Merged firm moves HQ to Main Line from Calif.
Consulting "took a major haircut"
Business consulting firm LECG Corp., Emeryville, Calif., yesterday completed its $33 million stock acquisition of Smart Business Advisory & Consulting LLC, the largest independent accounting firm in the Philadelphia area, and said it will move its corporate headquarters to Smart's head office on the Upper Main Line. Also, Smart shareholder Great Hill Partners has invested $25 million in new preferred shares of the firm, which is being called LECG Smart, for now. Statement here.
"We're moving it to Devon, and the reason is strategic: 65 percent of our combined business is on the East Coast or in Europe," Steve Samek, the former Smart chief executive who will head the combined company, told me. A Chicago native, he's leased an apartment in Wayne, "but I'm on the road 22 days a month" visiting the group's 39 U.S. and foreign offices, which serve legal and corporate clients.
The consulting business "took a major haircut" in last year's recession, Samek said. Revenues at LECG's economics-consulting, litigation support and business consulting units has fallen to $21 million a month, from $30 million in early 2008. Acounting, tax, risk and business consulting revenues for Smart, which is less than half LECG's size, have fallen less severely, Samek says. The combined companies employ 1,450, down from 1,700 before the merger. A few dozen additional cuts are expected as they shut redundant offices.
Samek expects a long, slow recovery. "We're winning more work," but legal cases, for example, face long delays. "Partly it's the economy, partly it's the new way companies are managing" their legal, technology and consulting contracts after a couple of years of tough times.