Business Communication and Character

McKinsey may be the first consulting firm held criminally responsible for giving advice that led to a client’s criminal activity. As a result of the deferred prosecution agreement, we see a clear admission of guilt for the firm’s role in the opioid crisis. The statement offers an example of demonstrating accountability and compassion, particularly when compared to statements about previous settlements.

Pages from a McKinsey deck encouraging aggressive sales of opioids served as the introduction to Chapter 10 of the 11th edition of Business Communication and Character. Since then, McKinsey has settled other lawsuits, and each statement is posted on the firm’s website. Here are statements after other settlements for students to compare:

February 2021 (State Attorney Generals and others): Former CEO Kevin Sneader wrote:

We deeply regret that we did not adequately acknowledge the tragic consequences of the epidemic unfolding in our communities. With this agreement, we hope to be part of the solution to the opioid crisis in the U.S. . . . As I have said previously, we are determined to take the steps necessary to strengthen our firm’s risk management policies and culture. We will build on the steps we have already taken to learn from past mistakes, and ensure we consistently meet the high standards our firm has always aspired to.

Around that time, Sneader also wrote to staff:

Indeed, while our past work with opioid manufacturers was lawful and never intended to do harm, we have always held ourselves to a higher bar. We fell short of that bar. We did not adequately acknowledge the epidemic unfolding in our communities or the terrible impact of opioid misuse and addiction, and for that I am deeply sorry.

March 2021 (Nevada): This statement repeats part of the February 2021 quote and includes this statement:

As we noted in connection with the prior settlements, McKinsey believes its past work was lawful and has denied allegations to the contrary. The settlement agreement with Nevada, like those reached in February, contains no admission of wrongdoing or liability.

September 2023 (Political subdivisions and school districts): This statement mentions another settlement with Native American Tribes but includes no quote. This one sounds more defensive:

As we have stated previously, we continue to believe that our past work was lawful and deny allegations to the contrary, and the settlement contains no admission of liability or wrongdoing. The firm entered into this agreement to avoid the time and expense of protracted litigation and, in the process, to support the efforts of these political subdivisions and school districts to help those affected by the opioid epidemic.

December 2024 (Deferred Prosecution Agreement with the U.S. Department of Justice): The purpose of this $650 million agreement is to avoid criminal prosecution, although one partner will plead guilty to obstructing evidence (deleting documents). The statement starts with this paragraph, with no sign of the previous “deny allegations” language:

We are deeply sorry for our past client service to Purdue Pharma and the actions of a former partner who deleted documents related to his work for that client. We should have appreciated the harm opioids were causing in our society and we should not have undertaken sales and marketing work for Purdue Pharma. This terrible public health crisis and our past work for opioid manufacturers will always be a source of profound regret for our firm.

This brings McKinsey’s settlement total to more than $1.5 billion in addition to the reputational damage. More significantly, other management consulting firms are now on notice. As U.S. Attorney Joshua Levy of Massachusetts said, “We will cut through the slick PowerPoints and the consultant speak and hold you accountable for your conduct if you engage in criminal violations.”

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