Bain & Company

Bain & Company
Bain & Company
Type Incorporated Partnership
Industry Management Consulting
Founded 1973
Headquarters Boston, Massachusetts, U.S.
Key people Orit Gadiesh
(Chairman of the Board)
Steve Ellis
(Worldwide Managing Director)
Products Management consulting services
Revenue $2.0 billion (est. 2007)
Employees 5,500 employees worldwide

Bain & Company is a global management consulting firm headquartered in Boston, Massachusetts. Bain is considered one of the most prestigious consulting firms in the world,[1] with 47 offices in 30 countries[2] and over 5,500 professionals on staff globally. Bain currently ranks first on the Vault Consulting 50,[3] and for nine consecutive years, has been named the Best Firm to Work For by Consulting Magazine.[4]




Bain & Company was established in 1973 by a group of seven former partners from the Boston Consulting Group headed by Bill Bain. The company was headquartered in Lexington, MA on Militia Drive.

Under Bain’s direction, the firm implemented a number of unconventional practices in its early years. Notably, Bain & Co. would only work with one client per industry to avoid potential conflicts of interest.[5] Partners did not carry business cards and clients were referred to by code names, further demonstrating its reputation for enforcing client confidentiality. The company preferred to win work by boardroom referrals rather than marketing itself, sometimes landing clients by offering several weeks of work at no cost until proving the results of its services. Bain consultants preferred to work on increasing a company’s market value rather than simply handing clients a list of recommendations.[6] To win business, Bain demonstrated the increase in stock price of Bain's clients relative to the Dow Jones Industrial Average.[7]

The firm’s founding was followed by a period of growth in the late 1970s and early 1980s as the firm opened offices in London, Munich, San Francisco, and Tokyo.

Another innovative consulting approach that Bain & Co. pioneered was aligning its incentives with its clients’ performance by occasionally accepting equity in lieu of fixed fees. An estimated 10% of Bain's revenue is derived from this equity participation or "success fees." This model has proved successful for both Bain and its clients. For example, the firm took an ownership stake in fruit processor Del Monte Foods while working to revamp the company’s strategy.[8] "Coming into a leveraged buyout situation is never easy," says Del Monte CEO Richard Wolford. "Knowing Bain and their desire to deliver results, they probably would have provided ongoing support regardless. But the fact they own a stake doesn't hurt."


After a successful start, Bain & Co. found itself facing a growing list of challenges in the late 1980s. In the midst of sluggish business conditions and overstaffing, Bain also faced the dilemma of having to turn away business due to its one-client-per-industry restriction. Competition increased as other firms copied Bain’s implementation-focused strategy.

However daunting these external challenges, it was internal infighting among the senior partnership that threatened to tear the firm apart. In response, Bain & Co. was formally incorporated in 1985 and, over the course of two years, the Employee Stock Ownership Plan (ESOP) was established. Bain's senior partners began borrowing against their equity for cash, eventually leaving the firm with a heavy debt load.[5]

As business slowed, this debt load began to squeeze the firm. Bain ultimately found itself in non-compliance with Bank of New England loan covenants. The resulting debt write-off at the Bank of New England eventually resulted in that bank's failure in 1991.[9]


Facing financial duress, Bain Capital partner Mitt Romney was asked to rejoin and lead Bain & Co. as interim CEO. Bringing along two lieutenants from Bain Capital, Romney began a traveling campaign to rally employees at all Bain offices globally. Romney also negotiated a complex settlement between the Bain partnership and the firm's lenders.

The Boston Globe pointed out that:

“Over several weeks, Romney managed negotiations with the banks and among the partners... The moment came when negotiations produced a package in which Bill Bain and the founding partners would give up control of the firm, turning back $30 million they had taken from the ESOP and $100 million in notes they held against the firm.”

Romney’s plan involved "a complicated restructuring of the firm’s stock-ownership plan, real-estate holdings, bank loans, and money still owed to partners".[10] To avoid the financial crisis that a buyout would have triggered, the group of founding partners agreed to return about $100M cash and forgive outstanding debt.[6]

Although in the role for just one year before returning to Bain Capital, Romney’s work had three profound impacts on the firm. First, ownership was officially shifted from the owners to the firm’s 70 general partners. Second, transparency in the firm’s finances increased dramatically (e.g. partners were able to know each other’s salaries[10]). Third, Bill Bain relinquished ownership in the firm that carried his name.

Orit Gadiesh at the World Economic Forum in Davos, Switzerland, 2007.

Within a year, Bain bounced back to profitability without major partner defections,[10] and the groundwork was laid for a period of steady growth.

In 1993, the head position was split into two roles – an executive head (Worldwide Managing Director) and a non-executive head (Chairman of the Board). Orit Gadiesh, named Bain’s first Chairman in 1993, was fundamental in maintaining Bain’s culture. After spending two years in military intelligence for the Israeli army and earning a degree in psychology from Hebrew University, Gadiesh enrolled in the Harvard Business School and graduated as a Baker Scholar. As a junior partner during the turnaround, she had been instrumental in keeping senior partners from leaving the firm; as chairman, she became the first female to lead one of the major consulting firms. Gadiesh was known throughout the firm for her passionate leadership and "True North" philosophy, which the firm still embraces. For the past several years, she has landed among Forbes list of the 100 Most Powerful Women in Business and is on the board of several organizations, including the World Economic Forum.[6]

Under Gadiesh and MD Tom Tierney, Bain simultaneously loosened its restrictions around the one-client-per-industry policy, by assuring clients that the firm's strict internal professional standards prohibited the circulation of client data internally, and expanded its presence worldwide throughout the 1990s. The firm grew by 25 percent per year, expanded its office count from 12 to 26, and increased partnership from about 70 to nearly 200.[6]


The new millennium began with Bain & Co. guiding its clients through managing the changes involved in the "New Economy." The economic slowdown following the dotcom boom was painful on all the major consulting players; however, Bain’s previous experiences with contraction left the firm zealous in avoiding layoffs. The firm weathered the economic downturn by investing in its leadership ranks with internal promotions and key external hires. Subsequently, the economic recovery has been followed by another period of sustained growth. In 2007, the firm expanded its global footprint to 37 offices, with office openings in Kiev, Moscow, Helsinki, and Frankfurt. The worldwide consulting headcount increased to approximately 2,700. Bain now has more offices in Europe than in any other region; the upshot of which being more revenue comes from its Continental operations than either the North American or Asian markets.

The new millennium also brought changes to Bain’s traditional generalist approach to solving client issues. Due to increasing specialization in the consulting industry, the firm developed niche "Practice Areas" in order to better serve the varying needs of its increasingly diverse multinational and local client base. Through targeted industry hires, Bain added industry experts to each of these "Practice Areas", significantly raising its profile in fields such as financial services, healthcare, information technology and media/entertainment.

Notable controversies

The Guinness affair


The Guinness share-trading fraud is an infamous corporate takeover scandal of the 1980s. In April 1986, the British government launched an investigation into Guinness' purchase of Distillers Company for equity valued at $3.8 billion. The government suspected that Guinness may have illegally inflated its stock price to sway Distillers' shareholders away from a competing offer from the Argyll Group, a Scottish food retailer.

Several executives were implicated in the investigation: the Guinness CEO Ernest Saunders, several top executives at Morgan Grenfell (Guinness's investment bank), and Guinness' director of financial strategy & development and then Bain VP Olivier Roux (who had temporarily been assigned to Guinness by Bain). Unfortunately, Roux was still on Bain's payroll at the time, prompting public criticism that Bain was guilty of a conflict of interest and leaving Bain vulnerable to lawsuits. Roux later resigned his posts at both Guinness and Bain.[11]

Sir Jack Lyons & "the Guinness Four"

In addition to Roux's involvement, Sir Jack Lyons, whom Bain hired to help build its consulting practice in Britain, had admitted to receiving more than $3 million in fees from Guinness for "advisory services." His company, J. Lyons Chamberlayne, was also under investigation for accepting another $480,000 from Guinness linked to improper share buying. Bain fired Lyons in January 1987; he was later charged (along with Ernest Saunders, Gerald Ronson, and Anthony Parnes). The four men became known as "the Guinness Four." All men were convicted but Lyons was not imprisoned due to ill health. However, he lost his knighthood and was fined £3,000,000 plus £1,000,000 prosecution costs.[12]

Due to Roux's resignation and Lyon's swift termination, Bain & Co. was never accused of any wrongdoing in the Guinness affair.

The Value Partners case


In 1998, Value Partners, a smaller management consulting firm based in Milan, filed a lawsuit in U.S. federal court against Bain & Co., alleging Bain's theft of Value Partners' office in São Paulo, Brazil, including its clients, employees, and confidential and proprietary information.[13]

Value Partners, which was established in 1993, had expanded its operations to five offices worldwide with 80 professionals. In 1994, Value Partners opened an office in São Paulo, Brazil. By 1997, Value Partners' Brazilian office was thriving and had grown to 25 professionals.[13]

Value Partners claimed that Bain unlawfully caused members of Value Partners São Paulo office to enter into a conspiracy with Bain to take-over Value Partners' Brazilian office. Bain, which at the time had no business presence in Brazil, allegedly determined that it thereby could expand into the region, without incurring the associated start-up costs and risks of a new branch office.[13]

According to the complaint, unbeknownst to fellow members of Value Partners at the time, the co-conspirators remained with Value Partners even after agreeing to join Bain, so as to secretly work from within Value Partners to better effectuate the wholesale misappropriation of Value Partners' São Paulo office.[13]

Post-trial outcome

Following a four-week trial, the jury found Bain liable for unfair competition and tortious interference under Brazilian law and awarded Value Partners $10 million in compensatory damages (the full award requested by Value Partners at trial). Value Partners was also awarded approximately $2.5 million in prejudgment interest.[14]

Bain’s post-trial motions were denied, and Bain had appealed to the U.S. Court of Appeals for the First Circuit. Value Partners had filed a cross-appeal, contesting the District Court’s denial of its companion claim for treble damages for unfair competition under Massachusetts law.[14]

Global offices

North America

United States Atlanta
United States Boston
United States Chicago

United States Dallas
United States Houston
United States Los Angeles

Mexico Mexico City
United States New York
United States Palo Alto

United States San Francisco
Canada Toronto

South America

Argentina Buenos Aires

Brazil Rio de Janeiro

Brazil São Paulo


Netherlands Amsterdam
Belgium Brussels
Denmark Copenhagen
Germany Düsseldorf
Germany Frankfurt am Main

Finland Helsinki
Ukraine Kiev
United Kingdom London
Spain Madrid

Italy Milan
Russia Moscow
Germany Munich
Norway Oslo
Turkey Istanbul

France Paris
Italy Rome
Sweden Stockholm
Poland Warsaw
Switzerland Zurich

Africa & Middle East

United Arab Emirates Dubai

South Africa Johannesburg

Asia & Oceania

Thailand Bangkok
China Beijing
India Gurgaon (Bain Capability Center)
Hong Kong Hong Kong

Malaysia Kuala Lumpur
Australia Melbourne
India Mumbai

India New Delhi
Australia Perth
China Shanghai
Singapore Singapore

South Korea Seoul
Australia Sydney
Japan Tokyo

Relationship with Bain Capital

In spite of popular belief, Bain & Co. is an entirely separate entity from Bain Capital. Bain Capital is a private investment firm specializing in private equity (PE), public equity, leveraged debt asset, venture capital, and absolute return investments. Bain Capital does not provide management consulting services to its clients.[15]

Bain Capital was founded in 1984 by several former Bain & Co. partners that include Mitt Romney (later to become the 70th Governor of Massachusetts), T. Coleman Andrews III, and Eric Kriss.[7] On account of these shared roots, Bain & Co. still maintains a strong institutional relationship with Bain Capital. Many current Bain Capital MD's and professional staffers began their business careers at Bain & Co.[16]


Three firms compete in providing management consulting services to the Fortune 500 set and consistently recruit top talent from elite colleges and professional/graduate schools globally: McKinsey & Company, The Boston Consulting Group (BCG), and Bain & Company. Consequently, this top tier of the consulting industry is commonly termed the MBB by executive recruiters and industry insiders.[17]

Although these three firms compete directly across all major sectors and geographies, each firm possesses its own unique profile that defines its sustainable competitive advantage in the marketplace. Having pioneered private equity (PE) consulting, Bain is the strongest player in the PE/LBO (Leveraged BuyOut) space, servicing most of the major private investment firms globally; Bain also displays competitive strength in the closely related mergers & acquisitions (M&A), organizational/turnaround and financial services consulting spaces. Geographically, Bain displays a strong market share in the Americas and Europe but is weak in Asia and other emerging markets.

McKinsey & Co., on account of its experience, deep board/C-level relationships and scale, is currently the strongest player in the MBB tier with particular strongholds in general strategy, financial services, operations and IT (through its BTO subsidiary). McKinsey holds the highest market share among the three firms globally with geographic strength across the Americas, Europe and Asia.

BCG displays competitive strength in general strategy and holds the second-highest market share globally after McKinsey.

Recruitment & professional advancement


In a Financial Times interview, Bain partner Bill Neuenfeldt identified the desired qualities in potential hires as “intelligence, integrity, passion and the ambition to make a difference.”[18]

In addition to these basic job requirements, an entry-level Associate Consultant (AC) is typically a graduate from an elite undergraduate institution with a demonstrable enthusiasm for problem-solving and a basic analytical skill-set. No specific major is required for the AC role, though an academic background related to data-based analysis (e.g., economics, business, sciences or engineering) can be a value-add on the job.

Professional advancement

The Associate Consultant (AC) role typically lasts for 24 months, after which most ACs are promoted to the Senior Associate Consultant (SAC) role. An SAC may have the opportunity to spend six months in a Bain office of his/her choice, leave Bain for six months to work for another company or non-profit organization, or take a two month sabbatical for purely personal pursuits. After 36 months at Bain, most SAC's either leave Bain to attend graduate school (top-performing SAC's may receive funding for graduate business studies) or join another company. Some SAC's choose to stay on for a fourth year; outstanding SAC's may be promoted directly to Consultant, the post-MBA position.

Those individuals that choose to join Bain after completing their MBA or other professional/graduate training enter in the Consultant role, where they are tasked with planning and managing the analytical process that produces key insights for Bain's clients. Increasing responsibility over planning and managing this analytical process in the Consultant role leads to a Case Team Leader (CTL) role. Most CTL's leave Bain to pursue junior management positions in industry or finance; some CTL's continue on to a Manager role at Bain. Managers are tasked with overseeing several inter-related analytical processes and are increasingly exposed to clients. Several years in the Manager role with demonstrated potential to build and manage client relationships may lead to a client-facing Principal role followed by election to Partner.

As Bain & Co. is an incorporated partnership, each Partner holds an equity stake in the firm and may rise to Director (a senior partnership role) or Managing Director (an executive head of a country or region) depending upon their professional strengths and capacity to build/maintain high-level relationships.

Notable current & former employees

Industry & finance

Politics & public service

Other notable people


  1. ^
  2. ^
  3. ^
  4. ^ Consulting Magazine:
  5. ^ a b Naficy, Mariam. "The Fast Track", 1997.
  6. ^ a b c d Sweeney, Jack. "Raising Bain." [1] Consulting Magazine, retrieved May 21, 2007.
  7. ^ a b "Counselor To The King," [2] New York Times, September 24, 1989 (retrieved December 13, 2007)
  8. ^ Del Monte Foods S-1 Registration [3] July 24, 1998 (retrieved December 13, 2007)
  9. ^
  10. ^ a b c Rees, Matthew. "Mister Powerpoint Goes to Washington".[4], retrieved May 21, 2007.
  11. ^
  12. ^
  13. ^ a b c d "Value Partners Files Suit Against Bain & Company for Theft of Brazilian Office". PR Newswire. August 18, 1998. Retrieved September 20, 2011. 
  14. ^ a b "Weil, Gotshal & Manges : Value Partners, et ano. v. Bain & Company, Inc.". Weil, Gotshal & Manges. Retrieved September 20, 2011. 
  15. ^
  16. ^
  17. ^
  18. ^ "Ask the experts: MBAs," [5], January 26, 2007 (retrieved December 12, 2007)

External links

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