<PAGE>


                                    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, 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: 0-19239


                            Law Companies 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)

                   114 TownPark Drive, Suite 500, Kennesaw, GA 30144
--------------------------------------------------------------------------------
(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 July 31, 1998 was 2,052,407. 

<PAGE>



                                TABLE OF CONTENTS


PART I.  FINANCIAL INFORMATION

         ITEM 1.  FINANCIAL STATEMENTS

         Condensed Consolidated Balance Sheets
          as of June 30, 1998 and December 31, 1997............................1


         Condensed Consolidated Statements of Income
          for the Quarters and Six Months Ended June 30, 1998 and 1997.........3


         Condensed Consolidated Statements of Cash Flows
          for the Six Months Ended June 30, 1998 and 1997 .....................4


         Notes to Condensed Consolidated
          Financial Statements.................................................5


         ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                   FINANCIAL CONDITION AND RESULTS OF OPERATIONS...............7

PART II.  OTHER INFORMATION

         ITEM 2.    CHANGES IN SECURITIES.....................................11

         ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.......11

         ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K..........................12

SIGNATURE.....................................................................13

<PAGE>
PART I.  FINANCIAL INFORMATION

     ITEM 1.  FINANCIAL STATEMENTS


CONDENSED CONSOLIDATED BALANCE SHEETS
LAW COMPANIES GROUP, INC.
(in thousands)



                                                         June 30     December 31
                                                           1998         1997
                                                       ------------  -----------
Assets
Current assets:
    Cash and cash equivalents                          $   10,103    $    9,527
    Billed fees receivable, net of allowance               57,363        56,808
    Unbilled work in progress                              34,580        32,105
    Other receivables                                         887         1,779
    Employee advances                                         488           420
    Prepaid expenses                                        4,659         3,268
    Deferred income taxes                                   1,982             0
                                                       ------------  -----------
Total current assets                                      110,062       103,907
Property and equipment:
    Land and buildings                                     12,086        12,094
    Equipment                                              38,597        36,507
    Automobiles                                             2,719         3,088
    Furniture and fixtures                                 12,247        12,386
    Leasehold improvements                                  3,311         3,526
                                                       ------------  -----------
                                                           68,960        67,601
    Less accumulated depreciation and
       amortization                                        45,992        44,095
                                                       ------------  -----------
                                                           22,968        23,506
Other Assets:
    Equity investments                                      1,335         1,361
    Goodwill, net                                          13,333        13,775
    Other assets                                            5,374         3,219
                                                       ------------  -----------
                                                           20,042        18,355
                                                       ------------  -----------
                                                       $  153,072    $  145,768
                                                       ============  ===========



See accompanying notes 


<PAGE>
CONDENSED CONSOLIDATED BALANCE SHEETS
LAW COMPANIES GROUP, INC. 
(in thousands)

                                                         June 30     December 31
                                                           1998         1997
                                                       ------------  -----------
Liabilities and shareholders' equity

Current liabilities:
    Short-term borrowings                              $       652   $     904
    Accounts payable                                        17,600      17,887
    Billings in excess of costs and fees earned 
      on contracts in progress                              13,576      15,168
    Accrued payroll and other employee benefits             10,080       5,990
    Accrued professional liability reserve                   3,205       3,504
    Other accrued expenses                                  18,374      21,339
    Income taxes payable                                     6,518       3,768
    Current portion of long-term debt                        3,717       2,231
    Deferred income taxes                                       -          701
                                                       ------------  -----------
Total current liabilities                                   73,722      71,492

Long-term debt                                              42,767      42,483

Deferred income taxes                                        1,405       1,528

Minority interest in equity of subsidiaries                    352       1,060

Cumulative redeemable preferred stock; issued and
 outstanding:  956,613 shares in 1998 and 956,613
 shares in 1997                                              9,875       9,864

Shareholders' equity:
    Common stock--$1 par value:
     authorized: 10,000,000 shares;
     issued and outstanding:
     2,052,407 shares in 1998
     and 1,872,000 shares in 1997                            2,052       1,872
    Additional paid in capital                              18,104      14,957
    Retained earnings                                       11,147       8,855
    Foreign currency translation adjustment                 (6,352)     (6,343)
                                                       ------------  -----------
                                                            24,951      19,341
                                                       ------------  -----------
                                                        $  153,072   $ 145,768
                                                       ============  ===========
                                                                     

See accompanying notes 


<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
LAW COMPANIES GROUP, INC. 
(in thousands, except per share data)

                                         For the Quarters                       For the Six Months
                                          Ended June 30,                          Ended June 30,
                                ---------------------------------       ----------------------------------
                                     1998               1997                  1998               1997
                                ---------------    --------------       ---------------    ---------------
<S>                             <C>                <C>                  <C>                  <C>                
Gross fees                      $     77,855       $     79,332         $    151,510         $  154,822
Less: Cost of outside                  8,810              9,358               16,742             17,455
                                ---------------    --------------       ---------------    ---------------
Net fees                              69,045             69,974              134,768            137,367

Direct costs and expenses:
    Payroll                           20,481             20,829               40,139             40,838
    Job related expenses               8,156              8,037               15,499             15,706
                                ---------------    --------------       ---------------    ---------------
Gross profit                          40,408             41,108               79,130             80,823

Indirect costs and expenses:
    Payroll                           15,617             15,260               31,245             31,228
    Other expenses                    20,601             22,551               40,290             43,207
                                ---------------    --------------       ---------------    ---------------
Operating income                       4,190              3,297                7,595              6,388

Other income (expense):
    Interest expense                  (1,136)            (1,028)              (2,191)            (1,983)
    Deferred financing costs             (24)              (295)                 (61)              (640)
    Other income (expense)               236               (287)                 237               (310)
                                ---------------    --------------       ---------------    ---------------
    Income before income taxes 
      and equity investments           3,266              1,687                5,580              3,455
                                                                        
Income tax provision                  (1,502)              (753)              (2,567)            (1,566)

Equity investments                         1                 34                   (7)               (15)
                                ---------------    --------------       ---------------    ---------------
Net income                             1,765                968                3,006              1,874
                                ---------------    --------------       ---------------    ---------------

Less:  Preferred stock dividend
       and accretion                    (282)              (175)                (564)              (175)
                                ---------------    --------------       ---------------    ---------------
Net income available to common
shareholders                    $      1,483       $        793         $      2,442      $       1,699
                                ===============    ==============       ===============    ===============
Basic earnings per
 common share                   $        .78       $        .42         $       1.29      $         .90
                                ===============    ==============       ===============    ===============
Diluted earnings per 
 common share                   $        .58       $        .39         $       1.02      $         .86
                                ===============    ==============       ===============    ===============
</TABLE>

See accompanying notes 


<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
LAW COMPANIES GROUP, INC. 
(in thousands)
                                                                 For the Six Months
                                                                   Ended June 30,
                                                           ------------------------------
                                                                 1998            1997
                                                           --------------    ------------
<S>                                                        <C>               <C>
Operating activities
     Net income                                             $      3,006      $    1,874
     Adjustments to reconcile net income to 
     net cash provided by operating activities:
         Depreciation and amortization                             3,344           3,998
         Provision for losses on receivables                         398             100
         Provision for losses on claims                               -               91
         Deferred income taxes                                    (2,805)         (2,401)
         Undistributed losses from equity investments                  7              15
         Gain on disposal of property and equipment                   62             318

             Changes in operating assets and liabilities:
                 Billed fees receivable                           (1,541)            770
                 Unbilled work in progress                        (2,830)          1,518
                 Other current assets                               (656)           (743)
                 Accounts payable and accrued expense              3,906             408
                 Billings in excess of costs and fees 
                  earned on contracts in progress                 (1,299)         (3,620)
                                                           --------------    ------------
     Net cash provided by operating activities                     1,592           2,328

Investing activities
     Purchases of property and equipment                          (2,732)         (4,834)
     Proceeds from disposal of property and equipment                 13              28
     Other, net                                                   (1,657)           (405)
                                                           --------------    ------------
Net cash used by investing activities                             (4,376)         (5,211)
                                                                            
Financing activities
     Net (payments) proceeds on short-term borrowings               (234)            427
     Net (payments) proceeds on revolving 
      line of credit and long-term borrowings                      1,782          (2,737)
     Deferred financing and preferred
      stock issuance costs                                          (369)         (3,267)
     Issuance of common stock and warrants                         2,888             150
     Repurchase and retirement of shares                            (291)           (214)
     Issuance of redeemable preferred stock                            -            9,850
     Preferred dividends paid                                       (400)           (121)
                                                           --------------    ------------
Net cash provided by financing activities                          3,376           4,088
Effect of exchange rate changes on cash                              (16)            (78)
                                                           --------------    ------------
Increase in cash and cash equivalents                                576           1,127
Cash and cash equivalents at beginning of period                   9,527           8,097
                                                           --------------    ------------
Cash and cash equivalents at end of period                   $    10,103      $    9,224
                                                           ==============    ============
</TABLE>
See accompanying notes 


<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
LAW COMPANIES GROUP, INC.


NOTE 1 - There have been no significant  changes in the  accounting  policies of
the Company during the periods  presented.  For a description of these policies,
see Note 1 of Notes to  Consolidated  Financial  Statements  for the year  ended
December 31, 1997 in the Company's Annual Report on Form 10-K for the year ended
December 31, 1997 (the "Form 10-K"). 

NOTE 2 - The unaudited condensed  consolidated  financial  statements  presented
herein have been prepared in accordance  with the  instructions to Form 10-Q and
do not include all of the information and note disclosures required by generally
accepted accounting  principles.  These statements should be read in conjunction
with the Consolidated Financial Statements and Notes for the year ended December
31, 1997  included in the Form 10-K.  The  accompanying  condensed  consolidated
financial  statements  at and for the quarter and six months ended June 30, 1998
and 1997 have not been  audited  by  independent  auditors  in  accordance  with
generally  accepted  auditing  standards,  but in the opinion of 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, 1998 may not be  indicative of the results
that may occur during the year ending December 31, 1998.

NOTE 3 - On January 15, 1998, the Company  refinanced its credit facilities into
one credit  facility  with a global  bank.  For a  description  of these  credit
facilities,  see Note 4 of Notes to  Consolidated  Financial  Statements for the
year ended December 31, 1997 in the Company's Form 10-K.

NOTE 4 - As of January 1, 1998,  the  Company  adopted  Statement  of  Financial
Accounting Standards No. 130, Reporting  Comprehensive Income ("SFAS 130"). SFAS
130 establishes new rules for the reporting and display of comprehensive  income
and its components; however, the adoption of this Statement had no impact on the
Company's net income or shareholders' equity. SFAS 130 requires foreign currency
translation  adjustments or other  adjustments,  if any, which prior to adoption
were  reported  separately  in  shareholders'  equity  to be  included  in other
comprehensive income.

During  the  first  six  months of 1998 and  1997,  total  comprehensive  income
amounted to $3,000,000 and $1,612,000,  respectively.  For the second quarter of
1998 and  1997,  total  comprehensive  income  was  $1,227,000  and  $1,101,000,
respectively.


<PAGE>
<TABLE>
<CAPTION>
NOTE 5 - Computation of Earnings Per Share


                            LAW COMPANIES GROUP, INC. 
                        COMPUTATION OF EARNINGS PER SHARE
                      (in thousands, except per share data)

                                                   For the Quarter Ended June 30,       For the Six Months Ended June 30,
                                                 -----------------------------------------------------------------------------
                                                       1998              1997                1998              1997
                                                 ---------------------------------------------------------------------------
<S>                                              <C>                <C>                <C>               <C> 
Numerator:
   Net income                                    $   1,765          $    968           $     3,006       $     1,874
   Preferred stock dividends and accretion            (282)             (175)                 (564)             (175)
                                                 ---------------------------------------------------------------------------
   Numerator for basic earnings per share -
    income available to common shareholders          1,483               793                 2,442             1,699

   Effect of dilutive securities:
      Preferred stock dividends and accretion          282               175                   282               175
                                                 ---------------------------------------------------------------------------
      Numerator for diluted earnings per
     share - income available to common
     shareholders                                $   1,765          $    968           $     2,724       $     1,874

Denominator:
   Denominator for basic earnings per share -
    weighted-average shares                          1,893             1,892                 1,893             1,884

   Effect of dilutive securities:
       Employee stock options                           79                23                    74                13
       Other stock options                              91                 -                    48                 -
       Convertible preferred stock                     957               578                   478               289
       Common stock warrants                             -                 -                   168                 -
                                                 ---------------------------------------------------------------------------

   Dilutive potential common shares                  1,127               601                   768               302
                                                 ---------------------------------------------------------------------------

      Denominator for diluted earnings per
      share-adjusted weighted-average shares         3,020             2,493                 2,661             2,186
                                                 ===========================================================================

Basic earnings per common share                  $     .78          $    .42           $      1.29       $       .90
                                                 ===========================================================================

Diluted earnings per common share                $     .58          $    .39           $      1.02       $       .86
                                                 ===========================================================================


</TABLE>



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

The  following  table  sets  forth,  for  the  quarters  and six  month  periods
indicated, (i) the percentage of net fees represented by certain items reflected
in the  Company's  condensed  consolidated  statements  of  income  and (ii) the
percentage  increase or decrease in each of such items in the 1998  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.
<TABLE>
<CAPTION>


                                          Qtr to Qtr                                  Year to Year
                                            Dollar                                       Dollar
                  Quarters Ended           Increase       Six Month Periods Ended       Increase
                     June 30,             (Decrease)              June 30,             (Decrease)
                --------------------   ---------------   ------------------------   ----------------
                   1998      1997       1998 vs  1997       1998         1997        1998 vs  1997
                ---------  ---------   ---------------   -----------  -----------   ----------------
<S>                <C>      <C>            <C>              <C>          <C>               <C>
Net fees           100.0%   100.0%         (1.3%)           100.0%       100.0%            (1.9%)

Gross profit        58.5%    58.7%         (1.7%)            58.7%        58.8%            (2.1%)

Indirect costs 
  and expenses      52.5%    54.0%         (4.2%)            53.1%        54.2%            (3.9%)

Operating income     6.1%     4.7%         27.1%              5.6%         4.7%            18.9%

Net income           2.6%     1.4%         82.3%              2.2%         1.4%            60.4%


</TABLE>


Results of Operations

Consolidated  net fees of  $134.8  million  for the  first  six  months  of 1998
decreased  1.9% from net fees of $137.4 million for the same period in 1997. For
the second  quarter of 1998,  net fees of $69.0 million  decreased 1.3% from net
fees of $70.0 million in the second quarter of 1997. Net fees from United States
operations decreased 1.2% from $89.0 million for the first six months of 1997 to
$87.9  million  for the  same  period  in  1998.  Net fees  from  United  States
operations for the second  quarter  decreased 1.1% from $45.6 million in 1997 to
$45.1 million for the same period in 1998. United States net fees continue to be
negatively  impacted by increased  competitive  pressures  in the  environmental
markets.  Reduced federal appropriations for defense-related  projects have also
adversely  impacted  the  Company's  net fees  from  government  markets.  These
decreases were largely offset by ongoing  improvements  in business  development
initiatives,  including sales and marketing programs introduced over the last 12
months.

The  International  Group's net fees for the first six months of 1998  decreased
3.1%  from  $48.4  million  in 1997 to $46.9  million in 1998.   For the  second
quarter, the International Group's net fees decreased 1.6% from $24.4 million in
1997 to $24.0  million.  This  quarter to quarter  decrease is  attributable  to
continued reductions in government  expenditures in the United Kingdom resulting
in a lower volume of public sector work.



<PAGE>
The  Company's  gross  profit  margin of 58.7% for the first six  months of 1998
decreased  slightly  compared  to 58.8% for the same  period in 1997.  The gross
profit margin for the second  quarter of 1998 of 58.5% also  decreased  slightly
compared to 58.7% for the previous  year.  The gross  profit  margin from United
States operations  increased slightly to 65.0% over the first six months of 1998
from 64.8% for the same  period in 1997.  The small  improvement  in U.S.  gross
margin reflects the Company's continuing drive to proactively manage and improve
project  management  discipline,  operating  procedures,  and  service  delivery
quality.  The International  Group's gross profit margin decreased from 47.9% in
the first six months of 1997 to 47.0% for the same period in 1998. This decrease
was  primarily  due  to  project  performance  issues  combined  with  increased
competition in international markets. 

Indirect  costs and expenses were $71.5  million,  or 53.1% of net fees, for the
first six months of 1998, compared with $74.4 million, or 54.2% of net fees, for
the same period in 1997.  This decrease of 3.9% is attributable to the continued
positive  impact of the Company's  labor  utilization  improvements  and expense
reduction  initiatives.  The  Company's  drive to lower  real  estate and office
occupancy  costs  continued  over the first six  months of 1998,  with  positive
results.

Interest  expense  for the first six months and second  quarter of 1998 was $2.2
million and $1.1 million,  respectively.  This  compares to interest  expense of
$2.0  million and $1.0 million for the same  periods of 1997.  This  increase is
attributable  to higher  average  outstanding  debt over the first six months of
1998.  Interest rates charged on bank  borrowings,  however,  have improved over
rates charged in the first half of 1997. The amortization of deferred  financing
costs declined  significantly (from $0.6 million in the first six months of 1997
to $0.06  million  during the same  period of 1998)  reflecting  the  successful
efforts to negotiate a bank credit  facility with reduced fees and related legal
costs. This new credit facility was obtained in January of 1998. 

The  effective  income  tax rate was 46.0% for the first six months of both 1998
and 1997. The effective tax rates were higher than the statutory federal rate of
34% due primarily to the effect of state income taxes and certain  nondeductible
expenses.

For the first six months of 1998, the Company recorded net income of $3,006,000,
or $1.29 per common  share  (basic),  compared to net income of  $1,874,000,  or
$0.90 per common share (basic),  for the same period of 1997. Net income for the
second  quarter  of 1998 was  $1,765,000,  or $0.78 per  common  share  (basic),
compared to net income of $968,000,  or $0.42 per common share (basic),  for the
second quarter of 1997.

Currency Translation

The translation of the Company's foreign subsidiaries' financial statements into
U.S.  dollars is done in  multiple  steps.  First,  all foreign  operations  are
measured into the functional currencies of the foreign  subsidiaries'  operating
environments  by  utilizing a  combination  of  current,  monthly  average,  and
historic  exchange  rates,  with  translation  impacts  included in income.  The
foreign  subsidiaries'  functional currency financial  statements are translated
into U.S. dollars,  the Company's  reporting  currency,  utilizing month-end and
monthly  average  exchange  rates,  resulting in an adjustment to  shareholders'
equity. In addition,  transactions denominated in different currencies result in
exchange  gains or losses,  which are included in income.  The impact of foreign
currency  translation  and  exchange  transactions  included  in income  was not
significant  over the first six months of 1998. The translation of the Company's
foreign  subsidiaries  for the first six months of 1998  resulted in a change of
$9,000 in the Foreign Currency Translation Adjustment component of shareholders'
equity.  This small  fluctuation was caused by a slight decrease in the strength
of the U.S. dollar relative to the pound sterling from December 31, 1997 to June
30, 1998, partially offset by a strengthening of the U.S. dollar relative to the
South African rand over the same period.



<PAGE>
Debt and Short-term Borrowings

The Company reported debt and short-term borrowings of $47.1 million at June 30,
1998,  compared  to $45.6  million at December  31,  1997.  Debt and  short-term
borrowings as a percentage of total capitalization amounted to 57.3% at June 30,
1998, compared to 61.0% at December 31, 1997.

On January 15, 1998,  the Company  refinanced its credit  facilities  (the "1998
Facility") with a bank with which the Company had no previous relationship.  For
a description of these credit  facilities,  see Note 4 of Notes to  Consolidated
Financial  Statements for the year ended December 31, 1997 in the Company's Form
10-K. The 1998 Facility bears a three-year  term expiring in January 2001,  with
two  one-year  extension  periods at the  Company's  option.  The 1998  Facility
includes certain  restrictions  relating to, among other things,  limitations on
capital  expenditures  and  achievement  of certain  leverage  and fixed  charge
ratios,  as well as other customary  covenants.  The 1998 Facility is secured by
substantially  all of the  assets of the  Company's  United  States  and  United
Kingdom operating subsidiaries. See also "Liquidity and Capital Resources".

Liquidity and Capital Resources

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

Prior to 1995, certain of the Company's  subsidiaries filed their federal income
tax returns on the cash basis of accounting.  Effective  January 1, 1995,  these
subsidiaries  changed  their method of  accounting  from the cash to the accrual
method for federal income tax purposes. Accordingly,  previously deferred income
of  approximately  $47.0  million at January 1, 1995 will be included in taxable
income over a four-year period, which began in 1995, resulting in an accelerated
tax liability of $16.0 million.  The Company will make the final payment of this
liability in the form of additional  income tax payments of approximately  $2.25
million  during the  second  half of 1998  related to this  change in income tax
accounting.

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 1998,  15,248
shares were traded out of the Plan totaling $291,000.

On May 6, 1997,  the  shareholders  of the  Company  authorized  and  approved a
transaction  between the Company and Virgil R.  Williams and James M.  Williams,
Jr., each a director of the Company (collectively, the "Investors"), pursuant to
which the  Company  sold to the  Investors  (including,  in the case of James M.
Williams,  a family  partnership  that he controls) a  combination  of Preferred
Stock,  Common Stock  warrants,  and options to purchase  shares of Common Stock
(the "Options").  The Options are eligible to be exercised in various quantities
and at various  prices  through  December 31, 2006. On June 25, 1998, Virgil  R.
Williams  and the James M.  Williams  Family  Partnership  exercised  options to
purchase an  aggregate  of 175,000  shares of the  Company's  Common Stock at an
exercise price of $16.50 per share  The proceeds of $2.9 million received by the
Company  will be  invested  in  initiatives  to further  reduce  real estate and
insurance costs as well as fund  improvements in technology  and increased sales
and marketing activities.

Cash Provided by Operations

Cash  provided by  operations  over the first six months of 1998 of $1.6 million
decreased  from $2.3 million  provided by  operations in the first six months of
1997.  This  decrease  was  primarily  due  to  increased  net  working  capital
requirements  in the first six months of 1998 compared to the same period in the
prior year.




<PAGE>
Capital Expenditures

Capital expenditures for the first six months of 1998 were $2.7 million compared
to $4.8 million for the first six months of 1997. This decrease was in line with
the Company's  1998 capital  expenditures  plan. In order to continue to enhance
productivity and potentially increase earnings,  the Company has continued,  and
will continue,  its capital  spending  programs,  particularly  for computer and
other  technology-related  equipment.  The  Company  believes  that the limit of
capital  spending  imposed by its credit  facility  ($7.0  million  per year) is
sufficient to meet foreseeable requirements.

Dividends

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 Preferred Stock and permitted by the 1998 credit facility,
the  Company  paid  dividends  to the  holders  of the  Preferred  Stock.  These
dividends totaled $0.4 million,  or $0.42 per preferred share for the six months
ended  June 30,  1998 and $0.2  million,  or $0.21 per  preferred  share for the
second quarter of 1998.

Year 2000 Consequences

As the  Company's  core  business  services are  engineering  and  environmental
science professional  consulting services, the delivery of these services is not
critically dependent on any mainframe,  mini-computer or personal computer based
applications.  Where computer  applications  are used to support the delivery of
services to clients,  the applications  are largely personal  computer based and
essentially year-2000 compliant.

Of  the  Company's   administrative  support  systems  that  are  not  year-2000
compliant,  the Company does not  anticipate  adverse  difficulties  or material
costs associated with migrating to year-2000  compliant systems.  Implementation
plans for compliant systems have been developed and are currently being executed
so that all administrative support systems will be fully  year-2000 compliant by
mid-1999.

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.  When used in this report, the
words "may," "could," "should," "would,"  "believe,"  "anticipate,"  "estimate,"
"expect,"  "intend,"  "plan" and similar  expressions  are  intended to identify
forward-looking statements. 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 the factors  described in the
Company's   filings   with  the   Securities   and  Exchange   Commission   (the
"Commission"),  as well as general economic and regulatory conditions in each of
the  geographic  regions  served by the Company and industry  trends could cause
actual  results or outcomes to differ  materially  from those  expressed  in any
forward-looking  statements of the Company. Any forward-looking statement speaks
only as of the date of this report and the Company  undertakes  no obligation to
update  any  forward-looking  statement  or  statements  to  reflect  events  or
circumstances  after the date on which such  statement is made or to reflect the
occurrence of an unanticipated  event. New factors emerge from time to time, and
it is not possible for the Company to predict all of such factors.  Further, the
Company  cannot  assess the impact of each such  factor on its  business  or the
extent to which any factor, or combination of factors,  may cause actual results
to differ materially from those contained in any forward-looking statements.

Effect of Inflation

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. 


<PAGE>
PART II.  OTHER INFORMATION

ITEM 2.     CHANGES IN SECURITIES

On May 6, 1997,  the  shareholders  of the  Company  authorized  and  approved a
transaction  between the Company and Virgil R.  Williams and James M.  Williams,
Jr., each a director of the Company (collectively, the "Investors"), pursuant to
which the  Company  sold to the  Investors  (including,  in the case of James M.
Williams,  a family  partnership  that he controls) a  combination  of Preferred
Stock,  Common Stock  warrants,  and options to purchase  shares of Common Stock
(the "Options").  The Options are eligible to be exercised in various quantities
and at various  prices through  December 31, 2006. On June 25,  1998, Virgil  R.
Williams  and the James M.  Williams  Family  Partnership  exercised  options to
purchase an  aggregate  of 175,000  shares of the  Company's  Common Stock at an
exercise price of $16.50 per share. The proceeds of $2.9 million received by the
Company  will be  invested  in  initiatives  to further  reduce  real estate and
insurance costs as well as fund improvements in  technology and  increased sales
and marketing activities.

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

The Company's  Annual Meeting of Shareholders  was held May 11, 1998 in Atlanta,
Georgia for the purpose of considering and voting on a proposal (the "Proposal")
to elect six (6) common  directors  and one (1) swing  director  to serve on the
Board of Directors of the Company until the 1999 Annual  Meeting and until their
successors are duly elected and qualified.

Each nominee for  director  was elected as a director at the meeting.  The votes
for each of the  nominees  for  director  included in the  Proposal are detailed
below:

       Directors                                      For              Withheld
----------------------------------------           ---------          ---------
Bruce C. Coles                                     1,388,220            41,911
Peter D. Brettell                                  1,386,816            43,315
Robert B. Fooshee                                  1,373,481            56,650
Walter T. Kiser                                    1,368,122            62,009
Frank B. Lockridge                                 1,377,485            52,646
Clay E. Sams                                       1,378,235            51,896
John Y. Williams                                   1,376,295            53,836


Additionally,  the Company's Articles of Incorporation  provide that the holders
of the  Company's  outstanding  Preferred  Stock have the right to elect six (6)
preferred  directors.  On February  20, 1998,  the holders of  Preferred  Stock,
acting by unanimous written consent, elected the following persons as directors:
Joe A. Mason, Thomas D. Moreland,  Steven Muller, James M. Williams,  Michael D.
Williams, and Virgil R. Williams.

ITEM 5.  OTHER INFORMATION 

Shareholder Proposals

The  Securities  and Exchange  Commission  has made recent  changes to the proxy
rules in Regulation 14A under the  Securities  Exchange Act of 1934, as amended,
including  Rule  14a-4  and Rule  14a-5.  Shareholders  are  entitled  to submit
proposals on matters  appropriate  for  shareholder  action  consistent with the
rules and  regulations of the  Securities  and Exchange  Commission and with the
Company's Bylaws.

In connection with a  shareholder's  proposal to be presented at the 1999 Annual
Meeting of Shareholders  where such  shareholder has not sought inclusion of the
proposal in the Company's  proxy statement and form of proxy, a proxy granted to
the Company's management will give management discretionary authority to vote on
any such shareholder proposal at the 1999 Annual Meeting of Shareholders if:

         (i)  the Company's Corporate Secretary,  Law Companies Group, Inc., 
         1105 Sanctuary Parkway, Suite 300, Alpharetta, Georgia 30004, receives
         such proposal after February 17, 1999; or

         (ii) if the Company's  Corporate Secretary receives such proposal on or
         before February 17, 1999 and management  describes the proposal and how
         it intends to exercise its discretionary  voting authority with respect
         to such  proposal  in its proxy  statement  relating to the 1999 Annual
         Meeting of  Shareholders;  provided that, even if the Company  includes
         such information in its proxy statement,  the Company's  management may
         not exercise its discretionary voting authority if, among other things,
         the  shareholder   submitting  the  proposal   provides  the  Company's
         Corporate  Secretary with a written statement on or before February 17,
         1999 that such  shareholder  intends to deliver a proxy  statement  and
         form of proxy to the  number  of  shareholders  required  to carry  the
         proposal.



ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

                  (a)   Exhibits

                           27.00            Financial Data Schedule

                  (b)   Reports on Form 8-K

                           None


<PAGE>
                                    SIGNATURE


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


LAW COMPANIES GROUP, INC.




/s/ R. B. Fooshee
-----------------------------------------------------------
Robert B. Fooshee
Chief Financial Officer and Treasurer


Dated:    August 14, 1998