Turnover at one-firm firms is clearly more carefully managed than it is among competitors. Those one-firm firms that do enforce an up-or-out system (McKinsey and Andersen) work actively to place their alumni in good positions, preferably with favored clients. McKinsey’s regular alumni reunions, a vivid demonstration of its success in breeding loyalty to the firm, are held two or three times a year. In part, due to the caring approach taken to junior staff, one-firm firms are able to achieve a very profitable high-leverage strategy (ie., high ratio of junior to senior staff) without excessive pressures for growth to provide promotion opportunities.

Excerpted from ‘Managing the Professional Service Firm’ by David Maister, page 308