Good day everyone and welcome to the FTI Consulting 2009 second quarter conference call. As a reminder, this call is being recorded. Now, for opening remarks and introductions, I would like to turn the conference over to Eric Boyriven of FD. Please go ahead.

Good morning and welcome to the FTI Consulting conference call to discuss the company’s 2009 second quarter results that we’ve reported this morning. Management will begin with formal remarks, after which they will take your questions. Before we begin, I would like to remind everyone that this conference call may include forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 that involve uncertainties and risks. Forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future revenues, future results and performance, expectations, plans or intentions relating to acquisitions and other matters, business trends, and other information that is not historical, including statements regarding estimates of our future financial results. Words such as estimates, expects, anticipates, projects, plans, intends, believes, forecasts and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements including without limitation estimates of our future financial results are based upon our expectations at the time we make them and various assumptions. Our expectations, beliefs and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that management’s expectations, beliefs and projections will result or be achieved or that actual results will not differ from expectations. The company has experienced fluctuating revenue, operating income and cash flow in some prior periods and expects this will occur from time to time in the future. The company’s actual results may differ from our expectations. Further, preliminary results are subject to normal year-end adjustments. Other factors that could cause such differences include the current global financial crisis and economic conditions and crisis in and deterioration of the financial and real estate markets, the pace and timing of the consummation and integration of past and future…

Thank you. Good morning and thank you for joining us to discuss our second quarter 2009 earnings announced earlier this morning. I hope you’ve had a chance to review the press release. If you have not, it is available on our website at www.fticonsulting.com. With me this morning on the call are Dennis Shaughnessy, our Chairman; Jorge Celaya, our Chief Financial Officer; David Bannister, our Chief Administrative Officer; and Dom DiNapoli, our Chief Operating Officer. The second quarter marked another milestone for FTI. It confirmed the momentum we experienced in the first quarter as we rebounded from the unprecedented upheaval of the second half of 2008. The world continued to struggle to transition from the paralysis and dysfunction that were so pervasive from the depths of the credit crisis to a period in which companies are beginning to look past the crisis and are beginning to plan for a more normalized state of affairs. It is also a time in which the new administration is putting in place the funding and key appointments necessary to take a more active stance on regulatory affairs. And this new agency leaders have begun to articulate both their priorities for addressing the fallout of the credit crisis and their philosophical approach is to active participation in business and financial affairs. We think we are close to an inflection point in this transition, a point in which we are seeing the initial indications of how the next phase will look. A little later we will talk about how this may play out. First, however, let me briefly discuss our performance in the quarter. In short, we reported a quarter of records across the board, record revenues, record net income, record earnings per share and record EBITDA. Our revenues in the quarter were $360.5 million, representing…

Thank you. (Operator instructions). We will hear first from Andrew Fones of UBS.

Yes, thanks. Just in light of recent announcements from your peer group, I was wondering if you have take a look at your accounting for acquisition and outs and how comfortable you feel about that? Thanks.

Yes, we have reexamined our accounting treatments, reviewed it with our outside advisors. And again we believe we account for earn-outs in according with GAAP.

Okay, thanks. And then in terms of your bankruptcy, basically, it’s – I was wondering if you could just update us on the rate of a new business wins there? Thanks.

Yes, just for some simple statistics, in Corporate Finance in general, the second quarter – the new – number of new matters opened was 224 versus 202 last year and it was 224 versus 214 in the first quarter of 2009. Now interesting in that statistic as we talked about last time was the mix of matters. As compared to last year, we have 23 bankruptcy matters compared to 15 and we had 23 compared to 28 in the first quarter, so relative flat. You would always expect more in the first quarter, because seasonally that’s when people get their order to financials and that’s where retailers get the results, so that’s a very strong number. And out of non-bankruptcy restructuring, we have 62 in the second quarter this year versus 31 last year and we have 62 versus 78 in the first quarter, again very strong. What’s also interesting is that our TAS practice, our transaction and support practice also has started to pick up a little bit, where its number of cases looked very strong and it was 69 in the second quarter versus 50 in the first quarter, so we are seeing some pickup there as I again perhaps some – we are seeing a little bit of M&A activity.

Okay, thanks. And then just one final one, in terms of utilization, you mentioned in Economic Consulting, it was down a little bit sequentially on the headcount additions. But could you comment in terms of Forensic and Litigation and also the Corporate Finance Group, how much of that decline was seasonality and kind of how we trended through the quarter and perhaps the way you ended the quarter, what we might anticipate for Q3? Thanks.

I think I got a little bit of them. I think what we mentioned was FLC was down slightly in headcount by about nine people from last year and in that – but in that is the fact that probably they have repositioned about 60 or so people from being generalist into a more specialty practices.

Yes, I think in restructuring, they are actually ahead of their hiring plan for the year in the first half and I think the minor difference year-over-year really is just simply driven for the six months anyway is simply driven by new people coming on board. So we have been – as you can imagine Andrew, in this environment, we have been a very attractive place to interview with and so we are trying to be very aggressive when we see the right kind of people to bring them in even that accelerates the hiring faster than when they have programmed it over the whole higher.

Andrew, one thing you need to look at is the actual chargeable hours and notwithstanding utilizations being down, because in the headcount as we mentioned, hours are up and revenues are up.

Thank you.

We will move next to Tim McHugh of William Blair.

Yes, wanted to touch on the Technology business, you gave a good explanation of why the margins there improved. And I think in the past you have cautioned us against assuming a 40% margin was sustainable there though. Given the changes you have made, is that a potentially sustainable level now or would you caution us to expect a pullback again?

I would always caution against normalizing a profit margin that is 40% in the business whereas the standard for software and service and all would be more in the 30%, low 30s. So it was an exceptional performance. It had a number of drivers in there. And as we ramp up, we will be needing to invest in more people and things there, so I would think that that would not be necessarily the normalized margin.

And we have indicated – this is Jorge. We have indicated that the Tech Group will be between the 32% to high 30s to 40% EBITDA margins. One quarter does not, obviously is going to make the answer. It’s just part of what you are going to see. They tend to have some quarters large cases if they may ramp up whether it’s their consulting practice that’s ramping up or data gathering on a particular large case and that’s going to make the margins go up and down.

Okay. And then another margin question was the Communications segment, given the headcount reductions you had taken last quarter. I know you had hoped for some expense savings there, but yet the margins – the EBITDA seemed relatively flat even though revenue improved, any more color there?

Just a little bit. There is – this is one of the intricacies of becoming a global company when you have headcount reductions. For example outside the US specifically and the UK, people have a right to basically get a stay of their termination for a couple of months, so we have not seen quite the full effects of the headcount reductions we have done there. But I think realistically when you look at it it’s the level of activity. We think this is a great business, we think as we have said, we are beginning to see the signs where we can more fully deploy them and so we don’t want to lose anymore people. And in fact, we are in the market hopefully pickup great people that might become available, because they are not happy where they are. So we would be investing in this business for that inflection point that we have talked. We see a lot of promise for this business.

Okay. Thank you.

Our next question comes from Arnie Ursaner of CJS Securities.

Hi, good morning. Want to focus again on the Technology segment. You mentioned you had particularly strong software sales in the quarter. Can you give us any better feel for how that may have impacted margin?

Arnie, it’s Dave Bannister. The comment was specifically directed to the year-over-year results, where last year, of course, we did not have Attenex as part of the software offering in the quarter, whereas this year we did. So software sales as a percentage of the total revenue are up and that really explain part of the margin, because they carry a very high incremental margin.

And Arnie, it is Dennis. We are just now beginning to feel the benefits of integrating the two platforms. So the first quarter, we obviously spent a lot of time introducing the integrated product out into the marketplace and the second quarter was really the first opportunity to get some sell through.

Okay. And a more general question, were there any unusual one-time programs that ramped through in any of your segments that you particularly would like to highlight?

Well, I believe – this is Jorge. I believe we highlighted in the Tech segment we had high activity in the second request.

It wasn’t one – it wasn’t one large job, it was numerous second requests. And again, I think where we are seeing a lot of activity for them and where we see it in the second half is – as the government makes inquiries on a regulatory basis, so not even on an M&A, there is a massive document production that’s required and of course this is the power alley of this group especially where it’s global and it’s complex, so we would expect them to get more business that’s linked to the regulation towards the end of the year.

Yes, I am parking back to restructuring – where for about three quarters, we explained the way of success, but this is reminiscent of what used to be business as usual in terms of the second request, because we are seeing our case filed, build up and when we talk to M&A lawyers in the industry who are our good clients, they are seeing a definite pickup in M&A strategic and financial M&A activity picking up.

And that addition to the work that the Technology practice is doing with the forensic practice on the large litigation that we mentioned earlier.

Yes, I wanted to stay on it one more moment if I can. You obviously are guiding it – Jorge mentioned, you’ve talked about 32% to 40% margins and I am trying to understand the factors that would cause it to drift lower in the next few quarters, obviously one would be significant R&D expenditures. Can you quantify or give us a sense of what you spent in the quarter and how much we should expect and how long it would continue?

Yes, in the quarter, we spent approximately $5 million compared to approximately $2 million and change last year, Arnie, so it come close to a doubling.

And Arnie, it’s Dunn. As I think that’s going to be steady state right now because we are actually looking at releases that will be coming out of this R&D starting at the end of this year, so we would keep that spend up certainly through the end of the year.

Final question from me, the Fraud Enforcement and Recovery Act was passed on May 20th and it seems to give not only dramatically more funding, but also expands the liability to people that make false claims or statements. It would seem to me that that could cause a dramatic change in a number of your businesses. What are you seeing now and when do you actually think we may see some more significant impact under business looking forward?

Well you see a couple of things. You see, first of all, the potential for more enforcement, it will take a little bit for that to be thoroughly digested and to get under way. You also see clients undertaking self assessments of things, which I think is another area of business for us where we have seen just again the beginnings of people. But I don’t think certainly to say that that has been fully implemented or that’s full impact. I don’t know you’re having a congressional hearings and things now that will pick out the targets for those things.

Thank you very much. Great quarter.

Thank you.

Deutsche Bank’s Paul Ginocchio has our next question.

Thanks. I know that the Corporate Finance/Restructuring business is sometimes lumpy and I think back in the third quarter of ’08, it was down QonQ. But at the last couple of quarters, on a quarter-on-quarter basis, you have been adding quite amount of – big amount of revenue which somewhat decelerated here into June. So kind of going back to the earlier question, should we anywhere anyway concern that the QonQ growth rate in bankruptcy is down or how would you explain that? Thanks.

It’s hard for me to be concerned about that business right now. It has a tremendous continuing group of cases we have been picked in every major case that comes along. There will be as I say, it does, there is a little bit of seasonality. You have tremendous activity in the first quarter. We had, in fact, tremendous activity in the second quarter. I wouldn’t take anything from the fact that it’s a few cases less in terms of restructuring bankruptcy. In the third quarter, there were literally hundreds of second and third tier audit suppliers that are in the $300 million to $1 billion range. They will begin to see the ripple effects. You will see the retailers are the ones who don’t survive the back-to-school shopping. So I just think you are going to see it. We had said all along, we thought there would be another wave of this in the third quarter or beginning of the fourth quarter. So I think that – as I say, the margins were spectacular. The utilization was great. They will be bringing on, they’re probably hiring off people out of colleges and universities. They will be the largest hirers of those, so they will have plenty of people to put to work. So we will be increasing the capacity. So as I say, I would not worry about that practice at this time.

And similar to last year, should we expect the revenues to be down QonQ into the third quarter in this division?

As we – as you know historically, we don’t give quarterly guidance. We certainly are not giving guidance by segments and we can only point to you to some of the historic seasonality.

Okay, great. Maybe just a final one on the corporate expenses, they’re basically not growing year-on-year, is that what we should expect going forward?

Again, not to speak quarterly, but just to give you a general sense. The SG&A – let’s SG&A in total. So far for the rest of this year, as you know, we have been holding pretty tight control on that. We are still going to continue to invest in the marketing area. You might see an uptick in SG&A likely in the third quarter, partly due to the marketing and of course we continue to expand globally. So you can’t expect the company of our size not to grow the SG&A in dollars, but we are trying to, by the end of the year, keep it pretty constant. Especially the fourth quarter should probably be as a percent of revenue pretty constant to where we are on the second quarter.

Yes, I think we are becoming large enough where we also are getting scale and operating efficiencies and we are working very hard at – it’s not so much expense reduction, but it’s a slowdown in the growth of expense, because you’re getting much more leverage off of the expense line.

Thanks very much.

Jim Janesky of Stifel Nicolaus has our next question.

Yes, good morning. I have a couple of questions. If we can go back to the – where we are in the phase of government investigations, I mean, outside of Economic Consulting, do you expect a lot of activity there, is there anything that’s concrete or is it more anecdotal?

I think we would definitely exclude. When our SEC investigations, practices, which is I think probably the largest cadre of former SEC practitioners outside the SEC is known, and they have been very busy, and I would think they would get only more busy as the SEC becomes more enforcement oriented. I would think that it would also impact across the board of Technology, certainly a lot of these things tend to be investigations, integrity of investigations would involve heavy document review. It would involve – traditionally in the past it has involved our Communications segment very, very heavily. People bring that into make sure that they control their message to their constituency. So I think what we believe is that going from a really dearth of any of that type of activity certainly since the last half of last year and probably since before that that should bode well for a number of our different practices.

The securities fraud office in London is certainly getting more active and our people are picking up business over there and we continue to get very large assignments on the continent that are related to foreign crop practice investigations either at the initiation of one of the governmental bodies or at the initiation of the boards either on a prophylactic basis or on a therapeutic basis.

And what – how much of the activity would you attribute to your folks being international probably more than anybody else in the industry?

Well one of the benefits being international is a firm for a practice is that it creates a lot of large scale investigations that geographical reach is important to be able to execute those projects. So we’re being thought of a lot more frequently because of our global expansion and the practices that we are built in that we would have two or three years ago.

Our intellectual capital and domain expertise in how to handle documents and discovery outside of the US is really a showstopper. That is very much a differentiating factor that when they work with our FLC folks, that’s a pretty tough combination to beat.

We have been told by large law firms and large clients that we would not have won certain engagements if we didn’t have a last model of execution in these respective countries where a lot of the inquiry has to take place.

Okay. And now shifting a little bit to the momentum going into 2010, if we can talk about a little bit about your comfort there, is it because of the second phase maybe of bankruptcy activity, what type of backlog do you have that gives you that comfort of talking about the momentum going into 2010?

We have a great backlog obviously already in here the States and it continues to grow. And I think as Jack has mentioned, the end of the third quarter, it tends to be another seasonal blip, so you start picking up business, one, as a result of people having bad third quarters on a cash generation. And then two, anticipating they are going to default at the end of the year on their numbers and trying to get ahead of the curve. So just I think on a seasonal basis, we feel good about that. I think if you read the Financial Times yesterday, it talked about the $400 billion plus in structured finance that Jack had mentioned that’s sitting on the banks books in Europe and that the private equity companies are going to have to be very aggressive in trying to get that refinanced. We just completed our first large assignment. It was a $4 billion credit to major banks and it’s ending up being debt-for-equity exchange. This is the first one. So we have got – and if you if you believe the FTE numbers, then we have got $396 billion left to try to help restructure. So I think our feeling is we are very, very well positioned with a huge backlog here in the US that we expect to even grow in the fourth quarter and move through next year. We feel that Europe is now just beginning which is why we have been so aggressive in the last six months in trying to build that capability and we are very pleased with the initial first six months results of our operations down in Latin America where we seem to be getting almost every major assignment that’s coming out. So I just think it’s a combination of backlog and very big wins that are just starting and in all honestly as Jack mentioned, Visteon and some of the others, we just started and there is a bunch and in all honestly, we can’t tell you about that we are involved in. So I think that we feel good on the backlog, we feel good on the seasonal uptick and we feel especially bullish in 2010 on what Europe is going to give us in restructuring.

Yes, there is kind of an ugly trifecta of lining up out there Jim, just I’ll take one more minute. When you think about the $400 billion of structured finance and then another $150 billion plus of bonds that are out there in Europe, those represent deals that were done at seven times here. Those were very highly levered deals and the trifecta is, as you have those coming due, you have less – just physically think about the consolidation that’s taken place, you have less lenders out there and each one of those lenders in our experience is not willing to hold as much as they were a year ago, so you have literally not enough money in the world to refinance these deals. So I think that means, debt-for-equity swaps, it means restructuring, it means hardball, it means a lot of things and that’s just, I am very excited about our presence in Germany, I am very excited about the UK. And as always, the leading restructuring practice in the US is the thousand women that have been with us for the last seven or eight years. So I think we are very well positioned for that.

Also, there is some crisis M&A deals to merge away out of a credit crisis. The other thing is when you look at commercial real estate, rents are down, the rates are down, vacancies are up, that drives property value is down. So when the owners need to refinance, they are going to have a real problem getting a level of financing necessary to take out the existing facilities that are maturing over the next six, nine, 12, 24 months.

Some of the healthiest REITs are our clients as you guys know and they have been raising money for a war chest, and in a conservation we have with one of the biggest ones in the country, he basically has told us he is going to be a buyer, he thinks in the second half of 2010. So I guess it’s one man’s expert that you are going to have some degree of capitulation pricing in 2010, which means we will see a lot of activity on that part of our restructuring practices as all this new money comes in at very, very attractive cap rates.

Okay, thanks for that detail. Just as a final question, do you expect a lot of this work that Technology type of revenues will accompany this type of work you’re talking about?

Well I think the Technology – the Technology business will certainly get a lot of work in – as Dom said, where there is M&A deals and especially given there would be more scrutiny even with a failing company doctor and standing behind the race on debtra, I think the Technology Group is going to be very prominent in producing a lot of that information. I think what we see the biggest gains for technology is probably going to be in response to the regulatory inquiry that’s going to happen not only here but in Europe and we think they’ll be at the forefront of helping companies provide those responses.

Okay, thank you.

Your next question comes from Tobey Sommer of SunTrust Robinson Humphrey.

Thank you. First question has to do with your development of the FTI brand and maybe if you could speak to progress and efforts in that regard in the context of your goal of increasing your percentage of revenue internationally and maybe talking about the international opportunity in that context? Thanks.

I think we have been very aggressive in three areas in trying to build the brand. One is clearly simply to gain mindshare. We have conducted special symposium for thought leaders in the legal and financial community in Ireland, in the UK and in Brussels. We don’t do that all the time here in the US, we partner often times with normally a significant media partner and we will continue to do that. We have been very aggressive in trying to gain thought leadership again and looking at a lot of the risk issues that are surrounding Asia and that’s been prominently centered with Steve Bickers. I think Steve is one of those popular guys at CNBC calls on to help them dissect a lot of things like that and I think it’s been great for our brand building in Asia. We clearly host and sponsor selective supporting events and obviously we are the main corporate sponsor of (inaudible) who has been a great spokesperson for us not only here in the States but especially in Europe. We were prominently – prominent advertiser all through the UK, the week leading up to the British Open, and the week afterwards, we took advantage of the fact that he was the defending champion and we took advantage of the fact that again you have historically interesting buying opportunities for media. And we will continue to do that through Europe, so it will be a combination of traditional focused outreach sponsorship of intellectual capital type of events most likely again centered in Brussels and London and then you will see a continued push to gain more recognition on the brand. I think we have such great intellectual capital that is embedded across the 3,400 people that we have with that we can do a better job of the actual PR part of it in getting these people out more prominently, we have created our own captive TV network which is really going to be a way for us on a push basis to use the Internet as a very cost effective way of pushing out to potential clients and intermediary the strength in intellectual capital that we have we will be able to take topical challenges at the moment and be able to literally push to select groups of people over the Internet in a very cost efficient way. Our exports who can make an up-to-date commentary on it and give good background and we think it will be view as a very valuable source of information by our clients and potential clients.

The good news is that we have done the heavy lifting or lot of it – the expensive stuff in the name recognition that really to establish a beach head, the stuff that Dennis is talking about the PR stuff is very exciting, because first of all, through FD and our Strategic Communications segment, we have some of the leaders and be enabled to mastermind those campaigns and the second thing is they don’t cost very much. There are situations where media outlets, et cetera are hungry for the insight that our people would have, so our ability to establish ourselves and get named in the articles and all that is going to be great. So I am very much looking forward to that over the next 18 months to see in a real uptick in the – not just seeing our Billboards and seeing our hats, but in seeing our great professionals profiled in various media outlets.

Thank you. And my last question relates to maybe you can give us some commentary on the hiring market as well as the M&A market given your building cash balance?

Hiring, I think Jack said it in his speech, we are clearly a company of choice right now we have had incredible success on the campus. We would like to believe that a lot of that is clearly the opportunities that FTI offers, but we are not naïve to the fact that it’s a much better competitive environment right now as far as other people hiring, so we will be bringing in our largest ever-class of hires. We are finishing up probably our most successful internship program nationally and clearly they represent sort of the next group of hires will be making the offers to most of those people and we anticipate a high acceptance level they offer, Tom.

And top of that, our turnover rate is very low. I can’t recall it being this low, it’s in the 11 and change level, which is historically as low as I have seen it for quite a while. So that’s a couple of good news, we are able to retain our people, plus we get an opportunity to hire some of the best talents out there, especially the accounting firms and many of our competitors are not hiring at the level that we are in.

On the M&A front, I don’t think any – we haven’t seen any change second quarter to first quarter and we are being shown a lot of transaction, some of them for a lot of reasons are under stress so buyer beware there. A lot of good companies that would be a nice tuck-in acquisitions, of course we are staying close too. But obviously these people understand the changes in market values and some of them are simply reluctant right now to sell their companies. So we are just in some cases just staying close to each other, using them where it’s appropriate important too with us in some things. And a lot of our growth really has come through very large group hires. Now this is to a certain extent because of the trauma than a lot of other people in the industry have been going through, but we were have been able bring in an entire teams with full support in Canada, in Germany, in South America and yet that has the effect of an acquisition is just structured differently. And then finally, we have been presented with very large opportunities. Obviously these in some cases require some strategic thought and expansion that we don’t have at this stage to another leg to the tool another division. I think we are very active in looking at those. There are some very attractive opportunities out there that can expand our portfolio and I think it’s totally – you cannot predict when we and a potential partner might pull the trigger on a very large deal, but there is certainly there and we are certainly being shown them. Hello?

Did you have anything further, sir?

No, thank you very much.

We will move to our next question which will come from David Gold of Sidoti.

Hi, good morning.

Good morning, David.

Couple of questions for you, one, just a follow-up. Hiring fronts, presumably, obviously some of those folks or many of them go to restructuring practice. Where else might you be thinking to fill out?

Well, we have aggressively hiring in ECON. I mean we have embrained [ph] these big economists and then you have to staff up underneath of them. And so that has been one big focus for us not only here but in Europe. Clearly, we have been going through a significant change in FLC, the numbers of FLC don’t show a big headcount growth, that’s significant change in the type of person we have been brining into FLC. We have put a much more premium on domain expertise and specialization rather than generalists. So if you sort of track in-flows and out-flows and there you would be seeing over the last 18 months, a concerted movement to move into the specialized area, so away from the general areas, that has resulted in some people leaving, but it’s also resulted in us aggressively hiring in those areas. I think clearly US has continued to be aggressive in the developing world as we build out our platforms so that that South America we are hiring aggressively, in Asia and the Middle East, we have been hiring aggressively. So it will be sort of in those areas.

So we will need people in Technology and in – as we said earlier, we will think it’s a great time to be active in the communications – Strategic Communications area because there are some great people out there who for one reason or another may think it’s time to hitch their wagon to another star, so that’s – we are investors at this point. We are very bullish on that inflection point that’s coming and so we will put our money where our mouth is.

Okay. And then part two, on restructuring, margins there pretty strong, yet obviously given some of the adds, your utilization leaves potentially some room to get into approach, let’s say historic peak levels. Is this is a good rate of margin to sort of expect go forward or could it get better from here as utilization improves?

If you don’t want to get better, this is a reasonable margin where we are very happy with this margin. But as we said earlier, with have added headcount, So we've got room to flex up to the extent, the avalanche of the larger cases that needs 10 to 15 people in short order to staff them are right. Again comfortable at these levels, these are very, very good levels, but they can flex higher.

Yes, and also keep in mind that part of the Corporate Finance segment is the SMG Group. And SMG at least in the short term is obviously has a freeze in the credit markets and therefore does not have a lot of transactional activity going on in the real estate area. So that as it improves especially as we look towards 2010, that’s one of the things that we had mentioned earlier that could be a good news for the overall Corporate Finance segment as we reported.

Got you. The attrition, you mentioned 11% or so. Can you give a similar number for the MD level or for the senior level?

We don’t break it out. We have got a very low attrition rate at the SMD level. The people we lose or often some of the lower performers and we work with them on finding a more reasonable place for them to be gainfully employed. You know what I mean. Since we – we don’t lose many senior people. Over the years, we have lost two or three that we really wanted to see if that we would be a lot. We have got a significant number of high performers and at this point, even losing a super star or two (inaudible) to change our budget.

Got you. Perfect, thank you.

Thank you.

Our next question comes from Kevane Wong of JMP Securities.

Hi guys, how you’re doing? So – and just a few things. First to beat the Corporate Finance/Restructuring segment horse a little bit more on the buildups here on work. Just trying to get a little since on the ramp, obviously, you have talked a lot of business, you had a little seasonality impact on the quarter. Do you feel like with the cases you have that even with just what’s already active that you have sort of a buildup element that happens on these cases, you got them, there are a certain amount of work that it takes a while to sort of all chugging or they – or these things really just stay tipped sort of from the ground running and it’s simply a matter of the flow of cases and there is a little bit of a seasonality this quarter.

I think there is still room for build some of those larger cases that we are in. There’s always seasonality in the third quarter. I think that tampered a little bit with the fact that we do have some large cases that will carry us through the quarter. In the third quarter, you don’t usually have a lot of new cases, but we have all have as many cases happening, fourth quarter, and that tracks with our performances historically as always been a bigger quarter, you got all the new people hired, getting started, third quarter there. There are some training, there are in a lot of new restructuring cases or big litigations going on, and because of the holiday and vacation schedules. So third quarter is you know always challenged by those things, but we are pretty comfortable that for the balance of the year in our estimate and a few engagements we see on the horizon that we will able to meet those numbers.

Some engagements might change their character too. We are in a lot of things in Europe and here in the States where we are advising one side or the other on something if it takes a take different course and has to move into a formal restructuring and the amount of work those teams might be required to do would be exponentially higher.

Got you. And I guess maybe it’s sort of a broader longer-term cases, do you also feel like in that space, we are still aggressively ramping up on sort of the longer-term situations because you are talking about sort of second wave in Europe, et cetera that you see coming or is it plateauing or just a little of the broader sort of picture on where that space is?

Historically, Europe follows the United States six to nine months. So we believe there – that is still ramping up. But as Jack laid out some of the maturity of the speculative grade bonds that are going to occur 2009, 2010 and into 2011, that should create a significant amount of new opportunities for us. And unless there is a – the flood gate opens with respect to liquidity, liquidity if we don’t see where it’s going to come from at the levels needed, we think we’re going to continue to be busy at least for the next 18 to 24 months on the restructuring front.

Got you. And I will just do a couple of quick ones here and I will let others. Looking at Strategic Communications, be able to stick on this one here, the – obviously it’s been a tough space. Do you feel like that’s sort of that in the bottom at this point and it’s hard to improve, you have talked obviously a little about some M&A looking to pick up, but it’s been a long transition and things are still pretty tough there. Where do you feel that is as far as a cycle?

The people in the business believe that they maybe seeing the bottom based on their experience in past cycles. There are the number of M&A transactions, I mentioned, there are the IPOs, as they have done a great job of actually picking up with the non-discretionary side of the business which is more of the strategic message crafting when there is some kind of the crisis or something like that. I think they are beginning to believe that they could have seen the bottom that it might bounce there a little while, but that’s what they think.

And if that’s the case, would you expect margins to also naturally start to pick up at some point as that picks up.

Yes, I think as I said, there is a tiny bit of pick up from the headcount management that they did in the first quarter that would maybe come in, but that will depend on volume picking up and that’s pure and simple. We would like to not take any further headcount actions there, because as I say, this is an investment and it will come back I can’t guarantee the day, but it will.

Okay. Thanks.

Our next question comes from Scott Schneeberger of Oppenheimer.

Thanks. Good morning. Could you refresh as just of in the restructuring in FLC in Economic Consulting, those three segments, pricing, are we seeing because the billable, the average billable rate increased nicely. Are we seeing – is it just you passing through price or is it working on higher price point, more of a mix element. If you could just elaborate on that please?

Well, we do raise our prices, our rates annually to meet the market. In restructuring, sometimes it’s dependent upon success piece that we get that average up the hourly rates when you divide the revenues by the total hours. But we don’t see a lot of pricing pressure certainly in Corporate Finance and we don’t see a lot of pricing pressure in FLC also. I mean we are competitively priced. Certainly there will be situation that are not known, but generally speaking, neither those practices are extremely price sensitive, it’s more important to get the top people on the case as quickly as possible to get the best result.

Thanks. And with regard to – you have mentioned in earlier question on acquisitions, have been quite in the first quarter and mentioned a few buyer beware things that you had looked at monitoring some tuck-ins. Should we expect a very active M&A second half or might we see use of your big cash stockpile in another foreign repurchases?

Clearly, if we thought the stock was the best investment for us at the time we will be looking at that since we not only see the cash, where it is today it’s going to increase significantly over the next two quarters given the anticipated performance. As I said, we are being presented a wide variety of activities, some of they are in different stages, some of them we don’t have agreement on price and we are discussing it actively with people and as far as the large wins are concerned, again these are – it is in the deal itself, it’s the strategy that’s the important part of it, so you have to make sure before we pull the trigger on one of those that we are very, very comfortable with the strategy just like we were moving aggressively in between occasions which has paid out extremely well for us over the last four years since we have owned the company and I think in looking at these big deals, it is a strategic decision not a deal decision. It’s unpredictable how they would hit. I think you would probably see us certainly closing some transactions in different parts of the world that we went on, but they will be smaller.

Great. Thanks.

Moving next to Joseph Foresi of Janney Montgomery Scott.

Hi guys. Question here just on sort of the general pick up and litigation and SEC work, wondering if you could talk about the bankruptcies movement into general pickup, the tail in bankruptcy and how that might coincide with a general pickup and litigation and anything you are seeing on that particular front?

A typical bankruptcy, we have always said, it’s approximately 18 months, 24 months. In recent cases, the larger ones with government intervention have been a lot smaller. I am not sure, however, there is trust or the residual assets that will take several years to liquidate to ultimately payout the creditors and that creates a different type of work whereas not the classic restructuring work. But it’s really it’s the change in the economic condition of the world that will dictate when the litigation business will really pickup and the restructuring business will wind down. And as you know, we are build – we are building and are continuing to build a TAS practice which is the M&A diligence side of the Corporate Finance practice to pickup ground where the restructuring may quiet down and that should dovetail along with the increase in the Forensic and Litigation activity when those investigations pickup.

Was your question about the litigation that normally follows the bankruptcy?

No, it’s more towards the general litigation trends and I think you guys pretty much answered that just as far as the SEC getting active and stuff like that.

There are a lot of SEC – that SEC and the various regulatory agencies that one feels hopefully that will create the bodies need to bring the actions to keep hearing our – in the pipeline to be brought.

And do you have anything further, sir? Our next question comes from Sean Jackson of Avondale Partners.

Hi, good morning. Can you talk about the laid off in the Stanford cases, how long appeal will those cases have and what’s your expectation, the win – they significantly roll off that you can I guess supplement those with other business?

We can’t talk about the internals of the case for obvious reasons. As you can see from the public announcements, the trustee in Madoff is moving into a recapture of funds set of activities. He has been very aggressive with our assistants and doing that. It’s in a combination of a claw back type of activity and people have received distributions and then actions against the feeder funds and fund to funds for a wide variety of reasons and that’s moving along at a good cliff. It’s not going to mature for a while. A lot of these cases have simply been filed recently. As in all these things, there is negotiations, there is settlements and there will be litigation, so it’s pretty difficult to predict how that’s going to go except to say that’s extremely active. I think in Stanford, Stanford will change its character, it’s been predominantly in investigation on behalf of the SEC. Now that Justice Department is in there it’s moving towards criminal activities and again it’s very difficult to predict these things because part of it will be determined by the pace they want to assume.

Okay. Is it safe to assume that the peak of the revenue contribution from these are already hedged or is it pretty steady through the rest of the year?

Well, you know, in all these things where – when the Technology Group is involved which tends to be in very beginning where you are grabbing hold of documents with intense amount of effort. So in a lot of these instances, what you do is you have a huge spike, you have the hours burning off and then you plateau on a more of a steady state. I think in Madoff, clearly, we have been more in a steady state. But in a rising curve, in Stanford, I think we would be in the decline to steady state mode, and a lot of that’s going to be driven by what Justice does.

Okay. Keep coming on the international revenue that you have, what percent of it – what percent is it of it of the entire business and what’s your expectations say for the –

That’s about 17% to 18% in actual terms and probably it would be higher in constant currency. Our goal would be by 2012, the number would be in the 30s.

Okay. All right thank you.

And our final question will come from Robert W. Baird’s Dan Leben.

Yes, great. Just one real quick one from me, just help us think about the regulatory engagements when the budgets get approved and comes around the new government fiscal year. How long does it take before you guys start seeing business flows and new engagements from that?

We are already seeing some. Certainly as Jack said, we are seeing business in the tech sector, we are seeing business in big pharma, that’s related to potential anti-trust issue. So that’s already, so we are in the discovery preparation document phase there to respond to subpoenas. And depending on how some of those mature, then you might have some aggressive activity back in forth in response to the regulator’s inquiry, so that may try to go into enforcement for something that could lead to trials. So I mean I think without a doubt as we are manning up, you are going to see more and more of the subpoenas hit and you are going to see a more demand for us to assist companies in responding to them.

Great. Thanks guys.

With no further questions, I will turn the conference back over to management for closing remarks.

That does conclude the conference today. Thank you all for your participation.