FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

(Mark One)

     |X|  QUARTERLY  REPORT  PURSUANT  TO SECTION 13 OR 15(d) OF THE  SECURITIES
          EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2001

                                       OR

     |_|  TRANSITION  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES
          EXCHANGE ACT OF 1934

For the transition period from ________ to ___________

                         Commission file number: 0-19239


                               LawGibb Group, Inc.
             -------------------------------------------------
           (Exact name of Registrant as specified in its charter)

Georgia                                                          58-0537111
------------------------------------                         -------------------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               Identification No.)

1105 Sanctuary Parkway, Suite 300, Alpharetta, GA                 30004
--------------------------------------------------------------------------------
(Address of principal executive offices)                       (Zip code)

                               (770) 360-0600
             --------------------------------------------------
             (Registrant's telephone number including area code)

                                     N/A
--------------------------------------------------------------------------------
(Former  name,  former  address,  and former  fiscal year, if changed since last
report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| NO |_|

The number of shares of Common Stock of the Company, par value $1.00 per share,
outstanding at August 14, 2001 was 2,617,348.


<PAGE>

                                TABLE OF CONTENTS

                                                                            PAGE
PART I.  FINANCIAL INFORMATION

         ITEM 1. FINANCIAL STATEMENTS

         Condensed Consolidated Balance Sheets
          as of June 30, 2001 and December 31, 2000............................1

         Condensed Consolidated Statements of Operations and Comprehensive
          Income for the Quarters and Six-Month Periods Ended June 30, 2001 and
          2000.................................................................2

         Condensed Consolidated Statements of Cash Flows
          for the Six-Month Periods Ended June 30, 2001 and 2000...............4
 .
         Notes to Condensed Consolidated
          Financial Statements.................................................5


         ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
                 AND FINANCIAL CONDITION ......................................8

         ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK...10


PART II. OTHER INFORMATION


         ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.............................10

SIGNATURE.....................................................................11

<PAGE>
PART  I  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS
<TABLE>
<CAPTION>

CONDENSED CONSOLIDATED BALANCE SHEETS
LAWGIBB GROUP, INC.
(unaudited - dollars in thousands, except per share data)
Assets                                                           June 30,            December 31,
                                                                   2001                  2000
<S>                                                         <C>                   <C>
                                                             -----------------    ------------------
Current assets:
    Cash and cash equivalents                                $          10,517    $            2,319
    Billed fees receivable, net of allowance                            41,146                41,571
    Unbilled work in progress                                           15,502                15,279
    Other current assets                                                 5,397                 5,079
    Current assets of discontinued operations                               --                48,020
                                                             ------------------    ------------------
Total current assets                                                    72,562               112,268
Property and equipment, net                                             10,615                10,978
Equity investments                                                         134                   175
Goodwill, net                                                            1,553                   942
Other assets, net                                                       10,743                 5,558
Noncurrent assets of discontinued operations                                --                15,783
                                                             ------------------    ------------------
Total Assets                                                 $          95,607     $         145,704
                                                             ==================    ==================

Liabilities and Shareholders' Equity
Current liabilities:
    Accounts payable                                         $          10,684     $          12,193
    Billings in excess of costs and fees earned on
      contracts in progress                                              2,367                 2,256
    Current portion of long-term debt                                       --                 3,955
    Other accrued expenses                                               5,141                 6,445
    Other current liabilities                                           12,668                10,147
    Current liabilities of discontinued operations                          --                29,237
                                                             ------------------    -------------------
Total current liabilities                                               30,860                64,233

Long-term debt                                                              --                10,941
Deferred income taxes                                                    1,011                 1,238
Noncurrent liabilities of discontinued operations                           --                 5,211

Cumulative convertible redeemable preferred stock;
      963,398 shares issued and outstanding                              9,939                 9,929
Shareholders' equity:
    Common stock--$1 par value; authorized: 10,000,000
      shares; issued and outstanding:  2,614,923 shares
      in 2001 and 2,613,878 shares in 2000                               2,615                 2,614
    Additional paid-in capital                                          28,894                28,866
    Retained earnings                                                   22,317                33,580
    Accumulated other comprehensive loss                                   (29)              (10,908)
                                                             ------------------    -------------------
                                                                        53,797                54,152
                                                             ------------------    -------------------
Total Liabilities and Shareholders' Equity                   $          95,607     $         145,704
                                                             ==================    ===================

See accompanying notes.

</TABLE>
1

<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
LAWGIBB GROUP, INC.
(unaudited - in thousands, except per share data)

                                                        For the Quarters                       For the Six Months
                                                          Ended June 30                           Ended June 30
                                                ----------------------------------      -----------------------------------
                                                     2001               2000                 2001                2000
                                                ---------------    ---------------      ---------------     ---------------
<S>                                             <C>                <C>                  <C>                 <C>
Gross fees                                      $       54,616     $       51,290       $      108,596      $       99,267
Less:  Cost of outside services                          8,346              7,362               17,719              14,211
                                                ---------------    ---------------      ---------------     ---------------
Net fees                                                46,270             43,928               90,877              85,056

Direct costs and expenses:
    Payroll                                             14,550             13,067               28,557              25,459
    Job related expenses                                 3,527              3,134                6,818               5,690
                                                ---------------    ---------------      ---------------     ---------------
Gross profit                                            28,193             27,727               55,502              53,907

Indirect costs and expenses:
    Payroll                                             11,407             10,279               24,128              21,473
    Other expenses                                      13,761             13,650               28,403              27,630
                                                ---------------    ---------------      ---------------     ---------------
Operating income                                         3,025              3,798                2,971               4,804

Other:
    Interest expense                                      (112)              (323)                (370)               (345)
    Deferred financing costs                               (14)                (7)                 (29)                (28)
    Other income (expense)                                  18                 15                   19                 (25)
                                                ---------------    ---------------      ---------------      --------------
    Income before income taxes and                       2,917              3,483                2,591               4,406
      equity investments

Income tax provision                                      (983)              (911)                (984)             (1,215)
Equity investments                                           3                 (2)                  --                   7
                                                ---------------    ---------------      ---------------     ---------------
Income from continuing operations                        1,937              2,570                1,607               3,198

Income (loss) from discontinued
      operations, net of tax                              (375)               806                  403               1,387
Loss from disposal of discontinued
      operations, net of tax                           (12,681)                --              (12,681)                 --
                                                ---------------    ---------------      ---------------     ---------------
Income (loss) from discontinued
      operations                                       (13,056)               806              (12,278)              1,387
                                                ---------------    ---------------      ---------------     ---------------
Net Income (Loss)                               $      (11,119)    $        3,376       $      (10,671)     $        4,585
                                                ===============    ===============      ===============     ===============

</TABLE>

2

<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
LAWGIBB GROUP, INC.
(unaudited - in thousands, except per share data)

                                                               For the Quarters                     For the Six Months
                                                                 Ended June 30                         Ended June 30
                                                    ---------------------------------------- ----------------------------------
                                                          2001                2000                2001               2000
                                                    -----------------    ----------------    ---------------    ---------------
<S>                                                 <C>                  <C>                 <C>                <C>
Income Available to Common Shareholders
Income from continuing operations                   $         1,937      $        2,570      $       1,607      $        3,198
Less:  Preferred stock dividend and
     accretion                                                 (282)               (282)              (564)               (564)
                                                    -----------------    ----------------    ---------------    ---------------
Income from continuing operations available to                1,655               2,288              1,043               2,634
     common shareholders

Income (loss) from discontinued operations                  (13,056)                806            (12,278)              1,387
                                                    -----------------    ----------------    ---------------    ---------------

Net income (loss) available to common
     shareholders                                   $       (11,401)     $         3,094     $     (11,235)     $        4,021
                                                    =================    ================    ===============    ===============


Earnings per common share - basic:
   Continuing operations                            $           .63      $           .88     $         .40      $         1.01
   Discontinued operations                                    (4.99)                 .30             (4.70)                .53
   Net income (loss)                                          (4.36)                1.18             (4.30)               1.54

Earnings per common share - diluted:
   Continuing operations                            $           .49      $           .68     $         .30      $          .77
   Discontinued operations                                    (3.83)                 .21             (3.58)                .41
   Net income (loss)                                          (3.34)                 .89             (3.28)               1.18



Comprehensive Income
Net income (loss)                                   $       (11,119)     $         3,376     $     (10,671)     $        4,585
Other comprehensive income:
   Unrealized holding gains (losses)                            (16)                   6               (21)                  6
   Foreign currency translation adjustment                      --                  (168)               --              (1,931)
   Reclassification adjustment due to foreign
     currency translation adjustment recognized              12,456                   --            10,900                  --
                                                    -----------------    ----------------    ---------------    ---------------
Comprehensive income                                $         1,321      $         3,214     $         208      $        2,660
                                                    =================    ================    ===============    ===============
See accompanying notes.
</TABLE>

3

<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
LAWGIBB GROUP, INC.
(unaudited - dollars in thousands)
                                                                                      For the Six Months
                                                                                        Ended June 30
                                                                             ------------------------------------
                                                                                   2001                2000
                                                                             -----------------    ---------------
<S>                                                                          <C>                  <C>
Operating activities
Income from continuing operations                                            $          1,607     $        3,198
Adjustments to reconcile net income to net cash provided  by
    (used in) operating activities:
         Depreciation and amortization                                                  2,323              2,238
         Provision for losses on receivables                                              193                350
         Deferred income taxes                                                           (523)              (969)
         Undistributed  losses from equity investments                                     --                 (8)
         Loss on disposal of property and equipment                                         4                 57

Changes in operating assets and liabilities:
         Billed fees receivable                                                           232             (6,035)
         Unbilled work in progress                                                       (223)            (2,053)
         Other current assets                                                            (384)               709
         Accounts payable and accrued expenses                                         (1,394)               922
         Billings in excess of costs and fees earned on
              contracts in progress                                                       111               (538)
                                                                             -----------------    ---------------
Net cash provided by (used in) continuing operations                                    1,946             (2,129)
Net cash provided by (used in) discontinued operations                                  4,527             (4,178)
                                                                             -----------------    ---------------
Net cash provided by (used in) operating activities                                     6,473             (6,307)

Investing activities
Business acquisitions, net of cash acquired                                              (993)              (338)
Purchases of property and equipment                                                    (1,443)            (1,946)
Proceeds from disposal of property and equipment                                           24                 31
Discontinued operations, net of cash sold                                              16,370                865
Other, net                                                                               (391)               (17)
                                                                             -----------------    ---------------
Net cash provided by (used in) investing activities                                    13,567             (1,405)

Financing activities
Net proceeds (payments) on revolving line of credit and
       long-term borrowings                                                           (14,896)             1,687
 Proceeds from exercise of stock options                                                   52                 23
 Repurchase and retirement of common stock                                                (51)              (139)
 Preferred dividends paid                                                                (400)              (400)
 Discontinued operations                                                                3,269              1,005
                                                                             -----------------    ---------------
Net cash provided by (used in) financing activities                                   (12,026)             2,176

Increase in cash and cash equivalents from discontinued
       operations                                                                         184              2,641
                                                                             -----------------    ---------------
Increase (decrease) in cash and cash equivalents                                        8,198             (2,895)
Cash and cash equivalents at beginning of period                                        2,319              4,676
                                                                             -----------------    ---------------
Cash and cash equivalents at end of period                                   $         10,517     $        1,781
                                                                             =================    ===============

See accompanying notes.
</TABLE>

4
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
LAWGIBB GROUP, INC.
(unaudited  - dollars in thousands, except per share data)

NOTE 1 - There have been no significant  changes in the  accounting  policies of
LawGibb  Group,  Inc.  (the  "Company")  during  the  periods  presented.  For a
description of these  policies,  see Note 1 of Notes to  Consolidated  Financial
Statements  in the  Company's  Annual  Report  on Form  10-K for the year  ended
December 31, 2000 (the "Form 10-K").

NOTE 2 - The unaudited condensed  consolidated  financial  statements  presented
herein have been prepared in accordance  with  accounting  principles  generally
accepted  in  the  United  States  for  interim  financial  statements  and  the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do
not include all of the  information and note  disclosures  required by generally
accepted accounting principles required for complete financial statements. These
statements  should  be read  in  conjunction  with  the  Consolidated  Financial
Statements  and Notes for the year ended  December 31, 2000 included in the Form
10-K.  The  accompanying  condensed  consolidated  financial  statements for the
quarter  and six months  ended June 30,  2001 and 2000 have not been  audited by
independent auditors in accordance with auditing standards generally accepted in
the United States, but in the opinion of the Company's management such financial
statements  include  all  adjustments,   consisting  only  of  normal  recurring
adjustments,  necessary to summarize fairly the Company's consolidated financial
position and results of  operations.  The results of operations  for the quarter
and six months ended June 30, 2001 may not be indicative of the results that may
occur during the year ending December 31, 2001.

NOTE 3 - In January 2001, the Company  acquired the Fort Worth,  Texas operation
of Maxim Technologies, Inc. ("Maxim") for a purchase price of approximately $1.0
million in cash. The Company received $0.4 million in property and equipment and
recorded $0.6 million in goodwill  which is being  amortized over a period of 15
years. The results of operations of Maxim have been included in the accompanying
condensed  consolidated  statements of operations and comprehensive income since
the acquisition date.

NOTE  4 - On May  3,  2001,  the  Company  completed  the  sale  of its  turnkey
engineering  services  segment for $26.8  million in cash plus an  assumption of
debt by the purchaser of approximately $7.7 million. The cash proceeds include a
$5.0 million escrow for certain  defined  possible  liabilities.  These services
were  provided  in the United  Kingdom,  Europe,  Africa  and in  certain  other
international  locations.  This  business  was a provider  of  multidisciplinary
design, consulting and management services for infrastructure,  industrial,  and
building projects at each stage from project  conception to completion,  with on
going  follow-up in the operation and  maintenance  phases.  These services were
provided to the owner or general contractors  associated with large construction
projects.  This segment of the business has been accounted for as a discontinued
operation and accordingly the  accompanying  consolidated  financial  statements
reflect the operating results,  balance sheet and cash flows of the discontinued
operations separately from continuing operations for all periods presented.

The continuing  operations are composed of engineering  support services,  which
are located in the United  States.  This business is a provider of  geotechnical
and materials analysis and testing and environmental services such as regulatory
compliance planning, field data collection, laboratory analysis, data evaluation
and  interpretation,  and  waste  site  cleanup  planning.  Engineering  support
services are generally provided as a specific service to owners, sub-contractors
of a general  contractor or a sub-contractor of a sub-contractor of construction
and construction related projects.

The operating  results of the  discontinued  operations were as follows with the
2001 results including operations through the date of sale:
<TABLE>
<CAPTION>

                                     As of and For the Quarters              As of and For the Six Months
                                            Ended June 30                            Ended June 30
                                      2001                2000                 2001                 2000
                               ------------------- -------------------- -------------------- -------------------
<S>                            <C>                 <C>                  <C>                  <C>
Net fees                        $        9,155      $       22,695       $       33,313       $      45,549
Gross profit                             3,812              10,555               15,079              21,686
Operating income (loss)                   (356)              1,470                  496               2,558
Net income (loss)                         (375)                806                  403               1,387
</TABLE>
5

<PAGE>
Net assets of the discontinued operations at December 31, 2000 were as follows:

Cash                                                              $      4,647
Billed fees receivable, net                                             25,062
Unbilled work in progress                                               15,103
Other current assets                                                     3,208
Property, plant & equipment, net                                         3,553
Intangible assets, net                                                  10,751
Other assets                                                             1,479
Short term borrowings                                                   (2,051)
Accounts payable and accrued expenses                                  (11,967)
Billings in excess of costs                                            (15,219)
Long term debt                                                          (4,400)
Deferred income taxes                                                     (679)
Minority interest in equity                                               (132)
                                                                   ------------
                                                                   $     29,355
                                                                   ============

6
<PAGE>
<TABLE>
<CAPTION>
NOTE 5 - Computation of Earnings Per Common Share
The following table sets forth the computation of basic and diluted earnings per
common share:
                                                                    For the Quarters Ended              For the Six Months Ended
                                                                            June 30                              June 30
                                                               -------------------------------------------------------------------
                                                                   2001             2000               2001               2000
                                                               ----------------------------------- -------------------------------
<S>                                                            <C>              <C>                <C>               <C>
Numerator:
   Income from continuing operations                           $   1,937        $   2,570          $   1,607         $     3,198
   Preferred stock dividends and accretion                          (282)            (282)              (564)               (564)
                                                               ----------------------------------- -------------------------------
   Numerator for basic earnings per common
      share -  Income from continuing operations
      available to common  shareholders                            1,655            2,288              1,043               2,634
   Numerator for basic earnings per common share - Income
      (loss) from discontinued operations available to common
      shareholders                                               (13,056)             806            (12,278)              1,387
                                                               ----------------------------------- -------------------------------
   Numerator for basic earnings per common share - Net income
      (loss) available to common shareholders                  $ (11,401) $         3,094          $ (11,235)        $     4,021
                                                               =================================== ===============================

   Effect of dilutive securities:
   Income from continuing operations                           $   1,655        $   2,288          $   1,043         $     2,634
   Preferred stock dividends and accretion                            --              282                 --                  --
                                                               ----------------------------------- -------------------------------
   Numerator for diluted earnings per common
      share -  Income from continuing operations available
      to common shareholders                                       1,655            2,570              1,043               2,634
   Numerator for diluted earnings per common share - Income
      (loss) from discontinued operations available to common
      shareholders                                               (13,056)             806            (12,278)              1,387
                                                               ----------------------------------- -------------------------------
   Numerator for diluted earnings per common share - Net
      income (loss) available to common shareholders           $ (11,401) $         3,376          $ (11,235)         $    4,021
                                                               =================================== ===============================

Denominator:
   Denominator for basic earnings per common
       share - Weighted-average shares                             2,615            2,614              2,615               2,615

   Effect of dilutive securities:
       Employee Stock Options                                        146              147                157                 158
       Other Stock Options                                            56               65                 60                  69
       Cumulative Convertible Redeemable
            Preferred Stock and associated Common
            Stock Warrants                                           592              963                591                 563
                                                               ----------------------------------- -------------------------------
   Dilutive potential common shares                                  794            1,175                808                 790
                                                               ----------------------------------- -------------------------------
   Denominator for diluted earnings per common
      share - Adjusted weighted-average shares                     3,409            3,789              3,423               3,405
                                                               =================================== ===============================

Earnings per common share - basic:
   Continuing operations                                       $     .63        $     .88          $     .40          $     1.01
   Discontinued operations                                         (4.99)             .30              (4.70)                .53
   Net income (loss)                                               (4.36)            1.18              (4.30)               1.54

Earnings per common share - diluted:
   Continuing operations                                       $     .49        $     .68          $     .30          $      .77
   Discontinued operations                                         (3.83)             .21              (3.58)                .41
   Net income (loss)                                               (3.34)             .89              (3.28)               1.18

----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
ITEM 2.  MANAGEMENT'S  DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
         FINANCIAL CONDITION

The following table sets forth, for the quarters and six months  indicated,  (i)
the  percentage  of net fees  represented  by  certain  items  reflected  in the
Company's  condensed   consolidated   statements  of  operations  and  (ii)  the
percentage  increase or decrease in each of these items in the 2001 periods from
the  comparable  periods in the prior year.  The Company  measures its operating
performance  on the basis of net fees since a substantial  portion of gross fees
flow through to clients as costs of  subcontractors  and other  project-specific
outside services. Net fees are determined by deducting the cost of these outside
services from gross fees.  The  following  table and the  subsequent  discussion
should  be  read  in  conjunction  with  the  Condensed  Consolidated  Financial
Statements and Notes to Condensed  Consolidated  Financial  Statements contained
elsewhere in this Form 10-Q.

On May 3,  2001,  the  Company  completed  the sale of its  turnkey  engineering
services segment provided by its  International  business to Jacobs  Engineering
Group,  Inc.  The  transaction  was  consummated  pursuant  to a Stock  Purchase
Agreement  dated  April 28,  2001.  These  operations  have been  classified  as
discontinued  operations in the condensed  consolidated financial statements and
in the following discussion.

<TABLE>
<CAPTION>
                                                                    Qtr to Qtr                                             YTD
                                                                      Dollar                                             Dollar
                                          Quarters Ended             Increase          Six Month Periods Ended          Increase
                                             June 30                (Decrease)                 June 30                 (Decrease)
                                     -------------------------    ----------------    ---------------------------    ---------------
                                        2001          2000         2001 vs. 2000         2001           2000          2001 vs. 2000
                                     -----------   -----------    ----------------    ------------   ------------    ---------------
<S>                                  <C>           <C>            <C>                 <C>            <C>
Net fees                                100.0%        100.0%             5.3%             100.0%         100.0%             6.8%

Gross profit                             60.9%         63.1%             1.7%              61.1%          63.4%             3.0%

Indirect costs and
  expenses                               54.4%         54.5%             5.2%              57.8%          57.7%             7.0%

Operating income from continuing
  operations                              6.5%          8.6%           (20.4%)              3.3%           5.6%           (38.2%)

Income after tax from continuing
  operations                              4.2%          5.9%           (24.6%)              1.8%           3.8%           (49.7%)

Income (loss) from discontinued
  operations                            (28.2%)         1.8%         (1719.9%)            (13.5%)          1.6%          (985.2%)

Net income (loss)                       (24.0%)         7.7%          (429.4%)            (11.7%)          5.4%          (332.7%)

</TABLE>

RESULTS OF OPERATIONS

For the first six  months  of 2001,  a $12.7  million  loss on the  disposal  of
discontinued  operations  (discussed below) lead to a net loss of $10.7 million.
For the second quarter of 2001, the Company recorded a net loss of $11.1 million
($4.36 loss per common  share - basic and $3.34 loss per common share - diluted)
which is a decrease  from net income of $3.4  million in 2000  ($1.18 per common
share - basic and $0.89 per common share- diluted).  For the first six months of
2001,  the Company  recorded a net loss of $10.7 million  ($4.30 loss per common
share - basic and $3.28  loss per common  share -  diluted)  which is a decrease
from net  income of $4.6  million in 2000  ($1.54  per common  share - basic and
$1.18 per common share - diluted).

Continuing Operations

The Company  continues  to  concentrate  on growing its net fees and  increasing
project wins.  Net fees increased 5.3% from $43.9 million for the second quarter
of 2000 to $46.3  million for the same period in 2001.  For the first six months
of 2001,  net fees increased 6.8% from $85.1 million for the first six months of
2000 to $90.9 million.

8
<PAGE>
The gross  profit  margin of 60.9% for the second  quarter of 2001  reflected  a
decrease compared to 63.1% for the same period of 2000. For the six months ended
June 30,  2001,  the gross  profit  margin of 61.1%  also  reflected  a decrease
compared  to 63.4%  for the same  period of 2000.  Gross  profit  was  adversely
affected by project labor inefficiencies experienced on specific projects and in
certain regions of the United States during the first six months of 2001.

Indirect  costs  and  expenses,   which  includes   non-billable  direct  labor,
operations support personnel as well as administrative  support functions,  were
$52.5 million,  or 57.8% of net fees, for the first six months of 2001, compared
with $49.1 million,  or 57.7% of net fees, for the same period in 2000. Indirect
costs and  expenses  were $25.2  million,  or 54.4% of net fees,  for the second
quarter of 2001,  compared  with $23.9  million,  or 54.5% of net fees,  for the
second  quarter  of 2000.  Indirect  expenses  for the first six  months of 2001
include  labor costs in excess of current  needs and $1.0  million of  severance
recorded in the quarter to bring the labor costs back into balance.

Interest  expense was $0.1 million and $0.4  million for the second  quarter and
first six months of 2001,  respectively.  This  compares to interest  expense of
$0.3 million for the second  quarter and first six months of 2000.  In the first
six months of 2000,  interest  expense was reduced as the Company  recognized  a
gain of $0.3 million related to the early  termination of its interest rate swap
agreement.  Also the Company's  average debt balance for the first six months of
2001  decreased to $15.5  million from $22.0 million for the first six months of
2000.

The  effective  income  tax rate was 38.0%  for the  first  six  months of 2001,
compared to 27.6% for the first six months of 2000.  The 2000  annual  effective
income tax rate benefited from anticipated  research and development credits and
adjustments  for  balance  sheet tax  accruals  that were deemed to be no longer
necessary.

For the second  quarter of 2001,  the Company  recorded  income from  continuing
operations of $1.9 million  ($0.63 per common share - basic and $0.49 per common
share - diluted) which is a decrease from $2.6 million in 2000 ($0.88 per common
share - basic and $0.68 per common share- diluted).  For the first six months of
2001, the Company  recorded  income from  continuing  operations of $1.6 million
($0.40 per common share - basic and $0.30 per common share - diluted) which is a
decrease from $3.2 million in 2000 ($1.01 per common share - basic and $0.77 per
common share - diluted).

Discontinued Operations

In the second quarter of 2001, the Company recognized a loss of $12.7 million on
the sale of its  International  operations.  The loss consisted of $12.5 million
from the reclassification of the accumulated foreign currency translation losses
previously  included as a separate  component of  shareholders'  equity and $0.2
million loss on the sale. The proceeds from the sale of $26.8 million, less $5.0
million held in escrow, were used to liquidate all outstanding debt obligations.

Net fees for discontinued operations were $9.1 million and $33.3 million for the
second  quarter  and first  six  months of 2001,  respectively.  Results  of the
discontinued  operations  were a net loss of $0.4 for the second quarter of 2001
and net income of $0.4 million for the six months ended June 30, 2001.

For the second  quarter of 2001, the Company  recorded a loss from  discontinued
operations of $13.1 million  ($4.99 loss per common share - basic and $3.83 loss
per common share - diluted)  which is a decrease  from income of $0.8 million in
2000 ($0.30 per common share - basic and $0.21 per common share-  diluted).  For
the first six months of 2001,  the  Company  recorded  a loss from  discontinued
operations of $12.3 million  ($4.70 loss per common share - basic and $3.58 loss
per common share - diluted)  which is a decrease  from income of $1.4 million in
2000 ($0.53 per common share - basic and $0.41 per common share - diluted).

FINANCIAL CONDITION

Cash provided by  operations  over the first six months of 2001 was $6.5 million
as  compared to cash used by  operations  of $6.3  million  during the first six
months of 2000.  This  increase was primarily  due to improved  working  capital
management.

Capital  expenditures  during  the  first  six  months of 2001 and the first six
months of 2000 were $1.4  million and $1.9  million,  respectively.  In order to
continue to enhance  productivity the Company has continued,  and will continue,
its  capital   spending   programs,   particularly   for   computers  and  other
technology-related  equipment.  The Company  believes that the capital  spending
amount  allowed by its credit  facility ($7.0 million per year) is sufficient to
meet foreseeable requirements.

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Cash  balances  increased  significantly  to $10.5 million at June 30, 2001 from
$2.3 million at December 31, 2000 as a result of the net proceeds  from the sale
of the  International  business.  A  portion  of the  proceeds  from the sale of
discontinued  operations was used to repay  outstanding  debt. As a result,  the
Company reported no short-term  borrowings or debt at June 30, 2001, compared to
$14.9 million at December 31, 2000.  The Company  believes  that, in addition to
strengthening  its balance sheet, the sale and resulting cash balances  position
the Company to invest in higher return opportunities.

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

The Company's 401(k) Savings Plan (the "Plan")  permitted  employees to elect to
invest their Plan  contributions  in Company Common Stock, and provided that the
Company's matching contributions,  if any, under the Plan be made in the form of
Company Common Stock.  As of May 10, 1996, the Board of Directors of the Company
decided to terminate the use 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. Over the first six months of 2001, 1,899 shares
were traded out of the Plan totaling approximately $51,000.

Cash dividends on Common Stock have been and continue to be prohibited under the
current and  previous  bank credit  facilities.  As required by the terms of the
Company's  outstanding  Cumulative  Convertible  Redeemable  Preferred Stock and
permitted by the credit  facility,  the Company paid dividends to the holders of
the Preferred Stock. For the second quarter,  dividends totaled $0.2 million, or
$0.21 per  preferred  share.  For the six months ended June 30, 2001,  dividends
totaled $0.4 million, or $0.42 per preferred share.

General  economic  inflation  had the effect of increasing  the Company's  basic
costs of operations.  These  increased  costs were generally  recovered  through
increases in contract prices.

Forward  Looking  Statements  - This  Quarterly  Report  on Form  10-Q  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 uncertain timing of awards and contracts,  increasing competition by foreign
and domestic competitors,  general economic and regulatory conditions in each of
the geographic  regions served by the Company,  industry trends, and other risks
could cause actual results or outcomes to differ materially from those expressed
in any forward-looking statements.

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to various  types of market risks in the normal course of
business,  including the impact of interest rate changes.  For a description  of
these  market  risks,  see  "Management's  Discussion  and Analysis of Financial
Condition and Results of  Operations"  in the Company's Form 10-K. At the end of
the second  quarter  2001,  however,  the  Company  has no debt  recorded on its
balance sheet.

PART II.  OTHER INFORMATION

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

          (a) Exhibits

              10.27  Second Amendment to Supplemental Executive Retirement Plan
                     effective April 1, 2001.

          (b) Reports on Form 8-K

               Current Report on Form 8-K, filed May 18, 2001,  reporting under
               Item 2 the sale of the  international  business,  which  operated
               under the Gibb name, to Jacobs Engineering Group, Inc.

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SIGNATURE


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant, LawGibb Group, Inc., has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.


LAWGIBB GROUP, INC.




/s/ Robert B. Fooshee
------------------------------------------------------------
Robert B. Fooshee
Executive Vice President, Chief Financial Officer and
Treasurer


Dated:    August 15, 2001


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