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What started as a bid to inject some much-needed cash into its debt-laden finances appears to be ending in the comprehensive dismantlement of LECG. Today's announcement—that the firm's San Francisco-based forensic accounting unit would be sold to FTI Consulting—is minor relative to other recent divestments but indicative of the hopeless outlook LECG execs have for their once-proud strategy outfit.
Approximately 25 employees will make the move from LECG to FTI. The Philadelphia Business Journal figures that that leaves roughly 500 remaining LECG employees, who now face the prospect of either switching companies or getting the axe.
Of all the possible outcomes, LECG appeared to suggest that the most likely would be the further divestment of the rest of the firm's assets. "With the advice of its restructuring advisors," the firm said in today's press release, "LECG continues to negotiate the transition of all practice groups remaining after today's transaction and transactions disclosed in previous public communications."
Could there be a more appropriate death knell for a strategy consulting firm than the hiring of "restructuring advisors" who aren't their own?
LECG's imminent breakup stems from its failure to pay back nearly $30 million in credit debt owed to banks. So far, FTI has been the main benefactor of LECG's disintegration; FTI firm has now purchased three of LECG's practice groups, compared to Grant Thornton's two and the handful of employees acquired by New York accounting/consulting shop WeiserMazars.
For more information:
Philadelphia Business Journal
Press Release: LECG Transitions Parts of Forensic Accounting Group to FTI
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