Question-and-Answer Session
Operator
(Operator instructions) And we will go first to Tim Willi with Wells Fargo.
Tim Willi – Wells Fargo
Thank you, and good afternoon. Couple of questions, first on eDiscovery and then one on Bankruptcy. In the eDiscovery business, could you talk a bit about the pricing environment that you are seeing with what appears to be sort of a shrinkage in available business? And then the second part of my question on eDiscovery was relative to your investment spending and just how we should think about the expense levels in that segment as we model forward. Do you feel like you have a pretty sustainable level of investment spend in there that will not go higher or what it actually reverse itself potentially in coming quarters as you cycle through some investments?
Betsy Braham
Sure. Tim, this is Betsy. What I would tell you about the pricing environment within Electronic Discovery is that we have seen processing prices become much more commoditized. And so that is where we are seeing the largest pricing pressure within the segment. We have seen expert service prices go up or maintain their current levels. And we would expect these pricing levels that we are experiencing on a current basis to remain consistent as we go through the remainder of this year and looking forward into 2010.
The second part of your question asking about the investment spending levels and whether those are locked in, and the answer is yes. We do not expect, as you look at the expense base for eDiscovery, for that to change as we go into the fourth quarter other than some slight increases in variable expense that are anticipated for increases in specific business that has been one and in particular, our document review business.
Tim Willi – Wells Fargo
Okay. And just on the topic of the pricing, has it gotten worse as the year has progressed, as people struggled to stay afloat or chase any kind of business that’s out there? Or would you say that 3Q versus 2Q – how would you characterize the environment around the processing? Is that what your comments were referencing or are you thinking more year-over-year?
Betsy Braham
No. I would say that during the course of the year, we have continued to see pricing declines in the areas of processing, in particular, from the beginning of the year to the third quarter, and – as well as year-over-year.
- To read the full transcript on Seeking Alpha, click here »
