Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Jeff Zekauskas from JP Morgan. Please proceed.
Jeffery Zekauskas – JP Morgan Securities
Can you explain what the transitional costs are in the asbestos liability?
Frank C. Sullivan
Sure. We talked about them actually at year end and the last call. Two things: we had a national defense counsel that had been acting for many years as essentially our asbestos actuary and paying lawyers to do actuarial work is quite expensive. So, this past year we moved from a law firm who had been doing that work very capably for us for probably a decade but, had become quite expensive to [Navagant] which is probably the world’s if not the nation’s, if not the world’s most sophisticated actuarial contingent liability firm. And, our annual costs went from millions to hundreds of thousands.
Secondly, in a number of jurisdictions given some of the changes in the underlying dynamics of asbestos cases and how they’re defended we made changes in defense counsel which also had resulted in significant savings. The combination of which on an annual basis ought to be in the $8 to $10 million range. But, in that process we were working over a six to eight month period with two firms transitioning from an old firm to a new firm and then some of the settlement issues that raised in the transition. Those are the result of the transitions – cost us about $12 million and that transition is now complete.
Jeffery Zekauskas – JP Morgan Securities
So, if I understand what you’re saying you’ve got two law firms that you’re
working with instead of one.
Frank C. Sullivan
We have dozen of law firms that we are working with across the United States. But, the two significant changes were moving from a law firm doing actuarial work and again, paying lawyers to do actuarial work is expensive, the database management to a much more sophisticated and substantially cheaper firm who does that for a living. And, in a number of jurisdictions we were working with two firms as we transitioned from a historical defense counsel to a new defense counsel in a couple of jurisdictions.
Jeffery Zekauskas – JP Morgan Securities
Can you remind me as to what your percentage of offshore revenues are now versus onshore? And, when you look at the volume growth that you experienced in the quarter is it the case that offshore grew and domestic shrank? Or, is that not the way to think about it?
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