Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of James Janesky - Stifel Nicolaus
James Janesky - Stifel Nicolaus
When you talk about in the release and your prepared comments about business slowing and clients being frozen, do you expect that that trend will continue into the first quarter of 2009 and at what point do you expect that the pipeline could start to open up.
Jim Burrows
It probably will extend into Q1. We do see some, we think that work will start ramping during the course of the year, some will start in Q1, some later. But we think that we’ll see a gradual improvement over time.
James Janesky - Stifel Nicolaus
What do you think it will take the pipeline to become or projects to become unfrozen, do you expect a change in the administration to have an effect on that, do you expect that whenever the financial markets stabilize that the pipeline will, I’m just trying to get a sense of what you think it will take.
Jim Burrows
It depends on the areas. Basically what we’re talking about is some of our, its not every project, its some of the bigger engagements where the clients are sensitive to our rate of billing. In the litigation area I don’t think it’s a function of the administration right now and unless the financial situation deteriorates worse, I think we’ll just simply see as those litigations start to get hot we will be billing more.
In the business consulting area we’ve had some fairly large engagements have been held off for various reasons but I think the climate is a factor. We expect to see that loosening up within Q1 and then getting better as the year go along. So we do see, I think that should give you a picture.
James Janesky - Stifel Nicolaus
So I guess the message as we go into 2009 is that it will be a slow start that we could see improvement but that the margins year-over-year should get better both on the gross margin as well as the SG&A lines, is that correct?
Jim Burrows
Well to the extent that we get revenue growth, that should happen or if we get even realization growth through rates, if we hit those numbers it will.
James Janesky - Stifel Nicolaus
Do you expect that in the first quarter at least that margins could hold up with the, in the gross margin line, this is on a non-GAAP basis by the way I’m looking at, do you think that the gross margins can hold around the 37% level?
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