Bain & Company

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This article is about the management consulting company. For the investment firm, see Bain Capital.
Bain & Company
Incorporated partnership
Industry Management consulting
Founded 1973
Headquarters Boston, Massachusetts, U.S.
Products Management consulting services
Number of employees
5,700 employees worldwide
Slogan Shared Ambition, True Results

Bain & Company is a global management consulting firm headquartered in Boston, Massachusetts. It provides advisory services to businesses, nonprofit organizations, and governments, and is one of the Big Three management consulting firms. Bain has 53 offices in 34 countries[1] and more than 5,700 employees.



Bain & Company was established in 1973 by a group of seven former partners from the Boston Consulting Group headed by Bill Bain.

Under Bain's direction, the firm implemented a number of practices that were unusual to the consulting industry in its early years. Notably, Bain & Co. would work with only one client per industry to avoid potential conflicts of interest.[2] Partners did not carry business cards and clients were referred to by code names to enforce client confidentiality. The company won clients by boardroom referrals rather than marketing, and claimed its consultants worked on increasing a company's market value rather than simply handing clients a list of recommendations.[3] To win business, Bain demonstrated the increase in the price of their clients' stocks relative to the Dow Jones Industrial Average.[4]

The firm's founding was followed by a period of growth in the late 1970s and early 1980s as the firm opened offices in Menlo Park, California, London, Munich, Paris, and Tokyo.

Another consulting approach used at Bain & Co. was accepting equity in lieu of fixed fees. An estimated 10% of Bain's revenue is derived from this equity participation or "success fees". For example, the firm took an ownership stake in fruit processor Del Monte Foods while working to revamp the company's strategy.[5] "Coming into a leveraged buyout situation is never easy", said 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."


Even though business was sluggish and the company was overstaffed, Bain had to turn away business due to its one-client-per-industry restriction. Competition increased as other firms also adopted Bain’s implementation-focused strategy, and internal infighting among the senior partnership threatened to break up the firm. In response, Bain & Co. was formally incorporated in 1985 and, over the course of two years, an 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.[2]

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.[6]


With the company 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 settlement between the Bain partnership and the firm's lenders, including a $10 million reduction in the $38 million Bain owed the Bank of New England,[7] which by that time had been seized by the FDIC and placed in Chapter 7 liquidation. Romney was able to negotiate this reduction in the debt amount with the FDIC by threatening to use the remaining cash that Bain had on hand as bonuses for Bain executives.[8] Bain & Company paid Bain Capital a fee of $4 million for Romney's services.[8]

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".[9] 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.[3]

Although in the role for just one year before returning to Bain Capital, Romney's tenure resulted in three changes to firm governance. 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[9]). 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 became profitable again and stemmed partner defections.[9]

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 took a lead role in keeping senior partners from leaving the firm; as chairman, she became the first female to lead one of the major consulting firms. For the past several years, Gadiesh has been on the annual Forbes list of the 100 Most Powerful Women in Business and serves on the board of several organizations, including the World Economic Forum.[3]

Under Gadiesh and MD Tom Tierney, Bain simultaneously loosened its restrictions around the one-client-per-industry policy, 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.[3]


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 to all the major consulting players. In response, the firm invested 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.[citation needed]

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" to 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.[citation needed]


In February 2013, Bain & Company co-signed an amicus brief to the Supreme Court of the United States along with 277 other companies supporting overturning of the Defense of Marriage Act.[10]

Relationship with Bain Capital[edit]

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.[11]

Bain Capital was founded in 1984 by several former Bain & Co. partners that included Mitt Romney (later to become the 70th Governor of Massachusetts and candidate for President of the United States), T. Coleman Andrews III, and Eric Kriss.[4] On account of these shared roots, Bain & Co. still maintains a strong institutional relationship with Bain Capital. Many current Bain Capital managing directors and professional staffers began their business careers at Bain & Co.[12]

Recruitment and professional advancement[edit]

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."[13]

An entry-level Associate Consultant (AC) is typically a graduate from an upper-tier undergraduate institution. 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 plus for the job. The AC program at Bain is extremely competitive with an acceptance rate of less than 1% from top tier colleges.

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 or 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 SACs either leave Bain to attend graduate school (top-performing SACs may receive funding for graduate business studies) or join another company. Some SACs choose to stay on for a fourth year; high-performing SACs may be promoted directly to Consultant, the post-MBA position.[citation needed]

Those individuals that choose to join Bain after completing their MBA or other professional/graduate training enter in the Consultant role. Increasing responsibility over planning and managing leads to a Case Team Leader (CTL) role. Most CTLs leave Bain to pursue junior management positions in industry or finance; some CTLs continue on to a Manager role at Bain. Managers are increasingly exposed to clients, and several years in the Manager role with demonstrated ability to build and manage client relationships may lead to a client-facing Principal role followed by election to Partner.[citation needed]

As an incorporated partnership, Bain allows partners to hold an equity stake in the firm. Partners have the opportunity to be promoted to Director, a senior partnership role, or Managing Director, an executive head of a country or region.[citation needed]

Notable current and former employees[edit]

Industry and finance[edit]

Politics and public service[edit]

Other notable people[edit]

Past controversies[edit]

The Guinness share-trading fraud was a 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 had 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). 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.[14]

Sir Jack Lyons and "the Guinness Four"[edit]

Sir Jack Lyons, whom Bain hired to help build its consulting practice in Britain, 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. He lost his knighthood and was fined £3,000,000 plus £1,000,000 prosecution costs.[15]

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

Value Partners case[edit]


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.[16]

Value Partners, which was established in 1993, had expanded its operations to five offices worldwide with 80 staff. In 1994, Value Partners opened an office in São Paulo, Brazil. By 1997, Value Partners' Brazilian office was thriving and had grown to 25 staff.[16]

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.[16]

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.[16]

Post-trial outcome[edit]

In 2002 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.[17]

Bain's post-trial motions were denied, and Bain appealed to the First Circuit U.S. Court of Appeals. Value Partners filed a cross-appeal, contesting the District Court's denial of its companion claim for treble damages for unfair competition under Massachusetts law.[17]


  1. ^ "Worldwide offices". Bain & Company. Retrieved 2012-01-30. 
  2. ^ a b Naficy, Mariam. "The Fast Track", 1997.
  3. ^ a b c d Jack Sweeney (February 2001). "Raising Bain". Consulting Magazine. Archived from the original on 2007-08-15. Retrieved 2012-01-30. 
  4. ^ a b Liz Roman Gallese (September 24, 1989). "Counselor To The King". New York Times. Retrieved 2012-01-30. 
  5. ^ "Del Monte Foods S-1 Registration". EDGAR Online, Inc. July 24, 1998. Retrieved 2012-01-30. 
  6. ^ Tim McLaughlin (July 20, 2009). "Long-failed Bank of New England still pays dividends". Boston Business Journal. Retrieved 2012-01-30. 
  7. ^ Schoenberg, Shira (July 15, 2011). "Romney accused of getting a ‘bailout’". Boston Globe. Retrieved 2012-01-30. 
  8. ^ a b Tim Dickinson (August 29, 2012). "The Federal Bailout That Saved Mitt Romney". Rolling Stone (magazine). Retrieved 2012-08-29. 
  9. ^ a b c Matthew Rees (December 1, 2006). "Mister Powerpoint Goes to Washington". The American (magazine). Retrieved 2012-01-30. 
  10. ^ "Windsor: Amicus Brief of 278 Employers". Retrieved 2013-02-27. 
  11. ^ "About Bain Capital". Retrieved 2012-01-30. 
  12. ^ "Senior Professionals". Retrieved 2012-01-30. 
  13. ^ "Ask the experts: MBAs". February 1, 2007. Retrieved 2012-01-30. 
  14. ^ Nancy J. Perry (April 27, 1987). "A consulting firm too hot to handle? Bain & Co. gets its hands deep in the trousers of client companies, says an executive who knows it well. Maybe too deep, the Guinness scandal suggests.". CNN. Retrieved 2012-01-30. 
  15. ^ "'Guinness Four' begin appeal". London: Mail Online. Retrieved 2012-01-30. 
  16. ^ a b c d "Value Partners Files Suit Against Bain & Company for Theft of Brazilian Office". PR Newswire. August 18, 1998. Retrieved 2012-01-30. 
  17. ^ a b "Weil, Gotshal & Manges : Value Partners, et ano. v. Bain & Company, Inc.". Weil, Gotshal & Manges. Retrieved 2012-01-30. [dead link]

External links[edit]