By the way, this is not to denigrate the analysts at McKinsey who were in my time typically very smart, nice, hardworking, etc... They performed an important data gathering function. But the bill for their time has the sort of relationship you get when a Legal Assistant at Cravath photocopies stuff in your file. No they aren’t “worth” $500k/hour or whatever rate they bill at these days to photocopy but that isn’t the point. You are paying for Cravath and how that Cravath fee is broken down is largely irrelevant.

McKinsey does flat fees. The flat fees are driven by a rate card estimate, but there's no marginal cost to an extra hour... fwiw

Thats because there is 0 additional marginal cost for their salaried consultants' time, too. Like many in the workforce, they are a paid a salary, and it's the same amount whether working 40 hours or 80 hours.

No... that's not a good explanation. While it is true they're salaried, there are plenty of professions that bill by the hour for the time of salaried employees. How you bill doesn't need to match how you pay salaries. It could also be billed per day of work regardless of the number of hours and the issues mentioned above would still be pertinent.

Isn't unpaid overtime illegal?

Not for white collar, FLSA-exempt employees! And boy is that a broad umbrella!

See: https://www.dol.gov/whd/overtime/fs17a_overview.pdf

Not if you're an exempt employee!

It's only illegal if your total salary would work out to less than minimum wage. Working 80 hour weeks year round at WA's 2020 minimum wage works out to $70k a year if you include time and a half after 40hrs/week.

Your job isn’t to do X hours of work your job is to meet a goal, objective or target. You don’t get to stop when the clock hits a certain hour in this industry.

Not if the position is overtime exempt.

I'm not sure if this exists in EU. Does anybody know of a similar situation in EU?

Absolutely does. Everyone just signs to opt out of the 40 hour (something like that) working week directive and contracts are clear that there is no such thing as overtime.

This is slightly twisting what you actually get, though. You want the Director-level time (and that's what is advertised during the sales process), but realistically you get a team of largely inexperienced kids supported by the person you actually want, who gives you a few hours while billing for the whole team to meet their blended rate target. In a lot of cases it's become a bit of a weird situation where the strategic guidance is almost free if you sign up to pay for a team of 20-somethings to follow a playbook and make some decks.

I've worked with various from McKinsey. The work is not that impressive. It's like having an MS Office expert, especially Excel and Powerpoint. The person is able to work long days, so after a workshop they spend a huge time to make it look nice again. Though one told me they have a separate department for quickly making presentations look "nice". Meaning, the consultant just sends it off to that other department.

Reading how expensive they are I'm glad McKinsey isn't used anymore.

The major reason they're hired is because of the McKinsey name (convincing others in your company). Not so much for anything else IMO. Maybe you we're doing great work but that's not the ones we saw (I saw various).

You don't hire strategic consultants because you don't know what to do: you hire them because you want someone else to tell your colleagues to do the thing you think you should do.

So, essentially it requires the same skillset as a fortune teller.

(In the private sector)

I'm trying to parse the phrase "peer level strategic counsel".

Does it mean advice as good as the advice we're giving other firms like you?

If I'm Corporate Big Wig I am not taking direction from some fresh-out or underling. I want to talk with the Partner -- a corresponding Big Wig who has "peer-level" status with me. We hash out the big-picture strategy, then the underlings do all the hard implementation work.

I parse it as you'll get the advice as coming from someone on the same level as you, not a subordinate/minion. So in theory it's level-headed, coming from a person not afraid to state things as they are, and you are covered if you act on it.

This kind of advice is hard to get for the C-suite outside their boardrooms (which may be biased).

I meant that C suite folks see McKinsey Directors as people at their level of judgement and skill who they can talk to in an open and honest manner to get advice. I’m not saying this is good/bad or right/wrong. Lots of CEOs want a consigliere with good advice who is on their side and that’s what they pay to get with a Director.

Thanks for the clarification. I think my mistake was interpreting what you said as the perspective of a hypothetical company and thus assuming you meant a peer-level company. It seems in general McKinsey is rather targeted at the C-Level.

It's typically targeted at someone of sufficient seniority that the cost of McKinsey is negligible when compared to the cost of doing the wrong / less optimal thing.

Or, in other words, if a manager makes a wrong decision then it costs the company $x00,000. If an SVP or C-level screws up, it costs the company $x0,000,000+.

I believe it is intended to mean "strategic advice from someone perceived as a social peer", meaning a high level important executive person, not a junior analyst.

Your mistake is trying to "parse". I am sure the phrase has meaning - it, presumably, means take advice from someone with the same social status - but at any deeper level it is quite meaningless. Don't bother. It isn't worth it.