In my experience McKinsey (like most consultancies) does almost all its hiring directly out of college or grad school. Hiring outside those pipelines was becoming a little more common when I left, but I'd imagine it's still probably <10% of the total.
I don't think there'd be much hiring of already 'corrupt' people, but it's pretty reasonable that when you have a very competitive and prestigious position, on average, you might find that more 'cutthroat' people are more willing to invest time and energy to getting hired.
I worked at McKinsey for three years. Here are a few thoughts. Sorry it's so long, didn't have time to make it more concise.
- I'd guess >95% of people never run into anything morally questionable while there. My teams always tried to do their best and I never felt like we were helping achieve any sort of nefarious goal. Most of the time I think we were worth the money for our clients.
- I do think the culture makes it more likely for individuals to take risks that may end up getting them in trouble. There's a lot of pressure to succeed, and a lot of money (and prestige) at stake. It's easy to imagine individuals cracking under that pressure and making bad choices, and that the rest of the team might fall in line so that they can also succeed. I'd put most of the blame here on McKinsey and some on the individuals involved - maybe 70/30.
- I'd guess most other consultancies have bodies hidden somewhere that are similar to McKinsey's (questionable contracts, outright fraud, botched projects, moral failures, etc).
- The closest I got to something morally questionable was a project where we had a huge contract to help the client cut costs, including firing people. You'd think our budget would have been on the chopping block too, but I guess not. Obviously this left a bad taste in most of our mouths. I feel we tried to do our best, but I doubt we were worth our fees in that instance. The company eventually merged with another, so even more people were fired in the end.
- The 'internal firewalls' are real - if you've been on a project for one big company in an industry, they won't let you work for a project with another one. There were internal experts we couldn't talk to because of concerns in this area. I'm sure this hasn't been 100% true 100% of the time, but generally I think this is a real concern for McK (if they couldn't guarantee this they'd lose client trust) so they make a real effort to prevent it.
- While I was there, projects with the tobacco companies were famous for having better work/life balance than almost any other project. They were hard to staff because so many junior consultants refused on ethical grounds, so I guess this was a carrot?
- I can mostly only speak to the US. I heard some jawdropping stories about how reliant the Saudi government is on McKinsey and other consultants to get almost any work done, even the most basic things. But that's all secondhand gossip. In general, the sense I get is that the standard in the US offices doesn't carry over to every global location, but I don't have the personal experience to say that for sure.
I don't think there'd be much hiring of already 'corrupt' people, but it's pretty reasonable that when you have a very competitive and prestigious position, on average, you might find that more 'cutthroat' people are more willing to invest time and energy to getting hired.