CRA International, Inc. (CRAI) Earnings Call Transcript & Summary

Okay. I think we're going to try to get things started. First of all, I want to welcome everyone who is joining us here in person. I also want to welcome all the people that are online. Really do appreciate you giving us your time. I'm Paul Maleh, I'm Chairman, President and CEO of Charles River Associates. I'm thrilled to have you all here. This is our second investor conference. The last one was back in November of 2019. During that last Investor Day, we presented a number of growth opportunities resident inside of our portfolio of services. I'm thrilled to report that we've delivered on those expectations. We have grown net revenue by more than 30%. And by the way, at record levels of profitability. CRA delivered this exceptional performance, as I'm sure all of you are aware, doing some truly unprecedented times. Today, I have leaders from our 3 largest practices here to describe the services they provide and also to tell you about the growth opportunities that are resident in our portfolio today. Before we get there, I'm going to try to take you through some of the foundational elements of our business. To make my General Counsel happy, I'm going to leave this slide up for a couple of seconds. I'm not going to read it because I only have 30 minutes of time. So these are our safe harbor disclaimers. Okay. In a couple of years, CRA will be celebrating its 60th birthday. It's quite sad to me that even the firm is younger than I am. The vision of our founders still permeates today's organization. As we apply university quality quantitative tools and microeconomic analysis to our clients' most important challenges. To deliver these kind of services, we requires that we hire, develop and retain the best and brightest. I am privileged to work with a very impressive group of colleagues. Approximately 80% of my senior colleagues have advanced degrees with more than 40% holding PhDs. These colleagues are spread across 2 lines of businesses and 11 practices. Today, we have leaders from both lines of business and our 3 largest practices, our Antitrust & Competition Economics, Forensic Services and Life Sciences practices. CRA works on behalf of top companies across the globe. In just the past 2 years, we have worked for 81 of the Fortune 100 companies. Our penetration into the legal community is even more impressive, having worked with 97 of the AMLA 100 firms in just the past 2 years. So we have these services. What is our objective as a firm. This is our financial objective. Our objective is to maximize CRA's long-term value per share. These are really important words to the management of CRA. Each component of this objective has implications on how we run our business. We don't manage to quarterly results. We focus our decision-making on multiyear outcomes. We're focused on creating value, not just getting larger. We want to be the best at what we do. More revenue and more profits might be good outcomes, but only if they enhance CRA's value. When evaluating value creation we focus on the owner of a single share of CRA. Our ability to achieve all this begins with strong operating performance of the business. And we're going to talk a little bit about some of those drivers before I turn it over to my practice colleagues. Okay. CRA has consistently increased its top line through challenging and difficult macroeconomic conditions. At the same time, we have expanded our profitability at an even faster rate. And that's all these percentages are trying to say. We've grown the top line impressively and the margins just keep getting better. All while returning substantial capital to our shareholders via stock repurchases and cash dividends. Achieving any one of these accomplishments is quite impressive. But achieving all 3 simultaneously is something that very few companies achieve. We buy back our stock because it's undervalued. Not merely to offset stock-based compensation. If you're looking at these, and here is just an example. For the last 5 years, average purchase price is a little over $60. In 2022, the average purchase price of our repurchases was around $86. So in a very short window of time, we have provided substantive returns to our share repurchase activity. And before you know it, we'll even surpass the average price of $111 in 2023. And even through -- even though our dividends only make up roughly 20% of our total distributions to our shareholders, we have tripled our dividend per share since its initiation in Q4 of 2016. The strength of our portfolio of services has been on display for well over the past decade. And particularly over the past 5 years against the backdrop of macroeconomic challenges. From the onset of the pandemic through the migration back to the office and now the rising interest rates in an attempt to slow the economy, our business has performed exceptionally well. Each of the past 5 years has established new high watermarks for revenue at CRA and hopefully, 2023, we'll make that 6 years in a row. This track record has been built on broad-based contributions from our practices and our geographies. In some years, we have Antitrust & Competition Economics practice leading the way. Then in other years, we have Life Sciences stepping up. And in practically every year, we have Forensic Services showing its strength and vitality. During past earnings calls, many of you have probably heard me cite growth and trends in our project lead flow when discussing the health and prospects of our business. And for good reason, as the growth in project lead flow has been a good leading indicator for the growth in CRA's revenue. So we put up a very simple chart. All we've done is taking our project lead flow and our revenue and indexed it to one in 2018. From fiscal 2018 through fiscal 2022, project lead flow grew by approximately 10% per year, while revenue grew by approximately 9% per year. This relationship began to break down during 2023. As the conversion of project lead flow, those numbers presented below the x-axis here, began to deteriorate unexpectedly. For the third quarter of fiscal 2023, our projected lead flow increased by 10% year-over-year. This marked the fourth consecutive quarter of double-digit growth in CRA's project lead flow. Yet revenue has not followed suit as conversion rates of those leads into new revenue generating projects fell below expectations. We believe that project lead flow remains a good indicator of demand for our services in the long run. Even if the conversion into projects has been temporarily disrupted by economic uncertainty. One of the other subjects that we have discussed this year is the attrition rate of our colleagues at CRA. Like many other firms, we have experienced surprisingly low attrition rate throughout fiscal 2023. As a result, our third quarter consulting head count surged 11.3% year-over-year. While we're pleased with the team we have assembled, we remain focused on balancing the supply of labor against the demand for our services. By year-end, we forecast consulting head count to increase by mid- to high single digits year-over-year. Higher-than-expected headcount, coupled with the lower-than-expected revenue, put some downward pressure on our profitability. With that said, let's not forget that 2023 still ranks third in profitability behind the exceptional and record-breaking years of 2021 and 2022. CRA's top 3 practices of Antitrust & Competition Economics, Forensic Services and Life Sciences account for more than 70% of the company's total revenue. Collectively, these 3 practices have delivered double-digit annual revenue growth over the past 5 years. That's not to say the rest of our portfolio hasn't also been growing. The remaining practices have delivered roughly 5% to 6% of annual revenue growth with significant contributions from both the labor and employment and risk investigations and analytics practices. However, it's the top 3 practices of Antitrust & Competition, Forensic Services and Life Sciences that represent CRA's engine for continued growth in the years ahead. So with that, I'm going to invite up colleagues from my competition practice, the global practice leader of Margaret Sanderson, colleagues of Peter Boberg and Laila Haider up here to the stand. The way we're going to try to organize things is they will not take questions during the presentation. Once their presentation is complete, we will open it up to questions either on the introductory remarks or to their presentation. So with that, I'm going to welcome up Margaret, Laila and Peter.

Great. Thank you. Can everybody hear me all right, in terms of -- okay, super. So my name is Margaret Sanderson, and I'm the practice leader of the Antitrust & Competition Economics practice at CRA. I've been the practice leader for over 10 years. I joined Charles River Associates in 1998. And I'm joined with -- by 2 colleagues, and we're going to talk to you about a number of different things this afternoon. So I wanted to introduce Peter Boberg on my far left. Peter joined CRA a year after I did in 1999. He obviously thought it was a good place to come. And has -- was [indiscernible] Vice President in the Competition practice in 2007. Peter has wealth of experience running large litigation matters and also large merger matters and so he'll be, as we run through these slides, he is going to talk about a number of changes in the current environment with respect to merger activity. And immediately to my left is Laila Haider. Laila joined CRA in 2020, remotely initially. And so Laila has a lot of experience in antitrust class actions, and she'll be speaking to that field in that area of our work. And I also thought that it would be useful to have Laila speak a little bit about why come to Charles River Associates from another firm and what we have to offer. So what we thought we would cover is essentially, I would speak a little bit about today's global expert offering from the competition practice. I'd give you a bit of a breakdown of cases between mergers and litigation work. Then we turn over to speak a little bit about merger activity levels in our overall environment. When speaking about those merger activity levels, we'll actually be focusing on what the enforcement agencies are doing. And because very few transactions are actually -- I mean there's many transactions that are examined by regulatory authorities, but very few lead to a remedy. And typically, when we are hired, we are hired on transactions where there's a prospect of a remedy or there's -- that's a more complex matter. So it's a subset of transactions that we're hired on, and those are the ones that we'll spend some time talking about. And we thought we would actually give you a sense as to some changes that are happening in the enforcement regulatory environment in the -- focusing on the U.S. because that's going to lead to continued demand for our services as Paul was referring. We'll give you a little bit on EU and U.K. enforcement trends. Then we'll turn it over to talk a little bit about litigation activity levels. The litigation that we'll talk about is antitrust class action oriented, which again, is an area where we do a lot of work. Then we'll just give you some sense, having covered the market as to what the competition practice growth has been on a revenue basis and then finally, cover off a couple of topics at the end related to what's our -- why do people come to work here. And ultimately that is what drives our ability to then provide services to clients and then preparing for future client needs. So we -- as Paul was saying, the competition practice is one of the largest practices at the firm and reflecting the global footprint that Paul spoke to you about, you can see that we also, within the competition practice, have very much a global offering. So we are at 320 staff now, with most of those staff in North America, but a very large presence in Europe. And in addition to the numbers that you see here, we also have expertise that we deploy regularly in China through a team that is based in Oakland, California, and we also have consultants in Sao Paulo that are providing services in Brazil and South America. So our work tends to be divided almost 50-50 between mergers and litigation. It depends a bit on how you think about litigated mergers. Do you think about a litigated merger as part of the litigation bucket? Or do you think about it as part of the merger bucket? This particular chart, we have thought about litigated mergers as part of our merger offering. And that's why you see something that is a higher fraction of our activity levels dedicated to merger-related work because as we'll talk about as we go through the presentation, the amount of litigation in the merger space has gone up and is expected to continue to grow, and we've been very active in that area. So turning to the environment, there's -- one of the things that's interesting about our work is that we've been -- we've grown the competition revenue and staff through a lot of cycles with respect to merger activity. So we've typically been quite -- we haven't been subjected to kind of the ups and downs that you might see if you were just to look at top line total merger activity. And so what you see here is the Orange line is total number of transactions globally. And as this audience would well know, those have been -- those peaked in 2021. And then there's been a decline in total merger cases or total -- just total merger activity levels. But -- and certainly, quite a decline in the total value merger transactions, but as we'll speak about the enforcement activity has actually been very, very strong. And as a result of that, we have not experienced any decline in our merger-related work. So I'm going to start with a few statistics and then turn it over to Peter Boberg, who will speak a little bit further about this. So these statistics come from Dechert, it's a law firm, and they publish a series of statistics called Dechert Antitrust Merger Investigation -- I think it's -- I can't quite read that, something tracker. So they're the source of these statistics, and they're tracking what the U.S. agencies are doing. This would be the U.S. Department of Justice and the Federal Trade Commission, and they're also tracking what the European Commission is doing. And then I will show you some statistics that we've compiled from the U.K. competition market authority as well. So as this slide indicates, consistent with total deals in sort of peaking in 2021 and then coming down from that, it's also the case that the total number of transactions that have been notified to the U.S. agencies has also declined since 2021. But what has been an interesting thing to note is that as the U.S. agencies have become more aggressive with respect to the transactions that they regard is raising significant or serious concerns, the fraction of significant transactions or those that get -- go beyond sort of a first phase of analysis and go into something that in the U.S. context is referred to as a second request, that fraction has gone up quite significantly. So for essentially the last decade from 2011 to 2020, the fraction of significant transactions that were litigated or abandoned rarely exceeded 30%. In 2021, we start to see that go up. That becomes 37% of significant transactions are litigated or abandoned by the U.S. government agencies. 2022, it rises again to 60% of significant transactions. And then quite amazingly in the -- for the first 3 quarters of 2023, 100% of significant transactions that are identified as such by the U.S. agencies were either litigated or abandoned. So they are small numbers, but they are raising -- they involve a tremendous amount of work. And these are the type of transactions that we get hired on with respect to being -- providing expertise and economic analysis. The other thing I wanted to note with these statistics is that not only are the number of transactions that are being litigated going up, but that the time line and the level of work that goes into these analyses is also going up. So the transactions are becoming more complex and the time that is taken by the agency to review these transactions has gone up as well. And we expect these intervention rates to remain quite high. going forward, and Peter will run through why that is the case.

Thanks, Margaret. So as Margaret said, there has been a shift in the U.S. with respect to enforcement on the merger front in the U.S. And we thought we'd like to talk a little bit about how we see that impacting our business. And to do that, we thought it would be helpful to lay out maybe a concrete example of how the enforcement perspective of the agencies has changed. And to do that, we're going to look at the merger -- horizontal merger guidelines, which Margaret referenced earlier. The guidelines were a document that the Department of Justice and Federal Trade Commission put forward and maintain that sets forth their perspective, their principles with respect to analyzing mergers for the purpose of determining whether they're going to be any competitive or not. And a key metric that the government uses in those guidelines, and it's used by enforces around the world, not just in the U.S., is market concentration. The more concentrated a merger makes a market, the more likely they're going to intervene and potentially try to block a transaction. And the measure of market concentration that they use in that context is referred to as the Herfindahl-Hirschman Index, most commonly or HHI. So what we thought we'd do is just do a little experiment. The government has recently released its proposed new guidelines. They're not in place yet, but they're proposed for next year and contrast those with the current guidelines that are in place and have been in place since 2010 to see how their perspective with respect to this Herfindahl-Hirschman Index and how it's used to analyze mergers has changed. And so up on the screen, what we've got is a simple graphic to illustrate how under the current guidelines that were put in place in 2010, the Department of Justice and Federal Trade Commission used this market concentration measure the bucket mergers into 3 groups in effect. One group is mergers that they think are presumptively anticompetitive. That's the red zone. And so I don't know how well you can read the numbers on the chart. But what we've got across the bottom is measuring what the market concentration will be after a merger occurs. If they let the merger through what will the market concentration level be as measured by the Herfindahl-Hirschman Index. And so a higher number means a more concentrated market and so a market in which they might be more likely to intervene. On the vertical axis, we have the change in market concentration due to the transaction. So if 2 players are merging, that's going to increase market concentration and that amount by which it increases the market concentration is on the vertical axis. So the mergers that increase the concentration by what are going to be viewed as presumptively anticompetitive. And that red zone is the area where they say, we don't need to look a lot farther. We think based on the effect of the transaction on market concentration, this merger is likely to be -- highly likely to be anticompetitive. And that's where firms like Charles River Associates come in, and we get higher to do analysis to test whether that really is the case and to develop analyses that assess what the likely impact of the transaction is on consumers and competition. The yellow area just below the red area or outside of the red area is then an area of kind of intermediate concentration. So mergers that are viewed as not presumptively anticompetitive, but those that are -- that have an effect on concentration that's high enough to push a merger into an area where the government deems investigation to be necessary. That's the yellow area. And then this green area where the market is relatively unconcentrated and the transaction has a relatively limited impact on market concentration is viewed as kind of a safe harbor where transactions are viewed as unlikely to raise any antitrust concern. And what's striking is the current administration's view is that -- or the current guidelines view that were set forth in 2010, the perspective of the agencies then was that many mergers are pro-competitive and actually good for consumers. They generate efficiencies and synergies. And as a result, we don't want to block all the transactions. We don't want to spend a lot of time investigating those transactions. So we'll use this market concentration metric to differentiate mergers that are presumptively or likely to be anticompetitive from those that are unlikely to raise any issues. And so if we flip ahead to the next slide, this is what the current administration is proposing the guidelines should look like in the future. And we can see immediately 2 striking things. One is that the green area has gone away. So the current administration's proposed guidelines would say there's no safe harbor. There's no transactions that would be presumed to be good for consumers, and so we don't need to investigate. Everything is potentially problematic from the perspective of antitrust and might need investigating. The second thing to note is that the red area which is the area that the government views as presumptively anticompetitive has increased in size dramatically. So there are a lot more transactions that are falling into that red bucket where the government is saying, we're presuming based on simple measures of market concentration, this transaction is not going to be good for consumers unless we can be convinced otherwise. So those two changes are -- we view as pretty fundamental, and it's quite a striking shift in their stance. And I think it's having direct implications for our business as we work either for the government or on behalf of emerging parties, the increasing number of mergers are being investigated and those that are being investigated are being investigated more intensively, as Margaret said earlier. And this kind of puts a metric or a visual to those trends. Before we turn to sort of how it's impacting our business, we thought it would also be helpful just to put things in a historical perspective. So prior to the current guidelines that were set forth in 2010, there were guidelines that were put out in 1992. The current administration in announcing their proposed new guidelines has said, one of the things they want to do is turn the clock back. And feel that enforcement has become too lax and they need to make enforcement more stringent. And so what we thought was interesting is to compare the proposed draft guidelines, which are on the far right, not just with today's guidelines in the middle, which we've already done, but also with the historical 1992 guidelines. And what's quite striking is the government proposed guidelines are really pushing the clock more than back before 1992. Not only is the trend, which from 2010 to the draft guidelines increasing in terms of its perspective on market concentration and tendency to enforce to be pro enforcement. But it's actually set us at a point where the guidelines today or the proposed guidelines would be more enforcement oriented than what we saw in 1992. Again, in '92, we still had a safe harbor area. So again, there were transactions that were viewed as presumptively not anticompetitive. And this area that's yellow has expanded dramatically under the proposed draft guidelines. So let's turn a little bit to how we think these changes are impacting our business. And I think the most immediate one, Margaret's already referred to, which is that we are seeing increased demand for our services. And that's coming from 2 main forces. One is the shift from green to yellow that we saw in the picture. So there are a lot more transactions that previously would have been viewed as transactions that will be presumed to be not problematic, no need to look at them. We typically wouldn't get hired by merging parties to work on those transactions because they're not likely to raise questions by the agencies, and we're not likely to get hired by the agencies either. But the second thing is the yellow to red transition. So more and more transactions are falling in that enlarged red area. And so those transactions are not -- they would have gotten a look previously. But now the look is more serious. It's more in depth, it takes longer. It requires more data, it requires more analysis. And that means, again, whether we're working for the government or for the emerging parties, the demand for our services is enhanced. And that -- there are some nuances to this. Margaret referenced second request. There's 2 key ways in which we help clients and help the government in these kinds of antitrust reviews of transactions. One is to do the substantive or economic analysis that looks at how a transaction is likely to impact prices or likely to impact the competitive process or innovation or quality as consumers perceive it. The other is the government in the process of reviewing a transaction has the ability to issue what's called a second request which is a massive usually 30, 40 page document that asks for all sorts of information from the companies that are proposing to merge. It includes all their databases in effect. And requires -- it's quite burdensome for the companies to comply with requires a lot of effort in terms of working through databases, compiling data and developing it into deliverables that can be provided to the government. So a key area of our work that we've seen expanding is this assistance to companies, in particular, in helping to comply with second requests, delivering data and information to the government in an organized fashion. And that means that we've had to increase our recruiting efforts as well as training efforts as some of this requires new types of software and new skill sets and so on for particularly our junior staff that come out of undergraduate programs. So we've certainly seen that impact of increased demand for our services and increased training and recruiting efforts. You might ask, is there a chilling effect that might offset some of these increases in demand for our services. Is there a tendency for companies to say, well, if the government has a more pro-enforcement approach, does that mean we don't want to go through a merger. And there's a few things that I think are relevant to think about that we see in our sort of day-to-day work that I think are relevant to that question. One is that a lot of the change from the green to the yellow that we saw in the pictures is transactions that we wouldn't have gotten hired on in the first place because they wouldn't have needed a review in the past. And so to the extent that a lot of companies are saying, "Gosh, I would have gotten through. My little merger would have been just fine. And today, my little merger might not be so fine. Maybe I won't go through the merger, that's really not having much impact on us because we wouldn't have done much work on those transactions in any case. A second factor is that while antitrust review is a big part of our revenues, it's a small part of a big deal. If you look at a multibillion-dollar transaction, the cost of complying with the government's requests and getting through the antitrust review process is relatively limited. And so it tends not to be a driver our experience with respect to decision-making. So we're not seeing -- we don't anticipate or don't see that kind of effect in our work so far. And the third thing I'd mention is the agency has challenged a number of transactions, but has not been successful in courts. And so they're sort of dismal record, if you will, with respect to try to challenge transactions, lease companies wondering how much weight to put on increased enforcement efforts by the government in terms of making decisions about transactions. Finally, I think another factor to think about in how all this has affected our business is to see that the increased tendency for the DOJ and the FTC to bring cases to challenge transactions in the courts has meant that more -- we're seeing more business in the form of mergers being litigated. And so now, whereas previously, we thought of it as this is work that we do before the agencies, it transitions into a period when we're providing expert testimony in a court room where the government is challenging the transaction. And so now a transaction that might have been business for us for a year, let's say, during the review process now extends beyond that because we now have to go into litigation as well. So those are a few of the ways in which I think the change in enforcement strategy by the government that we've seen so far, and it's been proposed in the new merger guidelines is impacting our business. And I'll pause there.

Just speak briefly about what is -- what we're finding in other jurisdictions. And so what Peter was describing in the U.S. is not unique to the U.S. In Europe, Europe has always been a fairly aggressive enforcer. So the European Commission has also continued to take a very active enforcement role. And again, we see that even though total transactions and their investigations are down in the European context, they talk about Phase II cases and Phase I cases. Phase II being the more serious ones with respect to seeking remedies. But a Phase I case would be one that might be comparable to a second request in the United States. And again, you can see that what we're finding in Europe is that the total intervention rate, if you will, of the European Commission has remained very high. Even with fewer transactions. And also like the U.S., we're finding that European investigation is the most complex ones, these Phase II investigations are now lasting at least 18 months. And as Peter mentioned on the U.S. side, typically, we are hired early and when we're working for the emerging firms and we will be involved with this transaction doing analysis and providing assistance to counsel and the parties throughout the entire process. The statistics I just showed you were for Europe, but the U.K. competition authority has been a very active enforcer. We have a large group of people in London. This is the intervention rate. So again, this is the fraction of transactions that then significant transactions that a remedy sought for, and the U.K. authority has been very aggressive. This is actually tapering off a little bit more recently. But again, you can see that these intervention rates are very high. So we've -- I thought what we do now is just sort of shift gears a bit and speak about the other half of our business, which is antitrust litigation. And I'll open it and then turn it over to Laila who will speak further about what the nature of that work looks like. So we're hired in a wide variety of commercial litigation, obviously, at the firm level. The work that we're talking about here is antitrust-related work. There's -- and Laila will be speaking about a subset of that where we're very active. So we provide economic testimony on a wide variety of claims of any competitive conduct, price fixing, exclusionary conduct attempts to monopolize the market and so forth. And a lot of that -- and we're hired at multiple stages, and we have experts within the practice that can be -- provide expert testimony at different phases of the litigation. So an early phase would be class action work, where we have experts like Laila who are heavily involved. We also do work on antitrust liability as well as damages. And maybe I'll just turn it over.

So Margaret and Peter talked to you about the -- to give you a sense for how merger activity has been looking and how we think it will look. And so what I'll do is I'll talk to you about antitrust litigation and I'll speak to you -- show you some statistics for antitrust class action litigation. As Margaret mentioned, just to be clear, antitrust litigation is broader than just class action litigation. But one reason it's helpful to share with you statistics about antitrust class actions is because it gives you a good sense for what's going on with private enforcement, how active they are and these often tend to be large cases. Margaret mentioned a moment ago that an antitrust class action will often involve multiple stages. So there's a class certification stage. And then there is the liability and damages stage. And the class certification stage, just very simply, what that means is that the court decides whether it is appropriate for the case to proceed as a class action or not. And economic analysis plays a crucial role in that inquiry. And then in the liability phase, the question is whether there was any merit to the claim or whether there was some business justification for the challenged Act. And then finally, in the damages phase, which occurs simultaneously with the liability and merits phase. The question there is if the -- what is the extent of harm, if there was any in terms of what happened to prices, profit, sales and so on. Now the one very good thing about CRA is that we have a deep bench of experts at CRA who are -- who have extensive experience providing expert testimony in these various stages. And the one thing that I've gotten a sense for from clients is that they really like that CRA has that offering because clients appreciate when they can turn to one firm for multiple phases of a litigation or even multiple related cases because that gives the end clients some efficiencies. So let me talk about class action litigation specifically. So I have a chart which shows the number of complaints that were filed in federal court. And this is referring to consolidated antitrust class action filings. This is from a report titled the sources there, 2022 antitrust. I'll just say antitrust annual report, class actions in federal court. So this is a report that was put out by the center for litigation and courts from the UC law in San Francisco and Huntington National Bank. And so the first thing that jumps out when you look at this chart is that you see a great deal of fluctuation from 1 year to the other. So what this is telling you is the number of complaints that are filed antitrust class action complaints really vary from 1 year to the next. The other feature that stands out is that they were 2 years here that really stand out as outliers. So in the year 2019 and the year 2020, there were many more complaints that were filed as compared to the other years. But in general, what really comes out of this is that these numbers vary from year to year, and I'll talk a little bit more about how long it takes to get through these cases. I guess I should point out -- so after 2020, because there was such a rise, this is a pandemic year, there was such a big increase in these filings. In the year 2021, the number of filings went down. But the 2021 number is, I believe, higher than the average over this 14-year period. And in the year 2022, the number of filings declined further, I believe it's below the average. So next, what I'll do is I'll give you a sense for the settlement -- the total settlement amounts for these antitrust class actions by year. So this is not per case or anything like that. This is the total settlement amounts by year. And again, what you see is tremendous fluctuation from year-to-year. There are some years where you see that the settlement -- total settlement amounts are much larger than others. In 2016 and 2018, these numbers were partly driven by antitrust class actions that involved financial products. And there were some big settlements that were approved in those particular years as well as in a couple of other industries, which drive those figures. The other aspect that this tells you is, so if we look at, say, 2022, the total settlement amount is about $3 billion. So it gives you a sense for the scale and how active private enforcement is in this -- when it comes to bringing antitrust cases. And so if we go back to the slide prior to -- so a couple of other things that I'll point out is these are long cases. It takes time to get through an antitrust litigation matter, and it certainly takes a long time to get through an antitrust class action matter. So over the last 14 years for which I showed you, statistics, the time from the filing of the complaint to the approval of a settlement is about 5 years. The length of that time has increased from about 4.5 years in 2009 to 6 years in 2022. But the reason -- how does this matter for our work. What this means is that it takes when we are engaged to testify, say, in an antitrust class action either on behalf of the plaintiffs or on behalf of the defendants, this work takes a significant period of time. It may not take all of that time because some of that accounts for the court looking at the papers and reaching a decision or perhaps the case is going on to trial, but it will easily be 2 years or more. I can give you a personal example. I submitted a report in a particular case in 2019, and I testified a trial in that case, more than 4 years later in 2023. So the work, this work is sustained and takes a long period of time and a large team, which we'll speak about shortly. In terms of looking ahead, I think just given the active enforcement from the U.S. agencies and often the private class action cases and so on are follow-on cases. And given how active private enforcement is as well, we expect sustained levels of demand for our work and for economic analysis and testimony related to these matters. There's also just based on what you see in the press, there is increased scrutiny in recent years from the agencies when it comes to particular industries, such as the tech industry. And also there are more investigations into particular types of conduct where we saw fewer cases in the past. So for example, there are more inquiries or investigations into conduct involving no poaching allegations, meaning employers, the allegation is that they will -- they have an agreement to not poach one another's employees and that -- the fact that there is an alleged agreement there that makes it an antitrust potential antitrust violation. And that's -- those cases, we are also being contacted for and being retained for in recent matters, and we're seeing more and more of those.

So I thought I would turn back to how does this -- what are we seeing in our environment. And so I think what I have here essentially is the competition practice net revenue from 2019 to 2023. And essentially, I'm just giving you essentially the growth in that revenue over time. And I think, hopefully, we've given you a sense that even though there's variation with respect to the number of merger transactions that may occur in a given year or variation in respect to the number of antitrust filings because of the level of increased enforcement activity, the length of these matters and the agency's continued interest in challenging more matters and investigating more antitrust violations, we at the practice level, have continued to grow quite consistently and steadily notwithstanding this variation that exists in the external environment. And one of the things that -- as to why people come to CRA for -- when they're looking to hire experts on these matters is that we -- these complex matters end up requiring very, very large staffs of people at different moments in time. And so you might start out with a relatively small team. But now that the agency has issued a second request, for example, you've just -- and maybe you're doing the data processing for both the acquirer and the target. Now you need a very, very large team of people that you bring into play, and we then need to scale the team extensively quickly and then have that team be heavily involved for a period of time and then maybe it goes away for a bit if the agency then decides to litigate, now we've got to put together a testifying team. And so one of the strengths for the competition practice at Charles River Associates is that we are able to put together very large teams of people that are distributed across many offices, and we're able to do that quite effectively for our clients. And so what I've given you here is just a couple of examples of what -- how large some of these matters can be. So on one merger case that we were helping the parties across multiple jurisdictions. At its peak, we had 44 staff working on that matter. Even a single U.S. matter where just the U.S. agencies are looking at it in the second example, this is a U.S. client just in a U.S. matter. That staff team rose to 29 at its peak. And in a class action matter potentially one of Laila's, there were over 25 economists involved in various phases of work through the economic analysis and then assisting through the expert testimony. The other thing that we're finding is that transactions. So not only are these very large teams, but we've actually been finding over time that our largest cases are becoming larger and these large cases are much more common. And so the last 2 statistics on this slide just reflect that. So in 2023, the single largest project that we had in the practice was over $18 million. Now that's over a lengthy period of time. And -- but that compares to the largest project size. Prior to that being roughly about $6 million in 2023, 25% of our projects in the competition practice had revenues that exceeded $5 million, and that was up from 14% in 2022. So I wanted to speak about that because the fact that these projects are so large and so complex and then require the ability to scale these teams up and have them deal with a wide variety of issues across multiple jurisdictions is also one of the reasons why experts want to come and join CRA. Because we are able -- if you're an expert at a -- and you're not in -- working out a consultancy that has this ability to scale like this, you will have -- you will either not be considered to be the testifying expert on particular matters because the lawyers realize they're going to need a very large team. Or alternatively, you might need to turn some things down because you don't have the ability to scale -- to accept sort of a new assignment that might require these resources. And so that's something that's been very important for us from a recruiting perspective as to why we attract experienced, highly qualified testifying experts. And I actually thought I would turn it over to Laila to speak a little bit about this since she joined us most recently.

Yes. Happy to do that. So I joined CRA 3.5 years ago. And it has been a tremendously positive experience. I'm happy to report. I'll highlight a few things. They'll dovetail, of course, with what Margaret just shared in terms of just ways that I think CRA provides a terrific platform for experts and to do economic analysis in this area. So first, is this ability that CRA provides for us to scale up to a large team when needed. So the nature of litigation work is such, of course, merger work as well, where during particular periods, you will need a larger team of talented economists. So if I'm working towards the submission of a report, that typically is the period where we'll need the most staff. And it's common that they would be about 15 economists working on a particular matter during that period, and there have been cases where there have been more than that as well. So the fact that CRA has the capability where that it's possible to do that is a tremendous benefit and really, I think, a great feature to attract additional experts to CRA. The second aspect I'll mention is the pool of extremely talented colleagues that we have in the practice and outside the practice, too. But speaking of the practice, given CRA's recruitment and retention efforts, we are not faced with this issue where, let's say I have a new case starting, and I'm looking for economists to join the team that there will be -- they're very select few or there are only certain people that you can go to. There is a large very talented pool that's very, very experienced and well trained. And so that's terrific because that flexibility is there to be able to find talent. And the third aspect that I'll highlight is -- I should actually mention with the second one, it's also about diversification of skill set. So there are certain colleagues who will be very skilled because they know they've worked on those particular industries before or they have particular technical expertise that we want to tap into. So that's a big plus. The third one I'll refer -- I'll talk about is referring colleagues or getting referred by colleagues in the firm. I remember when I joined CRA, I think it was very soon after it might even have been the day over -- the day after, I was -- I received an inquiry related to a finance matter. And that was -- they were looking for an academic who was affiliated with CRA to testify in that particular matter. And it was great that we were able to identify for the client the right person to take that on. And so similarly, over the years, these opportunities have come up with respect to other practice areas, whether it's life sciences, labor and employment. And also, I've been able to work with colleagues across different practice areas to form the teams to get the work done, which is also terrific. So lots of great stuff.

So I just thought I'd close with this slide. So thinking of the future and what some of our -- some of the places we're making some investments. So this, as I had highlighted to you the fact that these cases are becoming so large, we're investing more in cloud computing. And so we've been -- we're doing quite a bit more with respect to training our staff and being able to have a lot of this data work done in the context of the cloud, which I think will certainly help us from a productivity perspective and allow us to turn things faster for clients thereby being able to expand the level of analyses that we might be undertaking for them. And then we're also looking, obviously, into the future with respect to new areas that we anticipate will be more active on the litigation space and do we have a roster and a stable of experts that -- academics that can testify in those areas. And so I've just highlighted a few individuals here where we've reached out and they're now moving towards having an affiliation with us. These are experts that would have expertise in artificial intelligence in crypto currencies that would be Joshua Gans. Maxime Cohen is an expert. He's actually also affiliated with Yale and he's an expert on artificial intelligence. And then also recently, [ Leonardo Burstein ], he's at the University of Chicago and is an expert in technology and social media. So we're finding more and more demand for experts in these spaces, and we feel that we're in -- we're well positioned now with additional experts joining us that we'll be able to meet clients' needs when asked about these areas. And that's it. We're happy to take questions.

So we're going to start by seeing if there's any questions that any of our in of -- in-room attendees have. Kevin Steinke from Barrington.

So you talked quite a bit about the new proposed merger guidelines and how much more stringent they would be. What are -- what's the chances that those actually, those proposal guidelines get, I guess, approved? And then how long-lasting you think that could be? You mentioned that the agencies have kind of a dismal court record so far? And what's the chance is that changing presidential administration just could pull back on and make guidelines less stringent again?

Very good questions. I can go first and others jump in. I think it's very likely that the proposed guidelines will get put in place. It's -- the administration has a time line for that. I think as you can see from our slide that did a historical perspective, it varies how frequently these guidelines are revised and released. It requires some impetus some sense that the current guidelines are inadequate for the current administration's purpose, and it's a significant effort for the administration to put in the effort to drop the guidelines to invite public comment and so on and so forth. It's definitely a process. You wouldn't expect it to happen on an annual basis or something like that. Depending on the change in administration, it may be that if the proposed guidelines get adopted, the current administration or the future administration if it were different, could operate under those guidelines and simply operate in a way that's a little different than the guidelines might specify. They could be more lenient than the guidelines specify for example. But if practice is too far away from the guidelines, you'd expect some pressure for administration in the future to revise or update the guidelines. The only other thing I'd say before seeing if my colleagues have anything to add here is it's not clear that the administration proceeding this one was very different with respect to the outcomes that we saw in our business, how busy we were in terms of reviewing going through antitrust review of mergers assisting clients and so on with that process or the challenge of mergers. There's some increased -- certainly some increases under the current administration, but it's not kind of stark contrast between the immediately prior administration and today's administration. So we don't quite know what to think if a new administration comes in.

So I would add that the -- so in the academic literature in the field of economics, there's been a lot of papers have been written and there's a lot of public commentary that is made popular press about we had 2 lacks in antitrust enforcement on a variety of things. And so there are external pressures that are in place that I would be -- that I think mean that we'll probably have -- even if these guidelines, as Peter was saying, the future agency works within them in a different way than the current administration might, I think we are in a world with very, very active antitrust enforcement from these agencies for some time.

If I could just sneak in one more. Just you talked about really the ability to flex up on these large matters with the second request. And I was just curious as to how you handle that from a utilization perspective. It seems like that would create a lot more ups and downs in utilization, consultant utilization that we've -- than we've historically seen. So I was just wondering how that process is and once the matter ramps down, if you're able then to quickly place those people on another matter or how you handle all that internally.

Sure. I'm happy to take that. So that's where our scale is a tremendous advantage because for an individual matter, it's gone way up and it's come way down, but we're 320 people. So we're usually -- well not everything is thing is coming down at the same time and everything is coming down at the same time. So we basically are able to manage these individual peaks and valleys that an individual case is going through by redeploying staff from one matter to another. Now sometimes you have moments where you're like, okay, can you just give me a week? Because I know this other matters ending and these additional staff are going to free up and therefore, we'll be able to pull people in. And obviously, of course, there's times when we asked staff to work very long hours and then to manage it. But essentially, our scale is really what allows us to do that because the peaks and valleys are occurring across lots of different locations and lots of different teams.

Marc Riddick from Sidoti.

Thank you for all the commentary that you provided. I was wondering if you talk a little bit about, as you've seen these things become more complex, lasting longer? And can you talk a little bit about maybe how that's translated to a changing competitive environment and/or how that then might translate into the pricing that you're seeing and maybe what those -- what that might look like.

Sure. Just to be sure, I mean, when you said pricing, are you thinking of the bill -- like our bill rates?

Correct. Yes.

Okay. So I think from a competitive landscape, the largest consulting firms, we compete against sort of the same set that we've always competed against. I think because of the -- there are certain transactions that these very, very large ones, there's a limited number of firms that you would come to for those transactions. So now I guess what I don't know is I think it's the case that you probably would -- were coming to the same 3 or 4 firms for those matters when they were $6 million as when they were $10 million in size. But -- so I don't know that it's changed that much with respect to the competitive landscape, I would say that the very largest cases still come to a small set of firms, and we are one of those small set of firms. And then from a pricing perspective, there's obviously -- there has been pressure on -- our bill rates have gone up with the complexity of matters, and there's been a lot of demand for staff. So the labor market pressures have also been reflected in our billing rates.

Excellent. And then I wanted to shift back to the mix on kind of what does it look like and how it's evolved with global M&A and the activity there. And as I think you briefly mentioned some of the technology industry contributions, I guess. But have there been sort of leading industry verticals, maybe beyond technology that you think have been maybe little more active in meeting your services relative to maybe some others?

I guess I'll start, and maybe others might be able to think about other industries. It's certainly true that there's obviously a lot of interest in enforcement activity focused on the tech industry and large technology firms. And we're very actively involved in a number of those investigations on both sides. And I think actually one of the things that I take a lot of pride on actually is that we are thought of for both sides of the -- some of these debates so that people think of us as a neutral party as opposed to thinking of us as, "Oh, well, they're team A's go to and they'll never say anything that is against team A. So the technology sector is certainly one where we see a lot of activity. And I think also health care would be the other one, Peter, right? Do you want to comment on that?

Yes. I think we're definitely seeing increased attention on health care with health -- I mean, for lots of reasons, health care costs expanding and so on, the government has an obvious interest there in trying to make sure that mergers and acquisitions aren't contributing in any way to increase pricing pressure in the health care area. But I think across the board, maybe those industries, particularly, but I think generally, one of the things that the administration and the academics that Margaret referenced earlier are noting is there has been an increase in concentration as measured by these types of HHI measures that we put up earlier in a lot of areas. And so it gives the government sort of the ability or the interest to investigate in a lot of different industries. And so some of them might not be as front-page news as some of the tech cases or some of the health care cases, but we're certainly seeing that kind of activity generally across the board, I would say.

They're still going to do a super -- they're going to investigate a supermarket merger and hospitals.

Lumbar.

Lumbar, yes.

Next question, Andrew Nicholas from William Blair.

All right. First question I had was on kind of antitrust class actions. You showed on Slide 26, the spike in 2019 and 2020. And then you also talked about how these are really long cases, 4.5 years, 5 years, 6 years. Can you help us understand I think you're involved throughout that 4- to 5- to 6-year process. Is there a concentration of when you are involved? Is it front-weighted, back weighted? I know there's -- you said you waited for years to testify. Just trying to understand does the spike in 2019 and 2020, mean '23, '24, '25 is kind of set up from like a pipeline perspective? Or just kind of the cadence of work across the project, that would be helpful.

Sure. Yes, happy to. So I'll just talk through generally what happens when from the time a case is filed with respect to demand for expert work. So when a class action case is filed and this was talking about consolidated class action, so there may be class action suits filed in different courts and now they've been consolidated. One of the first things that happens is the defendants try to get the case dismissed. And so Typically, what I find is that attorneys will reach out sometimes prior to the motion to dismiss. If because they want to discuss potential economic arguments or think through economic issues, and they'll say, the motion to dismiss is pending. But then it's very common to reach out for and contact experts for economic analysis once, say, the motion to dismiss has been denied. And so I would say if you -- if we look at -- think of that 5-year window, it would be a case, let's say, that we're retained -- CRA is retained to work on a particular case. In the beginning of the case, we'll provide advice and so on, on discovery. So the types of information we want, data we might be interested in, things of that nature, the attorneys will reach out for advice and guidance. And then there will be -- so the work can take -- the time where you're very actively involved can easily be 2 years or more. Then there will be certain periods where you wait because the court has to reach a decision or say the parties don't settle, then it goes to trial. So it varies from case to case, but it can easily be somewhere between 2-plus years, 2 to 4, something in that range, where there are peaks and valleys in terms of what we do during that period.

And then at the end of that cycle, you would see it kind of spike up again with actual expert testimony.

So the period which is the busiest for us is going to be the period from when the data are made available for processing and analysis all the way until reports are submitted. And that period is what I should have clarified. So when I said at least 2 years, if not more, that's roughly that time span.

Perfect. That's super helpful. And then switching over back to the U.S. merger guidelines. So I think on Slide 20, it was very helpful. You laid out 1992, 2010 in the proposed guidelines. Is there any insight that you could provide in terms of what happened in kind of the immediate aftermath of '92 or around the 2010 time frame on overall activity? Did it have an impact on kind of the M&A chilling effect that you talked about. Just kind of curious if -- as we look to think about the potential ramifications of this new set of guidelines, if history gives us any insight as to different factors that could be at play over the next couple of years?

Yes. I mean I think one has to be a little bit careful in trying to line these dates up too carefully because I think, as I alluded to earlier, to some extent, the guidelines, they evolve over time. reflecting sort of long forces. And so the 2010 guidelines, I think, were put in place in part because the administration at that time had been acting in a way that was inconsistent with the '92 guidelines. So they were maybe not being as thorough or not -- thorough is the wrong word, but they were not being as aggressive in terms of pursuing transactions as might be reflected in the [ IGU ] guidelines view of market concentration. And so there had been a gap opening up over time, but I think it's a very gradual process. And so the '92 -- the 2010 guidelines reflected trying to align the way the guidelines talk about transactions with how the agency was actually practicing at the time. So we wouldn't necessarily expect to see a big change from immediately before 2010 to 2010, it's more of a gradual process of the agencies being maybe less and less concerned about transactions that are on the low end of the market concentration spectrum. What I think we're seeing now is maybe a little bit of a departure from that smoother trend. That we have an administration that's particularly focused on trying to look at transactions in a new way and pursue new theories and pursuit transactions, even if they're going to lose in the court. Their sense is that that's what their job is just to try to challenge transactions. And so I think maybe we're seeing a little bit of a disconnect from the historical relationship between the evolution of the guidelines and what happened in the marketplace with the proposed guidelines. So I'd be a little bit careful about using history to sort of forecast forward. I think, as Margaret indicated earlier, we think no matter what, given the sort of overall view of antitrust that's emerging in the economic literature, the academics, the government agencies, not just in the U.S. but in other countries and jurisdictions that we're expecting to see increased enforcement across the board for at least a while. And so I don't know how relevant it is to look at that kind of smoother trend from '92 to 2010 in terms of thinking about the impact of the draft guidelines.

Can I ask one more, I know it's [indiscernible] to this point. I just wanted to kind of circle back on the larger project dynamic Obviously, large projects are great when you're in them. There is the difficulty of managing utilization, as Kevin asked about. Is it fair to assume that larger projects means a lumpier business because it's harder to backfill? Or is your expectation that because of your market share because of your success kind of growing your workforce and your staff that you think it can still be growing consistently with this as a maybe bigger chunk, your items embedded in it?

Right. I think we'll be in terms of managing them. We've -- it's always been the case that you can have within the practice a relatively small set of very large matters that are very important. And that was true when we weren't 320 people. That was true when we were 260 people. So to some extent, as we've grown over time, that has facilitated, I guess, our ability to take these exceptionally large cases. And then and then having that scale, especially across multiple offices is then how we manage pulling people in, in those peaks when we need to pull a lot of people into a particular matter and then managing as they start to sort of come off. As we call it -- I mean, it's not like it drops to 0. Large matter that reports will be filed, but we've more or less. And we've got a whole bunch of people that we know are going to take a little bit of time off, but we more or less have things lined up for them right away. And we're -- I mean, part of what -- sometimes the job is this kind of holding back? No, you can't grab that person just yet. This other person needs them. So managing it that way. We also, quite frankly, manage, we have resources available to us outside of the practice. So there are skilled staff that are in other practices that would have similar skills, and we make use of those staff outside of the competition practice as well when managing these peaks and valleys.

I could give a little additional color to that. Our competition practice, average utilization is well north of the company average. The other thing I can add is the -- they are -- they have worked hard to have a regular set of demands placed on them from our clients. So even when Margaret talks about the troughs. The troughs in our competition practice still exceeds the company average. So it has been a very stable upward trajectory, growing practice for an extended period of time.

I was just going to add that when -- so just to give you an example, when -- in a particular case, you say there's a large team, and it's a very busy stretch. There are other cases even say, for the same expert. There are other cases which require attention. And they're a little bit earlier in the phase. But as soon as people wrap up one project, the we're eager to get them going on the other one.

So I've had Chad Holmes, Chief Corporate Development Officer, monitoring our virtual guests today. So I'm going to see if there's any questions that come online on different topics that we should address.

The questions from the room have covered the topics raised online. So we're good for this session.

Okay. Great. So -- we're going to take a 15-minute break. It's about 5 to 2 p.m. Eastern Time. We're going to ask everyone to sort of rejoin us at 10 past the hour. Thank you. [Break]

Okay. We're going to get started once again. I am happy to move to the next session now of our Forensic Services practice. We are fortunate to have a practice leader and senior colleague join us. That's Kris Swanson and Dan Rothman. At the end of their directed comments, we're going to take some Q&A before we move on to the Life Sciences practice. So with that, I'm going to turn things over to Kris Swanson.

Thanks, Paul. Dan and I are really excited to be here today and to share an overview of the Forensic Services practice and perhaps most importantly, our growth story first full year was only in 2016. But we've grown quickly, as you heard from Paul, to become the second largest practice in the firm worldwide. Dan and I have organized our slides into 3 sections. One is a high-level overview of what we do and to give you some tangible examples of what we've accomplished over the past 7 years. Then Dan is going to -- Dan, who joined us in May of 2021, will share some of his own personal growth story, which has been really exciting in its own right. But I think it's also consistent in many ways with the success that so many of our other colleagues have had when they came over to join the CRA platform. And finally, I'm going to spend some time talking about the estimated size of the market for Forensic Services the growth that's expected in that market over the coming decade and why we're so excited about working in this space. As Paul alluded, we will save time at the end if you have questions, and we welcome those. So what exactly do we do? Quite simply, we get called in to help companies get to truth. We help answer the questions of who, what, when, where, why and how often in moments of crisis when responding to allegations of fraud, cybercrime, misconduct and noncompliance. While we deploy many of our core competencies across almost all of our engagements, the need for our services from the client's perspective often presents in 1 of 3 ways. So the first bucket there that I've listed is the internal investigations. This is what indications arise that maybe there's been some sort of financial fraud or misconduct, perhaps the financial statements contain errors or regularities. Maybe a trusted employee has been embezzling. I have a case example for you later on. or that a top executive is seeking kickbacks from vendors. At the end of the day, we're being retained to help assess did employees misconduct occur? And if so, who what, when, where, why and how. In the second bucket, cyber incident response engagements or cyber investigations. These are also investigations into potential misconduct. Again, we're being retained to help answer the question of, did a data breach occur. And if so, how did the threat actor get in what regulated data did they take and which customers or employees need to be notified. Third, in what I've called theft of trade secret investigations, which is a particular specialty of my good friend and colleague, Dan Rothman, in this case, are indications that a former employee may have stolen trade secrets or other valuable information [Audio Gap] and when did it occur. All of these offerings are supported by a highly effective, nimble, scalable eDiscovery team and technology stack. Really, the primary difference between these 3 is just who the target is of the investigation. In the internal investigations, it's the part, the potential wrong door is typically an employee. In the theft of trade secret investigations, the typical target is a former employee. And in the middle, the cyber investigations, the typical wrong door is some sort of external party, some hacker of some kind or another. As you can appreciate, in moments of crisis, companies are usually highly motivated to hire the right team and get them started as quickly as possible. The clock is ticking, the queue has to be filed or the K has to be filed. And they have to figure out. Are there things that have to be written off? Or the disclosures that have to be made. And so this helps buffer us from the kind of pricing pressures that some other professional services may be more susceptible to. There's another advantage that we have, though that may not be immediately obvious, and that is we believe we have less exposure to credit risk than many other professional services providers. Because, many of our clients will have different kinds of insurance that will help backstop or cover the cost of the investigation. This may be D&O Insurance, it may be Fidelity Insurance, and maybe Cyber Insurance, different policies cover different kinds of misconduct. And we don't always know if the client has insurance. They don't always tell us. But my view is that this absolutely has been an important factor in our ability to consistently achieve some of the best collection rates in the entire firm. As you -- these are just a few of the statistics that we put in here. There are lots of numbers we're very proud of. But you see the CAGR, the 27% compound annual growth rate from 2016 to the present. We like that number. We like the head count growth since January of 2020, 84%. We've done that by hiring senior talent, rainmakers and potential rainmakers that we think have an opportunity to experience remarkable growth by coming over to our platform. We focus on our major markets, including Boston, New York, D.C., Chicago and Dallas. And then we carefully add staff. You can see we've managed our utilization quite nicely over the last. That same period. We carefully add staff and build out the leverage model as our new colleagues gather wind beneath their wings. One of the things that's been great about CRA from my perspective is how easy it's been to borrow staff from adjacent practices. Margaret touched on this earlier today as well because we also will have spikes in demand from time to time. And so -- but we've never had to turn away work. We've always been able to either borrow staff from other practices or -- and/or leverage some skilled, carefully selected and monitored subcontractors as appropriate. So here are just a couple of the accolades that we've gotten over the last few years. Some are at a practice level, some are at an individual colleague level. And I feel really excited about this because, obviously, we're competing against firms who have been in the space for many, many, many more years than we have. So we've had 4 colleagues, for example, who were included in the top 50 cybersecurity consultants awards this year. National Law Journal has recognized us as one of the top 3 forensic accounting providers in America. And we have quite a few colleagues who've been featured and Who's Who Legal. One of the things I like about Who's Who Legal is you can you can go and they actually interview and collect and post quotes from clients. And many of these quotes are really heart-warming. So it's not -- we didn't buy our way in or anything like that. This is a real process with real quotes. Some of you are here in 2019, if I'd put up a list of our client roster in 2019, it would have been a lot smaller. So now it's a lot bigger. So I think this really helps, helps prove the value that we provide -- that we're perceived as providing in the marketplace, right? These are clients who could have hired anyone in the country. They could have afforded to hire anyone, and they chose us. So many of our matters we'll start and end under highly confidential circumstances. And so some clients we can never mention my name or even allude to, but at least these are logos that I think you'll recognize, and we feel -- very proud of the work we've done for each and every one. And so now I'm going to turn the microphone over to Dan Roffman, who is going to share with you part of his own personal growth story.

Thank you, Kris. I'm very excited to be here and to share a little bit about my practice and my story over the past couple of years. I'm an expert in digital forensics. I'm based out of the Washington, D.C. office in our Forensic Services practice. And I started here in May of 2021. I was at a larger firm, and I was very happy with what I was doing. I was happy with the work. I was happy with the kinds of challenges I was getting. But I was lured away to CRA. And I think -- as I went through the recruiting process to come here, I learned about the top quality of experts that we had. And that was one of the first things that really drew me to this practice. I wrote down a quote that Margaret had up on the board earlier that said, people want to come work here. And I really truly believe in that. I feel that our experts are some of the best and brightest, and we're solving some of the most complex problems for clients. In the course of coming here, over 2.5 years, I've been able to double the revenue that I was bringing in. I'm working on larger and higher profile cases. And I'm actually working in a different role than what I was previous to this. So while my expertise is in digital forensics and trying to establish who did particular act on a computer who copied off the company's trade secrets and took them somewhere else. I'm often now finding myself directing our clients in ways that help to expand our roles on investigations. What should they be asking for from the other side? What discovery should they get? How should they go about the strategy of their legal case. And so this growth in both my personal career has also come with growth in the practice. The firm has supported me in that growth in a number of different ways. From the moment that I got here, I was given things like executive coaching and other forms of training that have helped me to get to the point where I am. I've also been given the tools and technologies and been able to leverage up staff. One of the messages I also heard in the presentation from Margaret earlier was this ability to handle larger cases by having a bigger pool of resources. And so that is a huge advantage at CRA that we have a large pool of highly qualified technical resources who are able to solve some of our clients' biggest problems. And we go to market together through cross-practice events and various other forms of marketing that we do. One of the things that I think makes our practice, particularly special is we sponsor a number of continuing legal education seminars for attorneys to come. And when they come to these, they're meeting regulators, judges assisting U.S. attorneys thought leaders in our company as well. And we're getting together and talking about some of the most important issues that are going on in the cases that we have. And so this brings our clients together with the types of people that they interact within a courtroom and helps to establish our branding and our presence with these law firms that we're this company that's sponsoring those kinds of events. And when we go to market, one of the things that I think differentiates our firm from others is that we have an integrated practice. So whereas some other companies split the different work streams that they do into different practice areas, like a digital forensics might be in one practice area and eDiscovery might be in another and cyber might be in another. And Kris' forensic accounting area might be in a different area. Our practice is one group that does all of this. So we're able to solve clients problems from end to end without having to refer work out to other areas. And this helps to both broaden our opportunities. But as I was saying, as I'm advising clients on the kinds of things we can do to help on their cases, I'm looking at it as a complete total solution that CRA can help our clients. So that's a little bit about my growth story. I'm going to turn it over to Kris who's going to talk a little bit about the market opportunities.

So as I mentioned earlier, even though a typical engagement for us will draw upon multiple competencies. Most of the estimates I found we're sort of for a deconstructed version of our practice. And so the market sizes and the market growth rates here, which seems reasonable to me and exciting. Our -- as you see, very tightly aligned to the way we started the presentation. There's the forensic accounting, there's the cyber, there's the digital forensics. There's the eDiscovery. Those correspond quite nicely to our 4 pillars. And so I had to give you 4 separate estimates to sort of help you get a sense of the composite size of what our practice does overall. So what's driving this demand and propelling this growth? Well, I'd like -- there's multiple reasons probably, but I'd like to share 3 with you, and then I'll provide examples that I think are especially significant. First, the ever-increasing sophistication creativity and activity levels of hackers of cyber criminals. Second session and other concerns other economic headwinds. And third, heightened expectations by regulators. The companies are going to do a better job of detecting, preventing and correcting these kinds of misconduct coupled with what seems to be a greater willingness to vigorously enforce those expectations. So let me share some specific examples of these 3 categories with you. So let's -- the first one, cyber criminals. Let's discuss ransomware for a minute, which is a particular type of cybercrime. I'm sure you've seen the articles about how ransomware came roaring back in 2023. And the tactics are getting ever more creative. Just 2 weeks ago, you may have seen that a ransomware group filed a whistleblower complaint with the SEC against one of its own victims. Claiming that the company had, had a data breach but that It hadn't disclosed that breach within 4 business days. This was an apparent attempt to further pressure the company into paying a ransom. Another creative technique used by various hostile governments is to get remote IT workers hired under false identities, and either skim off a portion of their wages and cash or to have these IT workers inject ransomware into the IT environment. In both cases, the cash generated helps to fund illicit weapons programs and other bad things. And I'm actually wrapping up an investigation of the large financial services right now that has this exact scenario going on. Let's talk about employee misconduct. So -- in the trade, we tend to talk about how employees steal or engage in other misconduct when 3 things come together, means, motive and rationalization. It's referred to as the fraud triangle. Obviously, as increasing fears about possible recession and economic headwinds continue to percolate in the U.S. and elsewhere. Those are generally expected to contribute to additional employee misconduct. And that's without even getting into the BYOD trends and working hybrid trends and things like that, where employees often have less supervision. So I have listed -- I want to told you earlier, I gave you a specific example. I listed a specific investigation that I personally led earlier this year where a Chief Marketing Officer was suspected of having stolen millions of dollars. Our investigation helped confirm those allegations. We determined how much he took in the schemes he used to pull it off. And we determined. And we determined where the money went. The embezzled funds were used to purchase 4 luxury homes, a $1.4 million yacht, $165,000 Mercedes-Benz G550 and Amphibious plane, a $53,000 watch and plastic surgery. Now the investigation ended before I had a chance to determine whether the plastic surgery was for himself or for a special companion. The company took all this information, wrapped a bow around it and provided it to local law enforcement. Yesterday, he signed a ple agreement, agreed to pay more than $10 million in restitution and the parties involved in the case have recommended an extensive prison term. There were other aspects of the case, too, right? There are adjustments to the financials they had to make, disclosures they had to make. We had to meet with the external auditors, help them through the analysis and the financial reporting. But this is one that's very public. You can see the DOJ press release yesterday. You can see lots of newspaper articles. And so as promised, we said we'd give you a case example. Okay. Third, the unprecedented demands by regulators, and I think Margaret touched on these in the Antitrust space. But in our -- and more of where we see these play out. First of all, for example, many of you are undoubtedly aware of the billions of dollars and penalties that regulators have obtained for off-channel communications. Courts have also been paying closer attention to whether litigants are preserving and producing relevant off-channel communications in civil disputes. And so all of this further enhances the need for our skilled digital forensics testifying experts, such as Dan Roffman. The SEC has adopted a 4-day business role for the disclosure of material cyber incidents that increases the need for skilled cyber investigation services such as ours. And the DOJ has published a [Audio Gap] safe harbor, which indicates that companies are companies and puts more pressure on them to prevent, detect and correct misconduct and to be timely and transparent in their disclosures. It's easy to make mistakes in this space. The failure -- the mistakes of course, not only create opportunities for regulatory enforcement but also for the class action bar to exploit as well. Recruit and integrate and support port, current and potential rainmakers, who we think have the opportunity to strengthen our business, strengthen our culture. And achieve remarkable levels of professional success. We're also continuing to develop our internal talent pipeline and invest in our technology stack. We're the only forensic services practice that I know that achieved an ISO 27001 certification, which is a privacy certification that helps affirm our commitment to the market. To the security of our clients' confidential information. And we get -- we maintain this and get this renewed every year. And of course, as Dan alluded, we continue to we plan to continue being vigorously and strategically active in the market, while collaborating with friends and colleagues from around the firm. So -- for those of you who are here in 2019, it's great to see you again. We're proud of the growth we've had in the interim. But whether you're returning or whether you're new, at this time would be, Dan, and I would be delighted to take any questions that you might have.

Thank you. Andrew Nicholas with William Blair. Crypto seems like that would be an area that's both ripe with fraud and also kind of the perfect opportunity for your expertise. So if you could kind of just talk about. I didn't see that in the trifecta, but I imagine it hits a bunch of those 3 tailwinds that would be great to learn what you're doing there.

Absolutely. Crypto and other technology -- we talk about them as being helpful for our -- technology has being helpful for us to delivering our services, but also that does get used often in the payment of ransom to cyber criminals. We've had -- if you're bribing somebody in a foreign country, it's easier to go click, click, click and send them cryptocurrency. You might not even know who's receiving it, than it is to carry a big bag of cash down the hall across the street to a government official. And so we have -- Andrew, I think our -- what you're asking is do we have crypto involved? Is crypto reflected in some of our ongoing investigations? And the answer is absolutely. It's a very significant percentage of our matters. Crypto will be a factor in one form or another.

And then maybe a separate question on talent broadly. It seems like would be professionals with expertise that's very much in demand. So can you talk about -- you've always talked about what attracts people to Charles River, but how do you kind of think about kind of the cost of talent and also, as it relates to kind of that demand for talent, is it difficult to find people with this type of expertise and how difficult is it to get them to come on board?

Well, first, we're really grateful for the opportunity to partner with our colleagues in corporate. So Chad and Paul and Jenn Cordell is not here and others, our partners in that process. [indiscernible] as I mentioned, on Boston, New York, D.C., Chicago the other offices where we already have a really sizable presence because it helps them leverage off the staff and the brand in the local markets. Really, if people get the opportunity to come and learn more about us. And for Dan, I mean, it took -- either I was a bad recruiter or Dan was a slow learner, but it took a couple of years to get the end in the door. We give people exposure. We're transparent. We don't want anyone to come and have regrets, right? So we give them -- and sometimes, I think we're too modest. Sometimes, I think we're overly modest in terms of what in terms of what a special place it is with a great partnerial culture, the annual officer meetings that we have for everybody worldwide, things like that. so it's continuing to look, I think, for top talent, and that's a good business and cultural fit. We need people who are going to mentor staff, take good care of staff, have our seen quality standards, things like that. There can be different flavors. We added someone recently who's focused will cost you head on export controls and sanctions compliance there's investigations into companies that have failed to comply with those rules, right? It's sort of a specialized flavor, but it's another one of those internal investigations I talked about earlier. Attempts to have its own regulators, its own language. Each of these areas will develop its own vocabulary over time. So we can't say computers, we have to say endpoints. We can't say cyber criminals, we have to say, threat actors. But if you cut through the language, it's basically. This is -- I think employee misconduct is as old as time.

Marc Riddick with Sidoti. I thank you for talking about the example with the Chief Marketing Officer, and I'm sure it's going to make a great American greed episode 1 day. But I was wondering if you could talk a little bit about the different demand levels that you're seeing from different industries. Are there any particular industries that are maybe more some of the growth that you outlined in some of the slides. And or are there industry specific drivers that you're noticing that might change the demand for you?

They all have their different characteristics. I mean I think the companies that come to us tend to be publicly traded companies often because they have the most regulatory exposure, right, and they have downstream securities litigation exposure and things like that. Newer companies, companies that have gone public recently, perhaps there a [ spec ] or other kinds of things may not have the robust internal controls in place yet. Companies that have a lot of regulated data in the past were credit card numbers, social security numbers, things like that, were targets of cyber criminals after a while, selling Kris Swanson' Social Security number for the 12th time become [indiscernible] web. So I think these things all kind of go in trends, but if it's -- there's -- the common threat is there's usually value there, right? Like a cyber criminal is more likely to try and target a company that they think can pay. I mean, as opposed to a company that can't pay. And -- but I haven't done the analysis that you're asking in terms of like industry trends. We just -- so I can't answer that more specifically. I'm not trying to avoid the connection. I think highly regulated companies, public companies, companies that are recently public or recently have had transactions. We saw -- if you're a big company and you buy another company, it's -- if that company it had, for example, FCPA violation going on or recent data breach going on or something, you're now expected to either figure it out in due diligence or figured it out within the next 6 months. And so we can -- we're -- as companies look at these things more closely, I fully expect that we'll be getting more calls.

Kevin Steinke, Barrington Research. So you talked a lot about your people and your expertise with your team. You have the point up there about your cutting-edge technology. Just wondering how much of a competitive differentiator that technology is in this space? Or is it just kind of you have to have it at a certain level to just be a competitor? Or are you finding that the technology can also be something that's driving new business and wins for you?

Well, technology has its place, right? And it's it can be really powerful in helping us get to truth more quickly. If we have large amounts of data that we analyze or a large number of e-mails that we have to get through or a large number of logs that have to be analyzed, technology can be very helpful. You have to know how to use it. You have to know how you interpret the results. These things don't just -- you just turn them on and they add value. The more sophisticated tools like Tanium, for example, I showed on an earlier slide, We, just last month, received -- we were acknowledged by them as the 2023 Information Security Innovation Partner of the Year. That is a tool that can be used in multiple different ways. We've used it in some very creative ways where we've taken our expertise and used it, for example, when we were a monitor for an information security and privacy, a hospital system that had was considered by the government to be a recidivist, and we were a monitor. We use this tool to help more quickly and effectively and comprehensively assess and help them improve compliance because it gave us the ability to do a lot of that work quickly and remotely, and this was during the middle of COVID. So technology has been -- we can -- you can't license every single tool in the market and be an expert in it and use it effectively. But there are a handful that I think are really valuable for us. And we'll continue to assess those things. And in 5 years, maybe some of them will be the same. Maybe some of them will be different when we put them on the shelf, you have to use them properly. And I think that's an area where we remain -- it's easier for us, I think, to become experts in some of these tools because we can use them on multiple engagements. Like it doesn't always make sense for a client to buy something and use it maybe once every 5 years. They're not going to be good at it. They're not going to keep up the tools just like the iOS on your phone or your computer or your watch those things update all the time, the tools improve, too. So build or buy right? And many times, it will be better for the company to hire us to bring to bear the power of our expertise enriched by the tools rather than trying to do it in-house. Some companies try and do it in-house.

Can I do one more quickly -- just for you, Dan. You mentioned you're happy where you were before, and it took a couple of years to -- for you to come over to CRA, but what kind of catch you over the hump to make that decision?

Well, I said it before, and I'll repeat again. The talent level here is unlike anything I've experienced anywhere else. And it's almost like a snowball effect where you get somebody good in the door and other staff want to come work with that person. And then those new staff come in the door and people say, "Oh, I want to work with that person." And so it helps both on the recruiting front, but I think the clients recognize it as well. We have a lot of momentum. It's like a snowball effect right now, and we're rolling leagues in mind who have the right skills, the right expertise. It's a really fantastic team that we've put together. When we don't have enough resources internally to our practice, we're able to pull in people with the right kinds of coding skills from other practice areas. So we're doing fantastically right now. Really, the thing that really drew me to this was going through that interview process and hearing from some of these other experts and really feeling comfortable that this was a place that had the right kind of expertise to help my clients.

I want to add a couple of words to one of the questions that Andrew Nicholas asked about our efforts in recruiting senior talent here. I should have done a better job connecting the dots on some of our speakers. So one of the reasons we invited Laila Haider, Dan Roffman, Angela De Martini, is to give you insights as to why CRA has been successful, why we've been successful in our ability to recruit talent from other successful established consulting firms to join CRA. We want to give you an understanding of that. And secondly, our ability to help these individuals reach an even larger platform is that's the means by which we earn a financial return. We are not getting bargains when we go out in inorganic pursuits. We are paying market, okay? The way we get a return, right, an economic return on those pursuits is our ability to help those people grow and prosper in the CRA platform. And I'm very proud to say it's not just in competition or forensics, life sciences, but we try to make this to be the hallmark of all our recruiting successes across the CRA portfolio. Greg Bell, the global leader of our Life Sciences practice and his colleague and my colleague, Angela De Martini to join us up here. We're going to have him speak and then you'll all have an opportunity to ask some questions at the conclusion. So Greg.

Thanks, Paul. Good afternoon, everybody. Met some of you back in New York in 2019. And it's wonderful to see folks again. And this time joined by my colleague, Angela De Martini, Angela is one of our strategy sector co-leads for the global life sciences practice. She's based in our [Audio Gap] but to -- to get started, I just want to talk a bit about what I think a lot of you already appreciate is there is tremendous opportunity in Life Sciences. And it's being driven by the scientific innovation that's happening. So yes, there's been talk about money. How some of the money is drying up for some of the smaller biotechs and the like. But what drives innovation and opportunity in life sciences is what's going on, on the science side. And that's what drives our opportunities as commercial consultants. And some of this is kind of clarified. I suppose it might be a bit trite to say but during the pandemic. One of the things technology platforms, entirely new approaches for therapies, mRNA [ vaccine ]. You've all heard of the gene therapies, these million dollar cures. What's important about these kinds of issues in Life Sciences is they're hitting on strategy issues, how do these products get to market when they get to market, how are they marketed? How do they compete? How do we drive awareness and trial usage. How are these paid for? So all of these strategy questions, there's incredible policy issues associated with all of the all. But the regulatory bodies are behind the science and they're playing catch-up. And so that's driving opportunities for us from a policy perspective. And then on the litigation side. I think one of the questions earlier today is [Audio Gap] there is right now a working group at the FDC looking at mergers and acquisition work in Life Sciences. We're seeing collaborations across companies. that's driving a lot of litigation issues in Life Sciences that are happening on the international stage in terms of arbitrations around failed co-development agreements or something like that. So each of these issues is raising opportunities for us in the Life Sciences Practice. Product HUMIRA was one of the anti-TNFs, right? It was for rheumatoid arthritis. It's also for psoriasis. So a completely different set of physicians prescribing it. Also for ulcerative colitis and Crohn's disease, a third different set of physicians. Facing competitors in each one of those different areas and providing different value in each one of those different areas. Became world's top selling drug. The PD-1 patients for KEYTRUDA for OPDIVO. And again, how are they competing in those, the policy issues around access and a lot of litigation concerns. The collaborations, gene therapies need to get there, there are viral [Audio Gap] vectors, collaborations between [ saved the ] Regeneron and Sanofi, which for years led to a number of significant new products, all of those with challenges. Combination therapies. This is becoming a big deal, obviously, in immuno-oncology, where you got backbone products like the PD-1s, and then they're tacked on other products that are going to be specific for different tumors and how is all of this going to get paid for? Well, we're one of the people that are out, there agencies think about paying for these. Because a lot of these combinations aren't all within one company. Personalization, you've all heard of the biomarkers, the personal genome sequencing early detection issues, right, raising huge opportunities for the industry. And there's also the consumerization of health care as we've expanded in terms of information being provided. All of us are a lot more informed about opportunities for treatment and issues than was the case 20, 25, 30 years ago. And consumerization in the U.S. looks very different from consumerization of these kinds of therapies in Europe and in Asia, again, creating opportunities. Access and policy, a big social issue is here. A standard poster child here is Alzheimer's disease. And not only how does that affect pharmaceuticals, but how does it affect caregiving treatment, how does it affect diagnostic budgets in terms of access. So the pharma company introducing a new Alzheimer's drug has a lot more stakes. HealthEquity, huge issue and is becoming a huge issue. Globally, not only in terms of access to all of these treatments, but also how the treatments are being developed. And one of our new ads in our practice is focused on R&D issues and R&D leading to commercialization. And HealthEquity is one of those keys. And lastly is the global reach. And it's one of the significant advantages of our practice. It's also one of our growth opportunities. I'm going to talk a bit about at the end because all of these products are available globally or driven towards access globally. But within that, they're all competing in very different health care ecosystems, responding to different regulatory agencies. Having to address different issues associated with pricing and reimbursement. And if you're going to commercialize successfully globally, you better be working with folks who actually know those markets, know those ecosystems and are able to talk about a global strategy that's focused on local implementation. So that's what our practice is about, and that was pretty cool. Let's try that again. We're organized in these 3 sectors, strategy, which is all about understanding the markets, optimizing performance in the markets through the individual brands and then also the portfolios as you think about what's the oncology strategy? What's the CNS strategy. What's the cardiovascular strategy at some of these companies? How are they leveraging the technology platforms they're accessing. On the policy front, we're -- we see a lot of our projects are actually a mix of strategy issues and policy issues, particularly as you're talking about launching new drugs, new therapies. When we talk about gene therapies and centers of excellence for providing gene therapy treatment. Well, they're not going to exist in every region. They're not going to exist in every country. How are you going to balance access issues across some of that. And then the litigation. You've heard from Margaret, you heard from Kris and Dan on the forensics side. One of the great advantages we think we have here in terms of the litigation practice in the Life Sciences practice is access to all of these different areas of CRAs expertise, and I'm going to talk about that a little bit later. The other thing I want to point out, not just about pharma, right? And the barriers between pharma and medtech devices, diagnostics, digital, they're all being eroded. They're all coming down. Regulators, though, are still thinking. It's pharma biotech. It's a device. It's a diagnostic. Lord knows what they're thinking on the digital front. That's still very much in process. But we need to be active across all of those areas because our clients are active across all of those areas. And effective treatments for a lot of these diseases involves aspects of the pharma side, the tech side, the diagnostic side. So our real competitive advantage, we think, out there in the marketplace is truly the breadth of the expertise that we've got in the practice. That's what's allowing us to win the more complex, multifaceted projects that we're seeing come down the pike. And there's going to be more of those as we continue to move forward because the science is continuing to progress. And one of the things to keep in mind, scientific progress today, 15 years from now, that's going to be new therapies. So we're looking at a long runway of opportunity in the life sciences practice. So with that, I'll turn it over to Angela for a little more in depth about the biggest part of our practice, that's the strategy sector.

Let's see if I can make it work. Okay. So by the end of this year, the life science practice will have conducted over 700 projects. We worked pretty much in every therapy area. But not surprisingly, over half of our projects are in oncology, rare diseases and neurology, which mirrors quite closely the industry pipeline. As Greg mentioned, the life science industry is an industry where scientific breakthroughs are really driving new business questions. Over the last few decades, the majority of the medicines that you've seen come to market were small molecules, monoclonal antibodies, enzymes, other type of proteins. And although they represent very important progress for medicine in general, the approach in bringing those to market is now quite established. However, what we're witnessing now is the advent of a whole new set of therapeutic modalities that are extremely sophisticated, very exciting, but also incredibly complex. And you've seen some of those, right? Greg mentioned during the pandemic, you saw the power of mRNA technology and how quickly you could get a medicine to market. You might have heard of CAR-Ts. This is an autologous cell therapy, whereby you take the patient cells, you engineer them, you make them smarter and you reinject them. And that helps the patient address target their own tumor cells. And you obviously heard of gene therapies, which hold great promise. However, as mentioned, these are extremely complicated to bring to patients. If you talk to doctors who deliver these therapies, they will compare many of them to an organ transplant because of all of the complexities in preparing the patients and figuring out who's the right patient for this type of therapy, but also for all the complexity that follows the administration of the therapy because there is monitoring, which is really important to make sure that the therapy is safe and it's actually doing what's intended to do. So you can imagine a world in the future where there's hundreds of thousands, millions of people receiving a therapy that is as complicated as an organ transplant, and you can appreciate what that level of complexity means for our clients. And in this context, the new business questions that are coming and that are new to our clients and to us as well are, for example, how can we best manage patient expectations. As mentioned, gene therapies, for example, come with a huge promise, yet there's still limited clinical evidence in the long run. So how do you manage the expectation of a caregiver, a parent of a child with a rare disease who is about to get a gene therapy? That's an important question for our clients. Or how do you price a single-shot drug when you don't even know how long the effect is going to be for 3 years, 5 years, 10 years, what's the value of that? Another important question is how do you prepare treatment centers for cell and gene therapies. But it's not just a product journey that is more complicated. The patient journey is different, the money flow is different. The information flow is different and these hospitals have to set themselves up for it. And in every country, it's different. So again, huge complexity is coming -- has already come in many centers. And at the same time, with all of these commercial challenges, how can we still exploit these platforms, the same way we've done with monoclonal antibodies. We really -- for decades, we really made the most of that technology, how can we do the same with cell and gene therapies, given all of these challenges in bringing them to market to the patient. And what happens when these new questions emerge is that also the way our clients operate is becoming different. So R&D needs to work much closer with commercial, with medical, with pricing and access with manufacturing, manufacturing never cared so much about the patient, right? They put the drug in a box or in a vial, but now they actually are really close to the patient like never before. And so from our perspective as well, we are investing a lot in being able to also have that cross-functional conversation with our clients. And that's why in addition to commercial strategy and pricing and access, we're bringing in capabilities around regulatory affairs, medical affairs, clinical development. And what I just described is not just a temporary bubble of cell and gene therapies. If you look further down the pipeline, there are many more exciting technologies coming really fast. Some of you may have read just this month, the first gene editing technology was approved in the U.K. It's a CRISPR-based technology. And what's amazing is that this was discovered just over 10 years ago, and the Nobel prize for chemistry was given in 2020. And 3 years later, we have the first therapy on the market. Now there's more coming about -- they're even talking about epigenome editing, which I would struggle to explain to you now, but it's just to say that more is to come and new business questions will come with it. Now maybe for epigenomic editing, I will be retired, but there's going to be some CRA consultants that will address those new questions, and Greg will still be here as well. And the fascinating part is that we talk a lot about gene and cell therapies today. But if you look at the ones that are already on the market, it's not even 30 hopefully, I'm not quoting anything wrong, but they're somewhere in between 20 and 30. So it's the tip of the iceberg. And actually, if you look at the clinical studies right now ongoing, there's over 2,500 studies. So there's so many more coming. This is just with advanced modality. It doesn't have all the old stuff of small molecules or monoclonal antibodies. This is a novel therapeutic approaches. And what this means is that for our clients -- for many of our clients, it will be the first of the kind that they are launching. And for many physicians out there, it will be the first of the kind that they're prescribing to the patient. So what does this mean for CRA? How are we positioned to really support our clients. Well, we deeply understand the markets in which our clients operate in, we understand every layer. We understand the policy environment. We understand the reimbursement system. We understand the health care infrastructure in different countries. And we also understand who's at the heart of that health care system, which is the patient. We talk to the patients, we talk to doctors. We talk to the caregivers, nurses, pharmacists, all the various specialists and primary care physicians also the OAC patients. So we understand these stakeholders what drives them their behaviors, what drives their decision making across all the therapy areas that I showed to you before. And our consultants in the life science practice work only on life science, right? So they don't look at other industries or maybe exceptionally, but they're focused on life science. And our business is only consulting. We don't sell data. We don't sell contract research. So we're really focused in what we do. And the third thing that is something we're really adamant about is when we come to our clients with the strategic recommendations, we really want to make sure they're grounded in high-quality data and insights. And for this, we have 2 centers of excellence in market research and advanced analytics that really help us make sure that, again, we support our recommendations with the highest quality insights and data. Now we wanted to bring you a couple of case studies, just so that we can bring to life more how we work with our clients and why we think we're unique. This is one client. It's a pharmaceutical company developing a gene therapy for a neuromuscular disorder that affects young children. And it's the first gene therapy in the neuro space that this company would bring to market. And we started off working with them in 2020, doing, if you like, a more traditional commercial strategy project where we were informing the product strategy. But then after that, we started to work also on pricing and access because as I mentioned earlier, how do you price a gene therapy when you don't know how long the effect will be on the patient. So we worked on innovative pricing strategies with them. After that, we worked on site readiness. So I mentioned earlier, many treatment centers need to figure out how to get organized. And the manufacturers want to help them but they don't know what they need and what's appropriate to provide. So we spoke with different centers across different countries to try and understand what are their requirements. I've personally been to some of these centers to talk to the neurologist about their requirements. Following that, we worked also with the global medical and marketing for unbranded campaigns. As I mentioned earlier, how do you manage patient and caregiver expectations with this kind of therapy? I'm pretty sure that if you're taking any medicines, you don't really know how it works. But for this kind of therapy, those patients and caregivers need to know how it works. And there's a lot of effort from pharmaceutical companies to ensure that the patient and the caregivers are educated. After that, we also did more -- another project looking at early experiences from patients in clinical trials. These are rare diseases. Every experience is really valuable to our clients. So we wanted to look into that. And the last project that we did this year is a really interesting example of how we operate. So when you go to regulatory authorities like EMA, you have to provide a certain type of documentation that shows that your safety material is of a certain standard. And we don't do this type of work. But the traditional way that is done for this type of work is not appropriate for gene therapy. And the regulatory authorities hasn't provided guidance on how to do it. And so our client came to us because, together, we thought we could develop a way that is appropriate for this type of therapy, and that's a responsible way for making sure that safety materials are adequate. And so I think this is a good example of how we're not always called because we've done it before, but we're hired because we can solve problems that have not been solved before because we understand the industry in-depth. Another completely different example speaks to our knowledge of global markets. So this is a client that is a midsized pharma whose sales are 90% in the U.S. and it has an ambition to really grow outside the U.S. This is not uncommon. U.S. pharma companies really struggle to grow outside. And the ones that do, it's mainly driven by a great product, not necessarily a deliberate strategy that they had. So this client really wanted to work on growing internationally. And in 2021, we were hired by the corporate development team to identify specific opportunities, specific diseases or specific product types that would lend themselves for strong international growth and also to understand what attributes of disease or product would be more favorable for supporting international growth. So that was the first project we did. And then this year, they called us back to actually help set a growth ambition. So their question is, what does success look like? What revenue growth should we aspire to what margin growth, what the footprint should look like? And the truth is that it was really hard to answer that question because when you look across the few successes, the reality is that they're all special. And so we develop growth architypes that could help them inform some of the ambitions that they wanted to set. Again, these are a couple of examples that I hope give you an idea of how we work in the long term with clients and really trying to work across functions and going and supporting a brand throughout its life cycle. I'll hand it over back to you.

Thanks, Angela. So that gives you a sense of what we do on the strategy sector of the life sciences practice. And again, that's somewhere between 2/3, 3/4 of the practice tends to vary by year. But building off these long-term engagements with clients' long-term engagements with brands exploiting our global knowledge of the marketplaces. So next, I just want to talk a little bit about the policy sector. Now the significance of our global policy team is really belied by its size. It tends to be only 10%-ish of the size of the practice. But it is what's keeping us right on the leading edge of how health care ecosystems are evolving, how pricing and access issues are evolving very much on a global basis. And so we're routinely engaged by the companies in terms of anticipating, right? What is going to be the business impact of some of these changes. Of course, huge issues here in the U.S. around drug pricing. What's going to be the impact of the IRA. How is that going to affect our product portfolio. Then how should we be thinking about responding. And this is something that it's not only individual companies and the policy areas of the companies that are calling us up, but the trade associations, pharma, FP is the European one, IFPMA, for much of the rest of the world. So how to respond to some of these initiatives. And again, it's not just in the pharma space across diagnostics, across devices. And then shaping the market, preparing the market for some of these new innovations, as Angela mentioned, as I mentioned earlier, the gene therapy, the centers of excellence. What's going to be the policies around access for that and around payments for that, for instance, in Europe, where you're not going to have necessarily a center in every country, okay? So market shaping is huge and how are the regulators going to keep up with the innovation that's happening. And the last thing is actually a big deal, alignment, right? We are typically talking about major multinational companies, right? They're operating in the U.S., they're operating in Europe. They're operating in Asia. What the Australian affiliate is saying about new initiatives in Australia around access to pharmaceuticals can't be at odds with what they're saying in the U.S. as a company. So this whole internal alignment around how the companies position themselves on policy issues is a major source of opportunity for us. This is just -- gives you a sense of one of the case studies from our policy team. And here, it was really helping EFFPA, right, that European trade association to characterize the benefits of the personalized medicines. When you think about personalized medicines, the biomarkers targeting a specific therapeutic, the gene therapies -- genome sequencing, introducing more genetic tests in terms of newborns, prenatal screening issues, okay? All of these are aspects of personalized medicine and a lot of the innovations coming down the pike are going to be able to be progressively more personalized as opposed to basically everybody taking the same kind of blood pressure med or something like that. So this was all about how EFFPA European Trade Association was going to be working with regulators in Europe around developing the kinds of systems that were going to be appropriate, not for mass market retail pharmaceuticals, but for personalized products. And then there's the litigation sector. All of you are familiar, I think, with that. The life sciences practice is kind of an industry-specific practice much of CRA is built around services to companies and the legal community. We're a microcosm of that within life sciences with a focus on what are the unique aspects of the challenges in the life sciences markets. So for instance, when it comes to some of the M&A issues, right? What is it about the way that the markets work in terms of access, the role of the learned intermediary in terms of physician, in terms of identifying which product is going to be used, et cetera, okay? That's fundamental to effective analysis on these kinds of questions. Commercial disputes have become a much, much bigger issue today than 25 years ago. 25 years ago, most of the issues in Life Sciences were around IP. There is still a lot of IP work going on inside life sciences because those are the crown jewels, the intellectual property that these companies are developing, science is expanding. But now because of all of the collaborations that are required, you just cannot encompass all of the different technologies that might be required to bring some of these new products to market. And you may not be able to commercialize them across every possible field of use or across all the different geographic markets. So there's a lot of work right now in issues of what we call CRE-type litigation, commercially reasonable efforts because when you're developing a partnering agreement with somebody, the drug is still maybe 6, 7 years away from being launched in the market. You can't specify all of the actions somebody is going to need to take because you want them to be able to respond to what's going on in the marketplace. And so these actions are often called what's commercially reasonable. How are you going to assess what's commercially reasonable? We're people that are principal experts in those kinds of situations because we are working across all of those different therapeutic areas. We've launched products across those therapeutic areas. We're working in the different geographies. We're going to see more on the product liability side, class cert issues coming up in these areas and financial disputes, CVRs, right, contingent valuation rights as we're seeing more activity in this space. We expect we're going to see more use of CVRs that are going to allow for payoffs when it turns out drug actually works or it achieves a milestone, such as FDA approval and the like. And all of this is very much leveraging the other practices at CRA. Clearly, the competition practice, the transfer pricing practice. Pharmaceutical industry is one of the biggest industries globally from a tax issue and transfer pricing. Why? Because all the values in the IP, and that's what's being traded globally as these companies are commercializing the products globally. Forensics and risk investigations and analytics, right? Huge issues associated with compliance concerns, FCPA concerns. Again, these are companies acting across multiple health care ecosystems across multiple different regulatory regimes. The IP practice, obviously, the finance practice on the valuation types of issues. And so I just want to get to our sort of 2 kind of areas of growth. We've got a number of what we're calling labs, it is after all the life sciences practice. In terms of where we're looking to focus, you heard Angela talk about rare disease, oncology. This is huge opportunity in the marketplace, right? There is thousands of rare diseases out there. A lot of them still untreated, undertreated, undiagnosed, underdiagnosed and we're investing in specifically issues associated with how to bring those products effectively to market, maximize the opportunity for them. Oncology, again, I talked a little bit about the immuno-oncology revolution in treatment. We're seeing more in opportunity assessments, and we think we are more effectively positioned for opportunity assessments now because we've got that broad global reach and we're active in all of these, as Angela was pointing out, new innovative developments in the science. And you really need to understand what's going on if you're going to effectively assess those opportunities. Digital therapeutics waiting and seeing just how significant an issue that's going to be. But obviously, we are investing with our clients in terms of understanding the opportunities there. And then pricing and access in both the U.S. and Europe. All of these new initiatives are generating all kinds of new challenges for pricing, access reimbursement. And so specific growth opportunities in life sciences. We've got a few of them up here, but the practice is 200-plus people. We've just recently added somebody who's going to lead for us on the R&D side, the R&D strategy, not R&D science, but R&D strategy and that link to commercialization. And as Angela was talking about extending that into med affairs, clin development, okay? We've made recent adds of developers in those areas as well. So while in the past, we were commercialization forward, we're now able to step back in that value chain for our clients. BD assessments. Again, we're seeing more opportunity for us on that front because of the much broader, deeper experience we got around these new therapies and the geographies. Key accounts is a primary focus for the practice. Angela was talking about these long-term engagements with brand teams, client teams, how do we do more with those clients. And from a General Counsel's perspective, we're seeing a real opportunity because we are now able to bring a much more comprehensive set of services to the GC's office, again, drawing on all of those other practices of CRA. We need more people. So active recruiting initiatives around the litigation front, particularly Europe, the policy front, it's actually more focused from a U.S. perspective and then regulatory, right? So I've talked about R&D, med affairs, clean development. We still have a hole on the regulatory side. And lastly, geographically, Asia. Estimates $4 trillion in health care spend in Asia in 2025. Now that's health care spend, right? So that's not just life sciences, that's including the hospitals and physicians blah, blah. But China and Japan, now the #2, #3 markets in the world for pharmaceuticals. And we're not on the ground there. We are absolutely engaging in projects through affiliate relationships, but as we see the future for the Global Life Sciences practice, we're going to need to be on the ground in Asia in order to maximize the opportunity for us. I think that's it from life sciences perspective. Happy to take any questions.

Andrew Nicholas with William Blair. Really helpful color. I guess I just wanted to start, and I'm going to preface my question by admitting that I'm not a pharma analyst, biotech analyst or far from an effort and expert in life sciences broadly. But my understanding is that the end markets over the past 12 to 18 months have been more challenged, higher interest rates, higher ways to get fundraising. I'm just kind of curious if you could speak to the health of these markets. It sounds like innovation is still very, very strong, but does that have any impact on product launches, willingness to pay for your services? And if you could just maybe speak to the cyclicality of the business broadly. That would be helpful.

Yes, sure. So number one, it does start with the innovation, right, scientific innovation that's generating the opportunities. No question, higher interest rates, some credit crunches we're going to see fewer smaller biotechs starting up. We're going to see more of the bigger companies cherry picking and being able to take out and bring in more of those opportunities into those companies earlier. That's where some of that BD assessment work I was talking about really comes into play. So is life going to be tougher for a small biotech, yes. Does that mean opportunity for some of these larger companies? Absolutely. The larger companies are also investing in their own innovation labs in terms of seeding some of this. So you maybe think of it as replacing some of the VC PE funding for those smaller biotechs with the bigger companies coming in. We're still seeing a lot of activity on the academic front, right? The universities are at the forefront of a lot of this R&D. So that's what I would say about that. In terms of pressure on pricing for our services and the like. I'd probably say 2 things. Number one, absolutely, the pharmaceutical sector is coming off a huge year in '21 -- 2021, 2022 and demand for the COVID vaccine, et cetera. So our budget is a little more strapped. Sure they are. On the other hand, you got a product that just got approved, its go time in terms of launching the product, bringing in our kinds of services because that's what these companies are about. It's about getting those products into the market.

So is it fair to say that like product launches can be a proxy for is that overreacting like product launches if -- and again, I'm not that close to life sciences space, but just thinking about kind of data points for us to look at as potentially being instructive for how business is going.

I think it probably is because it's the number of launches that are going to be indicative of how effective some of these new therapy platforms are being in generating products, getting products to market, and it's that transition as it comes to market, that is going to be a pretty good signal on opportunity for us. Angela?

I would agree, product launches. And obviously, there are therapy areas more valuable, right? People talk about obesity, a product launch there, they're going to spend more than a product launch in some other areas. But I think on average, it's actually a very good...

And then maybe just for a separate question. I think -- and you mentioned, Greg, about needing more people. I think if I go back to the last time you spoke in 2019, you were at a similar size in terms of head count. Is it a function of not being able to find people? Is it a function of the end market, has utilization gone up? I'm just trying to kind of bridge the gap between where you were 4 years ago versus where you are today. It sounds like a lot of the things that you talked about are similar in terms of growth opportunities. So just trying to piece all those things together.

Yes, I think it's a very fair characterization that a lot of the growth opportunities are similar, again, because they're all being driven by what's happening in the science. I think that -- well, there's no question. As a practice, we had grown quite rapidly, leading up to 2019, and we did need to do some retrenchment, build out more of those internal capabilities, and we think we've accomplished a lot of that. As a practice, though, we do have a voracious appetite for talent. And I think that's similar to most of CRA. And we're focused now more on building out some of these new areas of expertise as opposed to if a new pricing and market access team became available, would we be interested? Sure. If a medical affairs team became available, would we be interested? Absolutely. A devices team, absolutely. So it's more now about fleshing out that value chain that we're able to bring to the market.

You had the one particular slide where you're talking about investments in various areas of innovation. When I think about investments is that primarily or simply just finding people with certain -- those certain areas of expertise? Or are there other aspects to the investment?

It's certainly partly that, but it is maybe more about raising the capabilities of our team, building on some initial project opportunities like the one Angela was talking about and then how do we take individual product opportunities and build that more into more of an offering. That company she was talking about isn't going to be the first -- or it wasn't the first, I'm sure it's heck isn't going to be the only that's going to be bringing that new gene therapy idea to market and needing to create this capability. So a lot of those labs are about raising the level of our team to be more effective in terms of accomplishing those objectives. But up here, litigation policy, regulatory med affairs, those are absolutely going to be people, adds first and foremost.

Okay. And then secondly, what does the competitive landscape look like for you? And how do you seek to differentiate and grow with existing clients and win new clients?

But that's always the challenge. We look at the landscape probably as maybe 2 different types of firms. One is the boutique firms. So they'll be focused on particular areas. They're all going to be 100% life sciences but focused on particular areas or particular geographies. And area could be therapeutic areas or it could be a sector of the industry like pricing or op assessment or something like that. And then the other side are the big mega consulting firms that absolutely have a life sciences practice in addition to a number of other practices, they are not as focused on the client project team. Do they all have x years of experience in life sciences or last project where they're working on some manufacturing optimization at an investor plant. So we compete against the -- our bigger competitors with the breadth and depth of our experience in life sciences and the fact that we are truly global, it's challenging for some of those bigger companies that are organized along country lines to execute a project that crosses 12 different countries and requires a team that's going to be coming from a number of different countries. When it comes to the smaller players, we've got the breadth that, frankly, they don't have as much of. There may be somebody out there who's done as many rare disease projects as we've done, but I don't think there's anybody who's done more. And do I know that for a fact, no. But we've got a pretty good idea of who else is playing in the space. And we're here for the long haul. We're not somebody that's looking to be taken out by PE, VC money in another 5 years or something like that. So we're building a practice for the long term, much like CRA as a firm for the long term.

So with that, I guess that concludes our Investor Day. I want to thank everyone who joined us in person, who joined us virtually. Really appreciate your interest in CRA, and we genuinely look forward to sharing with you our successes in the quarters and years ahead. Thank you, everyone, and happy holidays. Thank you.