SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                                  FORM 10-Q

(Mark One)

    X             Quarterly Report Pursuant to Section 13 or 15(d) of the 
  -----           Securities Exchange Act of 1934

                  For the quarterly period ended November 30, 1998 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 0-16169

                      HARDING LAWSON ASSOCIATES GROUP, INC.
             (Exact name of registrant as specified in its charter)

       Delaware                                         68-0132062
(State or other jurisdiction of                      (I.R.S. Employer
 incorporation or organization)                     Identification No.)

                             7655 Redwood Boulevard
                            Novato, California 94945
               (Address of principal executive offices) (Zip Code)

       Registrant's telephone number, including area code: (415) 892-0821

Indicate by check mark whether the registrant (1) has filed all reports required
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

At January 7, 1999 the  registrant  had issued and  outstanding  an aggregate of
4,876,396, shares of its common stock.


<PAGE>


                                      INDEX

                      HARDING LAWSON ASSOCIATES GROUP, INC.


                                                                            Page

PART I.           FINANCIAL INFORMATION

 Item 1. Financial Statements

         Condensed Consolidated Balance Sheets -
         November 30, 1998 (Unaudited) and May 31, 1998.......................3

         Condensed Consolidated Statements of Income -
         Three and Six Months Ended November 30, 1998
         and November 30, 1997 (Unaudited)....................................4

         Condensed Consolidated Statements of Cash Flows -
         Six Months Ended November 30, 1998 and
         November 30, 1997 (Unaudited)........................................5

         Notes to Condensed Consolidated Financial Statements
         November 30, 1998 (Unaudited)........................................6

 Item 2. Management's Discussion and Analysis of Financial Condition
         and Results of Operations............................................8

PART II. OTHER INFORMATION

 Item 4. Submission of Matters to a Vote of Security Holders.................12

 Item 6. Exhibits and Reports on Form 8-K....................................13

SIGNATURES                 ..................................................14

INDEX TO EXHIBITS          ..................................................15


<PAGE>


                                     PART I

                                            FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS
<TABLE>
<CAPTION>

                                    HARDING LAWSON ASSOCIATES GROUP, INC.
                                    Condensed Consolidated Balance Sheets
                                      (In thousands, except share data)

                                                                    November 30, 1998            May 31, 1998   
----------------------------------------------------------------------------------------------------------------
                                                                       (Unaudited)
<S>                                                                      <C>                       <C>
ASSETS
Current assets:
     Cash and cash equivalents                                           $15,281                   $15,118
     Accounts receivable                                                  30,909                    28,976
     Unbilled work in progress                                            12,455                    13,863
     Less allowances for receivables and unbilled work                    (2,327)                   (1,836)
     Prepaid expenses                                                      1,385                     1,196
     Deferred income taxes                                                 2,659                     2,708      
----------------------------------------------------------------------------------------------------------------
         Total current assets                                             60,362                    60,025      
----------------------------------------------------------------------------------------------------------------
     Equipment                                                            25,942                    24,892
     Less accumulated depreciation                                       (20,866)                  (19,571)     
----------------------------------------------------------------------------------------------------------------
         Net equipment                                                     5,076                     5,321      
----------------------------------------------------------------------------------------------------------------
Deposits and other assets                                                 11,196                    11,272      
----------------------------------------------------------------------------------------------------------------
         Total assets                                                    $76,634                   $76,618      
================================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
     Accounts payable                                                     $6,165                    $6,381
     Accrued expenses                                                      5,195                     5,350
     Accrued compensation                                                  8,046                     7,794
     Billings in excess of costs and estimated
         earnings on uncompleted contracts                                 5,780                     5,352
     Income taxes payable                                                    661                       468      
----------------------------------------------------------------------------------------------------------------
         Total current liabilities                                        25,847                    25,345      
----------------------------------------------------------------------------------------------------------------
Other liabilities                                                          1,113                     1,084      
----------------------------------------------------------------------------------------------------------------
         Total liabilities                                                26,960                    26,429      
----------------------------------------------------------------------------------------------------------------
Commitments and Contingencies
Minority interest in subsidiaries                                            398                       401      
----------------------------------------------------------------------------------------------------------------
Shareholders' equity:
     Preferred stock--$.01 par value;
         authorized shares 1,000,000;
         issued and outstanding--none
     Common stock--$.01  par value;  authorized  shares  10,000,000;  issued and
         outstanding--4,836,297 and 5,009,018 at November 30, 1998
         and May 31, 1998, respectively                                       48                        50
     Additional paid-in capital                                           17,248                    18,891
     Retained earnings                                                    32,212                    31,059
     Foreign currency translation adjustment                                (232)                     (212)     
----------------------------------------------------------------------------------------------------------------
         Total shareholders' equity                                       49,276                    49,788      
----------------------------------------------------------------------------------------------------------------
              Total liabilities and shareholder's equity                 $76,634                   $76,618      
================================================================================================================
                   The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>


                                    HARDING LAWSON ASSOCIATES GROUP, INC.
                                 Condensed Consolidated Statements of Income
                                    (In thousands, except per share data)
                                                 (Unaudited)


                                                          Three Months Ended                 Six Months Ended
                                                             November 30,                      November 30,
                                                         1998             1997              1998           1997    
-------------------------------------------------------------------------------------------------------------------

<S>                                                    <C>               <C>              <C>            <C>    
Gross revenue                                          $40,697           $33,628          $80,140        $65,446
Less:  Cost of outside services                         13,900            12,348           25,662         22,485   
-------------------------------------------------------------------------------------------------------------------

Net revenue                                             26,797            21,280           54,478         42,961   
-------------------------------------------------------------------------------------------------------------------

Costs and expenses:
     Payroll and benefits                               18,690            13,917           37,623         28,509
     General expenses                                    7,987             6,098           15,089         11,860   
-------------------------------------------------------------------------------------------------------------------

     Total costs and expenses                           26,677            20,015           52,712         40,369   
-------------------------------------------------------------------------------------------------------------------

Operating income                                           120             1,265            1,766          2,592

Interest in loss of unconsolidated
     subsidiaries                                           --                --               --            (50)

Interest income, net                                       106               243              219            507   
-------------------------------------------------------------------------------------------------------------------

Income before income taxes
     and minority interest                                 226             1,508            1,985          3,049

Provision for income taxes                                  96               637              836          1,282

Minority interest                                           (9)              (20)              (3)           (44)  
-------------------------------------------------------------------------------------------------------------------

Net income                                                $139              $891           $1,152         $1,811   
===================================================================================================================

Basic net income per share                               $0.03             $0.18            $0.24          $0.37   
===================================================================================================================

Shares used in computing basic net
     income per share                                    4,835             4,971            4,859          4,929   
===================================================================================================================

Diluted net income per share                             $0.03             $0.17            $0.23          $0.36   
===================================================================================================================

Shares used in computing diluted net
     income per share                                    4,854             5,133            4,920          5,031   
===================================================================================================================
                  The accompanying notes are an integral part of these financial statements.
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                                    HARDING LAWSON ASSOCIATES GROUP, INC.
                               Condensed Consolidated Statements of Cash Flows
                                 (In thousands)
                                                 (Unaudited)

                                                                               Six Months Ended November 30,
                                                                                 1998                1997       

<S>                                                                             <C>                 <C>    
OPERATING ACTIVITIES
     Net income                                                                 $1,152              $1,811
     Adjustments to reconcile net income to
     net cash provided by operating activities:
         Depreciation and amortization                                           1,641               1,246
         Net increase in current assets                                           (173)             (1,353)
         Net increase/(decrease) in current liabilities                          1,358                (478)
         Other, net                                                                 17                (126)     
----------------------------------------------------------------------------------------------------------------

         NET CASH PROVIDED BY OPERATING ACTIVITIES                               3,995               1,100      
----------------------------------------------------------------------------------------------------------------

INVESTING ACTIVITIES
     Purchase of equipment, net                                                 (1,127)               (812)
     Investment in acquisition                                                    (184)               (197)     
----------------------------------------------------------------------------------------------------------------

         NET CASH USED IN INVESTING ACTIVITIES                                  (1,311)             (1,009)     
----------------------------------------------------------------------------------------------------------------

FINANCING ACTIVITIES
     Proceeds from sale of stock                                                   201                 156
     Repurchase of common stock                                                 (2,702)               (180)     
----------------------------------------------------------------------------------------------------------------

         NET CASH USED IN FINANCING ACTIVITIES                                  (2,501)                (24)     
----------------------------------------------------------------------------------------------------------------

     Effect of foreign currency translation                                        (20)                (90)     
----------------------------------------------------------------------------------------------------------------

NET INCREASE/(DECREASE)
      IN CASH AND CASH EQUIVALENTS                                                 163                 (23)

     Cash and cash equivalents at beginning of period                           15,118              24,464      
----------------------------------------------------------------------------------------------------------------

CASH AND CASH EQUIVALENTS  AT END OF PERIOD                                    $15,281             $24,441
================================================================================================================
  The accompanying  notes are an  integral  part of these  financial statements.
</TABLE>


<PAGE>


                      HARDING LAWSON ASSOCIATES GROUP, INC.
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

November 30, 1998

NOTE 1:  BASIS OF PRESENTATION

The accompanying  condensed consolidated financial statements have been prepared
without  audit by Harding  Lawson  Associates  Group,  Inc.  (the  "Company") in
accordance with generally accepted  accounting  principles for interim financial
statements and pursuant to the rules of the  Securities and Exchange  Commission
for Form 10-Q. Certain  information and footnotes required by generally accepted
accounting principles for complete financial statements have been omitted. It is
the opinion of management that all adjustments  considered  necessary for a fair
presentation  have been included,  and that all such adjustments are of a normal
and recurring nature.  For further  information,  refer to the audited financial
statements  and footnotes  included in the Company's  Annual Report on Form 10-K
for the fiscal year ended May 31, 1998. Reclassification of certain balances for
the fiscal year ended May 31, 1998 have been made to conform to the November 30,
1998 presentation.

NOTE 2:  COMMITMENTS AND CONTINGENCIES

The Company is currently  subject to certain claims and lawsuits  arising in the
ordinary  course  of  its  business.  In the  opinion  of  management,  adequate
provision has been made for all known liabilities that are currently expected to
result from these claims and lawsuits, and in the aggregate, such claims are not
expected to have a material effect on the financial position of the Company. The
estimates  used in  establishing  these  provisions  could  differ  from  actual
results. Should these provisions change significantly,  the effect on operations
for any quarterly or annual reporting period could be material.

NOTE 3:  NEW ACCOUNTING PRONOUNCEMENTS

In June 1997,  the  Statement of Financial  Accounting  Standards  No. 131 (SFAS
131),  "Disclosures  about  Segments of an Enterprise  and Related  Information"
(SFAS 131) was issued and is effective  for the year ending May 31,  1999.  This
Statement  establishes  standards  for  reporting  information  about  operating
segments in annual and interim  financial  statements.  The Company is currently
assessing the impact of SFAS 131 on its financial reporting.

In June 1997, the Statement of Financial Accounting Standards No. 130 (SFAS 130)
"Reporting  Comprehensive  Income" was issued and is  effective  for fiscal year
1999. SFAS 130 establishes  rules for the reporting of comprehensive  income and
its components in financial statements. At present, comprehensive income for the
Company includes net income and translation adjustments on foreign currency.

Comprehensive income for the six months ending November 30 is as follows:



                                                 Six Months Ending November 30,
                                                1998                      1997 

 
Net income                                     $1,152                    $1,811
Foreign currency translation adjustment           (20)                      (90)
                                               ------                    ------

Comprehensive income                           $1,132                    $1,721
                                               ======                    ======



<PAGE>


NOTE 4:  ACQUISITIONS

On May 8, 1998 the Company acquired all outstanding  shares of ABB Environmental
Services, Inc., a consulting and engineering firm, from ABB Services, Inc. Total
consideration of $12.0 million,  excluding  transaction costs, was paid entirely
in cash.  The  acquisition  was  accounted  for using the  purchase  method  and
accordingly  the  purchase  price was  allocated  to the assets and  liabilities
acquired based upon their fair market value. The excess of purchase price of the
acquisition  over the fair market value of the net assets  acquired was recorded
as goodwill.  The goodwill  will be amortized on a  straight-line  basis over 20
years.

The net purchase price was allocated as follows (in thousands):

Working capital, net                                           $  5,604
Equipment                                                         1,114
Other assets                                                        116
Goodwill                                                          5,516
                                                              ---------

Purchase price, net of cash received                            $12,350
                                                                =======


The following table presents  summarized  unaudited pro forma operating  results
assuming that the Company had acquired ABB Environmental  Services, Inc. on June
1, 1997 (in thousands except per share data):

                                 Three months ended            Six months ended
                                  November 30,1997            November 30, 1997

Net revenue                          $30,361                      $61,675
Income before income taxes             2,349                        4,793
Net income                             1,387                        2,923

Basic net income per share             $0.28                        $0.59
Shares used in computing basic
  net income per share                 4,971                        4,929
Diluted net income per share           $0.27                        $0.58
Shares used in computing diluted
  net income per share                 5,133                        5,031


<PAGE>


                      HARDING LAWSON ASSOCIATES GROUP, INC.
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

Cautionary Statement Regarding Forward-Looking Statements
---------------------------------------------------------

The  statements  in this  report that are  forward-looking  are based on current
expectations,  and actual  results may differ  materially.  The  forward-looking
statements  include  those  regarding  the  level of future  purchases  of fixed
assets,  the possible  impact of current and future  claims  against the Company
based upon  negligence and other theories of liability,  the  possibility of the
Company  making  acquisitions  during the next 12 to 18 months and the impact of
becoming year 2000 compliant.  Forward-looking statements involve numerous risks
and  uncertainties  that  could  cause  actual  results  to  differ  materially,
including,  but not  limited  to,  the  possibilities  that the  demand  for the
Company's  services  may decline as a result of possible  changes in general and
industry  specific economic  conditions and the effects of competitive  services
and pricing;  one or more current or future  claims made against the Company may
result in  substantial  liabilities;  the Company's  inability to find and close
acquisitions; and such other risks and uncertainties as are described in reports
and other  documents  filed by the Company from time to time with the Securities
and Exchange Commission.

Results of Operations
---------------------
(In thousands, except share data)

The following  table sets forth for the periods  indicated,  (i) the  percentage
that  certain  items in the  condensed  consolidated  income  statements  of the
Company bear to net revenues,  and (ii) the  percentage  increase  (decrease) in
dollar amount of such items from year to year.
<TABLE>
<CAPTION>

                                              Percentage of Net Revenue                         Percentage
                                   Three Months Ended          Six Months Ended             Increase (Decrease)
                                      November 30,November 30,   November 30,
                                                                                    Three Months         Six Months
                                    1998         1997         1998         1997     1998 vs. 1997       1998 vs. 1997
                                    ----         ----         ----         ----     -------------       -------------

<S>                                <C>          <C>          <C>          <C>          <C>                 <C>  
Net revenue                        100.0%       100.0%       100.0%       100.0%        25.9%               26.8%
Costs and expenses
     Payroll and benefits           69.8         65.4         69.1         66.4         34.3                32.0
     General expenses               29.8         28.7         27.7         27.6         31.0                27.2
Operating income/margin               .4          5.9          3.2          6.0        (90.5)              (31.9)
Interest income, net and
     interest in loss of uncon-
     solidated subsidiaries           .4          1.2           .4          1.1        (56.4)              (52.1)
Income before income taxes
     and minority interest            .8          7.1          3.6          7.1        (85.0)              (34.9)
Provision for income taxes
     and minority interest            .3          2.9          1.5          2.9        (85.9)              (32.7)
Net income                            .5          4.2          2.1          4.2        (84.4)              (36.4)
</TABLE>
<PAGE>

Second Quarter Comparison for Fiscal Years 1999 and 1998
--------------------------------------------------------

Net revenue for the fiscal quarter ended November 30, 1998 totaled  $26,797,  an
increase of 25.9 percent  from net revenue of $21,280 for the second  quarter of
the prior  fiscal  year.  The  increase in net  revenue  for the  quarter  ended
November  30, 1998 was  attributable  to the  acquisition  of ABB  Environmental
Services, Inc. (ABB ES). Net revenue would have been 11.7 percent lower than the
second quarter of the prior year had the  acquisition of ABB ES occurred on June
1, 1997.  The decline in net revenue for ABB ES for that period was 21.3 percent
compared  with the prior year due  primarily to the wind down of a large federal
project.

Excluding  the  acquisition,  net revenue  was 7.7  percent  lower than the same
period in the prior year.  This  decline  reflects an 8 percent  increase in net
revenues from domestic  industrial sector clients,  a 22 percent decrease in net
revenues from international operations and a 20 percent decrease in net revenues
from the public sector.  The decrease in net revenue was due to lower demand for
the Company's  services,  which was partially  offset by increased  prices.  Net
revenue from international  operations for the fiscal quarter ended November 30,
1998 was $974 or 4 percent of total net revenue  compared to $1,253 or 6 percent
of total net revenue in the same quarter of the prior fiscal year.

A  significant  portion of the  services  provided  by the Company to its public
sector clients are performed under a relatively small number of larger contracts
compared to private sector clients.  Similar to situations that have occurred in
the past few years,  some of these public sector contracts will be substantially
completed  during  fiscal 1999 and 2000.  The Company has been  awarded  certain
contracts that  potentially  could offset revenue that will be lost under nearly
completed  contracts.  However,  if the Company is unsuccessful in realizing the
full potential of these contracts or winning new contracts, or if funding delays
are experienced on previously awarded federal  contracts,  a material decline in
revenue could result.

Operating  income for the second  quarter of fiscal 1999 was $120, a decrease of
90.5 percent from $1,265 for the same period in fiscal  1998.  Operating  margin
decreased  to  approximately  1 percent of net  revenue in the  current  quarter
compared  with 6 percent in the second  quarter of fiscal  1998.  Excluding  the
operational results from the acquisition,  operating income would have decreased
by $2,041 from the prior year resulting in a negative margin of 3.9 percent. The
decrease in operating  income resulted from (i) the lower net revenue  discussed
above, (ii) charges of approximately $500 for a severance  agreement  negotiated
with the Company's  former Chief  Executive  Officer and the related  search and
recruitment  costs for a  successor  and (iii) a charge of $200  related  to the
write-down of excess premise leases.

Net interest  income for the second  quarter of fiscal 1999 was $106 compared to
net  interest  income  of $243 in the  second  quarter  of the prior  year.  Net
interest income was lower primarily due to the Company's decreased cash position
that resulted in lower  balances of invested  cash. The decrease in cash was due
primarily  to cash  utilized in the  acquisition  and, to a lesser  extent,  the
repurchase of more common stock by the Company than in the prior fiscal year.

The  effective  tax rate was 42.6 percent for the second  quarter of fiscal 1999
and was 42.2 percent in the second quarter of the prior year.

Net income for the quarter was $139 compared with $891 in the second  quarter of
1998, a decrease of 84.4 percent.  Basic  earnings per share were $0.03 on 4,835
basic weighted average shares  outstanding  compared to $0.18 per share on 4,971
basic weighted average shares  outstanding in the same period last year. Diluted
earnings  per  share  were  $0.03  on  4,854  diluted  weighted  average  shares
outstanding compared to $0.17 per share on 5,133 diluted weighted average shares
outstanding in the same period last year.

Six Month Comparison for Fiscal Years 1999 and 1998
---------------------------------------------------

Net revenue for the six months ended  November 30, 1998 amounted to $54,478,  an
increase of 26.8  percent  from net revenue of $42,961 for the six months  ended
November  30,  1997.  The  increase  in  net  revenue  was  attributable  to the
acquisition  of ABB ES. Net revenue  would have been 13.2 percent lower than net
revenue  for the six  months of the  prior  year had the  acquisition  of ABB ES
occurred on June 1, 1997.

Excluding  the  acquisition,  net revenue  was 7.1  percent  lower than the same
period in the prior year.  Net revenue from the public sector and  international
operations declined by 12 percent and 17 percent, respectively, which was offset
by a 10 percent increase in net revenue from domestic industrial sector clients.

Operating  income amounted to $1,766,  a decrease of 31.9 percent from operating
income of  $2,592  for the first six  months of the prior  year.  The  operating
margin  decreased to 3.2 percent from 6.0 percent a year ago.  Operating  income
was adversely affected, in particular,  by the $500 in costs associated with the
severance agreement and recruitment costs and the $200 related to the write-down
of excess premise leases discussed above.

Net  interest  income for the six months  ended  November  30, 1998 was $219,  a
decrease of 56.8 percent from net interest income of $507 for the same period of
the prior  fiscal  year.  The  decrease  was  primarily  due to a $10.8  million
decrease in the average cash balance compared to the prior year.

The  effective  tax rate for the six months  ended  November  30,  1998 was 42.1
percent, and for the six months ended November 30, 1997 was 42.0 percent.

Net income  for the six months was  $1,152,  a 36.4  percent  decrease  from net
income of $1,811 for the six month period in the prior year.  Basic earnings per
share were $0.24 on 4,859 weighted average basic shares outstanding  compared to
$0.37 on 4,929 weighted average basic shares  outstanding in the first six month
period  of the prior  year.  Diluted  earnings  per  share  were  $0.23 on 4,920
weighted average diluted shares outstanding compared to $0.36 per share on 5,031
weighted average diluted shares outstanding in the same period last year.

Liquidity and Capital Resources
-------------------------------

For the six months ended  November 30, 1998, net cash provided by operations was
$3,995  compared to $1,100 for the same period last year.  The  increase in cash
provided by  operations  was due  primarily  to focused  billing and  collection
efforts on a larger revenue base.

The  Company  made  capital  expenditures  of $1,127 in the first six  months of
fiscal 1999 compared to capital  expenditures  of $1,009 in the first six months
of the prior  year.  The  Company  anticipates  that its  capital  expenditures,
excluding  acquisitions,  for the current fiscal year will be approximately  the
same as those  incurred  in the prior  fiscal  year.  In the first six months of
1999, the Company made a payment of $118 related to an acquisition  completed in
fiscal 1994  compared  with payments made in the prior period of $197 related to
that acquisition.

At  November  30,  1998 the  Company  had cash on hand and cash  equivalents  of
$15,281.  The Company has a $20 million  revolving  credit line  agreement  that
expires in  November  2000.  At November  30, 1998 and 1997,  the Company had no
borrowings  outstanding  under its line of credit.  Borrowings were available to
the Company at an interest  rate of 5.6 percent at November  30,  1998,  and 5.7
percent  at May 31,  1998.  The  Company  is in  compliance  with all  covenants
pertaining to the credit line agreement.

On March 7, 1996 the Board of Directors  of the Company  approved a Common Stock
Repurchase  Program ("1996  Program") that authorized the Company to purchase up
to a maximum of 500,000  shares of stock on the open  market for the  purpose of
funding the Company's various employee stock programs.  The Company  repurchased
260,000 shares during the first six months of fiscal 1999 at an average price of
$9.12 compared to 21,300 shares  repurchased at an average price of $8.45 during
the  first six  months of fiscal  1998.  There  are 4,500  shares  which  remain
available to be repurchased  under the 1996 Program.  On September 25, 1998, the
Board  authorized  management to  repurchase up to 500,000  shares over the next
four years.

The Company is a  consulting  engineering  services  firm  engaged in  providing
environmental,  infrastructure,  geotechnical and construction related services,
and encounters  potential  liability  including  claims for errors and omissions
resulting from design or  construction  defects,  construction  cost overruns or
environmental or other damage in the normal course of business. The Company is a
party to lawsuits and is aware of potential  exposure related to certain claims.
In the opinion of  management,  adequate  provision  has been made for all known
liabilities that are currently  expected to result from these matters and in the
aggregate  such  claims  are not  expected  to  have a  material  impact  on the
financial  position  and  liquidity of the  Company.  Currently,  the Company is
provided a $10  million  per  occurrence,  $15  million  aggregate  contractor's
operations  and  professional  services  insurance  policy through an unrelated,
rated carrier.  The Company also maintains a general liability  insurance policy
with an unrelated, rated carrier.

The Company  believes that its available cash and cash  equivalents,  as well as
cash generated from operations and its available credit line, will be sufficient
to meet the Company's cash  requirements for the balance of the fiscal year. The
Company intends to actively  continue its search for  acquisitions to expand its
geographical representation and enhance its technical capabilities.  The Company
expects to utilize a portion of its liquidity  over the next 12 to 18 months for
capital  expenditures,   including   acquisitions  and  investments  in  aligned
businesses.

Year 2000 Compliance
--------------------

Computer  systems and software have  historically  been coded to accept only two
digit entries for the year in the date code. These two digit codes must accept a
four-digit  code in order to insure  that  systems do not  confuse the year 2000
with the year 1900 and either  shutdown or perform  incorrect  calculations as a
result of the problem.

The Company has  completed  several  tasks  related to the year 2000  compliance
issue and is on schedule to complete the  remaining  tasks prior to December 31,
1999.  Included  in the year  2000  program  is an  inventory  of the  Company's
hardware  and  software.  The Company  expects to complete  this  inventory  and
assessment  of the year 2000  problem  relative  to each piece of  hardware  and
software by June 30, 1999. During the second quarter of fiscal 1999, the Company
substantially  completed the upgrade of its major information  technology system
(an accounting and project management  system) to be year 2000 compliant.  Other
upgrades of equipment  and software  are  currently  scheduled as part of normal
business  operations.  Non-information  technology  used by the Company (such as
telephone and security  systems) is also being assessed for year 2000 compliance
and required  upgrades to such hardware and software are being  prioritized  for
resolution.  The assessment and  remediation  of  non-information  technology is
scheduled to be completed by December 31, 1999.  The Company  considers  risk in
this area to be minimal.  Contingency  plans will be developed in regard to year
2000  compliance  if the Company  determines  that  compliance  is not likely to
occur.

The Company has undertaken an analysis of its vendors and suppliers to determine
potential  areas of risk  with  regard to their  failure  to  achieve  year 2000
compliance,  and  is  preparing  an  assessment  document  to  be  sent  to  the
appropriate  vendors to assess the impact of the year 2000 problem as it relates
to third party goods and services. The Company is also inventorying software and
equipment that the Company has supplied under  contracts or  relationships  with
its clients and is in the process of  discussing  with them  possible  year 2000
issues. Contingency plans will also be developed as appropriate to deal with any
potential problems that may be identified.

The costs  associated with the year 2000 compliance issue have not been material
and generally fall within normally  anticipated  operating and capital spending.
The Company  currently  estimates the costs of becoming year 2000 compliant will
not be material to the financial  position of the Company.  Although the Company
does not currently  anticipate the costs of year 2000 compliance to be material,
it cannot  ensure year 2000  compliance  by third  parties.  The Company  cannot
predict  with  accuracy at this time the extent to which its vendors and clients
will become  compliant.  In the event that the Company's  vendors and/or clients
fail to become  year 2000  compliant,  the  resulting  effects on the  Company's
financial position could be adversely affected.



<PAGE>


                      HARDING LAWSON ASSOCIATES GROUP, INC.

                                     PART II

                                OTHER INFORMATION

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The annual  meeting of the  Registrant  was held on  November  4, 1998 and three
proposals  were  presented  to  security  holders  for a vote;  election  of two
directors,  approval of the Non-employee  Director  Compensation Stock Plan, and
ratification of the appointment of independent auditors.

The six-member  Board of Directors is divided into three classes.  Each year one
of the classes stands for election to a term of three years.  The class standing
for  election  at the 1998  annual  meeting  was  Class  II,  consisting  of two
incumbent directors: Richard D. Puntillo and James M. Edgar. The terms for Class
I Directors,  Retired Rear Admiral Stuart F. Platt and Donald K. Stager,  expire
in 2000, and the terms for Class III  Directors,  Richard S. Harding and Ross A.
Anderson, expire in 1999.

The following table lists the votes cast:
<TABLE>
<CAPTION>
<S>                                              <C>               <C>               <C>              <C> 

                                                   For             Withheld
Proposal 1
Election of Directors
         Richard D. Puntillo                     3,749,812          240,542
         James M. Edgar                          3,749,939          240,415

                                                   For              Against          Abstain          Non-Vote

Proposal 2
1998 Stock Option Plan                           2,782,526          400,377           130,133          677,338

Proposal 3
Ratification of Ernst & Young LLP
Independent Auditors                             3,966,157           23,023             1,174                0

</TABLE>

<PAGE>



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

                  a.       Exhibits

                           The following  exhibits are furnished along with this
                           Form  10-Q  Quarterly  Report  for the  period  ended
                           November 30, 1998:

                           Exhibit No. 11 Computation of Net Income Per Share

                           Exhibit No. 27 Financial Data Schedule

                  b.       Reports on Form 8-K

                           During  the  period  covered  by this  Report on Form
                           10-Q, the Company filed a Current Report on Form 8-K,
                           dated   October  2,  1998,   describing   changes  in
                           executive officers of the Company.


<PAGE>



                                   SIGNATURES


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



                                       HARDING LAWSON ASSOCIATES GROUP, INC.





Date:      January 11, 1999           /s/ Gregory A. Thornton                 
       ------------------------      ------------------------------------------
                                     Gregory A. Thornton
                                     President, Chief Executive Officer,
                                       and Chief Financial Officer
                                    (Principal Executive and Accounting Officer)


<PAGE>


                      HARDING LAWSON ASSOCIATES GROUP, INC.

                                  EXHIBIT INDEX


    Exhibit No.

        11                 Computation of Net Income Per Share

        27                 Financial Data Schedule