LECG Corporation

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LECG Corporation
Type Public (OTC Pink: XPRT)
Industry Management consulting services, Business Advisory Services
Founded 1988
Headquarters Emeryville, California
34 offices worldwide
Key people Bruce Rogoff, Chief Executive Officer
Warren Barratt, Chief Financial Officer
David Teece, Co-Founder and Vice Chairman
Products Testimony and analysis of corporate and government issues
Website www.lecg.com

LECG Corporation was a global expert services and consulting firm with more than 700 employees in 11 countries. It provided independent expert testimony on behalf of corporations, produced authoritative studies for industry, and conducted economic and financial analyses on disputes and issues,[1] and provided strategic advisory and financial advisory services to clients. The company's clients included Fortune Global 500 corporations, major law firms, local, state and federal governments and agencies worldwide. In March 2011 the company was liquidated as it was unable to service its debt obligations.

History[edit]

Faculty from the University of California at Berkeley formed The Law and Economics Consulting Group, Inc. in 1988. Original services included independent expert testimony, authoritative studies and advisory services for regulatory, business and judicial clients.[2]

The firm was renamed LECG in October, 1997 and shortly thereafter it went public through an IPO on the NYSE. Navigant Consulting, Inc. (NYSENCI) (then The Metzler Group, Inc.) purchased LECG in a deal valued at $214 million.

In October, 2000 the private equity fund Thoma Cressey Equity Partners and the management team of LECG announced the acquisition of assets from Navigant Consulting. At the time, the firm had more than 300 employees and focused on antitrust, deregulation, damage analysis, economic and financial modeling and intellectual property rights.[3]

In 2003 the firm went public again, this time on the NASDAQ. The firm made acquisitions to expand its geographic footprint and expand its lines of business including:

  • Economic Analysis LLC
  • Low Rosen Taylor Soriano
  • Silicon Valley Expert Witness Group
  • Washington Advisory Group, LLC
  • Beach & Company International LP
  • Lancaster Consulting, LLC
  • BMB Mack Barclay, Inc
  • The Secura Group LLC[4]

As LECG expanded beyond its original core of economic expert witness work through these acquisitions, some mid- and upper-level economists left the firm for competitors or to form independent firms. For example, one of the firm's founders, Professor Richard Gilbert,[5] left LECG for the firm now known as Compass Lexecon.[6] As another example, Dr. Vince O'Brien[7] and several of the firm's Principals left to form OSKR,[8] a boutique firm that patterned its incentive culture as "LECG 2.0." At a later date, the firm itself severed ties with the most active of the firm's founders, Professor David Teece. After a cooling-off period, Teece founded Berkeley Research Group, LLC, where many former LECG economists now work.

On August 18, 2009 LECG announced a merger with SMART Business Advisory & Consulting, LLC, a privately held provider of business advisory services. LECG received a $25 million cash investment from SMART's majority shareholder, Great Hill Partners in exchange for approximately 10.9 million shares of common stock and 6.3 million shares of preferred stock in the combined company.[9] On March 10, 2010 the merger was finalized and Steve Samek, former CEO of SMART and former US Managing Partner for Arthur Andersen assumed the role of CEO. On July 1, 2010, Yuri Rozenfeld assumed the role of General Counsel and Corporate Secretary, replacing Deanne Tully. On August 15, 2010, Warren Barratt assumed the role of Chief Financial Officer, replacing Steve Fife.[10] The firm closed its Emeryville, California office and relocated its back-office to SMART's headquarters in Devon, Pennsylvania.[11]

In July, 2010, LECG completed its first transaction since completing the merger with SMART, when it acquired Bourne, a UK Tax consultancy.[12]

The term loan assumed from SMART as a consequence of the merger agreement ultimately proved to be the company’s death knell. Continued losses, weak demand, high administration costs and consultant departures, resulted in the forced liquidation of the merged entity so as to satisfy interest and principal obligations due March 31, 2011. Practices were rapidly sold off to meet the deadline as no alternate sources of refinance materialized with the company announcing there would be no proceeds for common stockholders as it winds-down its business.[13] On April 5, 2011, Steve Samek announced his resignation along with that of CFO Warren D. Barratt.

LECG was delisted from the NASDAQ on April 21, 2011, and has employed the Staten Group, a liquidation firm, to help dissolve its business.

Competitors[edit]

References[edit]

  1. ^ "LECG 2007 Financial Release". Retrieved 2008-06-20. 
  2. ^ "About LECG". Retrieved 2009-12-30. 
  3. ^ "Thoma Cressey Equity Partners Funds Acquisition of LECG from Navigant Consulting". HighBeam Research. Retrieved 2009-12-30. 
  4. ^ "LECG to buy Secura Group". San Francisco Business Times. 2007-03-15. 
  5. ^ [1]
  6. ^ [2]
  7. ^ [3]
  8. ^ [4]
  9. ^ http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=BCOM&date=20090818&id=10280546
  10. ^ http://www.marketwire.com/press-release/LECG-Announces-New-Chief-Financial-Officer-and-General-Counsel-NASDAQ-XPRT-1266939.htm
  11. ^ http://philadelphia.bizjournals.com/sanfrancisco/stories/2010/04/26/story17.html.  Missing or empty |title= (help)[dead link]
  12. ^ http://philadelphia.bizjournals.com/sanfrancisco/stories/2010/06/21/daily26.html.  Missing or empty |title= (help)[dead link]
  13. ^ http://finance.yahoo.com/news/LECG-Provides-Update-on-State-iw-3429020450.html?x=0&.v=1