We have met with or talked to roughly 10 different privately held firms that compete in various parts of the disputes and investigations consulting market, including economic consulting, electronic discovery, regulatory investigation-related services, and dispute consulting. Based on these discussions, we believe that the demand environment for these solutions is solid right now. The strongest areas of demand are for AML investigations, IT/cybersecurity capabilities, and M&A-related projects for economic consulting and electronic discovery. These trends modestly increase our confidence in our projections for the disputes and investigations-related business units at specialty consulting companies. We continue to view Huron Consulting and FTI Consulting as our preferred picks in this group right now. Our discussions with privately held firms also bolster our confidence in the performance of Robert Half’s Protiviti unit.
Many of the companies that we met with described investigationrelated services as the strongest part of their business. In particular, several companies cited AML-related investigations as being particularly strong right now. This is consistent with some of the commentary that we heard on the second-quarter earnings calls for several publicly traded companies, including Navigant, FTI, and Robert Half. A few companies noted that AML projects tend to be large and lumpy. For example, we believe that several consultancies have billed more than $10 million for work at Standard Chartered. For example, Navigant has been the monitor of AML investigations there since 2012, and a news article in August suggested that Navigant’s contract to serve as monitor for Standard Charter was recently extended for two more years). We also have heard that several companies have been involved in work at HSBC, which continues to work on fixing some historical challenges with AML. One firm remarked to us that “spending on credit crisis-related issues is being shifted now at banks to investigations and regulatory compliance projects.” Besides AML investigations, FCPA cases are also solid right now. Lastly, one frequent topic of discussion among privately held firms was the future prospects of Kroll, whose parent company, Altegrity, appears increasingly challenged now that its USIS division has lost its main contract with the federal government. We believe that a number of consultancies are trying to capitalize on the situation to grow their investigationsrelated businesses. Overall, the commentary that we heard about this part of the market bolsters our outlook for Navigant’s Financial Services, Risk, and Compliance segment (where their AML/FCPA practice is based) and FTI’s Forensic and Litigation consulting (FLC) segment. Robert Half also mentioned some large AML projects as being a boost for its staffing operations on its last conference call, and our conversations with privately held firms suggest that demand for these solutions remains fairly strong.