[IMAGE]
Overview
As one of the world's leading  engineering,  environmental and design consulting
companies, LawGibb Group provides a wide array of multi-disciplinary services to
the industrial, commercial and government markets.

Headquartered  in  Atlanta,  the  Company's  global  network  of more than 3,500
professionals provides the technical depth and geographic diversity that enables
LawGibb to serve clients  worldwide  while  maintaining a strong local presence.
With  specialists  in  more  than 30  scientific  and  engineering  disciplines,
LawGibb's  staff  works from over 100  offices  in 30  countries  with  projects
spanning across 160 countries.

Locations
Asia
Africa
Europe
Middle East
North America
South America

Clients
Commercial
Education & Health
Entertainment & Hospitality
Federal
Real Estate
Telecommunications
Transportation

Services
Engineered Construction
Environmental Services
Facilities Services
Industrial Services
Telecommunications
Transportation Services
Water Engineering

                                                                               1

<PAGE>

Cape Hatteras Lighthouse
v        130 years old
v        200 feet high
v        Tallest brick masonry lighthouse in the world
v        5,000 tons
v        Moved 2,900 feet

The  ceremony to relight  Cape  Hatteras  Lighthouse  took place on November 13,
1999, designating the official completion of the relocation phase.

                                   [IMAGE]
"The design/build process was created to put together the most capable technical
talent to  accomplish  this job.  The  project was  totally  congruent  with the
desires of the Park Service.  That's  critical when you're working on a national
icon like this.  Our goal was to find the best people to get the job done, and I
think we succeeded." Bob Reynolds,  Superintendent of the Cape Hatteras National
Seashore.

6

<PAGE>

Historic Monument Survives Time
One of the most exciting and impressive achievements for LawGibb in 1999 was its
role in the highly  publicized  relocation of the Cape Hatteras Light Station in
North Carolina.  The extraordinary proposal effort, led by Randy Knott and other
key  LawGibb  professionals,   resulted  in  winning  the  prestigious  contract
involving one of the U.S.'s most enduring landmarks. This nationally significant
project  received  media  attention  internationally,  not only for its historic
importance  but  also  for its  complex  nature,  representing  one of the  most
challenging structural relocations ever undertaken.

                                   [IMAGE]
The $9.8 million  design/build  contract  awarded by the  National  Park Service
involved a seven-firm team with the monumental task of moving the Light Station,
a  complex  which  includes  the  lighthouse,  the  keeper's  quarters  and  all
associated structures. Its relocation to a new site 2,900 feet from its original
location was precipitated by 130 years of shoreline  erosion that threatened the
lighthouse. The complexity of the project required that LawGibb harness an array
of   multi-disciplinary   services,   including  more  than  fifteen   technical
disciplines as well as a team encompassing over thirty company members.

After months of work,  the  lighthouse  was moved in only three weeks - half the
time originally  estimated.  "We were exuberant about the success of this unique
project," stated LawGibb's Randy Knott,  Chief Engineer.  "Our team exceeded the
goals set forth to place this  national  icon  safely in its new  location  with
precision.  We are honored to have been  instrumental in the preservation of the
lighthouse for future generations."

Created by LawGibb  and  critical  to the  project's  success  was a peer review
program that provided quality assurance throughout the project.

                                   [IMAGE]
Trip Through Time
Integral to the highly  successful  performance of the  transportation  system -
jacks,  roadbed,  mats,  rails and steel  framing - was the proper design of the
move corridor by LawGibb.

LEADERSHIP
IN THREE PHASES

Planning
v        Conceptual design
v        Lump sum project cost
v        Design and construction management
v        Design/build delivery

Design
v        Site characterization, including geotechnical and hazardous materials
v        Project QA manual and QA/QC plan
v        Health and safety plan
v        Construction specifications and drawings

Construction
v        QC documentation and supervision
v        Testing and inspection of construction materials
v        Deflection monitoring
v        Health and safety audits


                                                                               7

<PAGE>

The Art of Design

                                   [IMAGE]
Noted  for  his  award-winning   designs,   Crispin  Wride,  head  of  LawGibb's
architectural  division,  believes  that when  designing  any  project it is the
responsibility  of the architect to demonstrate an understanding of the client's
emotional as well as technical needs.

Excellence Through Innovation
Quality and excellence, together with an innovative approach to problem solving,
distinguish  LawGibb's  design services group.  The breadth of LawGibb's  design
expertise,  provided by our Crispin Wride  Architectural  Design Studio (CWADS),
spans all sectors of our business, from multi-story buildings to pipelines,  and
our commitment to the highest standards means that we are continually  improving
the quality of our service.

LawGibb's  teams are  expert  in  assimilating  and  balancing  the  influential
parameters  of context and  culture,  proposal  and  program,  construction  and
technology,  energy  and  environment,  economy  and  efficiency.  This  careful
analysis  ensures  that  the end  product  will  meet  or  exceed  the  client's
expectations.

For nearly eighty years, LawGibb has been involved with some of the world's most
prestigious  projects,  from the  Cardiff  Bay  Barrage in the UK to the Lesotho
Highlands water project in Africa. The Company's history of design success stems
from the ability to see beyond the technical  requirements  and  understand  the
wider environment in which a particular  project has been conceived.  The future
of design lies more in meeting the widest range of parameters with an integrated
holistic  response that  satisfies not only technical  needs,  but also the more
subjective emotional aspirations of the client or building user.

Loch Lomond Footbridge
An example of CWADS'  holistic  approach is evident in the recent  award-winning
design of a  pedestrian  footbridge  at Loch  Lomond in  western  Scotland.  The
bridge,  which links Balloch Castle Country Park with a new visitors' center, is
designed to open the full width of the water,  permitting the two cantilevers to
open and  allowing  the  image of the  bridge  to vanish  into the  banks,  thus
preserving the full view.

The challenge was to design a pedestrian footbridge with an open section - while
realizing  the  emotional  requirement  of  preserving  the view and designing a
bridge that, when open, would literally  disappear into its environment.  Curved
cables  reflect  the  shape of the hills in the  background  while the masts are
designed to match the scale of the trees.

                                   [IMAGE]
So that boats can  continue to navigate the Loch,  the bridge will  dramatically
open with the two halves of the structure swinging apart toward the banks.

8

<PAGE>


Falkland Islands Chapel
In the case of CWADS'  award-winning  design for the Falkland  Islands Chapel at
Pangbourne  College  in  Berkshire,  England,  the  emotional  agenda as well as
technical issues guided the design. The project specifications required that the
building should serve both as a memorial chapel dedicated to British  servicemen
killed in the  Falklands  conflict and as a  functional  church for the nautical
college on whose grounds it has been built.

The answer to address  these unique design  specifications  lies in the shape of
the  building,  where two curved walls  produce a ship-like  nautical form while
also  creating a sense of protection  like two cupped hands.  The two walls that
envelop the space are separated at the front and to the rear to allow access and
natural light through the tall stained glass  screens.  A u-shaped upper gallery
level around the assembly hall  minimizes  the scale of the  interior,  allowing
adequate seating space for 550 people without  compromising the intimacy of the
memorial chapel.  The overall interior effect is one of protection,  comfort and
light.

The Chapel,  which was  formally  opened by Her Majesty the Queen in March 2000,
also had to harmonize  with its external  context.  Set in an informal  woodland
courtyard,  the  building  stands  alongside  a circular  memorial  garden  that
reflects the shape of the two memorials on the Falkland  Islands.  Carved into a
landscaped  mound, the small enclosed space has stone seating oriented towards a
simple  water  feature.  A map of the  Falkland  Islands is carved  into a black
granite panel over which the water falls.

Completed  in  1999,  the  Falkland  Islands  Chapel  is  dedicated  to  British
servicemen killed in the Falklands conflict.

                                   [IMAGE]
LawGibb works side-by-side with clients through all of the design stages of
their projects:
v        Architectural design
v        Structural design
v        Concept design
v        Planning design
v        Detail design

                                   [IMAGE]
A u-shaped  upper gallery level around the assembly hall  minimizes the scale of
the interior, allowing adequate seating space for 550 people.

                                                                               9

<PAGE>

Asset Reliability Management Services
Working  with a team  of  over  600  professionals  with  diverse,  but  related
backgrounds,  we deliver Asset Reliability  Management Services through a proven
process of:

v        Evaluating physical assets
v        Establishing asset worth
v        Tracking depletion rates
v        Optimizing budgets
v        Prioritizing investments
v        Managing and staffing the implementation of solutions
v        Administering contracts

We are not only able to develop  solutions in theory,  but to implement  them in
fact.

Creating Shareholder Value
Since the mid-1980s,  and  particularly in recent years, the global standard for
measuring  business  performance  has  been  shareholder  value.  We at  LawGibb
recognize the pressures on our valued clients to produce exceptional shareholder
value while achieving  aggressive  business  objectives in a highly  competitive
global market economy.

                                   [IMAGE]
Asset Reliability Management Services
Our Asset  Reliability  Management  Services (ARMS) group focuses upon designing
and  implementing  innovative  management  programs and IT-enabling  information
processes  that  maximize  the  value  of what is  historically  one of the most
overlooked  and  undervalued  of our  clients'  assets  - their  facilities  and
infrastructure.  ARMS  concentrates  upon the critical need to convert  physical
assets into  financial  terms,  and manage  these  assets with  attention to the
client's bottom-line return on investment (ROI).

Our expert staff and information  management  tools,  combined with our flexible
and adaptable approach to strategic asset management,  uniquely position LawGibb
at the forefront of an emerging market.

                                   [IMAGE]
At the core of LawGibb's ARMS program is FaMIS(C) - our  computerized  condition
analysis  and  budgeting  program.  It embeds the  financial  solutions  into an
implementation plan maximized for ROI.

                                   [IMAGE]
Enterprise Asset Management
Increasing marketplace challenges have compelled companies to create integrated,
enterprise-wide  facilities  management  solutions essential to organizations in
which change and flexibility are critical for success.

LawGibb recently entered into an exclusive relationship with one of the nation's
leaders in Enterprise Asset Management (EAM) solutions. LawGibb, statusgo.com (a
division of Carolina Power and Light) and Indus International have joined forces
to deliver holistic asset management  solutions  through the  implementation  of
Indus' PassPort EAM software. In this relationship, Indus International provides
the application,  statusgo.com is the host, and LawGibb designs,  implements and
manages the life of the program.


10

<PAGE>

Telecommunications Services

Tackling The Telecommunications Market
During the next five years,  the deployment of personal  communications  systems
(PCS), cellular/wireless voice services base stations and tower sites around the
world is expected to more than  double.  The result has been an explosion in the
volume  of work  available  for  engineering  solution  providers  as  operators
scramble  to improve  population  and  territorial  coverage  and achieve a lead
position  in  the  fiercely  competitive  market  for  wireless   communications
services.

LawGibb has responded to the challenges presented by the growth in this industry
with  a  team  of   multi-disciplined   professionals   highly   experienced  in
telecommunications   implementation   feasibility,   design,   and  construction
management services.  We provide a myriad of services to our clients on raw land
(greenfields)  and  co-locate  sites,  including  rooftops,  monopoles,  lattice
towers,  guyed wire towers,  water tanks,  existing lattice power structures and
flagpoles.

Leaders In The Industry
LawGibb's telecommunications group has taken a leadership role by leveraging its
technical expertise,  experience,  and local market presence in order to provide
single-source  turnkey  engineering  design  services to this  important  market
sector.

Having  recently  entered  into  client  agreements  to  provide a full range of
engineering  design services in numerous states throughout the U.S.,  LawGibb is
now pursuing opportunities in the Caribbean, Mexico and Europe.


To support the  single-source  design  solution,  the  Company's  local  offices
provide the following services:

v        Environmental assessment
v        Geotechnical investigation
v        Foundation design
v        Construction testing and inspection
v        Structural evaluation
v        Construction and project management
v        Site construction engineering design
v        National Environmental Policy Act compliance
v        Electrical resistivity testing
v        Wetland evaluation
v        Endangered species survey
v        Pay application and submittal review
v        Building attachment evaluation and design
v        Preliminary cell site assessment

The   accomplishments   of  LawGibb's  team  in  winning  major   contracts  and
strategically  positioning  the  Company  as a leader  in the  market  have been
significant.  Two  contract  wins of  noteworthy  importance  include work for a
worldwide  communications  company for which  LawGibb will provide  geotechnical
exploration,  resistivity testing,  environmental services,  construction design
engineering and required  regulatory  reconnaissance on over 200 sites in Texas.
Additionally,  two major  telecommunications  firms selected  LawGibb to provide
permitting and installation design engineering on thousands of sites in the U.S.

                                   [IMAGE]
Allen Kibler and Clovis Prince lead LawGibb's  efforts in providing  engineering
design services to the telecommunications market.

                                   [IMAGE]
LawGibb has provided  environmental  and  engineering  design  services for over
13,000 sites in the U.S.


                                                                              11

<PAGE>

Land Redevelopment

Redevelopment Of Environmentally Impacted Properties
Throughout the world there are hundreds of thousands of acres of land - often in
highly desirable locations sitting idle or abandoned. Once home to various types
of industrial operations, these properties, known as brownfields, are tainted by
environmental  contamination.  Typically located near population centers,  these
sites are equipped with existing infrastructure,  such as highways,  bridges and
rail  systems,   and,  therefore,   present  favorable   conditions  for  reuse.
Undertaking  redevelopment of these  environmentally  impacted properties offers
tremendous  opportunities to urban communities by creating a central location in
which people may live and work.

LawGibb's  professionals have pioneered remediation  technologies,  working with
property owners and developers,  to create  strategies for potential  productive
reuse of such  contaminated  land.  Through  innovative  methodologies,  turnkey
design  and  construction  capabilities,  as well as  strategic  alliances  with
developers,  owners and  corporations,  LawGibb  provides  clients with a single
source to manage clean-up of their properties.

The Company has been integrally involved in numerous high-profile  redevelopment
projects.  LawGibb's professionals bring to each client a unique and competitive
advantage that is rooted in the Company's extensive  experience with federal and
state   regulators,   as  well  as  an  in-depth   knowledge  of   international
environmental  regulations.  Based upon these factors,  LawGibb plays a critical
role in successfully transforming contaminated properties into useful sites.

LawGibb's  multi-disciplinary,  turnkey approach entails  providing clients with
the following services:

v        Zoning/rezoning properties
v        Environmental investigations
v        Environmental regulatory strategies
v        Risk-based (human health and ecological) management
v        Engineering remediation design
v        Oversight direction during remediation
v        Developing design and construction management for infrastructure
v        Conducting geotechnical investigations for future building sites
v        Facilitating environmental insurance to cover liability/limit liability

Papa John's University of Louisville Cardinal Stadium
To observe the  impressive  new  Louisville  Cardinal  Stadium,  one would never
imagine that this land was once used as a railcar and locomotive repair shop for
a major rail company.  For ninety years,  activities on the site included  motor
cleaning, use of solvents,  varnishes,  diesel fuel, lead lubricants and plating
solutions, building up a massive area of contamination.

Initial  estimates for remediation of the site were  approximately  $40 million.
Through LawGibb's technical leadership,  extensive  experience,  and cooperative
teamwork with all concerned  parties,  a risk  management  plan was developed to
sufficiently cap the site, protecting both construction workers and future users
from exposure and eliminating the need for costly remediation.  Ultimately,  the
remediation costs amounted to only $6.8 million.

                                   [IMAGE]
THE PHOENIX AWARD
LawGibb's Nick Schmitt  displays the prestigious 1999 Grand Prize Phoenix Award.
The  work  performed  on  the  Louisville   Cardinal  Stadium  project  received
commendation for its significant  benefit to the community and for demonstrating
extraordinary innovation and cooperation among various stakeholders.

                                   [IMAGE]
Activities  at the  railroad  site over a  ninety-year  period  left a legacy of
contamination.

                                   [IMAGE]
"This project exemplifies a commitment to cure an environmental problem and turn
it into a regional asset of the greatest significance."   -- U.S. Senator Mitch
McConnell


12

<PAGE>

Atlantic Steel Site - Prime Property To Be Renewed
In the heart of Atlanta lies the Atlantic  Steel site, a 134-acre  property that
was used for steel and  iron-working  operations  from  1901-1998.  LawGibb  was
jointly  engaged  by  Atlantic  Steel  and  the   Atlanta-based   firm,   Jacoby
Development,  Inc.,  to provide  environmental  regulatory  strategy in order to
convert the property which held limited  promise for future  potential - into an
ambitious new redevelopment program. The project's objective is to transform the
property into a multi-use  development,  offering work facilities,  recreational
facilities,  residential space and transportation,  transforming the land into a
thriving live-work-play community.

The  project  is  significant  in  that it is the  first  major  national  urban
redevelopment to be approved under EPA's XL program (Excellence and Leadership).
This program allows companies to adopt creative strategies to meet environmental
standards.

Due to LawGibb's  innovative  approach of integrating  risk analysis  procedures
into  the  infrastructure  development,  a  remediation  plan  for the  site was
designed  and  developed.   As  a  result,   the  anticipated  $20  million-plus
remediation cost to the seller was reduced to approximately $8 million.

Following the remediation process,  construction will begin on the site. LawGibb
will provide site development design, including geotechnical, infrastructure and
construction  management.  The  redevelopment  plan will  transform  the massive
downtown Atlanta site into a 15-million square foot residential,  office, retail
and entertainment space.

                                   [IMAGE]
BEFORE
The Atlantic Steel site served as a massive steel and iron working operation for
nearly a century until it closed in 1998.

                                   [IMAGE]
AFTER
Construction  on the Atlantic  Steel site will begin in 2000,  and will continue
over a span of approximately ten years, resulting in a $2 billion development.

                                   [IMAGE]
Twigden Homes Limited - Waltham Abbey
LawGibb's environmental team provided the project management and surveillance of
remedial work and subsequent highway construction at a 282-acre former munitions
factory in the UK. The  remedial  work  includes  building  decontamination  and
demolition,  assessment  and  testing of all streams  running  through the site,
excavation and on-site  relocation of  contaminated  soil and  construction of a
65,000 cubic yard landfill.  The site is being  redeveloped  for residential and
business parks and a parkland area.

                                                                              13

<PAGE>


Transportation

Global Transportation Services
The vast global  transportation  market  continues to broaden as urban and rural
areas increasingly require reliable,  modern  infrastructure to support economic
growth and population expansion.  With experts in all facets of transportation -
from  rail  systems,  airports,   highways,   bridges,  tunnels,  to  intermodal
facilities - LawGibb's  professionals  are highly  trained in the most  advanced
technology available today.

Transportation  engineering is  increasingly  more complex,  and planners of new
transportation  systems must concern  themselves  not only with the  traditional
physical   design  issues,   but  with   operational,   safety,   environmental,
geotechnical and construction considerations.

LawGibb's approach to solving its clients'  transportation needs revolves around
identifying existing and future transportation  demands and providing innovative
thinking  to  develop  solutions.  With a  versatility  keenly  in tune with our
clients'  specific  project  needs,  we  evaluate  demand  across  all  modes of
transportation,  assess alternative strategies and solutions, identify necessary
funding sources and assist clients to project completion.

Porto Metro Rail System
Having  previously  won a contract for the design  conception  and  construction
phases of the Porto Metro light rail system,  LawGibb,  in partnership  with two
Portuguese firms, was recently awarded a new contract to manage  construction of
the project.  This high-profile  project is of great significance to Portugal, a
country  whose  existing  transportation  system is being  upgraded  to meet the
requirements of its population and its role in Europe.

The new Metro system will provide a much needed public transportation system for
the metropolitan area of Porto in Northern Portugal. The project is particularly
exciting as it entails one of the largest public investments within the European
Community  and is one  of  the  largest  railway  projects  ever  undertaken  in
Portugal.

In  addition to the  complexity  of work  currently  underway  and the  numerous
disciplines  required to form the new rail system, plans are being developed for
a series of  enlargements  and  extensions to the proposed  network.  These will
include new  connections  to the Porto  International  Airport and extensions of
certain  service  lines to the  eastern  suburbs  of the  city  and  neighboring
municipality of Gondomar.

                                   [IMAGE]
The  construction  works on the Porto Metro Rail project include the creation of
new lines on the surface,  sub-surface,  and underground,  passing through urban
and suburban zones and into the rural districts of the Porto metropolitan area.

The  consortium  will  provide the client,  Metro do Porto SA, with  project and
construction  management  services  for all  aspects  of civil,  mechanical  and
electrical areas of this multi-disciplinary project, including:

v        Quality, safety and environmental management systems
v        Planning and cost control
v        Design review
v        Information management


14

<PAGE>

London City Airport
LawGibb's extensive experience with airports throughout the world has earned the
Company a  distinguished  reputation  for  excellence in this market.  A current
example of  LawGibb's  airport  work may be observed in the  development  of the
London City  Airport,  located in the inner city area of London  known as London
Docklands,  where dramatic growth in the regional economy precipitated the onset
of this project. The LawGibb team has worked closely with the airport management
to ensure  the  project's  success,  focusing  upon the  client's  own  business
objectives  and  maintaining   excellent  working  relationships  via  intensive
scrutiny of work performed, as well as open and consistent communication.

LawGibb's  experts  are  providing  ongoing  services in a broad range of areas,
including  environmental  impact  assessments,  airport  planning  and  capacity
analysis,  specialist airfield pavement engineering and architectural  services.
Current  projects  include  apron  extensions,  a fixed base  operator  terminal
development and strategic advice on airside  capacity  issues.  LawGibb has also
carried out infrastructure inspections as part of an asset management initiative
by the airport.

                                   [IMAGE]
Located on an  abandoned  wharf in the heart of London,  the London City Airport
has helped create the strong economic growth in the area.

                                   [IMAGE]
Creek Turnpike
The Oklahoma Turnpike  Authority's 6-mile extension of the Creek Turnpike around
the south side of Broken  Arrow,  Oklahoma,  was a complex  project -  including
several miles of roadway,  a bridge  widening,  ramp  improvements,  a mile-long
viaduct,  12 bridges,  17 culverts,  4 retaining walls, a utility relocation and
several  embankments  and cut  sections.  As a key  member of the team,  LawGibb
provided pavement design, quality assurance testing and geotechnical exploration
services on the project.  The total value of LawGibb's  contract is in excess of
$1 million.


                                                                              15

<PAGE>


                                                                   EXHIBIT 13.01


SELECTED FINANCIAL DATA
(Dollars in thousands except per share data)

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
                                     1999          1998          1997          1996            1995
----------------------------------------------------------------------------------------------------
<S>                                <C>           <C>           <C>           <C>            <C>
INCOME STATEMENT DATA:
   Gross Fees                      $293,128      $311,162      $310,791      $323,179       $368,417

   Net Fees                        $257,195      $274,920      $277,701      $286,282       $314,873

   Net Income (Loss)               $  8,220      $  8,422      $  4,081      $  1,910       $(2,266)

   Earnings (Loss) Per Share:
      Basic                        $   3.04      $   3.71      $   1.77      $   1.00       $ (1.19)

      Diluted                      $   2.17      $   2.77      $   1.60      $   1.00      $  (1.19)

   Cash Dividends Per Share        $     --      $     --      $     --      $     --       $    --

BALANCE SHEET DATA:
   Working Capital                 $ 40,202      $ 39,060      $ 32,415      $ 28,459       $ 30,384

   Total Assets                    $138,831      $150,911      $145,768      $138,697       $148,304

   Long Term Liabilities           $ 30,104      $ 54,056      $ 54,935      $ 50,303       $ 59,915

   Shareholders' Equity            $ 46,020      $ 29,042      $ 19,341      $ 17,590       $ 15,825
----------------------------------------------------------------------------------------------------
</TABLE>



16
<PAGE>



MANAGEMENT'S DISCUSSION AND ANALYSIS
--------------------------------------------------------------------------------
The following is  management's  discussion  and analysis of certain  significant
factors that have affected the results of operations and financial  condition of
LawGibb  Group,  Inc. (the  "Company")  for the periods  indicated.  The Company
measures its operating performance on the basis of net fees, since a substantial
portion of gross fees are a pass-through  to clients as costs of  subcontractors
and other project-specific  outside services. The following table sets forth the
percentage of net fees  represented by certain items  reflected in the Company's
consolidated  statements of income and the percentage increase (decrease) in the
underlying  dollar  amounts  of each of these  items from the prior  year.  This
discussion  should  be read  in  conjunction  with  the  Company's  consolidated
financial statements and accompanying notes.


RESULTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                               Year to Year Dollar
                                     Year Ended December 31,                   Increase (Decrease)
                                  1999         1998         1997       1999 vs. 1998      1998 vs. 1997
                                  ----         ----         ----       -------------      -------------

<S>                              <C>          <C>          <C>         <C>                <C>
Net Fees                         100.0%       100.0%       100.0%             (6.4%)            (1.0%)

Gross Profit                      58.6%        58.6%        58.2%             (6.5%)            (0.3%)

Indirect Costs and Expenses       51.8%        51.7%        53.2%             (6.3%)            (3.8%)

Operating Income                   6.8%         6.9%         5.0%             (8.2%)            37.8%

Net Income                         3.2%         3.1%         1.5%             (2.4%)           106.4%
</TABLE>

Comparison of 1999 and 1998 - The Company improved its net income margin in 1999
to its highest  level in 8 years (at 3.2% of net fees),  although  net fees fell
short of 1998 levels.  The Company achieved this improvement  through  continued
effective programs of cost containment and cash management. The Company believes
these  programs are  significant  in  maintaining  profitability  as markets are
pursued to generate fee growth.

Consolidated  net fees for 1999  decreased  6.4% to $257.2  million  from $274.9
million in 1998. This decrease, however, reduced net income by only $0.2 million
(to $8.2 million)  compared to 1998's net income of $8.4  million.  Net fees for
the U.S.  Operations  decreased to $170.3 million in 1999, or 5.0%,  from $179.3
million in 1998.  The primary factor leading to this reduction was a decision to
exit  certain  high-risk  markets  where the  Company  believed it was not being
compensated relative to the risks undertaken. The International Group's net fees
decreased to $86.9 million in 1999, or 9.1% from $95.6 million in 1998. Two main
issues are behind this decrease.  First, delayed startup of certain projects due
to an earthquake in Eastern Europe and other client delays  produced  reductions
in net fees.  The delayed  projects are expected to commence in future  periods.
Second, a broad reduction in South African  government-funded  projects severely
impacted net fees from this  segment of  International  Operations.  The Company
believes  that it has taken  appropriate  steps to position  itself ahead of its
competitors  when  the  South  African  economic   conditions  improve  and  its
government project funding increases.

The  consolidated  gross profit margin remained  constant at 58.6% for 1999. The
U.S.  Operations'  gross profit margin decreased  slightly from 64.3% in 1998 to
64.0% in 1999.  The  decrease  is  generally a result of  increased  competitive
pressures  in some of the U.S.  markets.  The  International  Operations'  gross
profit  margin  improved  from  47.7% in 1998 to  48.1%  in  1999.  Consolidated
indirect  costs and  expenses  were  $133.2  million in 1999  compared to $142.2
million in 1998. This decrease of $9.0 million,  or 6.3%, is attributable to the
continued  positive impact of the Company's cost reduction and cost  containment
initiatives.



                                                                              17
<PAGE>



MANAGEMENT'S DISCUSSION AND ANALYSIS
--------------------------------------------------------------------------------
Consolidated  operating  income  decreased by 8.2% to $17.5 million in 1999 from
$19.0 million in 1998. The U.S.  Operations'  operating  income margin  improved
from 8.4% in 1998 to 9.6% in 1999, while the International Operations' operating
income  margin  decreased  from 4.2% in 1998 to 1.4% in 1999.  The nature of the
U.S.  Operations  and its 1999 net fee  challenges  allowed  it to  aggressively
reduce costs in tandem with net fee reductions,  thereby improving its operating
margin. The longer-term  project nature of the International  Operations and the
project  delays  it  experienced  necessitated  maintaining  certain  labor  and
indirect costs in anticipation of project startups.

Interest  expense  decreased  27.0% from $4.4 million in 1998 to $3.2 million in
1999, as a result of reducing revolving and long-term debt by $25.7 million from
1998 to 1999.  The  significant  debt  reduction was partially a result of $11.7
million in proceeds  received from the exercise of stock options (See  Financial
Condition  discussion).  Additionally,  improved cash flows from operations were
used to reduce outstanding debt balances, resulting in lower interest expense.

In 1999,  the  Company  recorded  net income of $8.2  million  compared  to $8.4
million in 1998. The effective tax rate decreased from 43.8% in 1998 to 41.9% in
1999.  This  decrease  was  primarily  attributable  to  changes  in  items  not
deductible  for tax purposes.  Earnings per common share for 1999 were $3.04 per
common share - basic  ($2.17 per common  share - diluted)  compared to $3.71 per
common share - basic ($2.77 per common share - diluted) in 1998.

Comparison of 1998 and 1997 - The Company recorded  significant  improvements in
operating  income,  income before income taxes and equity  investments,  and net
income as compared to 1997. Additionally, the volume of gross fees for 1998 also
reflected an improvement  over the prior year. All primary margin  measurements:
gross profit,  indirect  costs and expenses,  operating  income,  and net income
improved as a percentage of net fees compared to 1997.

Consolidated  net fees for 1998  decreased  1.0% to $274.9  million  from $277.7
million in 1997. Net fees for the U.S. operations decreased to $179.3 million in
1998, or 1.1%, from $181.3 million in 1997. The  International  Group's net fees
decreased  to  $95.6  million  for  1998  from  $96.4   million  in  1997.   The
International  Group's  net  fees in pound  sterling  for  1998  were  adversely
affected by the continuing effects of the hold on government  expenditures which
surrounded  the 1997 United  Kingdom  general  election.  These  decreases  were
partially  offset  by minor  strengthening  of the  value of the U.S.  dollar as
compared to the pound  sterling.  The average  value of the dollar  increased by
1.2% in 1998 as compared to 1997.

The  consolidated  gross profit margin increased to 58.6% in 1998 from 58.2% for
1997. The U.S. Group's gross profit margin decreased slightly from 64.6% for the
year ended 1997 to 64.3% for the year ended  1998,  primarily  due to  increased
labor costs. The  International  Group's gross profit margin improved from 46.2%
in 1997 to  47.7%  in 1998.  This  improvement  was  primarily  attributable  to
improvements in job related expenses.  Consolidated  indirect costs and expenses
were $142.2 million in 1998 compared to $147.8 million in 1997. This decrease of
$5.6 million,  or 3.8%, was attributable to the continued positive impact of the
Company's cost reduction initiatives.

Interest  expense  increased  from $4.0 million in 1997 to $4.4 million in 1998,
primarily  as a result of higher  average  outstanding  bank debt as compared to
1997.  Lower interest  rates in the Company's  re-negotiated  credit  facilities
contributed  to partially  offset  these  increases.  During 1998 and 1997,  the
Company  expensed  $0.1 million and $1.5 million,  respectively,  related to the
amortization  of costs  associated with  re-negotiating  and securing its credit
facilities.  This $1.4 million  decrease was directly  attributable to the lower
level  of  fees  and  the  3-year  term   associated   with  the  1998  facility
renegotiation versus the 1997 facility renegotiation.

In 1998,  the  Company  recorded  net income of $8.4  million  compared  to $4.1
million in 1997.  A portion of this  improvement  was related to the decrease in
the effective tax rate from 49.8% in 1997 to 43.8% in 1998.  Earnings per common
share for 1998 were $3.71 per  common  share - basic  ($2.77 per common  share -
diluted)  compared to $1.77 per common  share - basic  ($1.60 per common share -
diluted) in 1997.


18
<PAGE>



MANAGEMENT'S DISCUSSION AND ANALYSIS
--------------------------------------------------------------------------------

FINANCIAL CONDITION

Cash provided by  operations  increased  significantly  in 1999 to $16.5 million
from $6.4  million in 1998.  In addition to  sustained  profitability,  the cash
provided  resulted  from  improved  working  capital  management  ($7.1  million
improvement  over 1998) and the  conclusion  in 1998 of tax payments  associated
with a change in tax accounting methods ($4.5 million).

Capital expenditures for 1999 were $3.0 million,  which represents a decrease of
$3.6  million  from 1998.  Although  significantly  reduced,  the total  capital
expenditures were in line with the Company's 1999 capital  expenditures plan. In
the previous two years, the Company  upgraded its personal  computer and network
systems.  This effort,  combined with a continued deliberate approach to capital
expenditures, has resulted in less requirement for such expenditures in 1999. In
order to continue to enhance productivity and potentially increase earnings, the
Company  has  continued,  and will  continue,  its  capital  spending  programs,
particularly for computer and other  technology-related  equipment.  The Company
believes that the limit of capital  spending  imposed by its credit  facility of
$7.0  million  per year is  sufficient  to meet  foreseeable  requirements.  The
Company has no other material commitments for purchases of additional equipment.

The Company reported debt and short-term borrowings of $22.8 million at December
31, 1999,  compared to $48.1 million at the end of 1998.  The  significant  debt
reduction was partially a result of $11.7 million in proceeds  received from the
exercise of stock options (See discussion  below).  Additionally,  improved cash
flows from operations were used to reduce outstanding debt balances. Finally, on
September 30, 1999, the Company consummated a transaction to sell its laboratory
facility in Pensacola,  Florida for $3.7 million.  The proceeds were used to pay
down bank debt to further position the Company for future growth initiatives. As
a result, debt and short-term borrowings as a percentage of total capitalization
improved to 28.9% at December 31, 1999, compared to 55.3% at December 31, 1998.

The Company  maintains one primary credit facility with a global bank. (See Note
4  to  the  Consolidated  Financial  Statements.)  The  credit  facility  has  a
three-year  term and two  one-year  extension  options,  both of which have been
exercised to extend the maturity date to January 15, 2003.  The credit  facility
contains  certain   restrictions  which,  among  other  things,   limit  capital
expenditures;  require minimum earnings before interest, taxes, depreciation and
amortization;  and specify  achievement  of certain  leverage  and fixed  charge
ratios.  In  addition,  cash  dividends  on  common  stock are  prohibited.  The
repurchase of shares for cash or notes is restricted and payments on existing or
future  notes  payable  to  shareholders  are  permitted,   subject  to  certain
limitations.  The facility is secured by substantially  all of the assets of the
Company's United States and United Kingdom operating subsidiaries.

On May 6, 1997,  the  shareholders  of the  Company  authorized  and  approved a
transaction  between the Company and Virgil R.  Williams and James M.  Williams,
Jr., each a director of the Company (collectively, the "Investors"), pursuant to
which  the  Company  sold to the  Investors  (including,  the  case of  James M.
Williams,  a family  partnership  that he controls) a  combination  of Preferred
Stock,  Common Stock  warrants,  and options to purchase  shares of Common Stock
(the "Options").  The Options are eligible to be exercised in various quantities
and at various prices through December 31, 2006. On June 25, 1998, the Investors
exercised  options to purchase an aggregate of 175,000  shares of the  Company's
Common  Stock at an  exercise  price of $16.50 per share.  The  proceeds of $2.9
million  received by the Company were invested in  initiatives to further reduce
real estate and insurance  costs as well as fund  improvements in technology and
increased  sales and  marketing  activities.  On June 30,  1999,  the  Investors
exercised their remaining  Options to purchase an aggregate of 584,028 shares of
the  Company's  Common  Stock at an  exercise  price of $20.00  per  share.  The
proceeds  of $11.7  million  received by the  Company  were  invested to further
enhance the capital  structure  and  financial  position  of the  Company.  As a
result,  there are no remaining  Options held by the  Investors  under the above
transaction. The agreement also includes an option granted to the holders of the
preferred  stock for the right to purchase up to 161,452  shares of common stock
for an average price of $13.97 per share.  These options are exercisable only in
conjunction  with  exercises  by holders of options  under the  Company's  Stock
Option Plan.




                                                                              19

<PAGE>

While the Company anticipates continuing capital requirements to support growth,
expansion of services, and capital expenditures,  the Company believes that cash
provided by operations and borrowings  available  under the bank credit facility
will be sufficient to meet its requirements for the foreseeable future.

Market  Risks - The Company is exposed to various  types of market  risks in the
normal  course of business,  including  the impact of interest  rate changes and
foreign currency  exchange rate  fluctuations.  In order to manage interest rate
risk relative to its credit facility, the Company employed an interest rate swap
agreement. Based on the Company's debt profile at December 31, 1999 and December
31, 1998, a 1% increase in market  interest rates would have increased  interest
expense and decreased  income before income taxes by  approximately  $71,000 and
$150,000,  respectively.  The company does not hold  derivative  instruments for
trading purposes. As part of its foreign exchange risk management strategy,  the
Company  occasionally borrows funds in the appropriate local currency where debt
financing is required to support foreign  operating  activities,  resulting in a
reduction  in  exchange  rate  risk.  The  Company  typically  does  not  employ
derivative  instruments for purposes of managing foreign currency  exchange rate
risk and as a result, could be exposed to the risk that certain revenue and cost
transactions  originated  in foreign  currencies  may be realized  at  different
exchange  rates than those  which had been in effect  historically.  The primary
foreign  currencies  in which  the  Company  has  exchange  rate  risk are pound
sterling,  South African rand, and the euro. Due to the historical  stability of
these  currencies,  (and, in the case of the euro, the related  currencies which
underlie the value of the euro itself), combined with the steps that the Company
has taken to manage  foreign  exchange  risk,  the Company does not believe that
these risks represent a material  exposure to its financial  position or results
of operations.

Year-2000 - In prior years, the Company discussed the nature and progress of its
plans to become Year 2000 ready.  The Company  completed in 1999 its remediation
and  testing  of  systems.  As a result  of those  planning  and  implementation
efforts,   the  Company  experienced  no  disruptions  in  critical  information
technology  and  non-information  technology  systems and believes those systems
successfully  responded  to the Year  2000 date  change.  The  Company  expensed
approximately  $150,000 during 1999 in connection with  remediating its systems.
The  Company  is not aware of any  material  problems  resulting  from Year 2000
issues,  either with its  services,  its internal  systems,  or the products and
services of third  parties.  The Company  will  continue to monitor its critical
computer applications and those of its suppliers and vendors throughout the year
2000 to ensure that any latent Year 2000  matters  that may arise are  addressed
promptly.

Forward  Looking  Statements  - This  Annual  Report  contains  "forward-looking
statements" within the meaning of the Private  Securities  Litigation Reform Act
of 1995 which represent the Company's  expectations or beliefs. These statements
by their nature involve  substantial risks and  uncertainties,  certain of which
are beyond the Company's  control.  The Company  cautions that various  factors,
including,  but not limited to, the factors  described in the Company's  filings
with the Securities and Exchange  Commission (the  "Commission"),  the uncertain
timing of awards and contracts,  increasing  competition by foreign and domestic
competitors as well as general economic and regulatory conditions in each of the
geographic  regions served by the Company and industry  trends,  and other risks
could cause actual results or outcomes to differ materially from those expressed
in any forward-looking statements.



20
<PAGE>


FINANCIAL INFORMATION
<TABLE>
<CAPTION>

                               LawGibb Group, Inc.
                        Consolidated Financial Statements
                        As of December 31, 1999 and 1998
                 And for the three years ended December 31, 1999


     <S>                                                              <C>

     Consolidated Balance Sheets                                      22

     Consolidated Statements of Income and Comprehensive Income       23

     Consolidated Statements of Shareholders' Equity                  24

     Consoldiated Statements of Cash Flows                            25

     Notes to Consolidated Financial Statements                       26-40

     Report of Independent Auditors                                   41

</TABLE>



                                                                              21

<PAGE>

CONSOLIDATED BALANCE SHEETS
LawGibb Group, Inc.
(Dollars in thousands, except share and per share amounts)

<TABLE>
<CAPTION>
        AT DECEMBER 31,                                                              1999            1998
-----------------------------------------------------------------------------------------------------------
<S>                                                                               <C>             <C>
ASSETS
        Cash and Cash Equivalents                                                 $  11,612       $  11,022
        Billed Fees Receivable, net                                                  56,274          55,346
        Unbilled Work in Progress                                                    26,853          31,464
        Other Receivables                                                             1,119           1,579
        Deferred Income Taxes                                                         3,866           3,074
        Prepaid Expenses                                                              3,185           4,388
                                                                                  ---------       ---------
           Current Assets                                                           102,909         106,873
        Property and Equipment, net                                                  16,527          23,442
        Equity Investments                                                            2,132           1,587
        Intangible Assets, net                                                       12,270          13,250
        Other Assets, net                                                             4,993           5,759
                                                                                  ---------       ---------
           Total Assets                                                           $ 138,831       $ 150,911
                                                                                  =========       =========

-----------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
        Short-Term Borrowings                                                     $   1,213       $     902
        Accounts Payable                                                             13,870          15,858
        Billings in Excess of Costs and Fees Earned on Contracts in Progress         16,537          13,805
        Accrued Payroll and Other Employee Benefits                                   6,143           7,127
        Accrued Professional Liability Reserve                                        3,931           3,518
        Other Accrued Expenses                                                       11,655          16,745
        Income Taxes Payable                                                          4,809           4,638
        Current Portion of Long-Term Debt                                             4,549           5,220
                                                                                  ---------       ---------
           Current Liabilities                                                       62,707          67,813

        Long-Term Debt                                                               16,995          41,979
        Deferred Income Taxes                                                         3,026           1,983
        Minority Interest in Equity of Subsidiaries                                     176             208

        Cumulative Convertible Redeemable Preferred Stock -
           963,398 Shares Issued and Outstanding                                      9,907           9,886

        Common Stock - $1 par value, 10,000,000 shares authorized,
           2,615,605 and 2,045,870 shares issued and outstanding                      2,616           2,046
        Additional Paid-In Capital                                                   28,984          18,046
        Retained Earnings                                                            22,703          15,931
        Accumulated Other Comprehensive Income                                       (8,283)         (6,981)
                                                                                  ---------       ---------
           Total Shareholders' Equity                                                46,020          29,042
                                                                                  ---------       ---------
           Total Liabilities and Shareholders' Equity                             $ 138,831       $ 150,911
                                                                                  =========       =========
</TABLE>

See Accompanying Notes.


22
<PAGE>

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
LawGibb Group, Inc. (Dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
          YEAR ENDED DECEMBER 31,                            1999            1998            1997
---------------------------------------------------------------------------------------------------
<S>                                                        <C>             <C>             <C>
         Gross Fees                                        $293,128        $311,162        $310,791
         Less: Cost of Outside Services                      35,933          36,242          33,090
                                                           --------        --------        --------
         Net Fees                                           257,195         274,920         277,701

         Direct Costs and Expenses:
            Payroll                                          78,055          81,160          81,613
            Job-Related Expenses                             28,496          32,591          34,450
                                                           --------        --------        --------
         Gross Profit                                       150,644         161,169         161,638

         Indirect Costs and Expenses:
            Payroll                                          60,823          62,474          60,604
            Other Expenses                                   72,364          79,688          87,240
                                                           --------        --------        --------
         Operating Income                                    17,457          19,007          13,794

         Other Income (Expense):
            Interest Expense                                 (3,186)         (4,365)         (3,995)
            Deferred Financing Costs                            (84)           (141)         (1,539)
            Other Income (Expense)                              (71)            197            (198)
                                                           --------        --------        --------
         Income Before Income Taxes
            and Equity Investments                           14,116          14,698           8,062
         Income Tax Provision                                (5,919)         (6,432)         (4,012)
         Equity Investments                                      23             156              31
                                                           --------        --------        --------
         Net Income                                           8,220           8,422           4,081
         Less: Preferred Stock Dividend and Accretion        (1,128)         (1,128)           (742)
                                                           --------        --------        --------
         Net Income Available to Common Shareholders       $  7,092        $  7,294        $  3,339
                                                           ========        ========        ========

         Earnings Per Common Share - Basic                 $   3.04        $   3.71        $   1.77
                                                           ========        ========        ========

         Earnings Per Common Share - Diluted               $   2.17        $   2.77        $   1.60
                                                           ========        ========        ========

RECONCILIATION OF COMPREHENSIVE INCOME

         Net Income                                        $  8,220        $  8,422        $  4,081
         Other Comprehensive Income:
            Foreign Currency Translation Adjustment          (1,302)           (638)         (1,282)
                                                           --------        --------        --------
         Comprehensive Income                              $  6,918        $  7,784        $  2,799
                                                           ========        ========        ========
</TABLE>

See Accompanying Notes.


                                                                              23
<PAGE>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
LawGibb Group, Inc. (Dollars in thousands)

<TABLE>
<CAPTION>
              Year Ended December 31,                                1999           1998           1997
--------------------------------------------------------------------------------------------------------
<S>                                                                <C>                <C>        <C>
Common Stock
              Balance at Beginning of Year                           2,046          1,872          1,905
              Issuance of Common Stock                                  --             21             --
              Repurchase and Retirement of Common Stock                (18)           (22)           (33)
              Exercise of Options to Purchase Common Stock             588            175             --
                                                                   -------        -------        -------
              Balance at End of Year                                 2,616          2,046          1,872

Additional Paid-In Capital
              Balance at Beginning of Year                          18,046         14,957         15,063
              Issuance of Common Stock                                  --            558             --
              Repurchase and Retirement of Common Stock               (185)          (182)          (256)
              Exercise of Options to Purchase Common Stock          11,123          2,713             --
              Issuance of Common Stock Warrants                         --             --            150
                                                                   -------        -------        -------
              Balance at End of Year                                28,984         18,046         14,957

Retained Earnings
              Balance at Beginning of Year                          15,931          8,855          5,683
              Net Income                                             8,220          8,422          4,081
              Preferred Stock Dividends                               (800)          (800)          (521)
              Preferred Stock Accretion                               (328)          (327)          (221)
              Repurchase and Retirement of Common Stock               (320)          (219)          (167)
                                                                   -------        -------        -------
              Balance at End of Year                                22,703         15,931          8,855

Accumulated Other Comprehensive Income
              Balance at Beginning of Year                          (6,981)        (6,343)        (5,061)
              Foreign Currency Translation Adjustment               (1,302)          (638)        (1,282)
                                                                   -------        -------        -------
              Balance at End of Year                                (8,283)        (6,981)        (6,343)

                                                                   -------        -------        -------
Total Shareholders' Equity                                         $46,020        $29,042        $19,341
                                                                   =======        =======        =======
</TABLE>

See Accompanying Notes.


24

<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
LawGibb Group, Inc. (Dollars in thousands)

<TABLE>
<CAPTION>
           Year Ended December 31,                                       1999           1998          1997
-----------------------------------------------------------------------------------------------------------
<S>                                                                    <C>            <C>           <C>
Operating Activities:
          Net Income                                                   $ 8,220        $ 8,422       $ 4,081
          Adjustments to Reconcile Net Income to
             Net Cash Provided by Operating Activities:
                Depreciation and Amortization                            6,604          6,724         6,782
                Financing Costs Amortization                                84            141         1,539
                Provision for Losses on Receivables                        603            731           172
                Deferred Income Taxes                                      251         (3,320)       (4,034)
                Undistributed Earnings From
                   Equity Investments                                      (23)          (156)          (31)
                Loss on Disposal of Property and Equipment                  93            205           228
          Changes in Operating Working Capital Assets and
             Liabilities, net of Effects of Business Acquisitions          705         (6,380)       (4,932)
                                                                       -------        -------       -------
          Net Cash Provided by Operating Activities                     16,537          6,367         3,805

Investing Activities:
          Business Acquisitions, net of Cash Acquired                       --           (187)         (415)
          Purchases of Property and Equipment                           (3,031)        (6,635)       (7,793)
          Proceeds from Disposal of Property and Equipment               3,889            120           227
          Other, net                                                    (1,227)        (1,903)          236
                                                                       -------        -------       -------
          Net Cash Used in Investing Activities                           (369)        (8,605)       (7,745)

Financing Activities:
          Net Proceeds on Short-Term Borrowings                            337            182           606
          Net Proceeds (Payments) on Revolving Line of
             Credit and Long-Term Borrowings                           (25,560)         2,701           (46)
          Deferred Financing and Preferred Stock Issuance Costs             --           (369)       (3,602)
          Issuance of Cumulative Convertible Redeemable
             Preferred Stock                                                --             --         9,850
          Issuance of Common Stock and Warrants                             --             --           150
          Repurchase and Retirement of Shares                             (523)          (423)         (456)
          Preferred Dividends Paid                                        (800)          (800)         (521)
          Exercise of Options to Purchase Common Stock                  11,711          2,888            --
                                                                       -------        -------       -------
          Net Cash Provided by (Used in) Financing Activities          (14,835)         4,179         5,981

          Effect of Exchange Rate Changes on Cash                         (743)          (446)         (611)
                                                                       -------        -------       -------
          Increase in Cash and Cash Equivalents                            590          1,495         1,430
          Cash and Cash Equivalents at Beginning of Year                11,022          9,527         8,097
                                                                       -------        -------       -------
          Cash and Cash Equivalents at End of Year                     $11,612        $11,022       $ 9,527
                                                                       =======        =======       =======
</TABLE>

See Accompanying Notes.


                                                                              25
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1999, 1998, and 1997,  LawGibb Group, Inc.
(Dollars in thousands, except share and per share amounts)
--------------------------------------------------------------------------------
1. Accounting Policies

Description   of  Business  -  LawGibb   Group,   Inc.   and  its   subsidiaries
(collectively,  the Company) provide comprehensive environmental and specialized
engineering  consulting  services to  governmental,  commercial,  and industrial
entities.

Basis of  Presentation  - The  consolidated  financial  statements  include  the
accounts  of  LawGibb  Group,  Inc.  and  its   subsidiaries.   All  significant
intercompany accounts and transactions are eliminated.

Use of Estimates - The  preparation  of the  financial  statements in conformity
with  generally  accepted  accounting  principles  requires  management  to make
estimates  and  assumptions  that affect the amounts  reported in the  financial
statements  and  accompanying  notes.  Actual  results  could  differ from those
estimates.

Revenue  Recognition - In general,  the Company recognizes  revenues at the time
services are performed. On cost-reimbursable contracts, revenue is recognized as
costs are  incurred,  and  includes  applicable  fees  earned  through  the date
services are provided. On fixed-price contracts, revenues are recorded using the
percentage-of-completion   method  of  accounting  by  relating  contract  costs
incurred to date to total estimated contract costs at completion. Contract costs
include  both direct and  indirect  costs.  Contract  losses are provided for in
their  entirety  in  the  period  they  become  known,  without  regard  to  the
percentage-of-completion.  Some of the Company's contracts with the U.S. federal
government,  as well as certain contracts with commercial clients,  provide that
contract costs  (including  indirect costs) are subject to audit and adjustment.
For all such  contracts,  revenues have been  recorded  based upon those amounts
expected to be realized upon final settlement.

Derivatives  - The Company has entered into an interest  rate swap  agreement to
synthetically  manage the interest rate  characteristics of its outstanding debt
and to partially limit the Company's exposure to rising interest rates.  Amounts
to be received or paid as a result of this  agreement are accrued and recognized
as an adjustment to interest  expense related to the designated  debt. Gains and
losses on terminations of interest rate swap agreements  would be deferred as an
adjustment to the carrying  amount of the  outstanding  debt and amortized as an
adjustment to interest  expense  related to the debt over the remaining  term of
the original contract life of the terminated swap agreement. In the event of the
early extinguishment of a designated debt obligation, any realized or unrealized
gain or loss from the swap would be  recognized  in income  coincident  with the
extinguishment gain or loss.

Receivables and Unbilled Work in Progress - Unbilled work in progress represents
amounts earned under contracts in progress, but not yet billable under the terms
of those  contracts.  These amounts  become  billable  according to the contract
terms  which  usually  consider  the  passage  of time,  achievement  of certain
milestones,  or  completion of the project.  Included in accounts  receivable at
December  31, 1999 and 1998 were  contract  retentions  totaling  $634 and $765,
respectively. Substantially all unbilled receivables are billed and collected in
the subsequent fiscal year. Billed fees receivable, net, at December 31, 1999 of
$56,274 and at December 31, 1998 of $55,346 were net of allowances  for doubtful
accounts of $4,025 and $4,223, respectively.

Cash  Equivalents - The Company  considers all highly  liquid  investments  with
maturities of three months or less when purchased to be cash equivalents.




26

<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1999, 1998, and 1997,  LawGibb Group, Inc.
(Dollars in thousands, except share and per share amounts)
--------------------------------------------------------------------------------
Property and Equipment - Property and equipment are stated at cost. Depreciation
and   amortization   are  provided  over  estimated   useful  lives  using  both
straight-line and accelerated methods. Useful lives range as follows:  buildings
40 years;  equipment 3-6 years;  furniture and fixtures 5-10 years;  automobiles
3-6 years; and leasehold improvements utilizing the shorter of the lease term or
the remaining useful life of the asset. Depreciation expense was $5,172, $5,316,
and $6,243 in 1999, 1998, and 1997, respectively.

Income Taxes - The  liability  method is used in  accounting  for income  taxes.
Under this method,  deferred tax assets and liabilities are determined  based on
differences  between financial reporting and tax bases of assets and liabilities
and are  measured  using the tax rates and laws that will be in effect  when the
differences are expected to reverse.

Intangible  Assets - Goodwill,  representing  amounts paid in excess of the fair
values of the net assets  acquired in  acquisition  transactions,  is  amortized
using  the  straight-line  method  over  periods  of  10-40  years.  Accumulated
amortization  of goodwill  approximated  $605 and $557 at December  31, 1999 and
1998,  respectively.  If facts and  circumstances  indicate that the goodwill or
other intangible assets may be impaired,  the Company's policy is to compare the
carrying amount for those assets to the undiscounted  cash flows associated with
those  assets in order to  determine  if a  write-down  to fair market  value is
required.

Other Assets - Included in Other Assets are primarily debt  financing  costs and
trademarks  which are amortized on a  straight-line  basis over the terms of the
related  agreement.  Accumulated  amortization  approximated  $1,418 and $959 at
December  31,  1999 and  1998,  respectively.  Additionally,  certain  long-term
prepaid  expenses and prepaid pension costs also are represented in the balances
at December 31, 1999 and 1998.

Foreign  Currency  Translation  -  The  functional  currency  for  most  foreign
operations is the local  currency.  The cumulative  effects of  translating  the
balance sheet  accounts  from the  functional  currency into the U.S.  dollar at
current exchange rates are included in Foreign Currency  Translation  Adjustment
in Shareholders'  Equity.  For all operations,  gains or losses from remeasuring
foreign  currency  transactions  into the  functional  currency  are included in
income.

Common  Stock  Reserved - The Company has  reserved  1,041,495  shares of common
stock for issuance  relative to employee stock option plans,  other stock option
plans, convertible securities, and common stock warrants.

Stock Based  Compensation - The Company grants to employees  stock options for a
fixed  number of shares  with an  exercise  price equal to the fair value of the
shares at the date of grant. The Company has elected to account for stock option
grants in  accordance  with APB Opinion No. 25,  Accounting  for Stock Issued to
Employees,  and,  accordingly,  recognizes no compensation expense for the stock
option grants (See Note 7).

Recent  Pronouncement - In June 1998, the Financial  Accounting  Standards Board
issued  Statement No. 133,  "Accounting  for Derivative  Instruments and Hedging
Activities,"  which is required to be adopted in years  beginning after June 15,
2000.  Because of the Company's minimal use of derivatives,  management does not
anticipate that the adoption of the new Statement will have a material effect on
earnings or the financial position of the Company.

Reclassification - Certain prior year amounts have been reclassified to conform
to the 1999 presentation.



                                                                              27
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1999, 1998, and 1997,  LawGibb Group, Inc.
(Dollars in thousands, except share and per share amounts)
--------------------------------------------------------------------------------

2.  PROPERTY AND EQUIPMENT

Property and Equipment are presented at cost less accumulated depreciation and
are detailed as follows:

<TABLE>
<CAPTION>
                                                    1999           1998
                                                  --------       --------
         <S>                                      <C>            <C>
         Land and Buildings                       $  8,342       $ 12,398
         Equipment                                  33,999         38,773
         Furniture and Fixtures                     11,661         12,074
         Automobiles                                 1,856          2,606
         Leasehold Improvements                      2,191          2,316
                                                  --------       --------
                                                    58,049         68,167

         Less: Accumulated Depreciation            (41,522)       (44,725)
                                                  --------       --------
            Total Net Property and Equipment      $ 16,527       $ 23,442
                                                  ========       ========
</TABLE>

3. CUMULATIVE CONVERTIBLE REDEEMABLE PREFERRED STOCK

On March 14, 1997,  the Board of Directors  approved an agreement to issue to an
investor $10 million of 8% Cumulative  Redeemable Preferred Stock (redeemable on
or after the seventh  anniversary of issuance),  together with separate warrants
exercisable for a period of 12 years and representing  approximately  33% of the
Common  Stock  outstanding  as of the  date of  issuance.  The  warrants  had an
exercise  price of $10.38 per share  until June 30,  1998 after  which the price
will range from $0.01 to $10.38  based upon the  Company's  performance  against
stipulated net income benchmarks. As of December 31, 1999, the exercise price of
the warrants is $10.38 per share. In addition, the agreement included options to
acquire up to 900,000 shares of Common Stock at a price of $16.50 per share from
July 1, 1997 through June 30, 1998, increasing on July 1 of each year thereafter
to $20.00,  $24.50, $29.00, and $33.00 through December 31, 2006. As of December
31, 1999, all options have been exercised. The agreement also includes an option
granted to the  holders of the  preferred  stock for the right to purchase up to
161,452  shares of common stock for an average price of $13.97 per share.  These
options are exercisable only in conjunction with exercises by holders of options
under the Company's Stock Option Plan (See Note 7).

The  Preferred  Stock is entitled to voting rights equal to the number of common
shares represented by the warrants.  The Preferred Stock may vote on all matters
except  as  expressly   provided  in  the  Company's   bylaws  and  articles  of
incorporation and under applicable law. The Preferred Stock is entitled to elect
Preferred Directors representing one less than a majority of the Company's Board
of Directors. The liquidation preference of each preferred share is its original
issue price of approximately $10.38 per share,  totalling $10 million. The value
assigned to the options and warrants of $150 and the costs of issuance of $2,149
are being  accreted/amortized  over the period to  redemption,  reducing the net
income available to common shareholders.



28
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1999, 1998, and 1997,  LawGibb Group, Inc.
(Dollars in thousands, except share and per share amounts)
--------------------------------------------------------------------------------

4. DEBT

Debt obligations consist of the following at December 31:

<TABLE>
<CAPTION>
                                                                                         1999         1998
                                                                                       -------      -------
         <S>                                                                           <C>          <C>
         Revolving Lines of Credit:
            United States (Average interest rate of 7.7% at December 31, 1999)         $ 7,000      $28,700
            International (Average interest rate of 6.8% at December 31, 1999)           4,192        3,576
         Notes Payable to former shareholders, interest at prime,  8.0%, and 8.5%        8,868       12,868
         Various Notes Payable, interest at rates ranging from
            5.4% to 17.5% due in installments through the year 2003                      1,484        2,055
                                                                                       -------      -------
         Total Lines of Credit and Notes Payable                                        21,544       47,199
            Less: Current Portion                                                        4,549        5,220
                                                                                       -------      -------
         Total Long-Term Debt                                                          $16,995      $41,979
                                                                                       =======      =======
</TABLE>

The Company maintains one credit facility with a global bank. The facility bears
a three-year term and two one-year  extension  options,  both of which have been
exercised.  The credit facility contains certain restrictions which, among other
things,  limit capital  expenditures;  require minimum earnings before interest,
taxes,  depreciation  and  amortization;  and  specify  achievement  of  certain
leverage and fixed charge  ratios.  In addition,  cash dividends on common stock
are  prohibited.  The  repurchase of shares for cash or notes is restricted  and
payments on existing or future  notes  payable to  shareholders  are  permitted,
subject to certain limitations.  The facility is secured by substantially all of
the  assets  of  the  Company's  United  States  and  United  Kingdom  operating
subsidiaries.


CREDIT FACILITY

<TABLE>
<CAPTION>
                                              MAXIMUM
             NATURE                          AMOUNT (C)                   INTEREST RATE                          EXPIRATION DATE
             ------                          ----------                   -------------                          ---------------
<S>                                       <C>               <C>                                                  <C>
Revolving Line of Credit (A)                    $40,000     Base less 0.25% to Base and LIBOR + 1.5% to 2.0%     January 15, 2003
Letters of Credit sub-facility                  $ 3,000     1.25% to 1.5% Per Annum                              January 15, 2003
Revolving Line of Credit and
   Overdraft Facility                     (pound)11,000     Base + 1.5% to 2.0% and LIBOR + 1.5% to 2.0%         January 15, 2003
Letters of Credit sub-facility            (pound)11,000     1.75% Per Annum                                      January 15, 2003
Capital Expenditure Facility (B)          (pound) 2,400     LIBOR + 1.5% to 2.0%                                 January 15, 2003
</TABLE>

(A)      The total revolving facility will be reduced by $10,000 on January 1,
         2001 and by an additional $5,000 on January 1, 2002.
(B)      The capital expenditure pounds sterling facility has an availability of
         (pound)1,600 at December 31, 1999, increasing to (pound)2,400 on
         January 15, 2000.
(C)      Amounts available under the revolving credit facility will be subject
         to a borrowing base limitation based upon the Company's earnings before
         interest, taxes, depreciation, and amortization measured on a monthly
         basis. Borrowings under the capital expenditure facility are
         repayable quarterly over a five-year period.


                                                                              29
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1999, 1998, and 1997,  LawGibb Group, Inc.
(Dollars in thousands, except share and per share amounts)
--------------------------------------------------------------------------------

Interest  payments totaled $3,864,  $5,366,  and $4,236 in 1999, 1998, and 1997,
respectively.  The  weighted  average  interest  rate on  short-term  borrowings
($1,213  of  short-term   borrowings   denominated   in  South  African  rand  )
approximated 16.5% in 1999. Future maturities of long-term debt are as follows:


<TABLE>
         <S>                                         <C>
               2000                                  $ 4,549
               2001                                    4,430
               2002                                    1,035
               2003                                   11,424
               2004                                      106
         Thereafter                                       --
                                                     -------
                                                     $21,544
                                                     =======
</TABLE>

In January  1998,  the  Company  entered  into an interest  rate swap  agreement
effectively  to fix the LIBOR rate on $20,000 of  variable  rate  borrowings  at
5.86% per annum until  January  2003 (See Note 14). At December  31,  1999,  the
Company had provided  guarantees of $1,855 under United States letters of credit
and $5,306 under international bonds, guarantees, and indemnities.


5. LEASES

The Company leases certain office space, equipment,  automobiles,  and furniture
under  noncancellable  operating  leases.  The following is a schedule of future
minimum  lease  payments  required  under  those  leases  which have  initial or
remaining noncancellable terms of one year or more:


<TABLE>
         <S>                                               <C>
               2000                                        $13,235
               2001                                          9,844
               2002                                          7,360
               2003                                          6,284
               2004                                          5,120
         Thereafter                                         26,961
                                                           -------
                                                           $68,804
                                                           =======
</TABLE>

Rent expense, net of income from subleases, aggregated $14,992, $14,803, and
$17,307 in 1999, 1998, and 1997, respectively.


30
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1999, 1998, and 1997,  LawGibb Group, Inc.
(Dollars in thousands, except share and per share amounts)
--------------------------------------------------------------------------------

6. BENEFIT PLANS

PENSION PLANS
The Company has a  noncontributory,  defined  benefit  pension plan covering its
United States employees over the age of 21 who were hired before March 28, 1996.
The  benefits  are  based  on each  eligible  employee's  years of  service  and
compensation during the last ten years of employment. A curtailment in the plan,
which  was  effective  March  28,  1997,   ceased  benefit  accruals  to  vested
participants  on that  date.  As a  result,  the  Company  recognized  a gain on
curtailment of $1,816 in the first quarter of 1997.

The  Company's  funding  policy is to  contribute  amounts  annually to the plan
sufficient  to meet minimum  funding  requirements  as set forth in the Employee
Retirement Income Security Act of 1974, plus additional  amounts, if any, as may
be determined to be appropriate by the Company's management.

Net periodic  pension costs consist of the  following  components  for the years
ended December 31:


<TABLE>
<CAPTION>
                                                       1999          1998          1997
                                                     -------       -------       -------
         <S>                                         <C>           <C>           <C>
         Service Cost                                $    --       $    --       $  560
         Interest Cost                                 2,889         2,687        2,635
         Actual Return on Plan Assets                 (3,226)       (3,639)      (2,845)
         Net Amortization and Deferral                  (160)         (160)           2
                                                     -------       -------       -------
            Net Periodic Pension (Benefit) Cost      $  (497)      $(1,112)      $  352
                                                     =======       =======       =======
</TABLE>


                                                                              31
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1999, 1998, and 1997,  LawGibb Group, Inc.
(Dollars in thousands, except share and per share amounts)
--------------------------------------------------------------------------------

The following table sets forth the funded status and net liability recognized
for the plan:

<TABLE>
<CAPTION>
                                                                  1999           1998
                                                                -------        -------
         <S>                                                    <C>            <C>
         Change in Benefit Obligation
            Benefit Obligation at Beginning of Year             $39,681        $35,669
            Interest Cost                                         2,889          2,687
            Actuarial (Gain) Loss                                  (974)         1,467
            Benefits Paid                                          (614)          (142)
                                                                -------        -------
            Benefit Obligation at End of Year                   $40,982        $39,681

         Change in Plan Assets
            Fair Value of Plan Assets at Beginning of Year      $40,509        $36,459
            Actual Return on Plan Assets                          2,857          3,379
            Employer Contributions                                   --            813
            Benefits Paid                                          (614)          (142)
                                                                -------        -------
            Fair Value of Plan Assets at End of Year            $42,752        $40,509
                                                                -------        -------

            Funded Status                                       $ 1,770        $   828
            Unrecognized Actuarial Loss                             647          1,253
            Unrecognized Transition Asset                          (319)          (480)
                                                                -------        -------
            Net Amount Recognized                               $ 2,098        $ 1,601
                                                                =======        =======

         Amounts Recognized in the Balance Sheet
            Consist of:
            Prepaid Benefit Cost                                $ 2,098        $ 1,601
                                                                =======        =======
</TABLE>


32

<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1999, 1998, and 1997,  LawGibb Group, Inc.
(Dollars in thousands, except share and per share amounts)
--------------------------------------------------------------------------------

Actuarial assumptions used to determine net periodic pension costs are as
follows for the years ended December 31:

<TABLE>
<CAPTION>
                                                                1999          1998          1997
                                                               -----         -----         -----
         <S>                                                   <C>           <C>           <C>
         Weighted Average Discount Rate                         7.50%         7.25%         7.25%
         Rate of Increase in Future Compensation Levels
            Pre-Curtailment                                      N/A           N/A          4.00%
         Expected Long-Term Rate of Return
            on Plan Assets                                      8.00%        10.00%        10.00%
</TABLE>

The Company periodically revises the actuarial  assumptions used for calculation
of net periodic  pension cost and the  projected  benefit  obligation  to better
reflect current economic and market  conditions.  Effective January 1, 1999, the
Company revised the weighted  average  discount rate and the expected  long-term
rate of return  assumptions.  These  revisions had an  immaterial  effect on net
periodic pension cost during 1999.

The Company also has a defined  contribution  savings plan which qualifies under
section 401(k) of the Internal Revenue Code,  covering  substantially all United
States employees,  in which Company stock was one of several elective investment
options.  As of May 10, 1996,  the Board of Directors of the Company  decided to
terminate the option of Company Common Stock under the Plan, whether as employee
contributions  or  as  Company  matching  contributions.  Consistent  with  that
decision,  employees  are  allowed to trade out of (but not into)  shares of the
Company's Common Stock held in their individual  401(k) accounts,  in accordance
with Plan provisions.  Employees may transfer funds out of this option quarterly
(transfers out are limited to 25% per quarter of the  employee's  balance if the
employee's  balance in this option is greater than $5), resulting in the sale or
repurchase of stock by the Company.  At December 31, 1999, the Plan holds 44,491
shares of the Company's stock with a value of $1,264.

The Company's international subsidiaries have defined contribution pension plans
covering  substantially  all full-time  employees  over the age of 21.  Eligible
employees can elect contributory or noncontributory  status,  with contributions
related to compensation.  Expenses  related to these plans aggregated  $1,497 in
1999, $1,680 in 1998, and $1,699 in 1997.

Employee Stock Ownership Plan (ESOP)

Effective January 1, 1991, the Company's shareholders approved the establishment
of an ESOP to provide substantially all of the Company's full-time United States
employees an additional  opportunity  to share in the ownership of the Company's
Common  Stock.  The ESOP is intended to be a  "qualified"  stock bonus plan,  as
defined in the Internal Revenue Code. Contributions to the ESOP's trust fund are
discretionary  based upon the operating  performance  of the Company and will be
used to purchase  shares of Common Stock (see Note 7). The Company  reserves the
right to amend,  modify or terminate the Plan,  but in no event will any portion
of the contributions made revert to the Company.  No contributions were made for
1999, 1998, or 1997.



                                                                              33
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1999, 1998, and 1997,  LawGibb Group, Inc.
(Dollars in thousands, except share and per share amounts)
--------------------------------------------------------------------------------

7. SHAREHOLDERS' EQUITY

Stock Option Plan
The Company is  authorized  under the 1990 Stock  Option Plan (the  "Plan"),  as
amended,  to issue up to 500,000  shares of Common Stock to key  employees.  All
options  granted have 10 year terms and vest and become fully  exercisable  at a
rate of 20% per year for five years of  continued  employment.  The option price
per share and the date of exercise are determined by the Compensation  Committee
of the Board of  Directors at the time of grant.  However,  the option price per
share may not be less than the fair market value of the  Company's  Common Stock
on the grant date,  with the options  expiring  ten years or less from the grant
date.  At December 31, 1999,  options to acquire  49,403;  500;  16,000;  6,000;
75,000;  176,000;  7,000; 74,000 and 18,000 shares of the Company's Common Stock
at $17.80,  $29.63,  $26.36,  $16.91, $11.64, $12.61, $14.33, $19.54, and $28.48
per share, respectively, were outstanding under this Plan. At that date, options
to acquire 202,503 shares were exercisable.

The Company has elected to follow  Accounting  Principles  Board Opinion No. 25,
Accounting for Stock Issued to Employees  (APB 25) and related  Interpretations,
in accounting for its employee stock options  because,  as discussed  below, the
alternative  fair value  accounting  provided for under FASB  Statement No. 123,
Accounting  for  Stock-Based  Compensation  (SFAS 123),  requires  use of option
valuation  models  that were not  developed  for use in valuing  employee  stock
options.  Under APB 25,  because the exercise  price of the  Company's  employee
stock  options  equals the market price of the  underlying  stock on the date of
grant, no compensation expense is recognized.

Pro forma information regarding net income and earnings per share is required by
SFAS 123,  and has been  determined  as if the  Company  had  accounted  for its
employee stock options under the fair value method of that  Statement.  The fair
value for these options was estimated at the date of grant using a Minimum Value
option pricing model with the following  weighted-average  assumptions for 1999,
1998, and 1997, respectively:  risk-free interest rates of 5.6%, 5.6%, and 5.7%,
dividend yields of 0%; and a weighted-average expected life of the option of 7.6
years.

Option  valuation  models  require  the input of highly  subjective  assumptions
including the expected stock price  volatility.  Because the Company's  employee
stock options have characteristics  significantly different from those of traded
options,  and because changes in the subjective input assumptions can materially
affect the fair value estimate,  in management's opinion, the existing models do
not  necessarily  provide a  reliable  single  measure  of the fair value of its
employee stock options.

For purposes of pro forma  disclosures,  the estimated fair value of the options
is amortized to expense over the options'  vesting  period.  The  Company's  pro
forma information follows.


<TABLE>
<CAPTION>
                                                        1999           1998           1997
                                                       ------         ------         ------
         <S>                                           <C>            <C>            <C>
         Pro Forma Net Income Available to Common
          Shareholders                                 $6,623         $6,877         $3,043
         Pro Forma Earnings Per Common Share
            Basic                                      $ 2.84         $ 3.49         $ 1.61
            Diluted                                    $ 2.02         $ 2.63         $ 1.48
</TABLE>


34
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1999, 1998, and 1997,  LawGibb Group, Inc.
(Dollars in thousands, except share and per share amounts)
--------------------------------------------------------------------------------

A summary of the Company's stock option activity, and related information for
the years ended December 31 follows:

<TABLE>
<CAPTION>
                                                               1999             1998             1997
                                                             --------         --------         --------
         <S>                                                 <C>              <C>              <C>
         Outstanding  - Beginning of Year                     456,500          398,000          330,750
         Granted                                               18,000           89,000          228,000
         Exercised                                              7,097               --               --
         Cancelled                                             45,500           30,500          160,750
         Outstanding - End of Year                            421,903          456,500          398,000

         Exercisable -  End of Year                           202,503          152,600           98,600
         Weighted Average Fair Value of Options Granted
            During the Year                                  $   9.29         $   6.20         $   4.16

         Weighted Average Exercise Price:
            Outstanding - Beginning of Year                  $  15.05         $  14.27         $  17.61
            Granted                                          $  28.48         $  19.01         $  12.66
            Exercised                                        $  18.27         $     --         $     --
            Cancelled                                        $  15.25         $  16.42         $  18.86
            Outstanding - End of Year                        $  15.57         $  15.05         $  14.27
            Exercisable - End of Year                        $  15.40         $  16.33         $  18.77
</TABLE>


Exercise prices for options outstanding as of December 31, 1999 ranged from
$11.64 to $29.63. The weighted-average remaining contractual life of those
options is 6.7 years.

SHARE REPURCHASES

As described in Note 6, Company Common Stock was previously an investment option
in the Company's 401(k) plan. In accordance with plan provisions, 16,128 and
20,913 shares were repurchased during 1999 and 1998 for $457 and $408,
respectively, related to transfers out of this investment option.


                                                                              35
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1999, 1998, and 1997,  LawGibb Group, Inc.
(Dollars in thousands, except share and per share amounts)
--------------------------------------------------------------------------------


8. INCOME TAXES

The federal, state, and foreign components of the provision for income taxes
are as follows at December 31:

<TABLE>
<CAPTION>
                                          1999          1998          1997
                                         ------        ------        ------
         <S>                             <C>           <C>           <C>
         CURRENT INCOME TAXES:
            Federal                      $4,051        $7,390        $5,796
            State                         1,317         1,677         1,156
            Foreign                         300           685         1,094
                                         ------        ------        ------
         Total Current                    5,668         9,752         8,046
         DEFERRED INCOME TAXES:
            Federal                        (121)       (3,709)       (3,533)
            State                           (21)         (695)         (643)
            Foreign                         393         1,084           142
                                         ------        ------        ------
         Total Deferred                     251        (3,320)       (4,034)
                                         ------        ------        ------
         PROVISION FOR INCOME TAXES      $5,919        $6,432        $4,012
                                         ======        ======        ======
</TABLE>

The foreign provision for income taxes is based on pre-tax earnings from foreign
operations of $477 in 1999, $4,367 in 1998, and $3,112 in 1997.

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax liabilities and assets are as follows at December 31:

<TABLE>
<CAPTION>
                                                                     1999           1998
                                                                   -------        -------
         <S>                                                       <C>            <C>
         DEFERRED TAX LIABILITIES:
            Software Capitalization                                $ 2,291        $ 2,281
            Mark to Market Accounting for Accounts Receivable          687          1,030
            Other - net                                              3,402          3,101
                                                                   -------        -------
         Total Deferred Tax Liabilities                              6,380          6,412
         DEFERRED TAX ASSETS:
            Depreciation                                             2,612          2,221
            Employee Benefits                                          492            780
            Non-Deductible Reserves                                  2,427          2,902
            Loss Carry-Forwards                                      3,299          5,660
            Other - net                                                240            188
                                                                   -------        -------
                                                                     9,070         11,751
         Valuation Allowance for Deferred Tax Assets                (1,850)        (4,248)
                                                                   -------        -------
         Total Deferred Tax Assets                                   7,220          7,503
                                                                   -------        -------
         Net Deferred Tax Assets                                   $   840        $ 1,091
                                                                   =======        =======
</TABLE>


36
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1999, 1998, and 1997,  LawGibb Group, Inc.
(Dollars in thousands, except share and per share amounts)
--------------------------------------------------------------------------------

Because the Company plans to continue to finance foreign expansion and operating
requirements  by  reinvestment   of   undistributed   earnings  of  its  foreign
subsidiaries,  United  States  income  taxes  have  not  been  provided  on such
earnings.  The  amount of  undistributed  earnings  which are  considered  to be
indefinitely reinvested is approximately $20,701 at December 31, 1999.

A  reconciliation  of the  statutory  U.S.  income  tax  rate  to the  Company's
effective income tax rate is as follows:


<TABLE>
<CAPTION>
                                                             1999          1998          1997
                                                             ----          ----          ----
         <S>                                                 <C>           <C>           <C>
         Statutory U.S. Income Tax Rate                      34.0%         34.0%         34.0%
         State Taxes, net of Federal Benefit                  6.1%          4.4%          4.2%
         Income Tax in Jurisdictions Other than 34.0%         0.7%          3.6%          2.4%
         Permanent Differences Between
            Book and Taxable Income                          (0.6%)         2.4%          4.0%
         Losses for Which No Benefit is Recognized            3.1%           --            --
         Other                                               (1.4%)        (0.6%)         5.2%
                                                             ----          ----          ----
         Effective Income Tax Rate                           41.9%         43.8%         49.8%
                                                             ====          ====          ====
</TABLE>

At December  31, 1999 the Company  had $2,236 of  operating  loss  carryforwards
related to foreign subsidiaries; $2,093 can be carried forward indefinitely. The
remaining  $143 will  expire in 2002 - 2005.  The  Company has $3,152 of capital
loss  carryforwards  in  foreign  jurisdictions  that  can  be  carried  forward
indefinitely.  A valuation  allowance  has been provided for deferred tax assets
related to loss carryforwards and other reserves.  The valuation allowance as of
January  1,  1998 and 1997 was  $4,396  and  $3,007,  respectively.  Income  tax
payments  amounted  to  $5,497,  $8,639,  and  $9,236 in 1999,  1998,  and 1997,
respectively.


9. CONSOLIDATED STATEMENTS OF CASH FLOWS

The changes in operating working capital as shown in the Consolidated Statements
of Cash Flows includes:

<TABLE>
<CAPTION>
                                                                        1999          1998          1997
                                                                      -------       -------       -------
         <S>                                                          <C>           <C>           <C>
         Decrease (Increase) in:
                           Billed Fees Receivable                      (2,268)          44         (1,190)
                           Unbilled Work in Progress                    4,325          433         (2,408)
                           Other Current Assets                         1,606         (824)          (714)
         Increase (Decrease) in:
                           Accounts Payable and Accrued Expenses       (5,354)      (4,806)        (1,568)
                           Billings in Excess of Costs and Fees
                              Earned on Contracts in Progress           2,396       (1,227)           948
                                                                      -------       -------       -------
         Changes in Operating Working Capital Assets and
            Liabilities, net of Effects of Business Acquisitions      $   705      $(6,380)      $ (4,932)
                                                                      =======       =======       =======
</TABLE>


                                                                              37
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1999, 1998, and 1997,  LawGibb Group, Inc.
(Dollars in thousands, except share and per share amounts)
--------------------------------------------------------------------------------

10. EARNINGS PER COMMON SHARE

The following table sets forth the computation of basic and diluted earnings per
common share:

<TABLE>
<CAPTION>
                                                                         1999          1998         1997
                                                                       -------       -------       ------
         <S>                                                           <C>           <C>           <C>
         NUMERATOR:
            Net Income                                                 $ 8,220       $ 8,422       $4,081
              Preferred stock dividends and accretion                   (1,128)       (1,128)        (742)
                                                                       -------       -------       ------
            Numerator for basic earnings per common share -
                Income available to common shareholders                  7,092         7,294        3,339
            Effect of Dilutive Securities:
                 Preferred stock dividends and accretion                    --         1,128          742
                                                                       -------       -------       ------

              Numerator for diluted earnings per common share -
                 Income available to common shareholders               $ 7,092       $ 8,422       $4,081
                                                                       =======       =======       ======

         DENOMINATOR:
              Denominator for basic earnings per common share -
                Weighted-average shares                                  2,334         1,968        1,892
              Effect of dilutive securities:
                Employee Stock Options                                     192            93           22
                Cumulative Convertible Redeemable Preferred Stock
                    And Associated Common Stock Warrants                   597           957          638
                Other Stock Options                                        150            29           --
                                                                       -------       -------       ------
              Dilutive potential common shares                             939         1,079          660
                                                                       -------       -------       ------
              Denominator for diluted earnings per common
                  share - Adjusted weighted-average shares               3,273         3,047        2,552
                                                                       =======       =======       ======

         Basic earnings per common share                               $  3.04       $  3.71       $ 1.77
                                                                       =======       =======       ======

         Diluted earnings per common share                             $  2.17       $  2.77       $ 1.60
                                                                       =======       =======       ======
</TABLE>

Options  to  purchase  750;  30,750;  and  153,000  shares of common  stock were
excluded from the diluted  earnings per share  calculations  in 1999,  1998, and
1997, respectively because their effect would have been anti-dilutive.

11.  Comprehensive Income

During 1998, the Company adopted Statement of Financial Accounting Standards No.
130, Reporting Comprehensive Income ("SFAS 130"). SFAS 130 establishes new rules
for the  reporting  and  display of  comprehensive  income  and its  components;
however,  the adoption of SFAS 130 had no impact on the  Company's net income or
shareholders' equity. SFAS 130 requires foreign currency translation adjustments
or other adjustments,  if any, which prior to adoption were reported  separately
in  shareholders'  equity to be  included  in other  comprehensive  income.  The
disclosures required by SFAS No. 130 are recorded on the Statements of Income
and Comprehensive Income in the section entitled Comprehensive Income.



38
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1999, 1998, and 1997,  LawGibb Group, Inc.
(Dollars in thousands, except share and per share amounts)
--------------------------------------------------------------------------------

12.  Commitments and Contingencies

The  Company  is a party to a number  of  lawsuits  and  claims  arising  in the
ordinary course of its business. While the ultimate results of lawsuits or other
proceedings  against the Company cannot be predicted with certainty,  management
does not  believe  the  ultimate  costs of such  actions,  if any,  in excess of
amounts provided in the consolidated  financial  statements will have a material
effect  on  the  Company's   consolidated   financial  position  or  results  of
operations.

Beginning  August 1, 1995,  the  holders of  preferred  stock of a  wholly-owned
subsidiary  issued in connection with the 1994 acquisition of HKS (the Company's
South African  subsidiary)  have had the option to require the Company to redeem
their shares at any time at a price equal to the appraised value per share as of
the preceding year-end.

13.    Special Charges to Operations

During 1999, 1998, and 1997, the Company recorded a $1,428,  $1,347,  and $2,126
charge, respectively, against operations to cover severance and related benefits
costs, early termination of leases and expected sublease shortfalls, disposition
of leasehold improvements and selected real estate, office relocation costs, and
other corporate charges related to its cost reduction initiatives.  The majority
of these charges were paid in cash during the year in which they were  recorded.
Any accrual amounts related primarily to severance liabilities were not material
as of December 31, 1999, 1998, and 1997.

14.  Financial Instruments

The  Company's  financial  instruments  at December  31,  1999 and 1998  consist
primarily  of cash and cash  equivalents  and  loans  payable.  Due to the short
maturities of the cash and cash  equivalents,  carrying amounts  approximate the
respective fair values. The carrying amount for loans payable  approximates fair
market  value  since  the  interest  rates  on  these   instruments   are  reset
periodically.  Financial  instruments  that  potentially  subject the Company to
significant   concentrations   of  credit  risk  consist   principally  of  cash
investments and trade accounts  receivable.  Concentrations  of credit risk with
respect to trade  accounts  receivable  are limited  due to the large  number of
entities  comprising the Company's  customer base. The Company  performs ongoing
credit  evaluations  of  its  customers'  financial  condition.   Collateral  is
generally  not  required  and  credit  losses  have  been  within   management's
expectations.

At  December  31,  1999,  the fair  value of the  Company's  interest  rate swap
agreement was $396. The Company has recorded no carrying amount  associated with
this  instrument.  The interest  rate swap  agreement was  terminated  effective
January, 2000.

15.  Business Segment and Geographic Area Information

The  Company's  operations  are conducted  principally  in the United States and
Europe. Accordingly,  the Company considers its operating segments to be defined
as  United  States  Operations  and  International  Operations.   For  financial
reporting  purposes,   International   results  are  presented   separately  for
operations in the United Kingdom,  Europe,  Africa and other countries.  The net
fees for each segment as described in the table below correspond directly to the
net revenues attributable to the geographic areas which are represented by these
segments.  Segment operating income has been restated for prior years to reflect
the allocation of corporate expenses to the operating  segments.  These measures
are  consistent  with  those  currently  being  used  by  management  to  assess
performance.  The table which follows  represents  combined  disclosure for both
business segment and geographic area information.



                                                                              39
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1999, 1998, and 1997,  LawGibb Group, Inc.
(Dollars in thousands, except share and per share amounts)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                   1999          1998          1997
                                                                 --------      --------      --------
         <S>                                                     <C>           <C>           <C>
         NET FEES
            United States Operations                             $170,275      $179,315      $181,331
            International Operations    United Kingdom             39,770        45,629        51,181
                                        Europe - Other             23,562        22,799        19,769
                                        Africa                     18,607        22,347        20,087
                                        Other                       4,981         4,830         5,333
                                                                 --------      --------      --------
            Total                                                $257,195      $274,920      $277,701
                                                                 ========      ========      ========
         OPERATING INCOME
            United States Operations                             $ 16,262      $ 15,020      $ 10,983
            International Operations    United Kingdom                230         1,034           638
                                        Europe - Other                130           517           246
                                        Africa                        373         1,936         1,576
                                        Other                         462           500           351
                                                                 --------      --------      --------
            Total                                                $ 17,457      $ 19,007      $ 13,794
                                                                 ========      ========      ========
         IDENTIFIABLE ASSETS
            United States Operations                             $ 71,947      $ 84,801      $ 79,393
            International Operations    United Kingdom             45,205        41,326        38,791
                                        Europe - Other              5,283         4,875         2,987
                                        Africa                     11,814        15,636        19,388
                                        Other                       4,582         4,273         5,209
                                                                 --------      --------      --------
            Total                                                $138,831      $150,911      $145,768
                                                                 ========      ========      ========
         DEPRECIATION AND AMORTIZATION
            United States Operations                             $  4,719      $  4,562      $  4,895
            International Operations    United Kingdom              1,155           920           923
                                        Europe - Other                 93           459           356
                                        Africa                        467           686           512
                                        Other                         170            97            96
                                                                 --------      --------      --------
            Total                                                $  6,604      $  6,724      $  6,782
                                                                 ========      ========      ========
         LONG LIVED ASSETS
            United States Operations                             $ 12,585      $ 18,815      $ 18,398
            International Operations    United Kingdom              3,039         3,524         3,753
                                        Europe - Other                228           181            96
                                        Africa                        637           869         1,191
                                        Other                          38            53            68
                                                                 --------      --------      --------
            Total                                                $ 16,527      $ 23,442      $ 23,506
                                                                 ========      ========      ========
         CAPITAL EXPENDITURES
            United States Operations                             $  2,044      $  5,259      $  5,998
            International Operations    United Kingdom                675           616           951
                                        Europe - Other                113           307           367
                                        Africa                        192           388           378
                                        Other                           7            65            99
                                                                 --------      --------      --------
            Total                                                $  3,031      $  6,635      $  7,793
                                                                 ========      ========      ========
</TABLE>


40

<PAGE>
REPORT OF INDEPENDENT AUDITORS
--------------------------------------------------------------------------------

The Board of Directors and Shareholders
LawGibb Group, Inc.

We have audited the accompanying  consolidated  balance sheets of LawGibb Group,
Inc. as of December 31, 1999 and 1998, and the related  consolidated  statements
of income,  shareholders'  equity and cash flows for each of the three  years in
the  period  ended  December  31,  1999.  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 auditing standards generally accepted
in the United States. 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 consolidated  financial  position of LawGibb Group,
Inc.  at  December  31,  1999 and  1998,  and the  consolidated  results  of its
operations  and its cash flows for each of the three  years in the period  ended
December 31, 1999, in conformity with accounting  principles  generally accepted
in the United States.



/s/  Ernst & Young LLP

Atlanta, Georgia
March 10, 2000





                                                                              41