<PAGE>   1




                    BARRISTER INFORMATION SYSTEMS CORPORATION










                   EXHIBIT 13 - ANNUAL REPORT TO SHAREHOLDERS
                    FOR THE FISCAL YEAR ENDED MARCH 31, 1998




<PAGE>   2

--------------------------------------------------------------------------------
                                                            FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
SELECTED FINANCIAL DATA
                                                                   Year Ended March 31
                                           ----------------------------------------------------------------------
                                              1998          1997           1996           1995           1994
                                           ----------------------------------------------------------------------
                                                          (In thousands, except per share amounts)
<S>                                         <C>           <C>            <C>            <C>            <C>     
STATEMENT OF OPERATIONS DATA:
  Revenues                                  $ 17,065      $ 14,177       $ 13,729       $ 15,327       $ 17,772
  Net earnings (loss)                             23          (386)          (205)          (159)        (1,334)
  Net earnings (loss) per common share             -          (.05)          (.03)          (.03)          (.53)

BALANCE SHEET DATA AT YEAR END:
  Working capital                              2,271         2,367          2,929          2,880          2,733
  Total assets                                 7,377         6,953          6,978          6,544          7,447
  Long-term debt(1)                            1,395         1,504          1,392          3,329          3,406
  Shareholders' equity                         1,993         1,952          2,337            298            197
</TABLE>

--------------------------------------------------------------------------------

QUARTERLY FINANCIAL DATA (UNAUDITED)

The following is a summary of quarterly financial data for the fiscal years
ended March 31, 1998 and March 31, 1997.

<TABLE>
<CAPTION>
                                         -------------------------------------------------------------------
                                            1st           2nd           3rd           4th           Total
                                          Quarter       Quarter        Quarter       Quarter         Year
                                         -------------------------------------------------------------------
                                                      (In thousands, except per share amounts)

<S>                                       <C>           <C>            <C>           <C>            <C>     
1998
   Revenues                               $  4,227      $  4,249       $  4,293      $  4,296       $ 17,065
   Net earnings (loss)                           5           (91)           107             2             23
   Net earnings (loss) per common share          -          (.01)           .01             -              -

1997
   Revenues                               $  3,415      $  3,254       $  3,777      $  3,731       $ 14,177
   Net earnings (loss)                          15           (33)            27          (395)          (386)
   Net earnings (loss) per common share          -             -              -          (.05)          (.05)
</TABLE>


(1)  See note 2 to the financial statements.


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     BARRISTER INFORMATION SYSTEMS CORPORATION -- ANNUAL REPORT 1998      PAGE 1

<PAGE>   3


MANAGEMENT'S DISCUSSION AND ANALYSIS


The following table sets forth for the periods indicated (i) the percentage
which each item reflected in the statements of operations bears to total
revenues and (ii) the percentage change of such items as compared with the
indicated prior period.


<TABLE>
<CAPTION>
                                                                                                   Period to Period
                                                      Percentage of Total Revenues                    Percentage
                                                           Year Ended March 31                    Increase (Decrease)
                                                  ---------------------------------------------------------------------
                                                                                                  1998            1997
                                                                                                   vs.             vs.
                                                   1998            1997            1996           1997            1996
                                                  ---------------------------------------------------------------------
<S>                                                <C>             <C>             <C>            <C>             <C>
Revenues:
   Product sales                                    11.3  %         17.5  %         13.0  %      (22.5%)         39.3%
   Services                                         88.7            82.5            87.0          29.5           (2.1)
                                                  ------          ------          ------
      Total revenues                               100.0           100.0           100.0          20.4            3.3
                                                  ------          ------          ------

Costs and expenses:
   Cost of product sales(1)                         20.3            35.5            43.2         (55.6)          14.5
   Cost of services(2)                              77.0            83.0            85.8          20.1           (5.3)
                                                  ------          ------          ------
      Total cost of revenues                        70.6            74.7            80.2          13.8           (3.9)
   Selling, general, and
      administrative                                23.6            24.3            20.4          16.6           23.4
   Product development and
      engineering                                    4.6             3.4             3.2          60.3            9.5
                                                  ------          ------          ------
      Total costs and expenses                      98.8           102.4           103.8          16.0            1.9
                                                  ------          ------          ------
Operating earnings (loss)                            1.2            (2.4)           (3.8)            -          (34.3)
Interest expense                                     1.1             0.3             1.2         377.5          (75.6)
Earnings (loss) before
      extraordinary item                              .1            (2.7)           (5.0)            -          (44.1)
                                                  ------          ------          ------
Extraordinary item                                     -              -              3.5             -              -
                                                  ------          ------          ------
Net earnings (loss)                                   .1            (2.7)           (1.5)            -           88.3
                                                  ======          ======          ======
</TABLE>


(1)  Percentage of product sales
(2)  Percentage of services revenues


--------------------------------------------------------------------------------
PAGE 2     BARRISTER INFORMATION SYSTEMS CORPORATION -- ANNUAL REPORT 1998 

<PAGE>   4


OVERVIEW


The following discussion and analysis provides information that management
believes is relevant to an assessment and understanding of the Company's results
of operations and financial condition. The discussion should be read in
conjunction with the financial statements and accompanying notes. The Company's
principal source of revenues is derived from hardware maintenance services on PC
related equipment provided to a broad base of customers throughout the United
States. The Company also derives significant revenues from the licensing of
software and software support services predominantly to the legal industry. The
Company's major product, Javelan, is a time and billing and practice management
system based on Microsoft Windows and client/server technology.

The Company has also licensed Javelan to accounting firms, consultants and
departments of Fortune 1000 companies. The Company expects to expand marketing
in these areas by attending trade shows and group conferences in these markets
and by establishing strategic relationships with others to enhance sales. If
successful, this will reduce the Company's concentration in the legal market and
reduce potential volatility of sales. The market for Javelan is characterized as
having: potential customers concentrated in major cities throughout the United
States; little foreign competition; barriers to entry based on the substantial
investment required to develop the sophisticated functionality of the software;
product life cycles between 5 and 10 years; and price elasticity. Pricing for
Javelan is based on the size of the system and functions licensed. Since
individual sales can be for sizable amounts and are characterized by high
margins, and because the timing of when contracts are signed is unpredictable,
operating results for any given period can vary significantly. Because of
competition, market demands and changing technology, there is a continuing
requirement to invest in product features and functions to remain a viable
competitor. The Company believes that it has the technological expertise to
maintain a state-of-the-art product and that future sales of Javelan will
provide the financing for its product development needs.

The hardware maintenance business has been generated through direct sales to end
users and subcontracts from other companies. In addition, a number of
contractual relationships have been established with computer resellers and
value added resellers to provide maintenance services to their customers.
Marketing focus is being placed on obtaining new business partners, as well as
increasing the level of business with established business partners. The market
for hardware maintenance services is very large; it encompasses all businesses,
is highly price competitive, has low technological barriers to entry and the
equipment serviced has short product life cycles.



--------------------------------------------------------------------------------

    BARRISTER INFORMATION SYSTEMS CORPORATION -- ANNUAL REPORT 1998       PAGE 3


<PAGE>   5



RESULTS OF OPERATIONS

The decrease in product sales for fiscal 1998 as compared to 1997 primarily
resulted from a decrease in the sale of low margin (10% - 15%) hardware related
products. Sales of the Company's Javelan software product were approximately the
same for the comparative years. These sales did not meet expectations due to
staff changes in the sales organization. The increase in product sales for
fiscal 1997 as compared to 1996 resulted from increased Javelan sales. The
percentage of margin realized on product sales increased for both years based on
the increased percentage of product sales that were comprised of the Javelan
software product which has a smaller associated cost of sales. Margins on
Javelan sales, which can include various hardware and third party software, in
addition to the Company developed software, generally amount to between 60% and
100% depending on the configuration of the sale. The Company expects to achieve
an increase in Javelan sales in fiscal 1999 because of market demand to replace
software that is not year 2000 compatible, the recent release of a new product,
Javelan Select, for the smaller law firm, enhancements made to Javelan during
the past year, and a reorganized sales department.

The increase in services revenues for fiscal 1998 as compared to 1997 resulted
from increased revenues from hardware maintenance contracts, hardware time and
material services and installation, training and conversion services associated
with the sale of Javelan. The increases in hardware maintenance contracts
resulted from two large contracts sold at the end of fiscal 1997 directly to end
users and contracts received from newly established business partners. The
Company has signed a number of business partnerships arrangements with equipment
resellers to provide hardware maintenance services to their customers.
Expectations are that these arrangements will provide additional contracts in
subsequent years. The increase in hardware time and material services was
primarily the result of a contract signed with CIC Systems Inc. in the third
quarter of fiscal 1997 to provide computer hardware maintenance services for CIC
customers nationwide and, more recently, in the use of a new computer system to
more thoroughly capture billable work. All work under the CIC contract was
halted in March 1998 and CIC was subsequently acquired by CompuCom Systems, Inc.
in May 1998. Revenues from CIC represented 7% of total revenues in 1998. The
Company expects to replace these revenues with new business from other sources
in 1999, but does not expect any appreciable growth in hardware maintenance
revenues in 1999.The increase in Javelan associated services is a direct result
of the increase in Javelan sales realized in fiscal 1997 and to services
realized from the growing base of customers. Installation and conversion
services will normally follow the product sales by one to six months or more
depending on the size of the sale and the pace of the installation desired by
the customer. Additional increases in these services are expected in fiscal
1999.

The decrease in services revenues for fiscal 1997 as compared to 1996 was
principally due to decreased revenues from hardware maintenance contracts. These
revenues were affected by the non-renewal of three large subcontracts from IBM
and a reduction in contracts for the Company's older minicomputer equipment.
Revenues from IBM dropped from 30% of total revenues in 1996 to 20% of total
revenues in 1997. (Revenues from IBM remained approximately the same in fiscal
1998 but dropped to 


--------------------------------------------------------------------------------

PAGE 4     BARRISTER INFORMATION SYSTEMS CORPORATION -- ANNUAL REPORT 1998

<PAGE>   6



17% of total revenues based on an increase in total revenues.) IBM's contract
with the Company has a provision that stipulates that IBM is able to terminate
any of its contracts by providing 30 days advance notice. If IBM were to cancel
a major portion of its subcontracts to the Company, or if the Company's sales
and marketing efforts are unsuccessful, an adverse impact on the Company's
results of operations for fiscal 1999 could occur.

Margins on services revenues increased for fiscal 1998 as compared to 1997
primarily from margins generated from the increase in Javelan associated
services and from the capture of additional hardware time and material billings.
The increase in margins on services revenues when fiscal 1997 is compared to
1996 was realized by reductions in labor and parts costs at a higher rate than
the drop in revenues. Cost of services includes a provision for service parts
inventory deemed to be no longer repairable or excess to the Company's needs
based on actual and projected service revenues. The amount of such charges were
$900,000, $900,000 and $1,045,000 for 1998, 1997, and 1996, respectively.

The decrease in selling, general and administrative expenses as a percentage of
total revenues for fiscal 1998 as compared to 1997 was based on achieving a
higher percentage growth in revenues then the increase in expenses. Expense
increases came principally from additional selling expenses including higher
commissions associated with the new business generated. The increase in these
expenses as a percentage of total revenues when fiscal 1997 is compared to 1996
resulted primarily from increases in selling expenses associated with enhanced
efforts to obtain new hardware maintenance contracts and increased levels of
Javelan sales.

Expenditures for product development and engineering, before taking into account
amounts capitalized and amortized for software production costs, were
approximately the same percentage of revenues for each of the comparative fiscal
periods. The increase in the amount of expenses incurred came from planned
increases in this area to further enhance Javelan and from higher amortization
of software production costs. Costs capitalized as software production costs
amounted to $304,000, $330,000 and $308,000 in 1998, 1997 and 1996,
respectively. Amortization amounted to $241,000, $116,000 and $59,000 for these
same three years.

Interest expense as a percentage of revenues increased for fiscal 1998 as
compared to 1997 based on a restructuring of a loan with BIS Partners, L.P. in
March, 1997, which extended the period of repayment and modified the interest
rate from a fixed 8% to a variable rate based on prime plus 3.5%. BIS Partners,
L.P. is ninety percent owned, either directly or indirectly by certain officers
and directors of the Company. The decrease in interest expenses as a percentage
of revenues when fiscal 1997 is compared to 1996 was based on reductions in
interest expense to BIS Partners. This resulted from the effect of the debt
forgiveness by BIS Partners in August, 1995. The accounting treatment of that
transaction stipulated that the debt forgiveness must first be considered a
reduction of all future interest expense before any restructuring gain was
measured. Accordingly, loan payments made after August, 1995 through March, 1997
were recorded as reductions in the principal balance of the loan.


--------------------------------------------------------------------------------

     BARRISTER INFORMATION SYSTEMS CORPORATION -- ANNUAL REPORT 1998     PAGE 5

<PAGE>   7



Based on the consideration of the weight of both positive and negative evidence
as required by Statement of Financial Accounting Standards No. 109, management
has determined that it is more likely than not that the deferred tax assets will
not be realized. Therefore, no tax benefits were established in the statements
of operations for any of the years in the three-year period ended March 31,
1998, since the Company has fully reserved for the tax effect of net deductible
temporary differences and operating loss carry forwards. These benefits will be
recorded in future periods as they are realized or as their realization becomes
predictable.

LIQUIDITY AND CAPITAL RESOURCES

The Company experienced a net decrease in cash of $16,000 during fiscal 1998.
The principal source of cash was provided by operating activities of $458,000.
Principal uses of cash during the year were additions to capitalized software of
$304,000 and additions to equipment and leasehold improvements of $131,000. In
fiscal 1997, the Company experienced a net decrease in cash of $972,000.
Principal uses of cash during the year were additions to equipment and leasehold
improvements of $332,000, additions to capitalized software of $330,000 and
repayment of long-term debt of $544,000. These uses were partially offset by net
cash provided by operating activities of $167,000. In fiscal 1996, the Company
experienced a net increase in cash of $1,014,000. Net proceeds of $1,952,000
received from the sale of 2,000,000 shares of common stock were used to repay
$564,000 of long-term debt and for additions to capitalized software of $308,000
and additions to equipment and leasehold improvements of $82,000.

The principal cash requirements for fiscal 1999 are investments in capitalized
software at levels that approximate those in fiscal 1998 and additions to
equipment and leasehold improvements that are expected to be somewhat higher
than amounts spent in 1998. Scheduled debt repayments should approximate
$127,000. The Company expects to meet its cash requirements by generating
positive cash flow from operating activities. Any income earned should not
require cash payments for taxes, since the company has use of net deductible
temporary differences and operating loss carry forwards of approximately
$2,246,000 at March 31, 1998. The Company expects a return to growth in Javelan
sales in 1999. This expectation is based on market demand to replace software
that is not year 2000 compatible, the recent release of a new product, Javelan
Select, for the smaller law firm, enhancements made to Javelan during the past
year and a reorganized sales department. Increased Javelan sales should also
lead to an increase of associated installation, training and conversion
services. While the Company expects additional hardware maintenance contracts to
be obtained from its business partners and direct selling efforts, most of this
revenue will be required to replace the work done for CIC Systems in 1998.
However, profitability is expected to improve since the costs of performing the
work for CIC were high and the implementation of a new computer system has led
to a more thorough capture of billable work. The Company continues to pursue the
sale of warranty upgrade contracts which generally have terms up to three years
and are prepaid at the time the contract is signed.


--------------------------------------------------------------------------------

PAGE 6     BARRISTER INFORMATION SYSTEMS CORPORATION -- ANNUAL REPORT 1998

<PAGE>   8



The Company continues its efforts to obtain additional working capital from
banks and asset-based lenders. If the Company is unsuccessful in returning to
profitability, there can be no assurance that it will be able to generate
positive cash flow from operations or that sufficient cash will be available to
meet its required obligations. Further, there can be no assurance that borrowing
will be available from banks or asset-based lenders or that other sources of
cash will be available.

YEAR 2000 COMPLIANCE

The Company's Javelan product is year 2000 compliant. Older software products
previously licensed by the Company are not year 2000 compliant and there is no
contractual obligation to bring them into compliance. Customers using these
products have been notified that they are not year 2000 compliant. Third party
software and hardware products that are integrated with Javelan continue to be
tested for year 2000 issues. While no material issues have been found to date,
the Company cannot fully predict the effects of the year 2000 with respect to
these third party products.

The Company is continuing the evaluation of its internal information technology
systems to determine those systems which are not year 2000 compliant.
Accordingly, the costs of addressing any year 2000 problems are unknown at this
time. However, based on the results of this evaluation to date, the Company does
not anticipate that the costs associated with year 2000 issues will have a
material adverse impact on its financial position, results of operations, or
liquidity.

ACCOUNTING PRONOUNCEMENT

In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related information," which requires financial information to be
reported on the basis that is used internally for evaluating segment performance
and deciding how to allocate resources to segments. The standard must be adopted
by fiscal 1999. The Company is currently evaluating the disclosures required
under the new standard.

FORWARD-LOOKING STATEMENT

When used in this report, the words "expects", "believes" and "intends" and
similar expressions are intended to identify forward-looking statements. Such
statements are subject to certain risks and uncertainties which could cause
actual results to differ materially from those projected. Readers are cautioned
not to place undue reliance on these forward-looking statements which speak only
as of the date hereof. The Company undertakes no obligation to republish revised
forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrences of unanticipated events. Readers are also
urged to carefully review and consider the various disclosures made by the
Company which attempt to advise interested parties of the factors which affect
the Company's business in the Company's periodic reports on Form 10K and 10Q
filed with the Securities and Exchange Commission.

--------------------------------------------------------------------------------

     BARRISTER INFORMATION SYSTEMS CORPORATION -- ANNUAL REPORT 1998     PAGE 7

<PAGE>   9


BALANCE SHEETS
(In thousands, except share data)

<TABLE>
<CAPTION>
                                                                            March 31
                                                                   --------------------------
                                                                     1998              1997
                                                                   --------------------------
<S>                                                                <C>              <C>      
         ASSETS (Note 2)
         CURRENT ASSETS:
            Cash                                                   $   210          $     226
            Accounts receivable, less allowance for doubtful
               accounts of $210 in 1998 and $125 in 1997             3,084              2,598
            Inventories:
               Service parts                                         2,853              2,826
               Other                                                    83                146
                                                                   -------            -------
                  Total inventories                                  2,936              2,972
                                                                   -------            -------
            Prepaid expenses                                            30                 67
                                                                   -------            -------
                  Total current assets                               6,260              5,863
                                                                   -------            -------
         EQUIPMENT AND LEASEHOLD IMPROVEMENTS, AT COST:
            Computer and other equipment                             2,859              2,873
            Furniture and fixtures                                     946                968
            Leasehold improvements                                     284                284
                                                                   -------            -------
                                                                     4,089              4,125
            Less accumulated depreciation                            3,673              3,666
                                                                   -------            -------
               Net equipment and leasehold improvements                416                459
                                                                   -------            -------
         SOFTWARE PRODUCTION COSTS                                     658                595
         OTHER ASSETS                                                   43                 36
                                                                   -------            -------

                                                                   $ 7,377            $ 6,953
                                                                   =======            =======
</TABLE>

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PAGE 8     BARRISTER INFORMATION SYSTEMS CORPORATION -- ANNUAL REPORT 1998     

<PAGE>   10



<TABLE>
<CAPTION>
                                                                                                      March 31
                                                                                            --------------------------
                                                                                             1998               1997
                                                                                            --------------------------
<S>                                                                                         <C>              <C>     
         LIABILITIES AND SHAREHOLDERS' EQUITY
         CURRENT LIABILITIES:
            Note payable to bank (note 2)                                                   $  250           $    250
            Note payable (to a related party, note 2)                                          100                  -
            Current installments of long-term debt ($98 in 1998
                and $55 in 1997 to a related party, note 2)                                    127                 99
            Accounts payable                                                                 1,274              1,119
            Accrued compensation and benefits                                                  722                642
            Customer advances and unearned revenue                                           1,461              1,320
            Other accrued expenses                                                              55                 67
                                                                                           -------            -------
               Total current liabilities                                                     3,989              3,497
                                                                                           -------            -------
         LONG-TERM DEBT, EXCLUDING
            CURRENT INSTALLMENTS ($1,377 in 1998 and
            $1,475 in 1997 to a related party, note 2)                                       1,395              1,504
         SHAREHOLDERS' EQUITY (notes 2 and 3):
            Preferred stock, authorized 2,000,000 shares,
               terms set at issuance                                                             -                  -
            Common stock, $.24 par value.
               Authorized 20,000,000 shares;
               8,216,362 and 8,201,300 shares issued and
               outstanding in 1998 and 1997, respectively                                    1,972              1,968
            Additional paid-in capital                                                      21,565             21,551
            Accumulated deficit                                                            (21,544)           (21,567)
                                                                                           -------            -------
               Total shareholders' equity                                                    1,993              1,952
                                                                                           -------            -------
         COMMITMENTS AND CONTINGENCIES (notes 6 and 9)
                                                                                            $7,377            $ 6,953
                                                                                           =======            =======
</TABLE>

         See accompanying notes to financial statements.

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     BARRISTER INFORMATION SYSTEMS CORPORATION -- ANNUAL REPORT 1998     PAGE 9


<PAGE>   11


STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)



<TABLE>
<CAPTION>
                                                        Year Ended March 31
                                               -------------------------------------
                                                 1998          1997           1996
                                               -------------------------------------

<S>                                            <C>           <C>            <C>     
REVENUES:
    Product sales                              $  1,927      $  2,486       $  1,784
    Services                                     15,138        11,691         11,945
                                               --------      --------       --------
       Total revenues                            17,065        14,177         13,729
                                               --------      --------       --------

COSTS AND EXPENSES:
    Cost of product sales                           392           883            771
    Cost of services                             11,657         9,703         10,245
                                               --------      --------       --------
       Total cost of revenues                    12,049        10,586         11,016
    Selling, general and
       administrative expenses                    4,023         3,451          2,796
    Product development and engineering             779           486            444
                                               --------      --------       --------
       Total costs and expenses                  16,851        14,523         14,256
                                               --------      --------       --------
OPERATING EARNINGS (LOSS)                           214          (346)          (527)


INTEREST EXPENSE:
      Related party (note 2)                        149             2            108
      Other                                          42            38             56
                                               --------      --------       --------
         Total Interest                             191            40            164
                                               --------      --------       --------
EARNINGS (LOSS) BEFORE EXTRAORDINARY ITEM            23          (386)          (691)


EXTRAORDINARY GAIN ON EXTINGUISHMENT
    OF DEBT (NOTE 2)                                  -             -            486
                                               --------      --------       --------
NET EARNINGS (LOSS)                            $     23      $   (386)      $   (205)
                                               ========      ========       ========

PER COMMON SHARE - BASIC AND DILUTED:

EARNINGS (LOSS) BEFORE EXTRAORDINARY ITEM      $      -      $   (.05)      $   (.11)

EXTRAORDINARY ITEM                                    -             -            .08
                                               --------      --------       --------
NET EARNINGS (LOSS)                            $      -      $   (.05)      $   (.03)
                                               ========      ========       ========
WEIGHTED AVERAGE NUMBER OF
  COMMON SHARES OUTSTANDING:
         BASIC                                    8,207         8,201          6,209
                                               ========      ========       ========
         DILUTED                                  8,478         8,567          6,320
                                               ========      ========       ========
</TABLE>



         See accompanying notes to financial statements.


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PAGE 10     BARRISTER INFORMATION SYSTEMS CORPORATION -- ANNUAL REPORT 1998     


<PAGE>   12




STATEMENTS OF SHAREHOLDERS' EQUITY
(In thousands, except share data)


<TABLE>
<CAPTION>
                                                                    Year Ended March 31
                                                          --------------------------------------
                                                           1998            1997           1996
                                                          --------------------------------------


<S>                                                       <C>            <C>            <C>     
COMMON STOCK
   Beginning balance                                      $  1,968       $  1,968       $  1,486
   Sale of 15,066 shares, 3,332 shares and 2,008,000
      shares in 1998, 1997 and 1996, respectively                4              -            482
                                                          --------       --------       --------
   Ending balance                                            1,972          1,968          1,968
                                                          --------       --------       --------

ADDITIONAL PAID-IN CAPITAL
   Beginning balance                                        21,551         21,550         19,788
   Debt forgiven by BIS Partners, L.P. (note 2)                  -              -            282
   Sale of common shares                                        14              1          1,480

                                                          --------       --------       --------
   Ending balance                                           21,565         21,551         21,550
                                                          --------       --------       --------

ACCUMULATED DEFICIT
   Beginning balance                                       (21,567)       (21,181)       (20,976)
   Net income (loss)                                            23           (386)          (205)
                                                          --------       --------       --------
   Ending balance                                          (21,544)       (21,567)       (21,181)
                                                          --------       --------       --------

TOTAL SHAREHOLDERS' EQUITY                                $  1,993       $  1,952       $  2,337
                                                          ========       ========       ========
</TABLE>


   See accompanying notes to financial statements.


--------------------------------------------------------------------------------

     BARRISTER INFORMATION SYSTEMS CORPORATION -- ANNUAL REPORT 1998     PAGE 11

<PAGE>   13


STATEMENTS OF CASH FLOWS
(In thousands)

<TABLE>
<CAPTION>
                                                                          Year Ended March 31
                                                                 ------------------------------------
                                                                   1998          1997          1996
                                                                 ------------------------------------

<S>                                                              <C>           <C>           <C>     
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net earnings (loss)                                           $    23       $  (386)      $  (205)
   Adjustments to reconcile net earnings (loss) to net cash
     provided (used) by operating activities:
       Depreciation                                                  173           207           259
       Amortization                                                  241           116            59
         Loss (gain) on disposal of equipment                         (2)           12            (3)
      Extraordinary gain on extinguishment of debt                     -             -          (486)
       Changes in current assets and liabilities:
         Accounts receivable                                        (486)       (1,020)          (13)
         Inventories                                                  36           398           635
         Prepaid expenses                                             37           (35)           11
         Accounts payable                                            227           320          (134)
         Accrued compensation and benefits                            80            93           (23)
         Customer advances and unearned revenue                      141           479          (115)
         Other accrued expenses                                      (12)          (17)          (26)
                                                                 -------       -------       -------
           Net cash provided (used) by operating activities          458           167           (41)
                                                                 -------       -------       -------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Additions to equipment and leasehold improvements                 (131)         (332)          (82)
  Proceeds on sale of equipment                                        3            40             5
  Additions to software production costs                            (304)         (330)         (308)
  Other                                                               (7)           (3)           17
                                                                 -------       -------       -------
           Net cash used by investing activities                    (439)         (625)         (368)
                                                                 -------       -------       -------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from long-term debt                                       17            29            25
   Repayment of long-term debt                                       (70)         (544)         (564)
   Proceeds from sale of common stock                                 18             1         1,962
                                                                 -------       -------       -------
           Net cash (used) by financing activities                   (35)         (514)        1,423
                                                                 -------       -------       -------
NET INCREASE (DECREASE) IN CASH                                      (16)         (972)        1,014
CASH AT BEGINNING OF YEAR                                            226         1,198           184
                                                                 -------       -------       -------
CASH AT END OF YEAR                                              $   210       $   226       $ 1,198
                                                                 =======       =======       =======
SUPPLEMENTAL CASH FLOW INFORMATION (note 7)
</TABLE>

    See accompanying notes to financial statements.

--------------------------------------------------------------------------------

PAGE 12     BARRISTER INFORMATION SYSTEMS CORPORATION -- ANNUAL REPORT 1998   


<PAGE>   14


NOTES TO FINANCIAL STATEMENTS

March 31, 1998, 1997 and 1996

    (1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         (a)  NATURE OF ORGANIZATION - Barrister Information Systems Corporation
              (the "Company") is a national developer and seller of
              Windows-based client/server software for law firms, accounting
              firms, consultants and departments of Fortune 1000 companies. A
              typical software transaction will consist of an initial license
              fee for the delivery of the software, an ongoing monthly
              support/license fee, and separately priced fees for software
              conversion, installation and training. In addition, the Company
              provides equipment maintenance and warranty service on a
              contractual and time and materials basis. These services are
              provided through a network of service locations throughout the
              United States.

         (b)  BASIS OF PRESENTATION - The preparation of financial statements in
              conformity with generally accepted accounting principles requires
              management to make estimates and assumptions that affect the
              reported amounts of assets and liabilities and disclosure of
              contingent assets and liabilities at the date of the financial
              statements and the reported amounts of revenues and expenses
              during the reporting period. Actual results could differ from
              those estimates.

         (c)  REVENUE RECOGNITION - Product sales consist of initial Javelan
              licensing fees and, to a lesser extent, the sale of third party
              software and computer hardware. Software license revenue is
              recognized upon delivery of the software product to the customer,
              unless the Company has significant related obligations remaining
              or the probability of collection is in doubt. When obligations
              remain after delivery, revenue is recognized when such obligations
              are no longer significant. Sales of third party software and
              hardware are recorded upon shipment.

              Services revenues include hardware maintenance services, which are
              primarily under contractual arrangements, and software related
              services such as monthly support/license fees, system conversions,
              installation and training. Revenues from hardware maintenance
              contracts are recognized on a monthly basis over the term of the
              contract which generally corresponds to the timing of cost
              incurred. Software service revenue, which is priced separately
              from the software license, is recognized as the service is
              provided.

              The American Institute of Certified Public Accountants' Accounting
              Standards Executive Committee (AcSEC) has issued Statements of
              Position (SOP) 97-2 "Software Revenue Recognition" and 98-4
              "Deferral of Effective Date of a Provision of SOP 97-2, Software
              Revenue Recognition". The SOP's specify the accounting
              requirements for software revenue recognition, including the
              methods used to allocate revenues among elements (licensing,
              support, services, etc.) in a multiple-element software
              arrangement. The SOP's are expected to be implemented by the
              Company in fiscal 1999. Pending further guidance being deliberated
              by AcSEC, the Company believes that its present revenue
              recognition practices are consistent with the requirements of the
              SOP's. Accordingly no significant impact on the Company's
              financial statements is expected.

         (d)  INVENTORIES - Inventories are stated at the lower of cost
              (first-in, first-out) or market. Service parts inventory is
              charged to cost of services when the part is no longer repairable
              or becomes excess to the Company's needs based on actual and
              projected service revenues.

         (e)  EQUIPMENT AND LEASEHOLD IMPROVEMENTS -Depreciation is recorded on
              the straight-line method based on the estimated useful lives of
              the assets. Computer and other equipment and furniture and
              fixtures are depreciated over estimated useful lives of three to
              ten years. Improvements to leased property are depreciated over
              the lesser of the term of the lease or the life of the
              improvements.


--------------------------------------------------------------------------------

     BARRISTER INFORMATION SYSTEMS CORPORATION -- ANNUAL REPORT 1998    PAGE 13


<PAGE>   15



         (f)  SOFTWARE PRODUCTION AND DEVELOPMENT COSTS - Capitalized software
              production costs are carried at the lower of unamortized cost or
              net realizable value, and are amortized based on current and
              estimated future revenue for each product with minimum
              amortization on the straight-line method over the estimated
              economic life of the product (3 years). Capitalization ceases and
              amortization commences when the product is available for general
              release. All costs to establish the technological feasibility of
              computer software products are charged to operations when
              incurred. Technological feasibility is defined through the
              existence of a detailed program design or, in the absence of such,
              a working model.

         (g)  STOCK-BASED COMPENSATION - Stock options are accounted for using
              Accounting Principles Board Opinion No. 25, "Accounting for Stock
              Issued to Employees" and related interpretations, whereby
              compensation is measured as the difference between an option's
              exercise price and the market value of the underlying stock at the
              grant date. See note 3 for the pro forma effect on operations as
              if the fair value-based method of accounting prescribed by
              Statement of Financial Accounting Standard (SFAS) No. 123
              "Accounting for Stock-based Compensation" had been applied.

         (h)  FAIR VALUE OF FINANCIAL INSTRUMENTS - The carrying amount of
              financial instruments is a reasonable estimate of their fair
              value, except for the debt due BIS Partners, L.P. (note 2) for
              which it is not practicable to estimate its fair value.

         (i)  PER SHARE DATA AND EARNINGS PER SHARE - The Company adopted SFAS
              128 "Earnings per Share" in 1998. The statement specifies the
              computation, presentation, and disclosure requirements for
              earnings per share and requires restatement of all prior period
              earnings per share data presented after its effective date. The
              statement had no impact on earnings (loss) per share. Basic net
              earnings (loss) per share amounts are based on the weighted
              average number of common shares outstanding. Diluted earnings per
              share includes the impact of stock options and warrants assumed to
              be exercised using the treasury stock method.

    (2)  NOTE PAYABLE AND LONG-TERM DEBT

         The note payable to bank is on a demand basis and bears interest at the
         prime rate plus 2 1/2 percent (11.0% at March 31, 1998). In March 1998
         BIS Partners, L.P. agreed to convert certain past due amounts from the
         Company into a demand note. This demand note expires on March 31, 2002
         and bears interest at prime plus 3 1/2 percent ( 12.0% at March 31,
         1998).

         A summary of long-term debt follows:


<TABLE>
<CAPTION>
                                                                                March 31
                                                                       -------------------------
                                                                        1998              1997
                                                                       -------------------------
                                                                             (in thousands)

<S>                                                                   <C>               <C>      
               Term note with BIS Partners, L.P.                      $   1,475         $   1,530
               Other                                                         47                73
                                                                      ---------          --------
                 Total long-term debt                                     1,522             1,603
               Less current installments                                    127                99
                                                                      ---------          --------
               Long-term debt, excluding current installments         $   1,395          $  1,504
                                                                      =========          ========
</TABLE>

--------------------------------------------------------------------------------

PAGE 14    BARRISTER INFORMATION SYSTEMS CORPORATION -- ANNUAL REPORT 1998    

<PAGE>   16


         BIS Partners, L.P. ("BIS") is ninety percent owned either directly or
         beneficially by certain officers and directors of the Company. These
         same officers and directors own approximately 40% of the Company's
         common stock. On August 31, 1995, BIS agreed to cancel $450,000 of
         long-term debt and to reduce the interest rate on the remaining debt to
         8 percent. In addition, the repayment terms were modified to
         interest-only through March 31,1996, with repayment in 36 equal
         installments thereafter. In accordance with this agreement, the Company
         reduced the amount of debt owed to BIS to equal the total cash to be
         repaid to BIS for both principal and interest. This resulted in a debt
         reduction of $282,000 which, due to the related party nature of the
         transaction, was reflected as a contribution to capital. All future
         payments to BIS were to be recorded as a reduction in the debt balance
         with no interest expense. In connection with this transaction, the
         Company issued warrants to BIS to purchase 450,000 shares of its
         capital stock at $1.93 per share (the fair market value at issue date),
         exercisable through August 31, 2005.

         During the fourth quarter of fiscal 1997, the Company again
         renegotiated the terms of its agreement with BIS, extending the
         repayment schedule through the year 2004 and, accordingly, reducing
         cash payments otherwise scheduled in fiscal 1998 and 1999 and adjusting
         the interest rate to prime plus 3.5%. As a result of this restructuring
         and the incremental cash flow it will require, the Company, in fiscal
         1998, reinstated the recognition of interest expense based on an
         effective estimated rate.

         The BIS note is supported by an agreement granting a security interest
         in all equipment, inventories and receivables. The agreement, among
         other things, requires the Company to maintain certain financial
         ratios, prohibits dividend payments, and restricts capital
         expenditures, lease obligations and executive compensation. The Company
         was in compliance with all covenants in the agreement except for the
         interest coverage covenant which was waived by BIS for 1998, 1997 and
         1996.

         In March 1996, an unrelated creditor agreed to a one-time payment of
         $400,000 as full settlement on debt with a recorded value of $886,000.
         This transaction created an extraordinary gain of $486,000 in the
         fourth quarter of 1996. 

         Payments on long-term debt are estimated to be due as follows:


<TABLE>
<CAPTION>
         Year Ending March 31                        Amount (in thousands)
         --------------------                        ---------------------
<S>                                                        <C>  
               1999                                        $ 127
               2000                                          176
               2001                                          251
               2002                                          339
               2003                                          374
               2004                                          255
                                                           =====
</TABLE>


    (3)  STOCK OPTIONS AND WARRANTS

         The Company has a stock incentive plan to which it currently has
         allocated 900,000 shares of its authorized common stock to be offered
         to key employees and directors. Under the plan, options are granted at
         prices determined by the Compensation Committee of the Board of
         Directors but not at a price less than the stock's market value at date
         of grant. The options granted may qualify as incentive stock options
         and are exercisable over a period of ten years.


--------------------------------------------------------------------------------

    BARRISTER INFORMATION SYSTEMS CORPORATION -- ANNUAL REPORT 1998    PAGE  15


<PAGE>   17


         A summary of stock option activity follows:

<TABLE>
<CAPTION>
                                                 ---------------------   --------------------   ---------------------
                                                         1998                    1997                    1996
                                                 ---------------------   --------------------   ---------------------
                                                              Weighted               Weighted                Weighted
                                                              Average                Average                 Average
                                                  Shares      Exercise    Shares     Exercise     Shares     Exercise
                                               (thousands)     Price    (thousands)   Price     (thousands)   Price
                                                 ---------------------   --------------------   ---------------------


<S>                                              <C>          <C>        <C>          <C>        <C>         <C>
         Outstanding beginning of year               525      $  0.56         536     $  0.55         510    $   0.55
              Granted                                266         1.25          -                       79        0.50
              Canceled                                (4)        0.50          (8)       0.50         (45)       0.56
              Exercised                              (15)        0.50          (3)       0.50          (8)       1.25
                                                 -------                 --------                --------
         Outstanding end of year                     772         0.78         525        0.56         536        0.55
                                                 =======                 ========                ========
         Exercisable at year end                     501         0.62         342        0.55         232        0.56
                                                 =======                 ========                ========

         Reserved for grant, end of year              79                       41                      33
                                                 =======                 ========                ========

         Weighted-average fair value of
             options granted during year         $  0.69                 $     -                 $   0.38
                                                 =======                 =======                 ========
</TABLE>


         At March 31, 1998, the range of exercise prices and weighted average
         remaining contractual life of outstanding options was $.50 - $1.63 and
         6.9 years, respectively. The per share weighted average fair values of
         stock options granted was computed using the Black Scholes
         option-pricing model with the following assumptions:

<TABLE>
<CAPTION>
                                                            -----------------
                                                             1998      1996
                                                            -----------------
<S>                                                          <C>       <C>  
                           Risk-free interest rate           5.45%     6.35%
                           Price volatility                   5.4%     49.8%
                           Dividend yield                       0%        0%
                           Expected term in years               7         7
</TABLE>

         The Company applies APB Opinion No. 25 in accounting for the Plan and,
         since options have been granted with exercise prices equal to the
         market value per share, no compensation cost has been recognized in the
         financial statements. Had the Company determined compensation cost
         based on the fair value of options at the grant date, the reported net
         earnings for 1998 would be decreased and the reported net loss for 1997
         and 1996 would be increased by $50,000, $17,000 and $6,000,
         respectively, with no change in the reported per share amounts. The
         full impact of calculating compensation cost for stock options under
         SFAS No. 123 is not reflected in the pro forma effect on the net
         earnings (loss) because compensation cost is reflected over the
         options' vesting period of 3 years and compensation cost for options
         granted prior to April 1, 1995 is not considered.

         The following warrants are outstanding at March 31, 1998:

<TABLE>
<CAPTION>
                         Number of Shares                Exercise Price             Expiration Date
                         ----------------                --------------             --------------------
<S>                                                            <C>                     <C>
                                                                                       March 29, 1998
                              250,000                          1.36                    March 29, 2001
                              450,000                          1.93                    August 31, 2005
</TABLE>

         The $1.36 warrants were issued to the placement agent in conjunction
         with a stock offering which occurred in March, 1996 and contain certain
         antidilution provisions as well as certain registration rights. The
         $1.93 warrants were issued on August 31, 1995 when the Company entered
         into a modification agreement in which BIS agreed to forgive $450,000
         in debt (note 2).


--------------------------------------------------------------------------------

PAGE  16    BARRISTER INFORMATION SYSTEMS CORPORATION -- ANNUAL REPORT 1998    

<PAGE>   18



    (4)  PENSION AND SAVINGS PLAN

         The Company has a defined contribution retirement plan covering all
         eligible employees. The Company partially matches employee
         contributions to the Plan. Expense under the plan was $29,000 in 1998,
         $25,000 in 1997 and $21,000 in 1996.

    (5)  INCOME TAXES

         There were no tax benefits established in the statements of operations
         for either of the years in the two year period ended March 31, 1997
         since the Company had fully reserved for the tax effect of net
         deductible temporary differences and operating loss carryforwards as
         management had determined that, under the criterion of FAS No. 109, it
         is more likely than not that the deferred tax assets will not be
         realized. Similarly the absence of a tax provision for 1998 results
         from a reduction in the reserve for deferred tax assets.

         The components of deferred tax assets fully reserved (computed using an
         expected effective tax rate) are as follows:


<TABLE>
<CAPTION>
                                                                         ---------------------------
                                                                            1998              1997
                                                                         ---------------------------
                                                                                 (in thousands)
<S>                                                                      <C>               <C>     
         Net operating loss carryforwards                                $    898          $    851
         Inventory write downs                                                290               352
         Inventory costs capitalized                                           15                30
         Depreciation                                                          85                90
         Vacation pay                                                          93                91
         Bad debt allowance                                                    84                50
         Software production costs                                           (263)             (238)
         Debt extinguishment                                                   34                42
         Other                                                                 17                17
                                                                           ------            ------
                                                                          $ 1,253           $ 1,285
                                                                           ======            ======
</TABLE>

         A prior year ownership change limits the future use of the net
         operating loss and credit carryforwards created prior to the ownership
         change. The pre-ownership change loss carryforward can be utilized at
         the rate of $80,000 per year. After application of this limitation,
         $2,246,000 of tax loss carryforward is available through 2013.


    (6)  LEASE COMMITMENTS

         The Company conducts its operations from leased facilities and uses
         certain equipment primarily under operating lease arrangements. Real
         estate taxes, insurance, and maintenance expenses are obligations of
         the Company. It is expected that in the normal course of business,
         leases that expire will be renewed or replaced. Total rental expense
         was $682,000 in 1998, $703,000 in 1997 and $744,000 in 1996.

         Future minimum rental payments required under leases that have initial
         or remaining noncancellable lease terms in excess of one year are:
         $557,000 in 1999, $319,000 in 2000, and $15,000 in 2001.


--------------------------------------------------------------------------------

    BARRISTER INFORMATION SYSTEMS CORPORATION -- ANNUAL REPORT 1998    PAGE  17


<PAGE>   19


    (7)  SUPPLEMENTAL CASH FLOW INFORMATION

         The following provides supplemental cash flow data:

<TABLE>
<CAPTION>
                                                                          -----------------------------------------
                                                                            1998             1997             1996
                                                                          -----------------------------------------
                                                                                       (in thousands)

<S>                                                                       <C>              <C>              <C>    
         Interest paid                                                    $   120          $    40          $   245
                                                                           ======           ======           ======
         Non-cash financing activities (BIS Partners, L.P.):
            Debt forgiven                                                 $    -           $    -           $   282
                                                                           ======           ======           ======
</TABLE>

    (8) MAJOR CUSTOMER

         Sales to the Company's largest customer accounted for 17%, 20% and 30%
         of total revenues for 1998, 1997 and 1996, respectively. The Company
         performs hardware maintenance services for end users under various
         subcontracts from this customer. These subcontracts can be canceled
         with 30 days notice.

    (9) CONTINGENCIES

         The Company is a party to various legal proceedings incidental to its
         business. Management believes that none of these legal proceedings will
         have a material adverse effect on the Company's financial position,
         results of operations or liquidity.





--------------------------------------------------------------------------------

PAGE  18    BARRISTER INFORMATION SYSTEMS CORPORATION -- ANNUAL REPORT 1998    


<PAGE>   20


--------------------------------------------------------------------------------
                          INDEPENDENT AUDITORS' REPORT
--------------------------------------------------------------------------------

The Board of Directors and Shareholders
Barrister Information Systems Corporation:



We have audited the accompanying balance sheets of Barrister Information Systems
Corporation as of March 31, 1998 and 1997, and the related statements of
operations, shareholders' equity, and cash flows for each of the years in the
three-year period ended March 31, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Barrister Information Systems
Corporation as of March 31, 1998 and 1997, and the results of its operations and
its cash flows for each of the years in the three-year period ended March 31,
1998, in conformity with generally accepted accounting principles.





KPMG Peat Marwick LLP
Buffalo, New York
June 22, 1998


--------------------------------------------------------------------------------

    BARRISTER INFORMATION SYSTEMS CORPORATION -- ANNUAL REPORT 1998    PAGE  19



<PAGE>   21



STOCK MARKET AND DIVIDEND INFORMATION

    The Company's common stock is traded on the American Stock Exchange under
    the symbol "BIS". For the periods indicated below, the following table sets
    forth the high and low closing bid or last trade prices as reported by AMEX.

<TABLE>
<CAPTION>
                                                            Price Range
                                                      -----------------------
    Quarter Ended                                       High            Low
<S>                                                    <C>              <C>
      June 28, 1996                                    3 13/16          1 3/4
      September 27, 1996                               3                1 7/8
      December 27, 1996                                2 3/4            1 3/8
      March 31, 1997                                   2 3/8            1 3/8

      June 27, 1997                                    2                15/16
      September 26, 1997                               1 11/16          15/16
      December 26, 1997                                2                15/16
      March 31, 1998                                   1 1/2            1 1/16
</TABLE>




    The Company's common stock was held by approximately 400 shareholders of
    record as of June 18, 1998.

    The Company has not paid any cash dividends on its common stock and the
    board of directors intends to follow a policy of retaining earnings for use
    in the business. Under the Company's loan agreement, the payment of
    dividends is prohibited without the lender's consent. Accordingly, it is not
    anticipated that cash dividends will be paid to holders of common stock in
    the foreseeable future.

TRANSFER AGENT, REGISTRAR

    American Stock Transfer & Trust Company
    40 Wall Street
    New York, New York  10005
    Telephone:  (718) 921-8200


--------------------------------------------------------------------------------

PAGE  20    BARRISTER INFORMATION SYSTEMS CORPORATION -- ANNUAL REPORT 1998    



<PAGE>   22



ANNUAL MEETING

          The annual meeting of shareholders will take place at 10:00 a.m. on 
          Thursday, September 3, 1998 at:
                  Buffalo and Erie County Public Library Auditorium
                  Clinton and Ellicott Streets
                  Buffalo, New York  14203

SHAREHOLDERS INQUIRIES

          Address all shareholder inquiries to:
                  Secretary
                  Barrister Information Systems Corporation
                  465 Main Street
                  Buffalo, New York  14203
                  Telephone:  (716) 845-5010

--------------------------------------------------------------------------------


DIRECTORS

Henry P. Semmelhack                          Warren E. Emblidge, Jr.
Chairman and President                       President
Barrister Information Systems Corporation    S.J. McCullagh, Inc.

Brent D. Baird                               Richard E. McPherson
Private Investor                             Retired Vice President
Barrister Information Systems Corporation

Franklyn S. Barry, Jr.                       James D. Morgan
President and CEO                            Vice President and Chief Scientist
Hemex, Inc.                                  Comptek Research, Inc.

Richard P. Beyer
Vice President, Finance                      James Page
Barrister Information Systems Corporation    Director, Enlightened TV, Ltd.


OFFICERS
Henry P. Semmelhack                          Mark C. Donadio
President and Chairman                       Secretary and General Counsel

Richard P. Beyer                             Mark J. Phillips
Vice President, Finance and Treasurer        Vice President, Sales

David L. Blankenship                         Susan T. Robinson
Vice President, Services Operations          Vice President, Software Operations


--------------------------------------------------------------------------------

    BARRISTER INFORMATION SYSTEMS CORPORATION -- ANNUAL REPORT 1998    PAGE  21



<PAGE>   23






--------------------------------------------------------------------------------
                BARRISTER INFORMATION SYSTEMS CORPORATION OFFICES
--------------------------------------------------------------------------------


<TABLE>
<S>                                <C>                         <C>
CORPORATE                          CHICAGO                     NEW HAMPSHIRE           
465 Main Street                    55 East Monroe              500 Harvey Road         
Buffalo, NY  14203                 Mezzanine Level             P.O. Box 4015           
716-845-5010                       Chicago, IL  60603          Manchester, NH  03108   
FAX:  716-845-5033                 312-782-0563                603-645-4430            
Website: www.barrister.com                                                             
                                   CLEVELAND                   NEW YORK CITY           
ATLANTA                            The Atrium Office Plaza     253 West 35th Street    
1597 Phoenix Ctr Office Park       668 Euclid Avenue           New York, NY  10004     
Suite 1                            Suite 310A                  212-564-7187            
Phoenix Blvd                       Cleveland, OH  44114                                
College Park, GA  30308            216-575-7570                SAN DIEGO               
770-997-4300                                                   6046 Cornerstone Ct. W. 
                                   DENVER                      Suite 102               
BOSTON                             518 17th Street             San Diego, CA 92121     
45 Pond Street                     Suite 913                   619-535-9294            
Norwell, MA  02061                 Denver, CO  80202                                   
781-681-7070                       303-534-5819                WASHINGTON/             
                                                               ARLINGTON               
CHARLOTTE                          HARTFORD                    3426 N. Washington Blvd.
5624 Executive Center Dr.          701 Hebron Ave.             Arlington, VA  22201    
Suite 140                          Glastonbury, CT  06033      703-524-9400            
Charlotte, NC 28212                860-659-1178                
704-569-0280                       
</TABLE>



                                             TimeManager and Barrister/Eagle are
                                             trademarks, Javelan and Barrister
                                             are registered trademarks and
                                             Barrister is a service mark of
                                             Barrister Information Systems
                                             Corporation. Windows, Windows NT,
                                             and SQL Server are trademarks and
                                             Microsoft is a registered trademark
                                             of Microsoft Corporation.

                                             Copyright(C) 1998 Barrister
                                             Information Systems Corporation.
                                             All rights reserved.



--------------------------------------------------------------------------------

PAGE  22    BARRISTER INFORMATION SYSTEMS CORPORATION -- ANNUAL REPORT 1998