Good day and welcome to the FTI Consulting 2008, Second Quarter Conference Call. As a reminder, today’s call is being recorded. For opening remarks and introductions I would like to turn the call over to Mr. Eric Borribbon of SD. Please go ahead sir.

Good morning. By now you should have received a copy of the company’s second quarter 2008 press release. If not, copies of the press release can be found on the FTI website at www.fticonsulting.com. This conference call is being simultaneously webcast on the company’s website and replay will be available on the site for 90 days. Your hosts for today’s call are Jack Dunn, President and Chief Executive Officer, Dennis Shaughnessy, Chairman, Dominic DiNapoli, Executive Vice President and Chief Operating Office, Jorge Celaya, Executive Vice President and Chief Financial Officer, Dave Bannister, Executive Vice President and Chief Development Officer and Declan Kelly Executive Vice President and Chief Integration Officer. 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 that involve uncertainties and risks. There can be no assurance that actual results will not differ from the company’s expectations. The company has experienced fluctuating revenue, operating income and cash flow in prior periods and expects that this may occur from time to time in the future. As a result of these possible fluctuations, the company’s actual results may differ from our projections. Further, preliminary results are subjected to normal year-end adjustments. Other factors that could cause such differences include the pace and timing of additional acquisitions, the company’s ability to realize cost savings and efficiencies, competitive and general economic conditions, retention of staff and clients and other risks described in the company’s filings with the Securities and Exchange Commission. Our press release includes information regarding EBITDA and segment EBITDA. We define EBITDA as operating income before depreciation and amortization of intangible assets, such litigation settlements. Financial measures such as EBITDA are not measures of financial condition or performance determined in accordance with GAAP. FTI believes that EBITDA as a useful operating performance measure for evaluating it’s results of operations from period-to-period and as compared to it’s competitors. EBITDA is a common alternative measure of operating performance used by investor, financial analysts and rating agencies to value and compare the financial performance of companies in FTI’s industry. FTI uses EBITDA to evaluate and compare the operating performance of its segments and is one of the primary measures used to determine and play bonuses. FTI also uses EBITDA to value businesses that acquires or anticipates acquiring. Our reconciliation of EBITDA to net income is included in the accompanying tables in today’s press release. Segment EBITDA is reconciled to segment operating income. EBITDA is not defined in the same manner by all companies and may not be comparable to other similarly titled measures of other companies unless the definition is the same. This non-GAAP measure should be considered in addition to but not as a substitute for or superior to information contained in our statements of income. With these formalities out of the way, I’d like to turn the call over to Jack Dunn, President and CEO of FTI. Jack, please go ahead.

Thank you, Eric. Thanks for that description of EBITDA. And good morning to everyone, and thank you for joining us to discuss our second quarter earnings, which we announced earlier this morning. In a separate release we also announced that it is our intention to sell a minority interest in our technology practice through an initial public offering of shares of a tribute newly formed company. I hope you have all had a chance to review these two releases, if you have not as Eric said that are both available on our website. Around the table with me this morning are Dennis Shaughnessy, our Chairman, Jorge Celaya, our Chief Financial Officer, David Bannister, our Head of Corporate development, Dominic DiNapoli, our Chief Operating Officer, and Declan Kelly, our newly appointed Chief Integration Officer. I think as you’ve seen the team grow over the years that reflects the growth of our company and the exciting opportunities that we have in front of us. I will briefly discuss our announcement about the technology business and then I will cover the key points for broadening our second quarter operating performance. And then I’ll finish with comments about how we see the second half of the year. As we said a few months ago when we announced the Attenex acquisition, in the strategic partnership with Endeca. We now have what we believed to be the leader in the e-discovery market with end-to-end technology that can operate across the full continuing of data types, significant, critical mass, leading intellectual capital, broad global reach and the ability to service corporations, law firms and government agencies in both the on-demand and on-premise floor mass. Our technology segment now has what we believe as the necessary critical mass to operate as an independent entity in the marketplace and…

Thank you. (Operator instructions). We will take our first question from Arnie Ursaner with CJS Securities. Mr. Ursaner, your phone line is open. Please go ahead. (Operator instructions)

Hi, it’s Arnie Ursaner.

Hi, Arnie.

Hi, good morning. One quick question. Can you give us a sense of the revenue contribution that we should expect from the acquisitions you’ve made in the balance of – in post Q2? Because I think you mention, we only had organic growth in the quarter. But can you give us a feel for perhaps the revenue contribution from the acquired businesses?

Arnie, its Dennis. We don’t believe given the size of the organic growth that the acquisitions will have a significant impact in the third quarter; it will have more impact in the fourth. The reason we break it up separately is we are integrating them totally into the operation to where in all honesty it could be hard for us to allocate credit for acquired versus non-acquired. So, I would say third quarter deminimus, fourth quarter certainly it’s going to have an impact but it’s all being bored and integrated which is one of the reasons for the charges we are going to take in the third quarter.

You have to forgive us for being a little circumspectly, realistically with regard to technology we are in essentially acquired period as we are pre-filing of an IPO. So, we really can’t break out give any more forward-looking information about that. The filing as we said we hope will be before the end of the year which will allow us to do the normal things I mean, you do with an IPO.

Final question. Could you give us the organic growth in total for the company in the quarter? Please.

25%.

25%.

Okay. Thank you very much.

Thank you. We’ll take our next question from Andrew Fones with UBS Securities.

Yes, thanks. I think I might have missed the organic growth for and could you give me that?

Our overall growth for the quarter is 25%.

In Forensic it was about 10% organic.

Okay. Okay, thanks. And can you give us a sense all in terms of the proportion of the technology business that you might look to sell?

Andrew, again this is difficult. You know the rules and once you announce until you file the S1, you are really restricted in what you can say. I think the only thing we could tell you is this is a carve-out sales split spin off. And so the normal sort of percentage guidelines what you might be looking at their market might be want to absorb it on IPO for secondary stock sales are not necessarily applicable here. But sure to that I think we are very reluctant to go into this at this time. I think, others have done a lot of good work and trying to analyze some of the value here. And I am afraid we just cannot be very helpful until the S1 is filed.

Okay, understood. And just coming back to frames with litigation. Again you’ve seen a little bit of an increase there in the organic growth from 2% in Q4, 8% Q1, 10% now in Q2. Are you seeing a little bit of a pick up from the impact of the credit crunch? What types of jobs have you won recently? How are you thinking about the outlook for the based on these things?

Yeah, I think where we are seeing a lot of degree, approximately it has as many of our competitors have noted. There has been a typically difficult market brought in the US on just run of the mill litigation prior to an election. It seems like it really does slow down. We’ve done a great job of holding our own there, we’ve had the foreign core practices acquisition, we’ve had the intellectual property work which has been very strong where we have particular expertise. And our growth drivers have really been our investigations business in some of our activities outside the US including our construction activities and as I mentioned foreign core practices that spill over from outside the US and to more global kind of situation. So, that’s where we are seeing the growth.

Thank you.

Thank you. We’ll take our next question from Randy Hugen with Piper Jaffray.

Thanks. If we were to see restructuring activity pickup to levels somewhere back in 2001, 2002. Where do you think the division’s margins could shake out and affect all given opportunities in that business?

Well, I think you are seeing, where the margins are today. I think you are seeing exceptionally good margins. If there are one or two points left that could be but we would, if we go back to the levels that we were in those days as we’ve told you our practice is a little different now. It has a little bit more leverage in it, before we were mostly a credit or practice where we would have a smaller number of people and it wouldn’t be unusual for them to work levels at periods of time of a 140% utilization. We will not get back of that we are much more of a general practice now. We will have larger teams, we will be phenomenally profitable but probably the margins would be up to that where they are now maybe a couple points more.

And as we move from transaction advisory services and more of those professionals into the core restructuring there are higher margins in core restructuring but as you recall. We also put in place some programs to make sure that we retain our most talented people in. And that has an impact of keeping the margins down little bit from what they could have been 10 years ago but we credit a lot more stability and team works amongst the team.

Thanks, that’s helpful. And then on the economic consulting business performing extremely well right now, how much of visibility do you have in the sustainability of results there could have slowed down in large corporate M&A hit results in early 2009 or do you think that you are fair with some of the drivers and also the other activity that you have going on there. Do you think that will allow you to keep posting good results even if we do see a slowdown in M&A?

Randy, its Dennis. I think we got really good visibility in it certainly for a while because you are just going to imagine these tend to be large assignments. The expertise detailed in our finance consulting group is of course very valuable and complex litigation which were now beginning to see, start to take shape. So, we actually are anticipating a pick up of business there. The retentions on big defense teams for huge financial low organizations are coming in. The teams are being put together in anticipation of a lot of complex financial litigation. So, I think there we would see sort of bright clouds emerging as far as demand for those services. On the M&A and competition side I think they are very busy right now, they have pretty good visibility clearly you would expect that to back off just as the numbers have backed off. But it seems like every week that we say that somebody announces another bigger more complex transaction that needs scrutiny. I think the other thing that we are very optimistic, the demand for Europe is clearly heating for our services. We are in the process of putting together a plan to actually out assets now based into Europe to service that rather than sort of parachuting them over. So, we see increased demand coming from over there. And then finally, I’m sure there will be some degree hiatus, but you will see if you have a change for administration that decides to get more interested in enforcement rather than approval of consolidations. You would see the demand shift to the certain extent for the talent there are people who have, where they are dragged into much more of a regulatory enforcement type of environment rather than trying to get a complex deals for yourselves. Pretty good visibility in the next year and the financial consulting side of the econ practice is starting to look much better given complex litigations that we see on the horizon. Also on the M&A front, we are all questioning how much M&A would we see in our slower economy. In a good economy as we have experienced companies merge with say they want to merge. I mean, now we are receiving the distress in some of the industries, companies have to merge because they have to merge and not just because they want to merge. And when you are talking about strategic mergers as a higher probability of anti trust interaction where that’s are the bread and butter of our economics practice.

Alright, thanks. And then one more to just I guess comment in general on how some of the proposed over hauled of some of the major financial regulations out there could benefit your business?

Well, typically regulation in dealing with it is a follow-up to enforcement action. Right now we are very busy on the front of helping financial institutions and that kind of thing, typically what happens is you begin to expertise yourself on how they have to deal with the new regulations. I think, as we go forward our SEC we have one of the somebody whose has joined us, who was a leading person at the SEC in terms of looking at the and reviewing financials to clinically very well set up to be involved in that. We have people on our economics divisions who are formally with bank regulatory agencies. So, I think that we will deal with that but I think before we typically would see the impact of regulation. It’s our monitor to change as good in the, they’ll be an awful lot of hangs between here and there. So, I think we’ll be more taken with what we see as an incredible amount of investigation and enforcement activity before we would really assess what regulation might have as a change to us.

So, is also Randy, there is government in ventured it, and we venture it every time it picks paper up. And with governmental intentioned it, we are tensed out to be reacting from the market is being intervened in and I think that’s going to increase not decrease. Secondly, as a lot of people are starting to write right now, the (inaudible) warehousing about a $0.5 trillion of mortgage backed product, that it will not hold on for ever, it eventually going to have to work out. And where there is a resolution trust put together to work it out or whether it is done in different ways, the government necessarily isn’t the best person who would try to work that out. And we think you’ll see physical solutions developed that might have very interesting implications to private contractors.

Okay. Thanks and congratulations.

Thank you.

Thank you. We’ll take our next question from Tim McHugh with William Blair & Company.

Yes. I wonder I know you are in limited and what you can say about the (inaudible), I wanted to just in terms of management there, is there anything you are actively looking for at the moment in terms of your management team over there to compliment, David already?

Thank you, we have a great management team there. I think it’s fair to say since it’s already been said that I think they have done an exceptional job ironically in there some of the people we’ve know long as to right after you have. So, we would look at that, we would look for – they will need to be self sufficient in terms of a Chief Financial Officer and accounting officer and things like that as we go forward.

Okay. And then the corporate finance and restructuring, you mentioned some success fees in the healthcare and then in the restructuring fees. Was that abnormally large or just kind of your standard level of success fees in the quarter?

That’s not abnormally large. The businesses evolving to our success fees are part of the engagement but they are still are not large enough to really drive the overall equation.

Okay. And then you mentioned the plan to move into Western Europe with economics, could that be true acquisition and if not what is your outlook for potential acquisition activity as your time probably being consumed with the tax been off right now or are you still hot on the trials, some other deals?

To power phrase it by any means necessary, it’s a priority for us to go into Western Europe. We have people that we may put there on a permanent or temporary basis we are actively looking for acquisitions. It’s our belief as we alluded to in the discussion of the economic division that even should there be a change in M&A work that always in a business cycle translate into increased activity on the litigation front between clients and on enforcement. So, there is a right market there and we need to be part of that. So, we are actively looking.

Yeah, I think we’ve made a decision to enter the market through a build strategy and buy. The build will come right away and the people who are working on all the projects are ready. So, it’s not a start offer, you going to incur start up cost could be more. The people that are already being parachuted of their some of them are preliminary over there. And then of course we will face, we will be active in trying to fill that in with buying local capital, I think overall, the question is we will not slowdown our activity level, it’s anything part of the reason for the tech is to retire our debt to enable us to be even inquisitive. We think the opportunities presented to us right now are around the world are greater than they ever have been. The valuations are probably the most attractive that we’ve seen in almost a decade in some of these companies. And the timing to sort of bring them in to address, what we see as an increasing curve that is now. So, I think which is one of the reasons we moved Declan Kelly into the prominent role that we have and one is his main role is obviously not only link all these acquisitions into the single brand but help build out even more this geographic footprint that we put together and clearly the proceeds from the subsidiary IPO are going to allow us to have a strong balance sheet in doing that.

And just following up on that you mentioned the chief integration officer, is it fair to characterize that as a proactive approach then to managing that process and any future acquisitions and not reactive to any issues that might be adverse with this--?

I think we are always proactive and we don’t have any issues and I would like since you are seeing right here Declan can give you a one minute answer to that himself.

I think that’s the fair summation on the situation obviously we already have processes inside our company in our company every time we acquire a business or every time we launch new product or service in any geographic region. What we are trying to do now through this new process and my role going forward is to be proactive in making sure that we advantage of the many opportunity that are there in the market and obviously because of our expanded geographic footprints and the fact that I have been active in those markets in my former role in SD we put out awareness as to what the opportunities are. And so, we are going to be working very over the next three to four quarters in particular to try and leverage some of those opportunities. We are getting a lot of inward interest because we know the market extremely well and we are excited about it. This is co-active measure not a reactive measure and we are building on our successful platform of program that we have faced already.

I think we talked in the beginning that one of our core (inaudible) has given somewhat collective backgrounds whereas the acquisition and integration I think, one of the key things now is results are quantifiable, it’s the building of the brand, the reputational side of the equation, we all start our clients that enterprise value is a function of reputation times results and I think we clearly want to spend a lot more time on developing reputation on brand side of these integrations into FTI as much as preserving good results which I think has done a good job so far.

Okay, great thank.

Thank you. We will take our question from Tobey Sommer with SunTrust.

Thank you. I was wondering on a go forward basis what should we look at in terms of the highest rate of organic growth kind of we (inaudible) unit figure in that, that may be an IPO in the second half. By bios and intense would say restructuring I wanted to know if you got other thoughts there?

You are saying which segment would have the highest organic growth?

Yeah, yeah exactly.

We were talking about this the other day, we don’t exactly know what’s on the horizon in restructure. But, clearly there factor aligned where I couldn’t disagree that would certainly have the outlook, looking among our business for there to be some event that would drive beyond the others, the others we think reasonably good outlooks for us, so I would say as you look for a wild card it certainly would be corporate finance restructuring.

I think you have got other parts of the business that are smaller but probably phenomenal growth opportunities and we are seeing that inside of FLC clearly one of the growth drivers is our special investigation business, it’s a global practice it has the unique positioning, there is somewhat of fragmented degree of competition around the world and yeah, we see demand for it in good economies and bad economies increasingly dramatically and I would think you could see exceptional growth out of that and that’s one of the areas where I know Dave Bannister was going to try to put a lot of capital behind it. Secondly, and this is somewhat contrary and it will depend to certain on when liquidity starts to pour into the market, I think our belief here is that the construction management arbitration, integration and the SMG, real estate consulting when the liquidity comes moving into the market this could be an explosive demand for that because we are going to see a lot of huge commercial projects pretty much get changed, they may change ownership, they may change balance sheet, they may change direction but there is going to be a lot of change and it could be driven liquidity coming into the market based upon the assessment of the cap rates are falling at the level we are not going to go much lower and I think we got a unique positioning to take advantage of that. So, we could see some very pleasant surprises coming out of there and I think you are going to see some explosive growth in specially investigation and we are looking hard at ways of giving you better visibility of that down the road. I think the other thing that we have been very impressed with, I am not trying to tell you that they can continue it but so far so good as FDs, prices management operations and the consulting practice that they are developing in brand and crisis around the world, I mean it is growing very rapidly it has surprised us to be honestly on the positive side and I think while its difficult to predict that they can sustain these levels we are pleasantly that the way its going.

Thank you. I was wondering if a prospective in administrations in the US and perhaps an associated change in the capital gains is doing anything in terms of your conversations with potential M&A candidates.

As Dennis mentioned we have seen as many good candidates and there is attractive prices that we have seen in a while so I think just as we saw in Europe last year where there was a pending change we are seeing certainly some, its not outside the minds of the sellers they are cognizant of that, yes.

And then shifting on that two questions on the international side could you update us on some of your principal offices, how many of your service lines are currently being offered there and what the prospects to continue to expand those service lines into the international offices?

I think, as we look around we couldn’t have a better model than London where we literally have all of our activities except for Econ and we are going to remedy that. So, I think that as you look there if we had a flagship of where the full power of FTI can be brought together in terms of cross selling that would be a good example. Otherwise we have in the US and some of our offices we have most of the services, New York would be an example. But, that’s one of the major opportunities we have as we go forward and is one of the things that Declan will be focusing on is the physical bringing together our people which always is the best tool to in terms of integration.

That most of the offices around the world are in middle east London, Asia have one to two of the offerings right now. So, the upside is not there, they are doing business by generating business and we are parachuting people in as far as in situ offerings about one to two.

And then we heard from someone in the broad peer group talk about opportunities in the middle east and I was wondering just if you could comment on the business opportunities among your segments in that area given all of the capital that is being massed there and the potential deployment in Europe kind of exposure to those capital flows? Thanks.

We are very well represented in the middle east, we have offices now in Abu Dhabi in Dubai, in Bahrain, we are very close to the families there FD represents sovereign funds on a communication basis, SMG represents sovereign funds on a placement of capital and commercial real estate. So, we already have, we are doing extensive work for the UAE government in planning so it really is going to be a function of how well we lever, what we clearly see is an increasing demand curve, one of the main reasons we brought Beaver in the UK was their strength throughout the middle east and the infrastructure and real estate consulting side. So, I think, I wouldn’t argue with anything anyone say about the potential there, its huge and I think we are very well position if not better positioned to any one take advantage of.

The other to make there, we have been in the market a long time, we understand it very well and we were there early. So, there is certain first mover advantage for us being there because we already have significant relationships there, the opportunity continues to grow.

Thank you very much.

Thank you. We will take our next question from Mark Bacurin with Robert W. Baird.

Good morning gentlemen. Couple of questions, looking first in the corporate finance restructuring business, I understand the utilization impact from SMG but just curious what the uptick in demand coming out of the global credit crisis, should we expect to see utilization coming at the second quarter level start to improve from their forward or will the mix growth from SMG continue to keep that depressed?

There are factors going on, one is you might remember this is the period where we add the most number of people. So, over the next month or two it will be just a question of how fast we can get them to pull it. So, even if we kept that these levels you would see improve results because we will a uptick in our work force. So, how far we will go beyond that will then be a factor of how deep the crisis goes and the number of big jobs that we bring in from there. But, I think we are very comfortable if it stays where it is because that will reflect a significant increase in our fire power.

And the utilization is a little lower than what you may have expected to say that is because headcount is little higher and as Jack said over the next two months we bring over 40 new people into that business and we have got the ability of flex it up or flex it down as the demand requires.

And then on the technology side you mentioned the margins were down here, I think they were basically flat year-over-year but they were down sequentially just wondering whether investments going on either related to the integration of 10X or product development…?

As we had told we had a very large job in the first quarter that we were trying to caution everybody we thought was a fish wind inflating the margin. We are happy to be beneficiary of it and the margins pretty much returned to back to level that we are trying to run business out.

Okay. Second half of the year you expect some more --?

It was not driven by investment on the first step, it was driven much more so by just an exceptionally profitable job.

And then, just finally in the FOC margins there obviously running below would you like to see them, can you comment on actions you can take either to drive, revenue growth obviously takes care, but other cost actions that you are looking at?

Two things, number one they were artificially impacted in the quarter by adjusting the way we had to take the accounting charges on the amortization of some cost associated with the acquisition so we would necessarily think they would move forward. Secondly, apart there was some retention bonuses in some of the acquisitions for general staff mostly in Europe because that’s the way its tend to done and we expensed all those right away so pretty much they should behind us. So, I think that represented some degree of pressure on margin. I think the other part you have to be honest, as Jack said, it’s a slow litigation period right now here in the States, and I think that it’s a tough economy, people are watching their costs, there’s not a lot of governmental pressure. I mean you have to realize and allow the enforcement agencies, your top level people are really preparing their resumes for a transition into a different career path, and they’re not necessarily looking to maybe sue the people or sue clients of the people who they’re going to land in. So there’s always somewhat of a trough pre-election, pre-changeover action, and I think it’s resulted in maybe more price pressure from competitors or just a lack of overall business to sort of satiate a marketplace. So I think they’re doing a good job of holding the margins where they are in a difficult year, and still producing overall growth in EBITDA. And I think we were artificially impacted by the UK acquisition.

I mean you’re seeing a couple of things. First, you know, the election will come and pass. Second is I think a perfect metaphor for the litigation scenario is the auction rate preferred marketplace, where you’re seeing it now getting down to tremendous amount of activists. The shock and staunching the bleeding of the financial crisis has gone through its phase. We’re now starting to see the active litigation and the beginnings of that, so I think in terms of cost cutting this would probably be the wrong time to institute that. I think we may have gone through the worst of that market, and I’m very bullish on post-election opportunities for us.

And there’s also been some settlements in some of the larger cases that we were gearing up for trial. When there’s a settlement the trial practice pretty much slows down until they refill that pipeline, so it’s temporary until the cases pick-up again.

And we have an excellent brand there. We have an excellent capability, as I’ve mentioned several times, where we have specialties, such as FDC activities and intellectual property, we really don’t want to tinker with that too much of record because there is a slight softness that we’ve seen every four years since I’ve been in the business.

Thank you.

Thank you. We’ll take our next question from Brandt Sakakeeny with Deutsche.

Thanks. Good morning. Just following up on the question around margins and corp fin restructuring, have you seen in the last few weeks or months an increase in the size of the deals that would enable you to put more bodies at those projects?

Yes, the deals are picking up in size, although we’ve got several very large cases in-house that we’ve been working on for the last 18 months or so. But we’re seeing a pick-up in filings. We’re seeing different industries starting to get impacted, retail in particular, hospitality. We think there will be several large opportunities for us and several that we’re currently pursuing. So, the larger the cases the more leverage we can put on them and the higher the margins per case.

Great. And I guess in the forensics business, the bill rates were down, was that just some wait rate pressure or was that a mix issue this quarter?

That’s really a mix issue.

Okay. And finally I didn’t get the retention metrics for the quarter. Do you have the turnover numbers and any material change or any difference in by practice or anything else?

Overall it was around 14% turnover for annualized for the quarter. There wasn’t anything really unusual on a practice-by-practice basis.

Okay, great thank you very much.

We will take our next question from David Gold with Sidoti & Co.

Hi, good morning. Just a couple of follow ups. Can you give you an organic number for the restructuring business.

32%.

32%. And can you comment a little bit on trends at SMG. I think lessons was to work our business that was picking up dramatically and you talked about a little bit and what’s happening there?

As we said on the last call an SMG obviously is challenge on the M&A side of the real estate practice. The retained business is doing fine, and what we done a great job in doing his mining opportunities within investors SGI particularly in corporate finance, they are several very large cases that they are extremely active and in they brought. You know, confidence to those cases that we hadn’t had before so that will expand the cases by introducing the SMG professionals. You know, as Jack and Dennis mentioned, you know, as liquidity returns and the M&A and investments in commercial property picks up again, I think we are going to be well positioned to take advantage of that. You know, foreign bound investment in US properties is down significantly from last year, tremendously. There really aren’t a lot of deals happening right now, but when that spigot turns on hopefully we’ll be well positioned to take advantage of it.

But on a year-to-year basis are they still seeing growth?

I’m sorry?

That SMG looking at that particular business year-to-year are they still growing?

Yes, over the last year they are growing low double digits. This is the forecast for this year.

Then question on the $0.02 to $0.04 that you are pointing to in the third quarter is that rapid amortization for Attenex, or something else?

Its in Attenex and its predominantly the write-off of in process R&D. I’m sure you guys know that it, in the technology business, now under the new rules you have to write-off in process R&D in the first quarter after you acquire it, and so it’s a one quarter hit which we had already put into our forecast, so we’re just trying to highlight the fact that on a third quarter basis it would be influenced by that.

And just before anybody worries about that, it’s not -- there’s nothing qualitative about it. It’s strictly in response to an accounting rule that says you could have a cure for the next disease, you’d still have to write it off.

Got you. One last from a strategic standpoint, I can’t say much on spin off but we think about that business how much cross selling happens where the business is sort of feeding other businesses or presumably there’s some way to sort of work that, I guess?

They predominantly sell through a direct channel that they control their own sales force. They do receive referral business from our FLC Group, which we would continue to expect happen through contractual relationships post-spin, and we don’t believe cross selling, I mean it would be, we would effectively become an indirect channel for their technology offerings, there would be referral contracts back and forth. They do not predominantly produce business for the rest of the house, they’re more of a recipient of it.

Got you, perfect. That’s all I have. Thank you all.

Thank you, Dave.

Thank you. We’ll take our next question from Bill Sutherland with Boenning & Scattergood.

Thanks. Good morning. Most have been asked, of course. But the headcount increase in the corporate finance side is that essentially all SMG?

Well, the 40 we’re talking about coming on is all restructuring. So, but the headcount in Q2 would be SMG, yes.

Predominantly.

Predominantly.

Okay. That’s what I was talking about, Jack, was the 599.

Alright.

The SMG practice, as you look at your total construction practice now, I wonder if you could just speak to how much of the vertical, the size of that vertical is now for you all?

Well, as you know, it’s a virtual vertical. So, when we look at the work we’ve done related to the homebuilders to the subprime all that kind of stuff as we look at our construction practice. Although and we figure it somewhere, as we said earlier when we bought SMG, it’s probably plus or minus $100 million practice all in. That would involve worldwide construction, as I say SMG and a lot of the work we’ve done in restructuring.

And I guess also some real estate related work, as well?

Real estate and also in FD, don’t forget, we have a vibrant practice there in the UK that does, that works heavily with real estate, the REIT in the UK and that kind of thing.

Do you all have exposure directly to project development, sharing and that kind of thing?

You mean as participants in the economics? No, we do not.

Okay. And are you involved with risk management in that business?

We do some risk management work there, construction analysis. We do as built analysis. Sometimes we’ll manage projects. Yes.

Okay. Last one is I have been thinking as you anticipate spinning out the tech group, whether, as you –

Bill, just one clarification when you say in that business I want to make sure we’re referring to our construction offering, generally not to SMG, on the managing the projects, etcetera.

No, I know SMG’s focus doesn’t

Right. Okay. Good.

Can’t cooperate that. And then just have a big picture one to end with. As you contemplate having a freshened up balance sheet, hopefully it all goes successfully, would you envision perhaps a whole other leg on the stool at FTI, or is it looking like you’ve got your main segments that you can kind of add to within? Thanks.

We have always said that we were open to another leg of the stool. For example, we have joked that we have almost five-and-a-half legs now because the construction and the real estate oriented activities are getting so large. So, yes, we would definitely in terms of our strategy be looking at that. And valuation practices, some we’d look at. There are a number of areas where strategic consulting is obviously some thin we are offered opportunities all the time to either by joint venture build with people. I would again built taking back to, we took that technology for very small offering a lot of capital behind it gave it visibility and obviously it has been know very successful to date. I think we think we have other opportunities of things that we already have in house but by shedding similar light on them better visibility, better branding behind and a lot more capital that they are in markets that could be very, very receptive to what we think to be exceptional growth so, I will give you will always see is working for the next big leg, if we could get it. We really think we have a lot of internal opportunity to build some of these, smaller domain expertise that has we think faster for or more interesting growth opportunities and then just the build of geography is very exciting to us. We think putting capital behind that, putting the management attention behind it now with Declan, we think you’ll see some very interesting results.

Anything further, Mr. Sutherland?

No thank you.

Thank you. We will take our next question from Jim Janesky with Stifel Nicolaus.

All of my questions have been answered, except just a quick question on the run rate of amortization per quarter, is about $6.5 million a good number to use considering the acquisitions that you’ve done?

That’s a good number with the exception of what we mentioned regarding the in process R&D in the third quarter.

Okay. And but that’s onetime in the third quarter?

Yes, that’s right, right. Run rate you’re fine.

Okay. And is that in process, just to be clear, is that in process number alone about $0.02 to $0.04, or is that a combination of increased amortization from acquisitions and the write-off of in process?

It represents the vast majority of the $0.02 to $0.04.

Okay. Great. Thank you.

Thank you. We will take our next question from Kevane Wong with JMP Securities.

Hey, guys. A few things. I am noticing about the segments, it doesn’t sound like there’s really marked changes as far as environment you’re seeing, and I’m trying to understand a little bit of why the, if you look at the 2Q op performance, it looks like second half EPS is guided down. Is it simply sort of this traction, as you’re trying to spin-off the eDiscovery business, that you’re taking a little more caution on the back half? Or is there some other element that’s sort of explaining the back half lowering of EPS?

No, we didn’t guide down. I mean I think what we’re saying is we did $1.25 I think for the first six months. I think we’re comfortable in the range that we are which is clearly, at least by my mathematic guide down, it’s 250 to 263. I think we’re feeling fine with momentum, we feel very good on the revenue side. I think the one variable that we’re trying to be cautious of is we’re about ready to launch probably one of the most complex financial transactions the company has been through. It’s going to take time. There’s going to be expense in the fourth quarter, we know that. We certainly wouldn’t be doing this if we didn’t see the benefits from it, but I think to not say that we won’t feel some impact to the earnings would be disingenuous. I think we’re comfortable with a range, and just if we hit the bottom to the median of the range, it’s an up six months over six months, so I don’t think we’re guiding down, unless I’m missing something.

I’m just looking at the guidance for the year not having changed despite like a basically a month sort of second quarter. So, I’m looking at from another view?

We don’t guide by quarter.

Yes, we don’t guide by quarter. I think we were just basically saying that we think the momentum will continue, we’re simply cautioning, we have one event in the third quarter which we had to make everybody aware of, that we had already baked into our numbers, but we weren’t sure if people were aware of. And, two, it’s an unknown right now. We’ll have a lot more clarity in the next 30 to 45 days, what the actual cost side of this complex restructuring is going to be.

Got you. Second, on the corp fin and restructuring area, can you talk a little bit about sort of people requirements and what you’re sort of seeing out there? If I look at sort of numbers of cases versus people that are sort of endless cases, that sort of ratio isn’t nearly as high as it has been in the past, which certain price you’d have some room to expand the business without really adding much as far as those top personnel. Can you give a little color as far as people requirements in that space?

I think we are pretty with the people requirements. We’re always looking for rainmakers in that business and leading restructuring professionals, but right now we’re at very comfortable utilization levels, and we can flex those utilizations up 10 points very easily. To the extent we need resources from other practices, specifically FLC, I mean those resources are available, we work very closely, the teams work very closely together, so we’re poised for a huge turnaround if it occurs in the third, fourth quarter.

Of the 40 people coming in would be lower level people that will be to work within the first two to three weeks that they get here, so that’s -- we’re not -- that isn’t a Hail Mary Hail Mary or anything, that’s people we need now to put on to cases.

As we have grown, as we have moved more to company side work, leverage has been a better opportunity for us, and that’s why we’re recruiting more and more undergraduates and MBAs from the various universities around the country.

Excellent. And then lastly looking at the strategic and financial communications, obviously, a great quarter here. You’ve also seen some movement in the space, one of your competitors recently bought out -- one, I guess are you seeing just a lot more opportunities for you to buy? And, secondly, maybe I’m getting greedy, but is that something that you would want to -- that you see as integral to your operations, never move out, or is that something that if you got the right valuation would be worth looking at a possible sale, as well?

We are in that stay, we are in the beginnings of the marriage between their communications and the rest of the Company is at a very early stage, and we are, you know, that absolutely, as you mentioned, there are opportunities both in the US and London where we’re dominate, but also as we move around the world it’s a great entry point for all of our services, including technology as we forward to enter those marketplace so we are committed to that space.

One of the exciting benefits of that acquisition, as Declan mentioned, is they’ve been working in many of these countries for many, many years. There isn’t a less costly way to enter these markets than through an existing subsidiary that’s got licenses to do business, understands the customs has relationships with the bankers, lawyers, and other targeted clients of ours. So we’ll just scratch the surface in our ability to round out our services around the world for those countries that our particular services make sense. We can’t put every practice in every office around the country, around the world, but there are many, many opportunities that we’re looking at to grow the various business on a more global basis.

The key thing to bear in mind as well, having worked in that business for the last 10 years is that the relationships we have in these geographies are primarily in the C suite, so it’s Chairman, CEO, or CFO, and that gives us a unique ability to leverage those relationships across the rest of our business. And one of the things I’m going to be looking at going forward is how we do that across all the other businesses that we’ve acquired over the last 18 months and the rest of our Company. So we feel very comfortable with the business, and we have a tremendous number of inward inquiries around the world who are interested in being part of what we’ve built. And as you’ve seen, we’ve acquired a significant number of businesses over the last two years in that space, and all of them have been integrated successfully and are performing upward from where we acquired them.

Right, alright, thanks guys.

Thank you. We will take our next question from Scott Schneeberger with Oppenheimer.

Thanks, good morning.

Good morning.

First question I would like to focus on economic consulting over the last few quarters you had to outsource due to demand there and its impacted margins, what kind of utilization it is actually down, could you kind of reconcile everything there?

I think the word "outsourcing" is probably, not to play semantics, but we really have exclusive arrangements with a number of big-named economists, so that really hasn’t -- you know, what we have is a, we have hired back person who has extremely exceptional experience worldwide who will be lynchpin of our efforts to globalize the practice. And while he ramps up, we have his cost, and we also have the -- what we had mentioned in terms of the compensation, where we have some of those outside consultants who are exclusive to us, have options that we have to account for on a variable accounting basis. So those have been the things that have really skewed the results a little bit. It’s not a tremendous amount of outsource, but we still are continuing looking to hire, and we’re very active in that marketplace.

Okay, thanks. I think last year that the was the segment that received the most incoming students in your summer recruit are you still looking to do about when the 12% growth annualize in there and what segments are you looking to sell amongst this year?

Let me just correct one thing you said, e-com is not one of the practices that hires a lot of undergraduates. It’s primarily forensic and the corporate finance practice.

Okay, thanks. And still looking to maintain the growth levels you spoken in the past as far as your approach?

The recruits there would be, we are looking for Phd, we are looking for people out of the top universities to work on the cases with our big experts as you know the traditional model which is true for most of our competitors is that the big-named economists are the people that bring in the cases, and then our real contribution comes from the people we have that do the research and the reports and that thing. So that’s where we’re constantly recruiting on all the campuses to get those folks.

And then came in is MBAs they work as research assistants and more than likely than not they’ll go back to college for a Phd. or some other higher degree.

Okay. Thanks. Moving over to tech consulting, you’ve recently moved into going to value added resellers. I just kind of, a broad question, with the IPO spin pending, are you going to manage the business any differently? Are you going to continue to work programs such as that or anything operationally going to change substantially?

Yes, I think that we’re starting to get into the forward-looking statements there, that we really can’t, I mean what we’ve told our people and everything is for the, it’s heads down in business as usual for right now.

Okay. Fair enough. And then software licensing fees still in the ballpark of 50?

I don’t want to sound cryptic here, but we’re, until we file the S-1 we’ve got attorneys having nooses around our neck. So, --

Okay, that’s fair enough. Thanks a lot guys.

Thank you. We’ll take our next question from Michel Morin with Merrill Lynch.

Yes, good morning. On the strategic communications practice, you had very good performance there. I was also surprised to see the margin bounce back from Q1, and I think if I recall correctly Q1 you had highlighted some mix shift dynamic. Could you comment a little bit on what’s been driving the margin there, and are you still seeing some of the trends you saw in Q1? Thank you.

We had larger than in the first quarter than we had in the gross expansion in the margin.

I apologize, I didn’t hear the first part, which segment were you asking about?

Strategic communications, in Q1 you had said that there was less capital markets related activity, and that had pressured your margin a little bit, and now this quarter you’re back up. So I wondering has that mix shift reversed itself or what was behind the margin in --?

It was not so much a mix shift in the first quarter was that we had couple of large events that’s the time when especially in the European practice, as part of their routine in terms of public companies, there are large events, which we host and put on for them, but that’s mostly a pass-through expense that we don’t mark-up. That was the mix, that was the margin issue in the first quarter. It’s still business as usual there, that was not a mix issue.

Right. But I think you had also alluded to a little bit of a slow-down in capital markets, related activity, if I’m not mistaken? Has that changed?

We did, but our point was that we have replaced that nicely with both crisis communications and event communications that have picked up that mix very well.

Okay. Great. And then the last thing is corporate expenses were very low, you know, again, and I think on the last call you had alluded to maybe that the Q1 level not initially being sustainable. It looks like you managed to do that again. Is that, is this kind of a level that we could expect going forward?

What we mentioned in the first quarter was that it was unusually low and that we would probably in the second quarter get back closer to the fourth quarter, which is a tad on an EBITDA basis, it’s a tad below $20 million, so that’s -- we came pretty close to what we had guided to in the second quarter. And going forward we’ve guided that at that level maybe a tad higher is where the expenses would go, especially with some of the things surrounding this, the IPO and transaction that we’re going to have.

Yes, I mean I think we’re pleased with the EBITDA margin for the quarter, when you add back the 123 R expense, it’s above the 25% cash EBITDA margin, and I think we’ve been pretty consistent in saying we’re trying to model the Company and manage it. I mean our goal would be to keep it where it is.

Right, now that’s great performance there. And then finally, I might have missed this but for the tech practice what was the organic growth?

Organic growth with the tech practice was 41.5%.

Thanks very much.

Thank you. And, ladies and gentlemen, we’ll go to our final question. It’s a follow-up question from Mr. Andrew Fones with USB Securities. Please go ahead, sir.

Yes, thanks. I just wanted to get into kind of what the impact of some of the kind of onetime or short-term impacts are from, and I guess you’ve gone into detail on the expensing of the in process R&D of $0.02 to $0.04. How, much accelerated amortization expense have you guided to for the second half of this year? And when could we expect that to roll-off? And then, if possible, can you give us any kind of ballpark estimate as to what the expense of the spinoff might be in the second half? Thanks

I think the $0.02 to $0.04 should be the accelerated impact, Andrew. So I don’t think we’ve seen anything beyond that, and we really see that coming mostly in the third quarter. As I said, we already took some expense in the UK acquisitions in the second quarter, slightly, so that’s in the numbers. I think from the point of view of trying to ballpark right now what the expenses would be, again, we’re on this slippery slope that we just don’t want to talk a lot about it, but I think we’re comfortable that we’re inside the range of earnings and we’ll have a lot more visibility on the expenses in about another month, and once we file the S-1 we’ll be a lot more free to talk about it.

Could, just so I understand on the amortization, the $6.5 million run rate that you mentioned, we shouldn’t expect any decline from that level as we go into kind of the, you know, second and third quarters of ‘09?

Yes, for the second and third quarter, first and second quarter of next year you probably would see it. Second and third quarter should stay about the same. It’ll start to burn-off a little bit third and fourth quarter next year, but it’ll be increased again by a factor of whatever David buys for us in the next two quarters.

Okay. But, that -- I mean it’s burning off, are you able to quantify that?

Well, I think we could. Again, I think what we tend to do is replace it, so I mean we will make other acquisitions between now and the end of the year.

Okay, thanks.

Thank you. And, that concludes our question and answer session. I’ll turn the call back over to Management for any final and closing remarks.

Okay. Well, thank you very much, and thank you for being with us today. We look forward to a great second half, and we’ll look forward to speaking with you as details unfold on our proposed transaction, and then also at the end of the third quarter. Thank you.

Thank you. Ladies and gentlemen, this does conclude our conference for today. We appreciate your participation. Have a wonderful day. You may now disconnect.