The Big Three management consulting firms—McKinsey, Bain, and the Boston Consulting Group—are increasing starting salaries for MBA consultants by 10,000 USD in 2022, according to a new report by ManagementConsulted. Total compensation packages for MBA consultants at the Big Three consulting firms, also known as MBB, are up by between 4% and 9%. McKinsey, Bain, and BCG are among the largest MBA employers in the world, and their diverse work environments and sky-high MBA consulting salaries make them some of the most attractive companies for MBA grads.
Although MBB froze salaries last year, consulting salaries are up by 10% across the industry. This follows a global increase in demand for management consultants, which saw consultancies report record revenues in the past 12 months. McKinsey, Bain, and BCG recruit thousands of MBA grads each year. It’s easy to see why they’re an attractive prospect: in their first year after an MBA, an MBB consultant can expect to take home more than 200,000 USD, including bonuses and benefits, according to ManagementConsulted.
In 2022, MBA consulting salaries at the MBB firms start at 175,000 USD, up from 165,000 in the previous two years. Performance bonuses have also increased: Bain pays bonuses up to 41,250 USD, and BCG pays up to 43,750. At McKinsey, the figure is 45,000. Signing bonuses across all three firms remain at 30,000. Differing bonus schemes mean total compensation packages vary between the three firms. Bain MBA consultants earn the least at $246,000, an increase of around 4% from last year. BCG pays a total of 248,750 USD, while McKinsey MBA consultants earn the most with 250,000, up by around 9% from 2021.
Big 4 Accounting
The Big Four—known primarily as accounting firms but all have large consulting arms—also pay high MBA consulting salaries. PwC consultant salaries have risen to 165,000 USD in 2022—that’s 15,000 above what the firm offered to new MBA hires in 2021. EY has also increased salaries by 10,000 USD to match PwC at $165,000. Fellow Big Four firms, Deloitte Consulting and KPMG, chose to freeze salaries at 2021 levels, which were lower than previous years. Deloitte consultant salaries start at 135,000 USD, while KPMG consultants earn 145,000.
Performance and signing bonuses across the Big Four vary, meaning total compensation packages differ dramatically between the firms. MBAs at PwC have the highest earning potential, with a possible 235,000 USD available. At EY, the figure is 210,500 USD, while at KPMG, it’s 197,400. MBAs who work at Deloitte Consulting can earn a maximum of 175,000.
A competition has emerged among law firms, battling for who will offer the highest salary increase. But in the latest round, some firms are struggling to keep up. It was within the last few weeks that the law firms of Millbank LLP, Davis Polk & Wardwell and Cravath Swaine & Moore countered each other’s salary increases with their own. By the end, senior associates were seeing their salaries surge by 13%, particularly at one notable firm. Cravath Swaine & Moore is currently in the lead and keeping the competition tough. Davis, Polk & Wardwell offered 396,500 USD weeks earlier but still fell short of Cravath’s 415,000 USD for senior associates.
The salary war started when these elite law firms began competing for top law talent, particularly the increasing competition to hire midlevel associates, according to experts. It also helps that record-breaking revenue and profits in 2021 have allowed law firm executives to offer these over-the-top raises. Davis Polk & Wardwell initiated the race in 2021 by increasing the salary for starting associates to $202,500. That increase caused other firms, such as Cleary Gottlieb Steen & Hamilton, Proskauer Rose LLP and Gunderson Dettmer Stough Villeneuve Franklin & Hachigan LLP, to follow suit with their own salary increases.
Ira Coleman, the chair at McDermot Will & Emery LLP, told the media, “We are so happy to be in a position to be able to reward our hardworking, best-in-class associates in this way. We see your amazing level of commitment and know you are ‘all in’ and very aligned with our plans to be the number one career accelerant in the legal profession”.
Not all firms, however, will be able to compete. Shannan Rahman, a managing partner with the Atlanta-based legal recruitment firm Partners Group, said, “non-elite firms are kind of putting their hands up, like ‘we don’t want to play this game.’ Particularly at firms that aren’t the Cravaths and that have that level of profit. I think you’re going to get more and more pushback from partners”.
Non-elite firms are going to have to look for other ways to not only attract top attorneys to their firms but keep them around. Attorneys are well-aware of the significant pay increases that may await them at these elite firms, but it’s important to note that many non-elite firms still maintain healthy business models and a wealth of legal talent.