SMART Business Advisory and Consulting, LLC was a consulting

Consultant

A consultant is a professional who provides professional or expert advice in a particular area such as management, accountancy, the environment, entertainment, technology, law , human resources, marketing, emergency management, food production, medicine, finance, life management, economics, public...

 company that served clients throughout the U.S. and globally. SMART was headquartered in Devon, Pennsylvania with locations in the metropolitan areas of Atlanta, Chicago

Chicago

Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...

, New York

New York

New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...

, Philadelphia, and internationally in London

London

London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...

. The merged entity of LECG/SMART was liquidated in March 2011 as the company was unable to service its debt obligations going forward.

History

SMART was founded in 1988 as primarily a tax

Tax

To tax is to impose a financial charge or other levy upon a taxpayer by a state or the functional equivalent of a state such that failure to pay is punishable by law. Taxes are also imposed by many subnational entities...

 and audit

Audit

The general definition of an audit is an evaluation of a person, organization, system, process, enterprise, project or product. The term most commonly refers to audits in accounting, but similar concepts also exist in project management, quality management, and energy conservation.- Accounting...

 firm. In 2002 with the hire of disenfranchised Arthur Andersen

Arthur Andersen

Arthur Andersen LLP, based in Chicago, was once one of the "Big Five" accounting firms among PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young and KPMG, providing auditing, tax, and consulting services to large corporations...

 personnel, SMART offerings broadened to include business advisory and consulting services. A series of acquisitions financed through debt translated to rapid revenue and headcount expansion. In 2007 with global credit waning, a business model predicated on leveraged financing ultimately led to the need for recapitalization, repeat turnover of CFOs, and the dismissal of the founder and CEO. On August 17, 2009, LECG Corporation

LECG

LECG Corporation was a global expert services and consulting firm with more than 700 employees in 11 countries. It provided independent expert testimony on behalf of corporations, produced authoritative studies for industry, and conducted economic and financial analyses on disputes and issues,...

 announced that it has entered into definitive agreements to merge with SMART.

Major developments include:

• May 1993: First major tax outsourcing
  Outsourcing
  Outsourcing is the process of contracting a business function to someone else.-Overview:The term outsourcing is used inconsistently but usually involves the contracting out of a business function - commonly one previously performed in-house - to an external provider...
  
   engagement
• November 1996: John Swanick joins from Deloitte and Touche to lead the Insurance practice.
• June 1997: First major consulting engagement
• October 2001: Opened Chicago office
• July 2002: After the conviction of Arthur Andersen LLP in June 2002 and the swift loss of partners' equity capital , 55 Andersen consultants led by six former partners (Joe Lanzisera, Stan Pittman, Jonathan Stomberger, Kathy Bellwoar, Bob Baxter and Neil Schneider) join SMART and Associates to drive the firm's Business Consulting practice.
• September 2002: Opened New York office
• October 2002: Purchased Glen Ingram Chicago (22 people). Company reports $25.5 million in annual revenues.
• March 2003: Purchased Strategis: Schaumburg, Philadelphia & Atlanta (21 people)
• May 2003: Purchased Grabush, Newman & Co. Baltimore (50 people). SMART employs roughly 300 people and with the Grabash Newman acquisition annual revenues approach $40 million.
• 2005: Opened Amsterdam office
• February 2006: Purchased KPMG
  KPMG
  KPMG is one of the largest professional services networks in the world and one of the Big Four auditors, along with Deloitte, Ernst & Young and PwC. Its global headquarters is located in Amstelveen, Netherlands....
  
   Compensation & Benefits Practice
• September 2006: Opened London office
• May 2007: Great Hill Partners, LLC acquires a controlling interest in SMART for $60 million and by refinancing $60 million of debt and other liabilities. CEO James Smart indicated the deal was sought to address the problem that "we're thinly capitalized
  Capitalization rate
  Capitalization rate is the ratio between the net operating income produced by an asset and its capital cost or alternatively its current market value...
  
  , have been from day one". The deal leaves Smart and 62 other partners in SMART Business Advisory with a significant minority stake. Smart would not say how much of the $60 million went to the partners. SEC proxy statement details the recapitalization consisting of $118,634,000 aggregate purchase price with nearly the entire Great Hill cash investment provided to SMART principals in exchange for 80% voting interest.
• March 2008: Terence Montgomery hired as CFO replacing Richard Devine.
• June 2008: Grabush, Newman & Co. staff released.
• August 2008: In August the firm reports that founder James Smart has stepped down from the position of CEO, and retained as chairman to focus on long-term strategy. In December it is confirmed that Smart was forced out by Great Hill Partners, the private equity firm that bought 80% of the firm in May 2007.
• November 2008: Steve Samek, former head of Arthur Andersen's U.S. operations, is hired as CEO.
• December 2008: Terence Montgomery resigns as CFO after brief tenure. In calendar year 2008, SMART is one of the very few large national consulting firms to experience both a decrease in revenues and subsequent employee headcount. Revenues contracted by 10% while nationwide the industry growth rate expanded at 9%.
• August 2009: Howard Stecker resigns as CFO
• August 2009: LECG announces proposed merger with SMART. LECG is to receive a $25 million cash investment from SMART's majority shareholder, Great Hill Partners in exchange for approximately 10.9 million shares of common stock and 6.3 million shares of preferred stock in the combined company. LECG will assume approximately $32.4 million of SMART net debt. The debt was incurred as part of the May 2007 Great Hill recapitalization effort wherein aggregate purchase price was supplemented with a term loan negotiated by Great Hill, on behalf of SMART, with a senior secured credit facility of $45 million.
• March 31, 2011: The term loam with termination date of March 31, 2011 ultimately proved to be the company's death knell. Continued losses, weak demand, high administration costs and consultant departures, resulted in the forced liquidation of the merged entity so as to satisfy unpaid principal and interest. Practices were sold off rapidly to meet the March 31 deadline, with the company announcing there would be no proceeds for common stockholders as it winds-down its business.
• April 5, 2011: Steve Samek announced his resignation on April 5, 2011, along with that of CFO Warren D. Barratt.