnership opened a San Francisco office in 1944 and, after the final separation from Kearney, entered Chicago under its own name in 1947. These were developments of the post-1939 eastern business, not evidence that all earlier Chicago operations had remained under its control.

In 1950, Bower succeeded Crockett as managing partner, a position he held until 1967. He helped formalize recruitment, ownership, and succession policies, including adaptations of an advancement system commonly described as “up or out.” Other partners played important roles in implementing the model. Shared staffing and standards made it possible to provide clients with expertise beyond a single office, an organizational capacity that mattered as the firm’s geographical reach increased.

In a 1979 reflection reproduced by McKinsey, Bower described a consultant’s responsibility to challenge clients when professional judgment required it. That commitment to independent advice became part of the firm’s stated professional identity.

The Overseas Expansion That Began in London

By the 1950s, McKinsey had established a substantial U.S. client practice, but overseas expansion was not an automatic choice. Work involving Royal Dutch/Shell, including assignments connected to Venezuela and the company’s European organization, demonstrated that international clients could generate continuing demand for management advice.

Gilbert Clee examined overseas opportunities, and he and Bower pressed the case for a London presence despite hesitation from other partners. The partnership approved the proposal in 1958. McKinsey’s London office opened in April 1959, becoming the firm’s first office outside the United States.

London became profitable by 1960 and attracted local business alongside multinational assignments. Offices in Geneva, Amsterdam, Paris, and Düsseldorf followed. Shell had supplied a bridge to international engagements; building an overseas practice also required partner agreement, recruitment, and staff who could work across national offices.

Expansion beyond Europe followed. The opening of a Tokyo office in 1971 marked McKinsey’s entry into an Asian office network. The development was larger than the addition of addresses: an initially American consultancy was becoming a partnership able to work in multiple national markets while maintaining shared systems of expertise and staffing.

From Generalist Advice to Industry and Research Expertise

As the office network spread, sharing expertise became increasingly important. In 1964, McKinsey launched the McKinsey Quarterly, publishing management ideas from its consultants and outside contributors rather than confining all its work to individual client assignments.

During Ron Daniel’s leadership, the firm says it established industry-focused practices crossing geographical office boundaries in 1976. Consultants could increasingly organize work around sector expertise as well as broad managerial problems. This complemented, rather than replaced, the earlier one-firm approach.

Fred Gluck led McKinsey’s strategic-management work, while Tom Peters and Robert Waterman contributed to organizational thinking associated with the 7-S framework in the late 1970s. The framework linked several dimensions of an organization rather than focusing on formal structure alone. Such methods and publications became a more visible part of McKinsey’s professional work.

In 1990, McKinsey established the McKinsey Global Institute to study economic and business developments. It was a research institute inside the firm, not an independent outside organization. McKinsey’s own chronology also records Beijing and Shanghai offices in 1995 and an India-based knowledge center in 1999, further examples of its expanding geographical and research infrastructure.

Beyond Advice: Analytics, Digital Work, and QuantumBlack

The firm’s later expansion changed not only where consultants worked but also what they could deliver. McKinsey introduced web-based McKinsey Solutions in 2011 and McKinsey Analytics in 2012, according to its corporate history. These offerings added ongoing tools and data-oriented capabilities to customized consulting engagements.

In 2015, McKinsey acquired QuantumBlack, a London-based analytics business that had already developed expertise through motorsport work. The acquisition brought that experience into McKinsey’s wider operations. At the time, New Ventures leader Daniel Pacthod explained the direction: “Clients are asking us for more than just advice.”

McKinsey Digital followed in 2016. Alongside strategy and organizational consulting, the firm’s work increasingly encompassed data science, technology development, and implementation. Its range of services was becoming broader than traditional management advice.

Generative AI later extended this direction. McKinsey rolled out Lilli, an internal generative-AI knowledge tool, in July 2023. A 2024 company case study reported adoption and time-saving benefits; those performance claims reflect McKinsey’s own assessment. QuantumBlack continued to operate as McKinsey’s AI-branded capability, and the firm’s 2026 materials describe services involving AI systems and enterprise implementation.

Professional Standards Under Legal and Regulatory Scrutiny

The firm’s long emphasis on professional judgment made later legal and regulatory problems especially consequential to its public identity. Those matters ranged from individual insider-trading convictions to bankruptcy disclosures, investment controls, opioid consulting, and bribery involving South African state contracts. Each involved different actors and legal outcomes.

Individual Misconduct, Disclosures, and Investment Controls

Two prominent insider-trading cases concerned individuals with McKinsey backgrounds. Former senior partner Anil Kumar pleaded guilty to securities offenses in 2010 and was sentenced in 2012. Rajat Gupta, a former McKinsey leader who served on public-company boards, was convicted in 2012 of conspiracy and securities fraud involving information passed to Raj Rajaratnam. Those convictions were personal; they were not criminal convictions of McKinsey for the individuals’ trading schemes.

In 2019, the U.S. Trustee Program announced a $15 million settlement resolving disputes over McKinsey’s disclosures in bankruptcy cases. The government’s objections concerned the adequacy of information about clients, investments, and possible conflicts; the agreement settled those objections without adjudicating every alleged conflict.

Another distinct matter involved MIO Partners Inc., McKinsey’s investment-adviser subsidiary. In November 2021, the U.S. Securities and Exchange Commission announced an $18 million penalty over inadequate controls governing material nonpublic information. MIO settled without admitting or denying the findings, and the SEC announcement did not allege actual insider trading by McKinsey consultants in that proceeding.

Opioid Consulting and Two Separate U.S. Resolutions

McKinsey’s advice to opioid manufacturers led to more substantial corporate resolutions. The company said it stopped opioid-related client work in 2019. In February 2021, McKinsey reached a multistate settlement of approximately $573 million over investigations into its advice for opioid manufacturers. State attorneys general described serious concerns about that work; McKinsey said the agreements did not include an admission of liability.

In December 2024, McKinsey & Company Inc. reached a separate $650 million federal criminal and civil resolution involving its Purdue Pharma work. McKinsey & Company Inc. United States, the U.S. subsidiary, entered a five-year deferred prosecution agreement covering charges related to records obstruction and conspiracy involving misbranding. Civil False Claims Act allegations were also settled. The $650 million figure combined criminal penalties, forfeiture, and civil payments.

McKinsey’s December 2024 statement acknowledged, “We should not have undertaken sales and marketing work for Purdue Pharma.” Unlike the 2021 state agreement, the later federal resolution included criminal charges against the U.S. subsidiary addressed through a deferred prosecution agreement, rather than a conviction of the parent.

McKinsey Africa and South African State Contracts

On December 5, 2024, McKinsey and Company Africa (Pty) Ltd, a wholly owned subsidiary, entered a separate three-year deferred prosecution agreement in the United States over bribery involving contracts connected to South Africa’s Eskom and Transnet. The resolution required more than $122 million in payments. Former partner Vikas Sagar separately pleaded guilty. The U.S. Justice Department described the misconduct in relation to contracts from 2012 through 2016.

McKinsey stated that it cooperated with authorities, reimbursed fees, and strengthened compliance procedures. In a January 2025 update, it reported that South African prosecutors withdrew their charges after obligations were completed. That later procedural development does not erase the separate U.S. deferred prosecution agreement or the former partner’s guilty plea.

These proceedings highlight a problem inherent in advising major institutions: access to sensitive client information and influence over important decisions make client selection, disclosures, and oversight central to the professional obligations McKinsey has long emphasized.

McKinsey Under Bob Sternfels and Into Its Centennial Year

Senior partners elected Bob Sternfels global managing partner in 2021 and reelected him in 2024 for a second, final three-year term beginning that July. In a 2021 conversation, Sternfels set out priorities including sustainable and inclusive growth, client trust, and stronger risk procedures.

As of October 12, 2026, McKinsey remained privately held, with senior-partner governance and a Shareholders Council. According to the firm, it had offices in more than 65 countries and offered strategy, operations, organizational, technology, and AI-related services. A 2024 leadership announcement put 2023 revenue at approximately $16 billion.

Legal uncertainty had not entirely receded. Reuters reported in September 2026 that Belgian authorities had seized approximately €65.2 million during a continuing preliminary French investigation into suspected aggravated tax fraud and money laundering. McKinsey denied wrongdoing and said it was cooperating. The seizure was not a fine or a finding of guilt, and the inquiry remained unresolved at the time of that report.

A Professional Institution Still Being Tested

From management accounting in Chicago to global consulting and AI, McKinsey’s development passed through a divided partnership, new ways of organizing professionals, overseas clients, and increasingly specialized services. Its later legal resolutions brought the responsibilities attached to those services into sharper focus.

At its centennial, McKinsey & Company was still identified with an ideal Marvin Bower had helped institutionalize: independent advice to senior leaders. Its history shows both the reach that professional model achieved and the difficulties of maintaining the standards on which it rests.

Timeline

These milestones trace the firm’s main structural changes, service developments, and significant legal resolutions.

1926

James O. McKinsey founds James O. McKinsey & Company in Chicago.

1933–1935

Marvin Bower joins the New York practice in 1933; the 1935 Scovell, Wellington combination leads to the McKinsey, Wellington consulting partnership.

1937–1939

James O. McKinsey dies in 1937. In 1939, an East Coast McKinsey & Co. partnership and a separate Chicago firm under Tom Kearney emerge.

1944–1947

The eastern firm opens San Francisco in 1944. The McKinsey–Kearney affiliation ends, the Chicago successor takes the A.T. Kearney name, and McKinsey opens its own Chicago office in 1947.

1950

Marvin Bower succeeds Guy Crockett as managing partner.

April 1959

McKinsey opens its first office outside the United States, in London.

1964

The McKinsey Quarterly begins publication.

1971–1976

McKinsey opens in Tokyo in 1971 and later develops global industry-focused practices under Ron Daniel.

1990

The McKinsey Global Institute is established.

2011–2012

McKinsey introduces Solutions and Analytics offerings.

2015–2016

McKinsey acquires QuantumBlack and establishes McKinsey Digital.

2019

A $15 million settlement resolves U.S. bankruptcy-case disclosure disputes.

February 2021

McKinsey reaches an approximately $573 million multistate opioid-related settlement without an admission of liability under those agreements.

2021–2024

Bob Sternfels is elected global managing partner in 2021 and reelected in 2024. In 2023, McKinsey rolls out its internal Lilli generative-AI tool.

December 2024

Separate U.S. resolutions address Purdue Pharma consulting ($650 million combined federal criminal/civil resolution, including a McKinsey U.S. deferred prosecution agreement) and bribery connected to South African contracts (a McKinsey Africa deferred prosecution agreement involving more than $122 million).

September 2026

Reuters reports an asset seizure in connection with an ongoing preliminary French tax investigation. McKinsey denies wrongdoing.

FAQs

Question: Who founded McKinsey & Company, and was Marvin Bower a founder?

Answer: James O. McKinsey founded the original consulting business in Chicago in 1926. Marvin Bower joined the New York practice in 1933 and helped form the East Coast successor partnership in 1939; he was not the founder of the 1926 firm.

Question: Is Kearney part of McKinsey & Company?

Answer: No. The two firms share an early corporate lineage, but distinct consulting partnerships emerged in 1939. Their remaining ties and name arrangements ended in 1946–47, and Kearney developed as a separate firm.

Question: Who owns McKinsey & Company?

Answer: McKinsey is privately held rather than publicly traded. Its parent is McKinsey & Company, Inc., and it operates with senior-partner governance and a Shareholders Council.

Question: What is QuantumBlack?

Answer: QuantumBlack was a London-based analytics company acquired by McKinsey in 2015. It is now the firm’s AI-branded capability and forms part of its broader data, technology, and transformation services.

Question: Were McKinsey’s 2021 and 2024 opioid settlements the same case?

Answer: No. The approximately $573 million multistate agreement announced in February 2021 concerned investigations into advice for opioid manufacturers and included no admission of liability under those agreements. The separate $650 million federal criminal and civil resolution announced in December 2024 concerned Purdue Pharma work and included a deferred prosecution agreement with McKinsey’s U.S. subsidiary.

Interviews & Firsthand Resources

Bob Sternfels on Leadership and Risk Priorities

In a 2021 conversation published when he became global managing partner, Bob Sternfels discussed the firm’s direction, the importance of client trust, and stronger risk processes. It is useful for understanding the goals articulated by the incoming leader, while remaining a statement of priorities rather than independent proof of results.

Read the Bob Sternfels conversation

Tom Peters on Organizational Thinking

In this retrospective interview, former McKinsey partner Tom Peters discusses organizational management and his earlier work associated with the 7-S framework. The conversation adds a participant’s perspective to the period when management ideas and research became a more visible part of the firm’s identity.

Read the Tom Peters interview

Sources

• Harvard Business School: Amar V. Bhidé, Building the Professional Firm: McKinsey & Co.: 1939–1968; Marvin Bower leadership profile.
• Kearney: Our story.
• McKinsey & Company — History and management ideas: Our History timeline; Thinking strategically; Enduring Ideas: The 7-S Framework; Tom Peters on leading the 21st-century organization.
• McKinsey Global Institute: About MGI.
• McKinsey & Company — Digital services and AI: Accelerating with QuantumBlack; Rewiring the way McKinsey works with Lilli; Artificial Intelligence insights.
• McKinsey & Company — Leadership: Bob Sternfels reelected global managing partner; Our Leadership; A conversation with Bob Sternfels.
• New York Attorney General: 2021 multistate opioid settlement announcement.
• McKinsey & Company — Opioid matters: 2021 states settlement statement; Deferred prosecution agreement relating to Purdue Pharma.
• U.S. Department of Justice — Corporate resolutions: 2024 Purdue Pharma criminal and civil resolution; 2024 McKinsey Africa bribery resolution; 2019 bankruptcy disclosure settlement.
• McKinsey & Company South Africa: Statement concerning U.S. and South African resolutions.
• U.S. Securities and Exchange Commission: MIO Partners compliance-failures resolution.
• U.S. Department of Justice — Individual cases: Rajat Gupta sentencing; Anil Kumar sentencing.
• Reuters: Belgian seizure in preliminary French McKinsey tax investigation (September 2026).