Good day, and welcome to the FTI Consulting First Quarter 2012 Earnings Conference Call. As a reminder, today's conference is being recorded. Now for opening remarks and introductions, I would like to turn the conference over to Mr. Daniel Slottje of FTI Consulting. Please go ahead, sir.

Good morning. Welcome to the FTI Consulting Conference Call to discuss the company's first quarter 2012 results as reported this morning. Management will begin with formal remarks, after which, we 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 21 of the Securities Exchange Act of 1934 that involve uncertainties and risks. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events, future revenues, future results and performance expectations, plans or intentions relating to acquisitions or other matters, business trends and other information that is not historical, including statements regarding estimates of our future financial results. For a discussion of risks and other factors that may cause actual results or events to differ from those contemplated by forward-looking results, investors should review the Safe Harbor statement in the earnings press release issued this morning, a copy of which is available on our website at www.fticonsulting.com, as well as other disclosures under the heading of Risk, Factors and Forward-Looking Information in our most recent Form 10-K and in our other filings with the Securities and Exchange Commission. Investors are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this earnings call. During the call, we will discuss certain non-GAAP financial measures such as adjusted EBITDA, adjusted segment EBITDA and adjusted earnings per share. For a discussion of these non-GAAP financial measures, as well as our reconciliation of these non-GAAP financial measures to the most recently comparable GAAP measures, investors should review the press release we issued this morning. With these formalities out of the way, I would like to turn the call over to Jack Dunn, President and Chief Executive Officer. Jack, please go ahead.

Thank you very much. Good morning and thank you to everyone for joining us today. With me are Dennis Shaughnessy, our Chairman; Roger Carlile, our Chief Financial Officer; and David Bannister, our Chairman of North America. First, we'd like to give you a brief overview of the quarter and then get to your questions. Our first quarter results are as diverse as the economic environment that gave rise to them. On the cost side, as usual, in the first quarter, we had a burden of approximately 150 to 200 basis points of expense related to benefits and payroll taxes that will not recur in the remaining quarters. In addition, this year, as well as in years going forward, we will have an additional first quarter non-cash expense of around 100 basis points relating to certain equity bonus compensation to be recognized in the first quarter when paid as opposed to amortized over the remaining life of the related employment obligations. Finally, in the quarter, we incurred approximately 65 basis points of expenses and investments that not only do we believe will not recur but should actually enhance performance in many cases during the rest of the year. As I said, in a moment, I'll turn it over to Roger to drill down further on these items. On the revenue side, the analysis is very compelling and reflects an interesting picture of the world. From a geographical perspective, the results appear well-correlated to headlines from today's papers. Activities in Latin America, by all accounts, a cauldron of investment industry and intrigue, grew by 100% year-over-year. All of our services are represented there, and all had good quarters reflective of the nature of the economic activity in this vibrant part of the world. Asia Pacific slipped from the housing and growth rates…

All right. Thanks, Jack. As mentioned in our first quarter this morning, our first quarter results included 3 types of expenses, which we don't expect to recur in the second, third or fourth quarters of this year. Those are: one, benefits and payroll tax, which we have discussed in previous years; two, accelerated bonus-related equity compensation expense; and three, timing-related SG&A expenses related to unique first quarter projects and other investments, which are expected to generate future benefit to the overall business. Regarding the benefits and payroll taxes expense, as we have discussed in the past, our first quarter of each year carries an increased expense burden for expenses such as payroll taxes and 401(k) matching of employee contributions, due to the higher compensated employees having a disproportionate amount of these expenses in the first quarter as compared to the second, third and fourth quarters. As noted in the press release, the first quarter expense burden is approximately 150 basis points to 200 basis points of adjusted EBITDA margin. With respect to our bonus-related equity compensation expense, our first quarter in 2012 and in future years will carry an additional increased expense burden of approximately 100 basis points of adjusted EBITDA margin. This charge is a result of certain clauses such as retirement and non-renewal clauses in the employment agreements of our ICP agreements of our senior professionals participating in that program, and the non-cash equity expense, which is related to the bonus deferral element of that program being recognized in the first quarter at the time our annual bonus payments are paid and the equity related to those deferrals are awarded, rather than being recognized over the entire period of the senior professionals' future employment obligations. To be clear, this impacts the quarter in which the expense is recognized…

Great. So with that, we'd like to turn it over to your questions, if we could.

[Operator Instructions] And we will go first to David Gold with Sidoti. David Gold - Sidoti & Company, LLC: I was hoping you could give a little bit more color, just to start really on the change in compensation, the bonuses and the acceleration there. A, is it as simple as an accounting change or is it something that you've changed your compensation program?

David, it's Dennis. It's basically more a natural reaction of the contracts. So what happens, there's 2 elements to it. One, when people accumulate enough time in service and age, they can elect retirement. No one has done that, everybody's working. But once you do reach that, then you no longer can amortize any of the expense, even though they're not vested in the actual payments yet. You have to then book it when they can theoretically retire, which will be instantaneously if they gave you notice. So that's part of the equation. So again, they don't get the benefit. There's still a rolling 3-year timeframe. If they do retire, they have a non-competition requirement that they would have to honor in order to get the benefit. So none of that has changed. What's changed is the way it has to be booked instantaneously once they achieve that time and service and age. And again, to restate, no one -- some of these people have had this now for several years, and no one has retired nor have they given us any intention of retiring. Secondly, in the first group of SMD contracts, ICP contracts, it was basically a 10-year program that once you reach the sixth year, you start rolling onto annual contracts that are automatically renewed with 90-day notice. Again, the bonuses are still deferred as far as actual payments. So there's a time-vesting requirement. But since they're annual contracts that people could give us notice at the end of the year, they then have the non-competition requirement that's attached to it. So they don't get paid unless, to use illegal terminology, they're good leavers. So the practical aspect is not changed in the contracts. It's more the way you have to account, and it's driven by those 2 elements. One, just simply part of the contracts maturing to where they are now on annual renewal. And part of the contracts, some of them have matured to annual renewal, they're still on term, but people have accumulated enough time and service to where they could retire.

Yes, David, it's Roger. Just to be real clear on that, it has not changed the timing of when those grants are made. It has not changed the total expense of those grants. It simply changes which quarters the expense is recognized then.

Right. David, it pulls expense in that you would either amortize over a 4-quarter basis or a 36-quarter basis depending on the actual deferral. It pulls it into 1 quarter. David Gold - Sidoti & Company, LLC: So you anticipated -- part 2 of the question, which was, so essentially, looking at that 100 basis points, it's acceleration into a certain quarter so the rest of the year should benefit?

That is correct. David Gold - Sidoti & Company, LLC: Okay. And then on the other expenses that you called out, can you give us a sense -- some of those sound like, at least, for this year, they'll be ongoing, like the website initiative and the board expansion? Can you give us a sense for how much of that truly rolls off as onetime to first quarter versus maybe they are specific to this quarter, but they're sort of with us to stay?

Yes. About 1/3 of it is the final payments to outside vendors for the redesign of our website, which is now up and in place. And it was the end of the project, it was third-party vendors, engineers and designers who are working with us on it, and that won't recur. The new website is up and running, and those payments were made in the quarter. The annual -- we have a global management meeting normally every 18 months to 24 months, and it simply fell in this quarter. We won't have another one until probably mid next year when we pull everybody together. And it fell into the quarter, pulling that many people around the world, as expense of that represented about $1 million in round numbers of the expense. We will be adding -- if you looked at our proxy, we are adding 4 new directors, 2 from Europe, 1 from South America -- actually, 3 in Europe, 1 from South America. And those gentlemen have accepted our invitation to come. They are in our proxy statement. The shareholders, in fact, are voting on their election as we speak, and we are optimistic that they will be successfully elected and will join us at our annual meeting in June. The fee to the outside search firm that worked with us in this director search was a first quarter charge, so that, again, will not recur. So there's a mix and match, but at the end of the day, David, it's really driven by 3 things. One, it was the final payments to the outside vendors who worked with us on the design of the new website. Two was the fact that our almost sort of semi-annual or annual-plus meeting fell in the first quarter. And then finally, it's the director search fees for 4 new directors that were paid to a third-party headhunter. David Gold - Sidoti & Company, LLC: Perfect. Perfect. That's really helpful. Just one quick one, if I can sneak it in. So all of that stuff sounds like fairly routine to be expected, so to speak, of doing business. So I guess, just curious, without formally updating guidance, can you give us a sense for how much of the expense basically, truly surprised you versus what was embedded in your guidance?

Well, nothing surprised us. I think the timing of the web project ending when it did probably surprised us. We actually thought it would be finished more towards the end of last year, continued into this year. And so I would say, if we had 1 surprise, it was probably that. The annual -- the actual meeting costs, we knew would just be a timing element. And I think we were well aware of the pull in expenses from the charge of the SMD bonus payments into the first quarter. I think it wasn't until, perhaps, we had pushed every number that we got the final amounts. Part of it was driven, David, because we had to wait for the audit of last year to confirm what the bonus pools were and what the payouts would be to the individuals. So there might have been a slight increased number there. So I think, basically, what we're saying is that we don't expect those costs to continue for the year. Some will recur next year, as Roger stated, and therefore, that's pretty much baked into our heads as we go forward, looking at our potential results.

Yes, they were expected throughout the year. They happen to occur on the first quarter. So none of them were unanticipated, it was just, you didn't know when the director search fees and you didn't know when the website fees were going to be completed. So those 2 were more serendipitous as to timing.

And we will go next to Tim McHugh with William Blair & Company. Timothy McHugh - William Blair & Company L.L.C., Research Division: I just want to know if you can elaborate a little more on what you're seeing in the Technology segment. I know you talked about the potential impact of elections, but generally, as I check around with companies, it sounds like their demand environment is still reasonably positive there. So can you give us a little more color on what happened if there's some big cases that rolled off and what the kind of pipeline looks like for the rest of the year?

Yes. We did -- we have 2 very large cases that are rolling off and slowing down. And so that might be unique to us, but that is the circumstances. And so the new business is obviously replacing significant assignments that have rolled off. Tim, we are also seeing pricing pressure on the processing side by competitors. I think while there is a demand out there for services, clearly, there are a lot of people that are competing pretty much based on price. And I think that's not so much a case in complex matters, but it certainly seems to be the rule rev and the exception and sort of your ordinary matter. So maybe the volume of ordinary matters is up, but we're seeing much more aggressive pricing pressure in those areas. And I think we're cautiously optimistic on second requests going forward, given the amount of retentions we're getting in Econ, but we saw second requests start to trip. While we did very well in the quarter in second requests, we saw the momentum start to trail off at the end. And so I think, as Jack said, we'll have to see whether people actually pull the trigger on some of these deals that we're helping them analyze. If they do, that will argue well for that business to go up. So I would say your assumption is right. One, we've had 2 big accounts slow down, and two, we are seeing pricing pressure pretty aggressive again in the processing side. Timothy McHugh - William Blair & Company L.L.C., Research Division: Where are you at with those large cases rolling off? I mean, is there more pain, if you will...

In a baseball game parlance, in one of them, we're in the eighth -- the bottom of the eighth, and in another one, we're probably entering the top of the eighth. Timothy McHugh - William Blair & Company L.L.C., Research Division: Okay. And then the restructuring business, I know you've been due a Lehman success fee, and you get success fees every now and then. But was there anything unusual about the amount of success fees?

No, we did not get the Lehman success fee in the quarter.

Yes, this was basic blocking and tackling and a lot of hard work by these folks, and it had to happen. But Europe and Spain, in particular, started to show a market there that it had to -- I knew it had to happen, it just hadn't, so we saw a very strong results there. And again, not surprisingly, our U.S. healthcare practice was very, very strong. Timothy McHugh - William Blair & Company L.L.C., Research Division: Okay. And then last one for me, just kind of following up a little bit on David's. A line of questioning there was -- so, I mean, are you trying to -- I guess the way you're describing the first quarter, is this in line with what you would have expected when you gave your prior guidance or did the mix of revenue come in such that the margins are a little lower? Just trying to understand how to think about this relative to what you expected.

I think the expenses came in about where we expected and we didn't expect. As I said, there are 1 or 2 exceptions that may have fallen in the second quarter that we thought may have fallen into the fourth quarter. We didn't know the final impact of the pull -- the pull into the first quarter of the equity compensation expense, until late in the quarter once we had finalized the audit, what the bonus payouts were going to look like, though we might have been a little surprised from the expense side. On the revenue side, without a doubt, the bigger surprise is Technology because it's one of our highest margin businesses. And the fact that the revenue came in, it came in lower than we had anticipated there. While it was offset by increases in revenue elsewhere, they have the highest margin of any of our businesses. And so -- and even inside of Tech, we saw a shift in some of their businesses to where it affected their margins. So I would say, clearly, the single biggest difference in our thought process was the margin of Technology that was driven by shifts of business and obviously, less-than-expected revenues. Timothy McHugh - William Blair & Company L.L.C., Research Division: If I could just follow-up one last one on that. I mean, do you -- talk about the competitive position of that Tech segment and how do you feel. Has there been any changes that make you more or less confident around kind of the competitive environment or is it more to do with timing?

I think that it's -- I think it's extremely competitive. They've had some significant new wins that will be reflected as they go forward, and they've had new wins against big name technology companies with sort of FORTUNE 500 size clients. I think there is no doubt that in the middle sort of the continuum, middle-size type engagements, it's extremely price competitive. I think the law firms, we can read about all the issues facing law firms and the pressures on them by their clients to contain costs. I think that's flowing through into what they would view as routine matters where you need this type of electronic production. And so I would say that we are seeing significant price competition. We have the ability to meet it. We will meet it on a selective basis. We are seeing less of it at the high-end and the complex-end, but then these very huge cases are difficult to predict exactly when they're going to hit you. We know we'll get them, but you can't predict quarter-to-quarter exactly when they come in. So I think that we feel very well-positioned. We're rolling out a new suite of technology that has significant user face-friendly advantages. We've tested it with a couple of major law firms. So we're getting very good feedback back about how much easier it is to use the technology. There's never been a doubt that our technology has been at the high-end of the power range. There has been some complaints from people that it's not the easiest to use out there. I think that will be solved with this new rollout. So on a technology basis, we are still investing heavily in it. We think it's yielding us good competitive advantage. On a consulting basis, we don't view that there's anyone out there that's better than we are, which is why we feel we get the big cases. In the routine cases, I think the general counsels, who are under pressure to control their costs, are pressuring the law firms to control costs. And ergo, any other third-party vendor is getting the same pressure, and I don't think that's going away.

Yes, I think the -- some -- when you analyze our business as opposed to some others, we do have an R&D cost that doesn't go away. If the revenues are down on a quarterly level, we also -- we think our new Ringtail product that Dennis alluded to is going to be perhaps a game changer for us, they are certainly important. And also, the work that we're doing right now, vis-à-vis, the ability to host in the cloud, and I think it's perhaps going to be a major differentiator for us. So we're still very optimistic for the year, and we think, again, we have the right team in place to handle whatever comes.

And we will go next to Dan Leben with Robert W. Baird. Daniel R. Leben - Robert W. Baird & Co. Incorporated, Research Division: Could you just flash back to last year, help us understand what the quarterly progression of the bonus compensation would have looked like through the year on the equity side so we know what's baked into that comparison?

Dan, it's Roger Carlile. In terms of looking at 2011, if you remember the change we made last year in the third quarter, if you look at those numbers now, you'll see that same trend. We're just calling it out because I don't think people fully understand it. But you'll see the same trend of having a higher equity compensation expense related to the bonus deferrals in that program in Q1 versus Q2s, 3 and 4.

Yes, this was -- our explanation of this was not an issue of explaining a differential between this year and last year, it was to help you with your model going forward so that you didn't build that in as a fixed cost throughout the year. That's all we were trying to do. Daniel R. Leben - Robert W. Baird & Co. Incorporated, Research Division: Okay, great. And so with the -- no significant success fees move in the base on restructuring, has the base level for you guys moved up a little bit, where you think the bottoming-out process is somewhere closer to $110 million?

Well, I think we feel -- as we said to you, probably starting in the third quarter last year, we were feeling fairly confident that we are in that bottoming-out range. I mean, we're now seeing real growth. So we're seeing new assignments coming in, and we have significant growth -- I would say, what the main drivers of the growth was year-over-year improvement in our European operations. And I mean, I don't have to tell you what's going on in Europe. We're all looking at it minute-by-minute, and it is now translating into increased work for them. And depending on how that situation is managed over there, clearly, it could increase fairly significantly the amount of business they're doing, and we are prepared to handle that kind of increased work. Daniel R. Leben - Robert W. Baird & Co. Incorporated, Research Division: Great. And then last one from me. Just on the FLC side, from a bill rate utilization, headcount perspective, those trends have kind of ticked down in the last few quarters. Could you talk about any impact of the LECG personnel moving on to the FTI model that's driving that or just help us understand the dynamics there?

Dan, it's Roger Carlile. I don't think the LECG personnel that joined FLC at this point are having any impact in terms of being on the model or the impact of the margins. They're performing at the -- on the same compensation models and at the same run rates. So there's nothing there. I think as was mentioned by Jack in his comments in the press release, I think Forensic and Litigation Consulting is facing pricing pressure in North America. As you could see in the numbers there, their average rate moved down just a little bit over -- year-over-year. So I think that's something that they're facing. And then the headcount reduction, although minor, I think, is just them being cautious in this environment, that you have some normal attrition. And they are adding people in the right places, but they're not adding as quickly as their normal attrition.

FLC is probably the area where we invested the heaviest in what we call multiple new initiatives. Some of those initiatives are absolutely beginning to pay off. As Jack talked about, the growth in Latin America, now in Asia and Europe, of our GRIP practice is really starting to pay off. Other initiatives have not paid off well for us. They appear to either be marginal, and we're trying to decide whether that's macro-driven or micro-driven. And if it's micro-driven, then we will take the appropriate steps to end those initiatives because you can only go so far with investments before you have to turn around and say, "It's just not going to give us the return we want." So I think you will probably see in that segment over the next 2 quarters us being more aggressive in analyzing those initiatives, which could result in a reduction of headcount as we terminate initiatives that just simply have not paid off for us in a way that we would like and try to feed the other ones that are, in fact, doing better than we thought.

And we will go next to Tobey Sommer with SunTrust.

I'm just curious about your overall perception of the market for you. Is there a change that maybe we're not going to see that much of an up-cycle? Because you do have businesses that perform differently in different kind of economic scenarios, and from the prepared remarks, it seems like maybe that's changed.

Tobey, it's Dennis. I think Jack's comment that this is a confusing world we're living in right now is appropriate. I think there is clearly segment -- sectors and segments in the U.S. economy that seem to be doing really well. But the question is, are they doing really well relative to their highs in 2007 or are they doing better because they're comping against numbers that are being measured against the trough of 2008, 2009, maybe in 2010? Clearly, some, on an absolute basis, are doing very well. I think the overall growth in the U.S. is not exciting and really if we're agonizing or already saying we're trying to figure out what's going to happen in the second half. Europe is, in our opinion, much worse than we thought it was. We are well-positioned to take advantage of issues that may arise out of there, but without a doubt, it is absolutely depressing their capital markets. While there has been IPO activity here in the U.S., certainly, notable tech IPOs, there are practically 0 activity in any of the European marketplaces. And so that's just -- it's almost a direct derivative of the fact that there's just nothing going on over there as far as new offerings, new capital raises. And I think, overall, our feeling is Europe is worse, U.S. has the potential to have a slower second half than maybe a lot of people thought, we're trying to figure that out. On the other hand, Latin America and Asia are right now doing better than we thought they would do for us. So I think we've got 1 quarter of data, and I think that's what we're trying to digest. It's too early to make any kind of call yet, but I think it's a confusing environment.

Picking up on Dennis' comments, Latin America is vibrant, and it's not surprising that all our services down there are doing really well because we serve every phase of the economy. In other areas of the world, the things that we do that deal with crisis, where you can't afford not to bring us in, or where we do with planning, where, again, ironically, you can't afford not to bring us in, are doing very well. I reference our economic consulting and the amount of work we're seeing on Antitrust and M&A. I reference the European activity in our restructuring where people -- when the economy is so bad, people can't put off any longer some of the issues that they have to face. And then I think it's indicative of our GRIP practice, where around the world, they are some of the busiest people we have, because people are still trying to figure out and plan what to do either proactively or reactionarily to the changes that are going to come in as a result of political change and the unrest. So I think the bottom line is we think we're very well-positioned. We think, just like every other time we've been through this, a dam will burst, but it's hard to predict what the date of that or timing will be. But certainly, towards the back half of the year, you would think with some of the resolution of the political issues, we would begin to see some action one way or the other, and that's when FTI really thrives.

You highlighted the healthcare business as being good. I was wondering if you could give us sort of some more color or rate of growth there and then comment on what your expectations are for industry consolidation in 2012.

Toby, could you elaborate industry consolidation? You mean in our offerings or industry consolidation in the macro sense?

Industry consolidation within your offerings and what kind of role you expect to play.

Okay. In general, the healthcare business has been up, and it's a combination of a lot of things. David, why don't you take that?

Well, our healthcare business comprises a number of different practices, a number of different segments. So the one we're specifically referring to within the corporate finance segment is the people who help hospitals become more efficient in what they do. So it involves process improvement, purchasing. So that particular business was up about almost 20% year-over-year in the quarter.

So I think that's one of the primary drivers. I would say, our business on monitorships, where we're actually in various healthcare providers monitoring certain issues, has been stable, maybe up slightly. The -- obviously, we are going to market more across our segments on an industry basis. We've had good success in doing that with our communications, media and entertainment group. We've had some good success with that in some of our financial services, especially our insurance group. And I think you will continue to see probably our company evolve to where, at a minimum, there will be virtual industry groupings across our segments that go to market together to use their domain expertise inside the marketplace as a competitive advantage.

Was your question on the M&A front, are we seeing activity in the hospital consolidation area?

No, it was broader than healthcare. Just kind of curious...

Okay. Well, we are, anyway.

And we will go next to Kevin McVeigh with Macquarie.

I wonder if you could give us a sense of kind of utilization in the U.S. versus Europe and how we should think about headcount across some of the verticals as we make our way through 2012.

I think -- you want to go through each of the -- when you say the verticals, you want to go through each of the segments and their utilization?

Yes. Just across kind of U.S. versus Europe. And then as you think about headcount across the segments, it seems like you had an uptick in Q1. How should that play out over the balance of the year?

Right. Okay. At the tip of my fingers, I don't -- I can't break it down in terms of segment and geography that quickly. But generally speaking, what you would see is, is that utilization and headcount for each of the segments follows closely the way we spoke about the regions and the products. So if you think about FLC, FLC's headcount and utilizations are up and strong in Latin America and Asia Pacific but not so in the U.S. In the U.S., their headcount would tend to be probably down slightly, and their utilizations are down. As you saw, the average is down.

Also, there's a little bit of a trick in there, in the U.S. versus outside U.S. A major part of our activity in the U.K. is in the Strategic Communications where they don't keep utilization as a number, it's a fixed fee type of assignment business. Similarly, around the world, a lot of our practices, the GRIP practice, and in Asia, the utilization per person, is not as important as it is for project fees and things like that. So I just give you that caveat, while Roger explains that. So we're -- intuitively, the utilization is very good in the places they keep it in Europe, for example, in restructuring and in economic consulting. So Roger...

Right. No, I think that's right. So I mean, off line, I could probably give you a little more detail. But in terms of looking at the overall segments, if you look at the regions and you look at the segments that are participating in that region, you would see a high correlation, as I explained for FLC.

I think you're seeing -- we're adding people in Econ. It reflects sort of the emergences as really the #1 player. The demand is high there. New engagements that were open in the quarter were approaching record. And so you would see that possibly expand. FLC, as Roger said, just based on demand, plus what I had said before that, that is where I anticipate that we will be making some movement in this quarter and next quarter to analyze the investments that we made in some of these initiatives over the last couple of years and decide which ones we're going to continue and which ones are going to stop. That could yield at least over 2- or 3-quarter basis a drop in the personnel complement in that area. Technology actually added people in the first quarter, and in FLC, I think their personnel complement is budget to be fairly flat for the year. But again, demand geographically could change that, but it would probably just balance out 1 geography after another.

If I could point out one thing you may find significant. You'll know that the economic consulting utilization is roughly the same this year's quarter versus last year's quarter, suggesting correctly that the LECG professionals who have joined us are working at the similar high rates that our people do traditionally in the business. So I think that's a real positive thing for how well that acquisition is going.

Got it. And then in Europe, in particular, how trend has been on the Corporate Finance/Restructuring side? Has that business kind of been where you thought it was, a little bit stronger given the dislocation? Or is it kind of -- is that more of a second half 2012 event for that business?

No, it started the year better than we anticipated or about possibly where -- certainly, it's stronger in Europe than we anticipated. And I think, overall, it slowed a little bit in Asia. That was offset by a pickup in Europe. It's picked up down in Latin America, and it's clearly moving in the right direction here in the States. So I would say, the momentum there is more than we would have planned, sort of a couple of quarters ago looking at this year.

And we will go next to Jim Janesky with Avondale Partners.

When you look at election years, we certainly seen in the past that election years do often cause a freeze in litigation. What are your thoughts, once the election is over, with the current administration, do you think they will be likely to or it will be likely to open up litigation? Will it take a change in administration or do you think that neither are going to get very aggressive in 2013?

Well, just the resolution of the election will resume activity. Because in today's environment, nobody is not going to be able to continue to go after some of the excesses that took place in the last several years. So I think that will matter. You'll see an antitrust enforcement incredibly increase, and that's one bright spot, as I was talking about, that does not seem to have abated. Not only does the Justice Department seem pretty fired up about going after people, but there does seem to be this new, at least, on the surface, collaboration between authorities and the different governments, even though I think their interest are not necessarily aligned. So I expect that to stay very strong. And on the SEC enforcement side, I would expect that no matter who is elected, that in the areas of foreign corrupt practices and of restatements and things like that, you're going to see activity resume. This is usually a phenomenon not so much of anything but people trying to figure out where they're going to be working after the election, whether they are riding the right horse, whether they're getting their résumés out or whatever. So I think either way, no matter what happened in the past, it really hasn't mattered who came in, it was the resolution of the election that just got the Justice Department and other entities repopulated, re-led, and it goes its own course. So the people don't go there to be inactive.

Okay. And you talked about the strength in Corporate Finance within Europe. Can you give us an idea of what percent of revenues overall company, overall, are within Europe? And is Corporate Finance disproportionately higher or lower than the company average?

Well, the answer is, yes, we can. We don't break those out. About 26%, 27% almost this quarter of revenues were non-North America, with Europe being the predominant place where those revenues would reside. And Corporate Finance over in Europe would -- yes, would not be disproportionately higher. If anything right now, it might be because of the -- that's where the financial dynamics group was founded, and that's where the bulk of their revenues are. It would be actually smaller as a percentage of overall revenues versus Corporate Finance as a whole in the company.

Okay. And then with respect to the benefit and payroll resets, was there anything that came in unusually high in the first quarter? Or were you just trying to call it out to make sure that everyone takes that into consideration when modeling the first quarter?

Yes, it's the latter. They came in maybe a little higher. I mean, we had a very good year last year, and so that simple drives the bonus pools, the bonus pools drive what percentage is paid in stock. As I said, the people don't have that, the people don't have that, but they'll get it over time. But we now book it in 1 quarter versus -- over the life of their employment obligation. So I would say just maybe a slight uptick on what we were expecting. We really wanted to call it out because it is a significant change, and that change will reoccur going forward. And for the most part, it's pulling expense in the 1 quarter that would have been the minimum over 1 year or several years.

So we should expect somewhere on the order of 250 to 300 basis points between payroll, benefits and non-cash comp, right?

That is correct.

And we will go next to Joseph Foresi with Janney Montgomery Scott.

This is Jeff Rossetti calling on behalf of Joe. I know you've mentioned some cases, large cases rolling off. Is there -- and the challenging environment for FLC in Technology. But could you maybe talk about if there is a pipeline at all for the larger cases for this year?

Well, we've got 3 significant wins, can't discuss the cases for obvious reasons. All 3 have the potential to be large cases, but we won't know yet until we really get into them. And I think without describing the cases to you, which I won't do, we really can't talk about it, except to say that we -- and they're very recent wins, they literally have been in the last couple of weeks.

Okay. And Dennis, I think -- just a follow-up. I think you have mentioned this a few times. But the possible headcount reductions, is there any kind of detail on those investment initiatives, more specific on what area within FLC?

No, I think it's in several areas. And I think, as we said, so I think we've been talking about this for several years. We wanted to give some of these some runway to see how they would work out. Some, as Jack talked about earlier, worked out extremely well. Others have not worked, and we had already started making some moves to stop those investments. And some, more importantly, you get caught in sort of the Never Land of they're working okay, but not anywhere near an acceptable margin that we're used to. And the question is, are we better off re-diverting those resources into other areas that certainly have more upside potential and are working much better? So I think you'll see the actions take in this quarter and next quarter, but I don't want to call out on our call necessarily which ones -- once we take actions, I think it will be easier to discuss them.

And we'll go next to Ato Garrett with Deutsche Bank.

Since we didn't really get an explicit update on guidance, can we consider that guidance for the full year has been reiterated on the call? Would you guys...

No. I think our policy is to update guidance at the end of the second quarter, after we've had 2 quarters. I think we tried to point out to you, certainly, on an expense side, that first quarter was impacted by a bunch of expenses that won't reoccur. So that's clearly a positive. But I think we are not sitting here right now saying that we have the clearest of crystal balls on the revenue side going forward. I think we have good news in some areas coming in, some okay news in other areas. And I think we'll digest it this quarter, and we will update our guidance as is our policy at the end of the quarter.

Okay. And then also looking at the effect of M&A, it seemed that it was positive for Economic Consulting but then was a headwind for Strategic Communications. Can you help us kind of how to think about that? Now that it was the same factor, it was negative for 1, positive for the other.

Sure. There's very little M&A right now emanating out of Europe, and that's where they have -- probably, their strongest M&A business would be over in Europe. So I think they're geographically impacted by the fact that there's just been a dearth of any of that activity. The Econtract just tends to be a more global practice, and again, it tends to be brought in on a prospective basis than an actual basis. So they get a lot of retentions looking at deals and trying to understand whether -- if the target is actually acquired, can it be approved either in Europe, U.S. or wherever the relative jurisdiction is. And I think that we had 3 big M&A assignments over the last 1.5 years out in Australia where our guys did a fantastic job on them. Both of those were completed in, and they were clients, those Strategic Communications. So there is just the example of 3 deals burnt off. And I think if you're reading anything about the Australian economy, things have calmed down there a little bit, so it might take a while for that to reappear.

In a nutshell, I think what it looks like to us is people are doing an awful lot of planning, a lot of what-ifs, a lot of -- they have every issue from stranded cash to taxation and what's going to happen. And I think there's a lot of planning doing, which bodes well for when there's a little bit of clarity. Then the other segments of FTI Consulting ought to be able to capitalize on that.

And at this time, there are no further questions. I'd like to turn it back to our speakers for any additional or closing remarks.

Okay. I guess the closing remarks will be the same ones that we had in the press release, which is, we are extremely well-positioned for whichever way the world goes over the next 12 months. Our crystal ball, like everyone else's, is a little murky with the election results just in from France, the ones coming up here. And so we think we have some good runway, some good vision, but I think the major impact is going to be really as these elections, political and economic crises unfold and we get a chance to really see where the world is going. So with that, we look forward to speaking to you on our next conference call. Thank you.

And this concludes today's conference. We do thank you for your participation.