UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K
(Mark One)
[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934
         For the fiscal year ended DECEMBER 31, 1999
                                   -----------------
                                            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: 1-11782

                           ESQUIRE COMMUNICATIONS LTD.
                           ---------------------------
             (Exact name of Registrant as specified in its charter)

         DELAWARE                                    13-3703760
--------------------------------                     ----------
(State or other jurisdiction of                      (I.R.S. Employer
incorporation or organization)                       Identification No.)

750 B STREET, SAN DIEGO, CALIFORNIA                  92101
-----------------------------------------            -----
(Address of principal executive offices)             (Zip Code)

Registrant's telephone number, including area code:  (619) 515-0811
                                                     --------------

Securities registered pursuant to Section 12(b) of the Act:

                                                     NAME OF EACH EXCHANGE
TITLE OF EACH CLASS                                  ON WHICH REGISTERED
---------------------------------------              -------------------------
Common Stock, $.02 par value                         Boston Stock Exchange

Securities registered pursuant to Section 12(g) of
 the Act:                                           Common Stock, par value $.02

Indicate by check mark whether 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 Registrant was required
to file such reports) and (2) has been subject to such filing requirements for
the past 90 days.    Yes X  No __

As of March 1, 2000, the aggregate market value of the voting stock held by
non-affiliates of the registrant, based on the closing price, was approximately
$2,607,000.

As of March 1, 2000, the registrant had 5,334,479 shares of Common Stock
outstanding.

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

<PAGE>

                                    BUSINESS

GENERAL

          Esquire Communications Ltd. (the "Company") is the nation's leading
provider of court reporting services to law firms, insurance companies and
corporations through Company-owned offices located in 24 markets in 11 states
and the District of Columbia. In certain markets, the Company also provides
permanent and temporary staffing of legal and financial professionals, legal
video services, records retrieval, process service and document depository
services. The Company also has contractual relationships with approximately 400
independent court reporting, legal video and process service firms through its
DepoNet(R) marketing network, which together with Company-owned offices enables
the Company to deliver these services to its clients in every market within the
United States.

          The Company, largely since its inception, has experienced a deficiency
in working capital and recurring operating losses. The Company is unable to
repay principal, in the amount of $82.8 million due January 3, 2000 under its
Revolving Loan Agreement (the "Loan Agreement") and suspended interest payments
due thereunder effective November 1999. The lenders to the Loan Agreement have
agreed to both forebear receiving the payment of interest for the period
November 1999 to April 14, 2000 in the amount of approximately $3.3 million and
extend the maturity date of the Loan Agreement to April 14, 2000. The loan is
presently due and payable.

          The Company, presently and for the foreseeable future, is unable to
pay interest or principal amounts outstanding under the Loan Agreement and is
currently negotiating with the lenders thereunder to continue to forebear
receiving principal and interest or otherwise restructure the terms thereof. In
the event the Company is unable to successfully renegotiate an appropriate
period of continued forebearance or other satisfactory restructuring of the Loan
Agreement, the lenders thereunder have the right to accelerate the loan and
exercise their remedies under the loan documents, including the foreclosure of
their security interest in the Company's assets.

          Additionally, the Company may not be able to fund operations or repay
certain other obligations as they become due without increased credit facilities
and/or rescheduling payments. The Company's ability to acquire increased credit
facilities and/or reschedule payment terms is highly uncertain and cannot be
assured.

          One of the potential outcomes of the events described above could
result in the ultimate liquidation of the Company. The accompanying financial
statements do not include any adjustments that might be necessary should the
Company be unable to continue as a going concern.

          Between 1993 and 1998, the Company pursued a strategy of consolidating
the highly fragmented court reporting industry. In pursuit of this strategy,
since 1997 the Company acquired 42 court reporting companies and 3 providers of
permanent and temporary legal and financial professionals. Certain of those
acquisitions have performed significantly below expectations, such that the
associated "excess of purchase price over assets acquired" (goodwill), in the
amount of $25.7 million, has been deemed to be permanently impaired as of
December 31, 1999. Goodwill associated with acquisitions with remote potential
to achieve profitability in the foreseeable future has been written off.
Goodwill associated with under-performing acquisitions has been written down to
estimated recovery value. The Company continuously evaluates recoverability of
goodwill and may be required to take future impairment charges.

INDUSTRY

          The legal support services industry is comprised of a broad range of
services that assist legal professionals in all aspects of their practice. The
Company provides services primarily in two components within the legal support
services industry: court reporting and temporary and permanent legal staffing,
and to a lesser extent process services, document depository and records
retrieval within the legal support services industry.

          Based on available industry data, the Company believes that the market
for court reporting and temporary and permanent legal staffing services exceeds
$5 billion and is highly fragmented with more than 1,000 independent court
reporting and over 400 legal staffing firms. The Company believes that growth in
the legal support services market is characterized by several trends, including
an increase in: (i) efforts by law firms and corporations, especially insurance
companies, to reduce legal expenses; (ii) the outsourcing of legal support
services to companies that specialize in providing such services; (iii) the use
of lawyers on a temporary basis by law firms and corporations; (iv) the volume
and complexity of litigation; and (v) the national scope of litigation,
particularly in class action and product liability lawsuits.

          Legal support services, such as court reporting, records retrieval and
temporary and permanent legal staffing, traditionally have been, and continue to
be, marketed to law firms. Increasingly, insurance companies and corporations,
who ultimately pay the cost of legal support services used by their counsel, are
seeking to control and reduce the costs associated with lawsuits, centralize
their purchasing decisions and ensure consistent service quality. As a result,
these companies are more frequently selecting the providers of legal support
services themselves, rather than delegating that decision to the law firms
engaged to represent them.

          The highly fragmented legal support services industry consists
primarily of local and regional firms that typically provide a single or limited
number of services. Legal support businesses often lack a broad range of
services, regional or national coverage or effective marketing programs and,
therefore, are unable to meet the needs of large, geographically dispersed
clients.

LEGAL SUPPORT SERVICES OFFERED BY THE COMPANY

          The Company provides court reporting and permanent and temporary
placement of legal and financial personnel and to a significantly lesser extent,
records retrieval, process services and document depository services as
described below.

          Technology is, and continues to, rapidly transform both the delivery
of and the legal support services and products offered by the Company. The
Company anticipates the need to allocate significant resources to evolving
technologies, including electronic delivery capabilities, necessary to remain
competitive and ensure a pipeline of differentiating legal support products and
services, as well as to recruiting and training highly qualified technology
differentiated court reporters and staff.

          COURT REPORTING. Court reporting is the verbatim transcription of the
spoken word into the written word, generally from sworn legal testimony. The
industry is divided into two distinct sectors: (i) the recording of proceedings
in court, or "official" court reporting and (ii) all other private sector court
reporting. Official court reporting is performed by civil servant court
reporters employed by local, state or federal courts. All other private sector
court reporting is performed outside the courtroom by free-lance court
reporters, who are self-employed or employees of, or have an independent
contractor relationship with, a court reporting agency. Through the use of
independent contractors, the Company provides court reporting services for legal
proceedings (typically civil proceedings) outside the courtroom and, to a lesser
extent, the recording of other events such as hearings, arbitrations, board
meetings, stockholders' meetings, conferences, conventions and media events.

          Most states require court reporters to be licensed, which requires
them to attend a certified court reporting school and pass required
examinations. Court reporting requires a skilled professional capable of
transcribing speech, which generally approximates 200 words per minute, using
shorthand symbols. Most of the Company's court reporters use a computer-aided
transcription ("CAT") system for transcribing the spoken word into phonetic
symbols. The shorthand notes, which can be recorded in both paper and electronic
form, are translated and edited to produce a final transcript. CAT systems
enable the computer to interpret the shorthand symbols and translate them into
English.

          Technology has, and is expected to continue to, transform the products
and services offered by court reporting companies. Commonly available
"value-added" services include:

     o    LEGAL VIDEO SERVICES. The Company provides a staff of certified legal
          video specialists using broadcast quality equipment to record
          depositions, presentations and other events. The Company provides
          editing, indexing and courtroom playback that enables the client to
          search time-coded transcripts and retrieve key segments of testimony
          with software that synchronizes the video with the text of the
          transcript.

     o    REALTIME TRANSCRIPTION. The Company's court reporters provide instant
          transcripts of testimony on laptop computer monitors, which may be
          located where the testimony is taking place, as well as simultaneously
          at remote locations. This system also allows attorneys to receive a
          transcript of the testimony on diskette at the conclusion of the
          proceeding.

     o    INTERACTIVE REALTIME TRANSCRIPTION. Interactive realtime transcription
          enables an attorney to connect a computer to the court reporter's
          system using specialized software which enables the attorney to review
          earlier testimony and make notes during or immediately following the
          deposition.

     o    TEXT SEARCH AND RETRIEVAL PROGRAMS. The Company uses specialized
          software that enables the client to search, store, index and manage
          transcripts and other documents to locate a word or portion of text
          quickly and easily.

          PERMANENT AND TEMPORARY PLACEMENT OF LEGAL AND FINANCIAL
PROFESSIONALS. The Company provides permanent and temporary staffing of legal
and financial professionals as a result of the Company's 1998 acquisitions of
three New York-based executive search firms. The Company is engaged and paid by
the hiring firm or corporation on either an exclusive or non-exclusive basis
pursuant to arrangements that may include a non-refundable retainer paid to the
Company or that entitle the Company to a fee contingent upon the successful
placement of a candidate with the client. Temporary attorney or paralegal
assignments may range from one day to more than a year and may involve one
professional or a team of professionals.

          RECORDS RETRIEVAL. Records retrieval services are labor-intensive and
involve the preparation, handling, tracking and delivery of large numbers of
written documents from public or private sources, a significant portion of which
involves records acquired on behalf of insurance companies and their counsel,
for litigation or other legal proceedings.

          PROCESS SERVICE. Process service includes the preparation and delivery
of written notices and subpoenas and the monitoring of the recipient's response.

          DOCUMENT DEPOSITORY SERVICES. The Company offers document depository
services, which include document storage, archiving, indexing and retrieval of
documents in a hardcopy or digital format. The Company is able to quickly
retrieve specific documents on demand for use by its clients in various legal
proceedings.

ACQUISITION STRATEGY

          Founded in 1988, the Company's predecessor was created to consolidate
the highly fragmented court reporting industry.

          Since 1997, the Company has acquired 42 court reporting companies and
3 providers of permanent and temporary staffing of legal and financial
professionals. The Company has ceased its acquisition strategy and over the near
term intends to focus on building the infrastructure and operating platforms
necessary to integrate the existing acquired businesses. The Company does not
contemplate making any acquisitions in the foreseeable future.

          The following table summarizes the Company's acquisition activity
since 1997. All acquisitions were of court reporting firms, except as otherwise
indicated.


                                   DATE OF
ACQUIRED COMPANY                   ACQUISITION       MARKETS SERVED
-------------------------------    -------------     ---------------------

Nevill & Swinehart..............   January 1997      Southern California
Pelletier & Jones...............   January 1997      Southern California
Wolfe, Rosenberg & Associates...   May 1997          Chicago
Krauss, Katz & Ackerman.........   June 1997         Philadelphia
American Network Services
  (DepoNet).....................   June 1997         Nationwide Referral Network
Hyatt Court Reporting...........   August 1997       Denver
Kim Tindall & Associates........   October 1997      San Antonio
Associates/Certified Reporting..   October 1997      Fort Lauderdale
County Reporting................   October 1997      Fort Lauderdale
Justice Reporting...............   October 1997      Fort Lauderdale
Lauderdale Reporting............   October 1997      Fort Lauderdale
Merit Reporting.................   October 1997      Fort Lauderdale
Haynes & Harpster Court
  Reporters.....................   October 1997      Southern California
Cynthia Varelli.................   October 1997      Chicago
Jurist-Begley Reporting Services   November 1997     Philadelphia
Henry Jacobs & Associates.......   December 1997     New York City
Certified Reporting Company.....   December 1997     New York City
A&A Court Reporters.............   January 1998      Houston
Brody & Geiser..................   January 1998      Northern New Jersey
Kerns & Gradillas...............   January 1998      Southern California
Jewelinski Court Reporters......   February 1998     Southern California
Friedli, Wolff & Pastore........   February 1998     District of Columbia
VerbaVolant.....................   March 1998        New York City
McGuire's Reporting Service.....   March 1998        Chicago
Morrissy & Others...............   March 1998        Chicago
Pollock & Upshaw................   April 1998        San Antonio
Atlantic Court Reporting........   April 1998        Fort Lauderdale
Bright & Associates.............   May 1998          Austin
Riggleman, Turk & Nelson........   May 1998          Baltimore
A-L Associates(1)/A-L
  Attorneys on Assignment(2)....   May 1998          New York City
Rubin Reporting.................   May 1998          Chicago
Summit Reporting(3).............   June 1998         Houston
Hamilton-Legato Deposition
  Centers.......................   June 1998         Michigan
Cooksey-Regal Deposition
  Reporters.....................   July 1998         Sacramento
Messenger and Associates........   July 1998         Dallas
Mudrick Witt Professional
  Reporting.....................   July 1998         South Florida
Sandra S. Phillips and
  Associates....................   August 1998       Sacramento
Gregory & Gregory Associates(4)/
  Gregory & Gregory Staffing(2).   August 1998       New York City
Lieberman & Chaim...............   October 1998      Philadelphia
Precise/Verbatim Reporting......   November 1998     Ft. Lauderdale
Mannion Reporting...............   November 1998     Southwest New Jersey
The Granite Group(2)............   December 1998     New York City
CAT-LINKS Incorporated(5).......   January 1999      Southern California
LawTek, Inc.....................   January 1999      Fort Lauderdale
Mudrick-Witt Legal Video
  Services, Inc.................   June 1999         South Florida

----------

(1)  Retained Executive Search.

(2)  Temporary legal staffing services.

(3)  Includes document retrieval business.

(4)  Permanent staffing services.

(5)  Computer software development.

CLIENT RELATIONSHIPS, NATIONAL BRAND LEVERAGE, SALES AND MARKETING

          The Company believes that its clients purchase services based on a
variety of factors, the most important of which are the quality of the local
service provided, the strength of their relationship with the Company and price.
The Company's client base is comprised of more than 1,000 law firms, insurance
companies and corporations. The Company has a broad client base, and no single
client accounted for more than 2% of the Company's revenue for 1999. Clients
typically engage the Company for a single job, an entire litigation matter or
pursuant to a contractual relationship to provide ongoing legal support services
on a regional or nationwide basis.

          The Company's strategy to immediately transition the local and
regional companies it has acquired to the Esquire brand name has had mixed
results. Post acquisition success, including transition to a national brand, is
highly dependent on the motivation and participation of former owners, court
reporters, and employees of acquired companies. A number of acquisitions have
suffered significant local client erosion subsequent to acquisition, however,
the Company believes that it does enjoy significant brand equity and leverage
through its industry leadership position and ability to deliver nationwide court
reporting services. The Company's national accounts program seeks to leverage
the national brand, targeting establishing relationships with those large
national law firms, insurance providers, and corporations who value and are
seeking to centralize their purchasing decisions to control litigation costs and
ensure quality.

          In addition to the Esquire proprietary court reporting network, the
Company provides referrals for court reporting, process services, and legal and
video services through its DepoNet(R) brand. DepoNet(R) is a referral network
with contractual relationships with approximately 400 independent court
reporting, legal videography, and process service firms. DepoNet(R) targets
legal professionals who require services outside of their normal work locations
but do not have the direct ability to easily identify quality of out-of-town
providers. The Company leverages the DepoNet(R) system to service requests
through company-owned operations where available. Significant financial,
infrastructure, and management resources are necessary to revitalize and
leverage the DepoNet(R) brand and market position.

          The Company's general managers and local sales staff target regional
and local accounts, permitting the Company to capitalize on the local expertise
and client relationships of its branch office employees. The Company views its
network of independent court reporters as a potential source of new business
referrals and is evaluating programs designed to motivate court reporters to
generate additional new and repeat business. The Company solicits new business
through professional sales presentations, telemarketing, direct mail, referrals
from existing clients and advertising in a variety of local and national legal
trade publications and journals. The Company also participates in a number of
legal trade shows.

COMPETITION

          The market for legal support services is highly competitive.

          The Company competes primarily on the basis of quality, personal
relationships with clients, reputation, breadth and timeliness of service,
geographic coverage and price.

          The Company competes with numerous local and regional court reporting
and records retrieval companies, and also competes with permanent and temporary
legal staffing companies, including national temporary staffing firms. Certain
of the Company's competitors in legal staffing have substantially greater
resources and operate in broader geographic areas than the Company.

          Many larger clients retain multiple legal support and placement and
staffing service providers, which exposes the Company to continuous competition.
Furthermore, there can be no assurance that clients will continue to increase
their outsourcing of legal support and staffing services needs or that such
businesses will not bring in-house services that they currently outsource.

INDEPENDENT CONTRACTORS

          The Company provides court reporting services through the use of
independent contractors who are not employees of the Company, but are essential
to the success of the Company. Typically court reporters are contracted on a
job-by-job basis and are free to move between court reporting companies. The use
of independent contractors as court reporters is a widespread practice in the
court reporting industry. The Company has active relationships with in excess of
1,000 independent contractors.

          The Company does not pay federal or state employment taxes or withhold
income taxes with respect to these independent contractors or include such
persons in the Company's employee benefit plans. Independent court reporters are
responsible for purchasing and operating their own court reporting equipment. In
the event the Company were required to treat court reporters as its employees,
the Company could become responsible for the taxes required to be paid or
withheld and could incur additional costs associated with employee benefits and
other employee costs on both a current and retroactive basis, which could have a
material adverse effect on the Company's business, financial condition and
results of operations.

EMPLOYEES

          As of March 1, 2000, the Company had approximately 580 full-time
employees. The Company's employees are not represented by a collective
bargaining agreement. Hourly wages for the Company's temporary employees are
determined based on local market conditions. The Company pays mandated costs of
employment, including the employer's share of social security taxes, federal and
state unemployment taxes, unemployment compensation insurance, general payroll
expenses and workers' compensation insurance. The Company offers access to
various insurance programs and benefits to its temporary employees. The Company
believes its employee relations are good.

REGULATION

          Court reporters in many states and attorneys in every state are
subject to licensure requirements and to the continuing oversight by their
respective regulatory bodies, many of whom have broad discretion in interpreting
and enforcing applicable laws and regulations. The conduct of court reporters is
also subject to ethical and other restrictions imposed by state laws and
regulations. While these regulations are not directly applicable to the Company,
they affect the Company's court reporting business. Legislation has been adopted
by several states, where the Company does not currently have Company-owned
operations, and in Georgia, where the Company does have a Company-owned
operation, that prohibit the provision of services by a court reporter under any
agreement other than on a case-by-case basis. Legislation has also been enacted
or proposed in certain other states that prohibit a court reporter from being
employed by, or serving as an independent contractor for, a court reporting firm
unless a majority of the firm is owned by certified shorthand reporters. Any
such laws effectively prohibit the Company from providing court reporting
services in such states. The Company expects that there will continue to be
efforts to sponsor the adoption of similar prohibitions by legislative or
regulatory action or through the ethics codes governing the conduct of court
reporters. In addition, federal and state legislative proposals have included
limitations on the number and length of depositions or have proposed the
substitution of video tape recording for stenographic transcription of certain
legal proceedings.

          In addition, attorneys are subject to significant regulation by
committees on legal ethics and professional responsibility of the various state
and national bar associations, who, from time to time, examine and issue
opinions regarding attorney services, including the use of temporary attorneys
through a placement agency. These opinions have suggested that the payment of
fees to agencies that place temporary attorneys may constitute, in certain
circumstances, the improper splitting of legal fees with a non-lawyer. The
applicability of these opinions to the Company's business is uncertain, and
there can be no assurance that a state will not determine that the business as
conducted by the Company violates ethical or professional responsibility
regulations for attorneys. In addition, the practice of placing temporary
lawyers with a number of firms may raise conflict of interest issues under
applicable ethics codes, particularly when attorneys from the same placement
firm are placed with opposing parties, or law firms representing such parties,
in a lawsuit or business transaction.

          Although the Company believes that its existing operations, which
include an integrated offering of legal support services in one state, are in
material compliance with applicable laws, the relationships among various legal
support services are unique, and many aspects of these relationships have not
been subject to judicial or regulatory interpretations. The Company has not
sought judicial or regulatory interpretations with respect to the manner in
which it conducts and plans to conduct its business. Changes in these laws and
regulations, particularly in the states from which the Company derives most of
its revenues, could have a material adverse effect on the Company's business,
financial condition or results of operations.

ITEM 2.   PROPERTIES

          The Company leases office space in all the locations where the Company
operates. The Company leases a total of 52 offices, ranging from 800 square feet
deposition-only suites to 21,780 square feet, full-service local and regional
offices. The leases generally run for a term of five years and expire at various
dates ranging from February 28, 2000 through June 30, 2009, with annual rents
ranging from $21,900 to $430,200. The leases provide, among other things, that
the Company is responsible for its share of increases in certain utilities,
maintenance and property taxes over a base amount. The Company believes its
facilities are generally adequate for its needs and does not anticipate
difficulty replacing such facilities or locating additional facilities if needed
in the future.

ITEM 3.   LEGAL PROCEEDINGS

          The Company is a party to various claims and legal actions in the
ordinary course of business. In the opinion of management, the ultimate
disposition of these matters will not have a material adverse effect on the
Company's financial statements taken as a whole.

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

          Not Applicable
<PAGE>


                                     PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

PRICE RANGE OF COMMON STOCK

          All share and per share information set forth herein has been adjusted
to reflect the Company's one-for-two reverse stock split of its Common Stock
which occurred in November 1998. Effective May 18, 1993, the Common Stock of the
Company was listed on the Boston Stock Exchange and Nasdaq Stock Market under
the symbol "ESQS." Effective the close of business on July 27, 1999, the
Company's stock was delisted from the Nasdaq Stock Market for failure to meet
continued listing requirements. The following table sets forth for the calendar
periods indicated the high and low bid prices on the Nasdaq Stock Market for the
Common Stock for the period commencing January 1, 1998 through July 27, 1999 and
prices in the over-the-counter market thereafter. The prices set forth below do
not include retail mark-ups, mark-downs or commissions and represent prices
between dealers and are not necessarily actual transactions.

                                              HIGH               LOW
             1999

             First Quarter                     $6.75             $2.00
             Second Quarter                     6.13              1.66
             Third Quarter                      2.16               .69
             Fourth Quarter                     1.19               .41

             1998

             First Quarter                    $14.75             $9.50
             Second Quarter                    13.75             10.50
             Third Quarter                     14.50              6.50
             Fourth Quarter                     7.125             4.00


          There were approximately 110 stockholders of record of Common Stock as
of March 1, 2000. This number does not include beneficial owners holding shares
through nominee or "street" names. The Company believes that it has more than
2,000 beneficial holders of Common Stock.

DIVIDEND POLICY

          The Company has never declared or paid cash or other dividends on its
Common Stock. The declaration or payment of dividends, if any, in the future is
within the discretion of the Board of Directors and will depend upon the
Company's earnings, capital requirements, financial condition, and other
relevant factors.

          Pursuant to the terms of the Company's Series A and Series C Preferred
Stock and Loan Agreement with its lenders, the Company is prohibited from paying
cash dividends on its Common Stock. Series A and C Preferred Stock dividends
accrue at 6% and have certain liquidation priorities. The Company paid cash
dividends on its Series A Preferred Stock through October 1997. Subsequent to
October 1997, financial constraints have precluded payment of cash dividends,
which have been accrued in the amount of $2.9 million through December 31, 1999,
on either the Series A or C Preferred Stock.

          The Company presently intends to retain any earnings for use in its
business and does not anticipate declaring or paying cash dividends on its
Common Stock or Preferred Stock, which accrue at $1.5 million annually, in the
foreseeable future.


<PAGE>

ITEM 6.   SELECTED FINANCIAL DATA (000'S EXCEPT PER SHARE INFORMATION)


                            1999        1998         1997       1996       1995

Net Sales                 $144,264    $110,586     $ 53,178   $29,501   $26,781
Net Income (Loss)         $(41,380)   $ (2,093)    $ (3,157)  $  (608)  $   321
Earnings (Loss) Per Share $  (7.76)   $   (.48)    $  (1.12)  $  (.25)  $   .06
Total Assets              $123,143    $151,256     $ 82,851   $31,834   $20,573
Long Term Obligations:

 Long Term Debt (including
   current portion)        $95,060    $ 94,108     $ 49,803   $15,139   $10,239


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

INTRODUCTION

          Revenues from court reporting services are primarily derived from
services provided for recording sworn testimony at depositions and typically are
based on the number of pages transcribed, with a significant portion of revenues
being derived from the production of additional certified copies. Substantially
all of the Company's court reporting services are performed by independent
contractors. Under arrangements with independent court reporters, the Company
retains a portion of the total court reporting fee and the independent court
reporter receives the balance. The different types of court reporting services
provided by the Company yield varying profit margins, with accelerated delivery
transcripts, transcript copies and compressed transcripts providing higher
margins. In addition, profit margins vary among the different geographic markets
in which the Company operates. The Company also derives revenues from its
DepoNet(R) network, which consists, in part, of approximately 400 affiliated
firms in locations not directly served by the Company. Under contractual
arrangements with DepoNet(R) members, the Company refers court reporting and
certain other assignments to network participants for which it receives an
annual fee.

          The Company recruits and places legal professionals on a temporary or
contract basis. The Company charges its clients an hourly fee for the number of
hours worked by attorneys and paralegals placed with clients on a temporary or
contract basis. Recruiters are paid commissions based upon revenues from hourly
fee income less the direct cost of the attorneys or paralegals placed. The
Company's permanent placement recruiters are compensated on a commission basis.
Fees for successful placement of professionals typically are based upon a
percentage, approximately 25% to 30% of such professional's total compensation
earned during the year following the placement, of which 40% to 60% is
customarily paid to the individual permanent placement recruiter. This fee is
subject to a partial refund if the new employment arrangement is terminated
prior to the expiration of a negotiated period, usually three months.

SIGNIFICANT ADVERSE OPERATING AND FINANCIAL DEVELOPMENTS


          The Company, largely since its inception, has experienced a deficiency
in working capital and recurring operating losses. The Company is unable to
repay principal, in the amount of $82.8 million due January 3, 2000 under its
Loan Agreement and suspended interest payments due thereunder effective November
1999. The lenders to the Loan Agreement have agreed to both forebear receiving
the payment of interest for the period November 1999 to April 14, 2000 in the
amount of approximately $3.3 million and extend the maturity date of the Loan
Agreement to April 14, 2000. The loan is presently due and payable.

          The Company presently and for the foreseeable future, is unable to pay
interest or principal amounts outstanding under the Loan Agreement and is
currently negotiating with the lenders thereunder to continue to forebear
receiving principal and interest or otherwise restructure the terms thereof. In
the event the Company is unable to successfully renegotiate an appropriate
period of continued forebearance or other satisfactory restructuring of the Loan
Agreement, the lenders thereunder have the right to accelerate the loan and
exercise their remedies under the loan documents, including the foreclosure of
their security interests in the Company's assets.

          Additionally, the Company may not be able to fund operations or repay
certain other obligations as they become due without increased credit facilities
and/or rescheduling payments. The Company's ability to acquire increased credit
facilities and/or reschedule payment terms is highly uncertain and can not be
assured.

          One of the potential outcomes of the events described above could
result in the ultimate liquidation of the Company. The accompanying financial
statements do not include any adjustments that might be necessary should the
Company be unable to continue as a going concern.

          Between 1993 and 1999, the Company pursued an aggressive acquisition
strategy, having acquired 48 court reporting companies and three permanent and
temporary staffing companies. Of these acquisitions, three were acquired in
1996, 17 were acquired in 1997, 25 were acquired in 1998 and 3 were acquired in
1999. All but one of these acquisitions have been accounted for using the
purchase method, and a substantial portion of each acquisition's purchase price
is represented by goodwill in the amount of $121.3 million before subsequent
amortization.

          Certain of those acquisitions have performed significantly below
expectations, such that the associated "excess of purchase price over assets
acquired" (goodwill) has been deemed to be permanently impaired. Accordingly,
goodwill was written down and an associated charge recorded in the amount of
$25.7 million, as of December 31, 1999. Goodwill associated with acquisitions
with remote potential to achieve profitability in the foreseeable future has
been written off. Goodwill associated with under-performing acquisitions has
been written down to estimated recovery value. The Company continuously
evaluates recoverability of goodwill and may be required to take future
impairment charges.

RESULTS OF OPERATIONS

COMPARISON OF YEARS ENDED DECEMBER 31, 1999 AND 1998

          REVENUE. Revenue increased by approximately $33.7 million, or 30.5%,
to $144.3 million in 1999 from $110.6 million in 1998. Substantially all of the
increase was due to 1999 having a full year of revenue for all of the
acquisitions completed during 1998.

          OPERATING EXPENSES. Operating expenses increased by approximately
$23.1 million, or 36.3%, to $86.5 million in 1999 from $63.5 million in 1998.
This increase is the result of a full year of operating expenses relating to the
acquisitions completed during 1998 as well as an increase in salaries relating
to the temporary staffing business acquired in August of 1998 which has a
smaller gross profit margin than the court reporting business.

          GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative
expenses increased by approximately $16.1 million, or 43.3%, to $53.3 million in
1999 from $37.2 in 1998.

          General and administrative expenses in 1999 included charges of
approximately $7.2 million which included approximately $2.8 million reserve for
increased doubtful accounts and approximately $1.5 million of severance costs
associated with certain terminated executive management and other personnel. The
remaining increase was largely due to expenses related to acquisitions completed
during 1998, consisting of payroll and occupancy expenses, as well as increased
sales compensation and administrative support expenses due to increased revenue
levels. General and administrative expenses in 1998 included approximately $0.8
million relating to the write-off of costs associated with its abandoned
secondary offering.

          Excluding the foregoing items, general and administrative expenses
increased by approximately $9.7 million, or 26.6%, to $46.1 million in 1999 from
$36.4 million in 1998. The increase was largely due to expenses related to the
acquisitions completed during 1998, consisting of payroll and occupancy
expenses, as well as significantly increased overheads, including sales
compensation and administrative support expenses to manage and operate the
increased acquisitions and associated increased revenue levels.

          DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense
increased by approximately $2.0 million, or 41.4%, to $6.7 million in 1999 from
$4.8 million in 1998. This increase was due primarily to additional amortization
expense resulting from the acquisitions completed in 1998 and the change in
amortization life for goodwill to 25 years effective October 1, 1999. A
significant component of the amortization expense relates to goodwill, which is
the cost in excess of fair market value of net tangible assets of acquired
businesses.

          ASSET WRITEDOWN AND OTHER CHARGES. During 1999, the Company recognized
asset write down and other charges of $27.0 million, including $25.7 million due
to the impairment of goodwill. Goodwill associated with acquisitions with remote
potential to achieve profitability in the foreseeable future has been written
off. Goodwill associated with underperforming acquisitions has been written down
to estimated recovery value. The remaining $1.3 million charge related to the
write-off of $1.0 million associated with discontinued capitalized information
system development and $0.3 million due to the write-off of fixed assets.

          INCOME FROM OPERATIONS. Income from operations decreased by
approximately $34.5 million, or 670.0%, to a loss of $29.3 million in 1999 from
income of $5.1 million in 1998. Excluding the $27.0 million charge relating to
goodwill impairment and other asset write-offs taken in 1999 and the $0.8
abandoned secondary offering charge in 1998 discussed above, income from
operations decreased by $8.2 million to a loss of $2.3 million, or 139.0%, in
1999 from income of $5.9 million, or 5.3%, in 1998. The $7.2 million of charges
recognized in 1999 and discussed above under General and Administrative
expenses, accounted for 20.9% of the change in income from operations from 1998
to 1999.

          OTHER EXPENSE, NET. Other expense, net, consisting primarily of
interest expense, increased by approximately $4.0 million to $10.6 million in
1998 from $6.6 million in 1998 due to the full year impact of the debt incurred
to purchase the 1998 Acquisitions and additional interest required under the
Company's Loan Agreement.

          PROVISION FOR INCOME TAXES (BENEFIT). The Company recorded a tax
benefit of approximately $78,000 in 1999 and $589,000 in 1998 as a result of tax
refunds generated by the carryback of its tax loss generated in 1998 and 1997.

COMPARISON OF YEARS ENDED DECEMBER 31, 1998 AND 1997

          REVENUE. Revenue increased by approximately $57.4 million, or 108.0%,
to $110.6 million in 1998 from $53.2 million in 1997. Substantially all of the
increase was due to the effect of acquisitions completed after June 30, 1997.

          OPERATING EXPENSES. Operating expenses increased by approximately
$33.2 million, or 109.6%, to $63.5 million in 1998 from $30.3 million in 1997.
This increase was consistent with the increase in revenue. Operating expenses as
a percentage of revenue increased to 57.4% in 1998 from 57.0% in 1997. This
small increase is the result of higher operating expenses, principally salaries,
in the staffing business, which was added in 1998 as compared to the court
reporting business.

          GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative
expenses increased by approximately $17.2 million, or 85.6%, to $37.2 million in
1998 from $20.0 million in 1997. General and administrative expenses in 1998
included approximately $839,000 relating to the write-off of costs associated
with its abandoned secondary offering, and general and administrative expenses
in 1997 included approximately $1.3 million relating to an officer's termination
agreement and termination expenses relating to certain marketing activities, as
well as approximately $922,000 in costs incurred in connection with an
acquisition accounted for using the pooling of interests method of accounting.
Excluding the foregoing items, general and administrative expenses increased by
approximately $18.6 million, or 104.1%, to $36.4 million in 1998 from $17.8
million in 1997. The increase was largely due to expenses related to the
acquisitions completed after June 30, 1997, consisting of payroll and occupancy
expenses, as well as increased sales compensation, marketing and promotional
expenses and administrative support expenses due to increased revenue levels.
Excluding the items described above, general and administrative expenses as a
percentage of revenue decreased to 32.9% in 1998 from 33.5% in 1997. This
decrease was due to the large number of tuck-in acquisitions completed in 1998
(which allowed the Company to operate the acquired businesses through its
existing infrastructure), resulting in a lower impact of corporate overhead as a
percentage of revenue.

          DEPRECIATION AND AMORTIZATION. Depreciation and amortization increased
by approximately $2.2 million, or 88.5%, to $4.7 million in 1998 from $2.5
million in 1997. This increase was due primarily to additional amortization
resulting from the acquisitions completed in 1997 and 1998. A significant
component of the amortization expense relates to goodwill, which is the cost in
excess of fair market value of net tangible assets of acquired businesses.

          INCOME FROM OPERATIONS. Income from operations increased by
approximately $4.8 million to $5.1 million in 1998 from $326,000 in 1997.
Excluding the $839,000 relating to the write-off of costs associated with its
abandoned secondary offering in 1998, and approximately $1.3 million relating to
an officer's termination agreement and termination expenses relating to certain
marketing activities and approximately $922,000 in costs incurred in connection
with an acquisition accounted for using the pooling of interests method of
accounting in 1997, income from operations increased by approximately $3.5
million, or 135.0%, to $6.0 million in 1998 from $2.5 million in 1997. Excluding
the foregoing items, income from operations as a percentage of revenues
increased to 5.4% in 1998 from 4.8% in 1997.

          OTHER EXPENSE, NET. Other expense, net, consisting primarily of
interest expense, increased by approximately $3.9 million to $6.6 million in
1998 from $2.7 million in 1997 due to the incurrence of additional debt to
finance acquisitions and to fund working capital.

          PROVISION FOR INCOME TAXES (BENEFIT). The Company recorded a tax
benefit of approximately $589,000 in 1998 as a result of a tax refund generated
by the carryback of its tax loss generated in 1997, and recorded a tax expense
of approximately $125,000 in 1997 as a result of offsetting the majority of its
current income tax expense by utilizing its deferred tax asset.

LIQUIDITY AND CAPITAL RESOURCES

          The Company, largely since its inception, has experienced a deficiency
in working capital and recurring operating losses which have largely been funded
through term debt financing. The Company is unable to repay principal, in the
amount of $82.8 million, due January 3, 2000 under its Loan Agreement and
suspended interest payments due thereunder effective November 1999. The lenders
to the Loan Agreement have agreed to both forebear receiving the payment of
interest for the period November 1999 to April 14, 2000 in the amount of
approximately $3.3 million and extend the maturity date of the Loan Agreement to
April 14, 2000. The loan is presently due and payable.

          The Company, presently and for the foreseeable future, is unable to
pay interest or principal amounts outstanding under the Loan Agreement and is
currently negotiating with the lenders thereunder to continue to forebear
receiving principal and interest or otherwise restructure the terms thereof. In
the event the Company is unable to successfully renegotiate an appropriate
period of continued forebearance or other satisfactory restructuring of the Loan
Agreement, the lenders thereunder have the right to accelerate the loan and
exercise their remedies under the loan documents, including the foreclosure of
their security interests in the Company's assets.

          Additionally, the Company may not be able to fund operations or repay
certain other obligations as they become due without increased credit facilities
and/or rescheduling payments. The Company's ability to acquire increased credit
facilites and/or reschedule payment terms is highly uncertain and cannot be
assured.

          One of the potential outcomes of the events described above could
result in the ultimate liquidation of the Company.

OPERATING ACTIVITIES

          Net cash used in operating activities totaled $21,000 for the
year ended December 31, 1999 compared to $0.5 million in 1998. The decrease in
cash used in operating activities 1999 was due primarily to an increase in
accounts payable and accrued expenses, offset by an increase in net operating
loss.

INVESTING ACTIVITIES

          Net cash used in investing activities totaled $3.9 million and $47.0
million for the years ended December 31, 1999 and 1998, respectively, and
primarily has been used to fund payments for the net assets of acquired
businesses and investments in capital equipment. Net cash used to acquire
businesses was $1.5 million and $43.7 million for the years ended December 31,
1999 and 1998, respectively. Cash used to invest in capital equipment totaled
$5.1 million and $3.3 million in 1999 and 1998, respectively. The Company
continues to invest in capital equipment, principally to upgrade facilities,
computer systems and photocopy equipment. At December 31, 1999, the Company had
no commitments to purchase equipment; however, the Company expects to make
additional capital expenditures in excess of $2.0 million in 2000, none of which
is pursuant to a firm commitment.

FINANCING ACTIVITIES

          Net cash provided by financing activities for 1999 and 1998 was $4.6
million and $48.3 million, respectively, and consisted primarily of proceeds
from Loan Agreement borrowings and the issuance of Series A and Series C
Convertible Preferred Stock used to fund payments for acquired businesses and
for working capital. In addition, the Company from time to time issues
promissory notes in connection with acquisitions.

          The Company currently has a Loan Agreement with financial institutions
which, as amended, provides for borrowings up to $83.5 million based on
operating cash flow as defined therein. Borrowings under the Loan Agreement bear
interest at the prime rate, plus specified margins. The payment of certain of
the margins is deferred until the maturity of the Loan Agreement. The Loan
Agreement, which is secured by substantially all the assets of the Company,
restricts future indebtedness, investments, distributions, acquisitions or sale
of assets and capital expenditures and also requires maintenance of certain
financial covenants. At December 31, 1999, the effective interest rate was 11.2%
and aggregate borrowings under the Loan Agreement were $82.8 million.

          In connection with the Company's acquisition of Gregory & Gregory
Associates and Gregory & Gregory Staffing in August 1998, a preferred
stockholder guaranteed the repayment of a $2.5 million overadvance made to the
Company under the Loan Agreement and received a fee of $125,000 in consideration
of such guarantee. In January 1999, preferred stockholders paid $2,437,500
pursuant to its guaranty and received 2,437.5 shares of Series C Preferred
Stock. Additionally, in February 1999, the preferred stockholders guaranteed
$1.5 million of an overadvance made to the Company under the Loan Agreement and
is entitled to receive a fee of $75,000. Preferred stockholders paid $1.5
million pursuant to its guaranty in April 1999. The funds paid by preferred
stockholders on the guaranty are evidenced by a subordinated promissory note
with interest at the rate of 18% per annum, principal and interest to be due and
payable, as extended, October 16, 2000.

          At December 31, 1999, the Company had approximately $9.4 million of
indebtedness payable to sellers of various acquired businesses.

          The Company is unable to repay the principal and interest due on both
the Loan Agreement and the note due the preferred stockholders. The lenders
under both the Loan Agreement and the note have agreed to waive the payment of
current interest and have agreed to extend the maturity date of the Loan
Agreement to April 14, 2000. The Company presently is unable to repay amounts
outstanding under either the Loan Agreement or the note and may not be able to
renegotiate or enter into a replacement facility. Additionally, the Company may
not be able to continue to fund operations or repay certain other obligations as
they become due without increased credit facilities and/or rescheduling
payments, which cannot be assured.

INFLATION

          Certain of the Company's expenses, such as wages and benefits,
occupancy costs and equipment repair and replacement, are subject to normal
inflationary effects. Supplies, such as paper and related products, can be
subject to significant price fluctuations. Although the Company to date has been
able to substantially offset any such cost increases through increased operating
efficiencies, there can be no assurance that the Company will be able to offset
any future cost increases through similar efficiencies or increased charges for
its products and services.

YEAR 2000 COMPLIANCE

          The Company did not experience any material difficulties with respect
to year 2000 compliance. The costs incurred by the Company to address year 2000
compliance did not have a material adverse effect on the Company's business,
financial condition or results of operations.

NEW ACCOUNTING STANDARDS

          In June 1998, Statement of Financial Accounting Standards No. 133,
"Accounting for Derivative Instruments and Hedging Activities" ("SFAS No. 133"),
was issued and is effective for all fiscal quarters of fiscal years beginning
after June 15, 2000. This statement establishes accounting and reporting
standards for derivative instruments and hedging activities.

          The Company anticipates that the adoption of SFAS No. 133 will not
have a material effect on the financial position, results of operations or
liquidity of the Company.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

          The Company is exposed to changes in interest rates as a result of its
Loan Agreement which is based on the Prime Rate.

          Based on the indebtedness outstanding under the Company's Loan
Agreement at December 31, 1999, a sensitivity analysis was performed using a
hypothetical 10% increase in interest rates. The analysis indicated that the
Company's interest expense and net loss for the twelve months ended December 31,
1999 would have increased by approximately $704,000. This amount does not
include the effects of other events that could affect interest rates, such as a
downturn in overall economic activity, or actions management could take to
lessen the risk. This also does not take into account any changes in the
Company's financial structure that may result from higher interest rates.

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

          Reference is made to the Financial Statements, the reports thereon and
notes thereto, commencing on page F-1 to this report.

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE

     On September 16, 1999, the Company engaged Deloitte & Touche LLP as its
independent accountants to audit its financial statements in place of KPMG LLP
(the "Former Accountants").

     The decision to change accountants was approved by the Board of Directors
and the Audit Committee of the Company.

          The Former Accountant's report on the financial statements of the
Company for each of the past two years did not contain an adverse opinion or a
disclaimer of opinion, and was not qualified or modified as to uncertainty,
audit scope or accounting principles. There were no disagreements of the type
described in paragraph (a)1(i)(iv) of Item 304 of Regulation S-K or any
reportable event as described in paragraph (a)(1)(v), paragraph (a)(2) or
paragraph (b) of Item 304 of Regulation S-K.

<PAGE>

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

          The directors and executive officers of the Company are as follows:

                                                                    DIRECTOR OR
NAME                       AGE  POSITION WITH COMPANY              OFFICER SINCE

Malcolm L. Elvey(1)(2)     58   Chairman of the Board and Director     1993
Paul H. Bellamy            51   Chief Executive Officer and Director   1999
Carole L. Hughes           52   Senior Vice President-- Government
                                and Industry Relations                 1998
Steven L. Wolkenstein      40   Vice President, Treasurer and
                                Secretary                              1997
Mortimer R. Feinberg(1)(2) 77   Director                               1993
Joseph P. Nolan(1)(2)      35   Director                               1996
Cary A. Sarnoff            52   Director                               1994

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

(1)      Member of the Compensation Committee

(2)      Member of the Audit Committee

          MALCOLM L. ELVEY has served as Chairman of the Board of Directors of
the Company since its incorporation in 1993 and also served as Chief Executive
Officer of the Company until February 1997. Mr. Elvey is the founder of The
Elvey Partnership, a boutique venture catalyst specializing in internet related
companies in the United States, Europe and South Africa. Mr. Elvey is also a
general partner in Collaborative Capital, a venture capital fund focusing on
early-stage internet enabling technology companies. Mr. Elvey sits on the Board
of Directors of Algol, a public company headquartered in Milan, Italy and on the
Advisory Board of VastVideo, a leading B2B video application service provider.

          PAUL BELLAMY has been Chief Executive Officer and a member of the
Board of Directors of the Company since December 13, 1999. From October 1992 to
May 1995, Mr. Bellamy was Chief Executive Officer and President, Chief Financial
Officer, a member of the Board of Directors, and consultant to Nichols
Institute, Inc., a medical diagnostics and services company. From October 1995
to February 1998, Mr. Bellamy was Chief Financial Officer of Davis Vision, Inc.,
an eye care HMO and optical retail company. From March 1998 to March 1999, Mr.
Bellamy was President and Chief Operating Officer, Chief Financial Officer, and
a member of the Board of Directors of Graham Field, Inc., a medical home health
care and surgical products manufacturer. From April 1999 to December 1999, Mr.
Bellamy was an independent consultant. During November and December 1999, Mr.
Bellamy was a consultant to the Board of Directors of Esquire.

          CARY A. SARNOFF was Senior Vice President of Litigation Support until
his resignation in September 1999, and was the former Vice Chairman of the
Company. Mr. Sarnoff has been a director and officer of the Company since
November 1994. Prior thereto, Mr. Sarnoff was President of Sarnoff Deposition
Service, Inc. ("SDS"), a court reporting firm acquired by the Company in 1994.
Mr. Sarnoff has more than 25 years experience in the court reporting industry.

          CAROLE L. HUGHES is Senior Vice president, Government and Industry
Relations. Prior thereto, Ms. Hughes was Senior Vice President of East Coast
Operations for the Company since February 1998. From 1981 to November 1997, Ms.
Hughes was the Vice President and a principal shareholder of Jurist-Begley
Reporting Services (or its predecessor), a court reporting company in
Philadelphia, Pennsylvania, that was acquired by the Company in November 1997.

          STEVEN L. WOLKENSTEIN was appointed Vice President and Treasurer of
the Company in September 1997 and Secretary in March 2000. From April 1993 to
August 1997, he was tax and treasury/international finance manager for the Upper
Deck Company, and for five years prior thereto he was with KPMG LLP, with his
last position being senior tax manager.

          MORTIMER R. FEINBERG, PH.D., has served as a director of the Company
since its incorporation. He is the co-founder of BFS Psychological Associates,
Inc., a human resources consulting firm, and has served as Chairman of its Board
of Directors since 1960. Dr. Feinberg is Professor Emeritus, Baruch College,
City University of New York and is a frequent contributor to the WALL STREET
JOURNAL on human resources and other business topics.

          JOSEPH P. NOLAN has served as director of the Company since October
1996. Mr. Nolan joined GTCR in 1994 and became a Principal in 1996. Mr. Nolan
was previously a Vice President in mergers and acquisitions with Dean Witter
Reynolds Inc. and an Associate at Coopers & Lybrand. Mr. Nolan graduated with an
MBA from the University of Chicago and a BS in accounting with honors from the
University of Illinois. Mr. Nolan was an Illinois gold medalist and a national
silver medalist on the CPA examination. Mr. Nolan is currently a director of
Excaliber Tubular, DeLite Outdoor, Province Healthcare, Lason, LeapSource,
Alliant, Proximus Information, Heritage Golf Group and Global Passenger
Services. In the past, Mr. Nolan has also been a director of Golf Enterprises.

DIRECTOR COMPENSATION

          Compensation for directors who are not officers of the Company
presently is $1,250 per meeting, plus reimbursement for any out-of-pocket
expenses incurred in connection with attending such meetings. In addition, each
current outside director has received, and each outside director upon election
to the Board of Directors will receive, options to purchase shares of Common
Stock of the Company.

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934

          Section 16(a) of the Securities Exchange Act of 1934 (the "1934 Act")
requires the Company's executive officers and directors, and persons who own
more than ten percent of the Company's common stock to file reports of ownership
and changes in ownership with the Securities and Exchange Commission (the
"SEC"). Executive officers, directors and holders of more than ten percent are
required by SEC regulations to furnish the Company with copies of all Section
16(a) forms they file. Based solely on a review of the copies of such forms
furnished to the Company and written representations from the Company's
executive officers and directors, the Company believes that during the year
ended December 31, 1999, its executive officers, directors and holders of more
than ten percent complied with all applicable Section 16(a) filing requirements.


ITEM 11.  EXECUTIVE COMPENSATION

          The following table sets forth certain information regarding
compensation paid by the Company or accrued for services rendered in all
capacities during the fiscal year ended December 31, 1999, to the Company's
Chief Executive Officer and to each of the other most highly compensated
executive officers of the Company whose aggregate cash compensation exceeded
$100,000:

                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>

                                        Annual Compensation                          Long Term Compensation
                                    -------------------------------  -------------------------------------------------------
                                                                     Awards                  Payouts
                                                         Other       Restricted
Name and                                                 Annual      Stock         Options    LTIP        All Other
Principal Position            Year   Salary    Bonus   Compensation  Awards(s)     /SARS      Payouts     Compensation
                                     ($)        ($)       ($)         ($)           (#)       ($)          ($)

<S>                          <C>     <C>        <C>    <C>           <C>           <C>         <C>        <C>
Malcolm L. Elvey             1999(1) $200,527                                       ---
Chairman                     1998     203,187                                     20,000
                             1997     200,043                                     15,000




David A. White              1999(2)   208,333                                        ---
Chief Executive             1998      233,675                                    100,000
Officer                     1997      174,791                                    125,000


Carole L. Hughes            1999      137,323   60,000                            10,000
Senior Vice President       1998      131,875                                     12,000


David A. Higson (7)         1999      175,000                                     25,000
Executive Vice President    1998      170,833                                     87,500
                            1997(3)    93,750   13,000                            62,500

Paul H. Bellamy             1999(4)      --                                          --
Chief Executive Officer

Steven N. Welch (7)         1999(5)   147,890                                    100,000
Chief Financial Officer/
Acting Chief Executive
Officer

William J. Forbes (7)       1999      128,867                                     22,500
Vice President              1998(6)    81,005                                     30,000


(1) Mr. Elvey's employment with the Company terminated on April 30, 1999.
(2) Mr. White's employment with and service as director of the Company terminated October 31, 1999.
(3) Represents compensation for the partial year from May 15, 1997.
(4) Mr. Bellamy earned $15,000 for all services provided in November and December 1999.
(5) Represents compensation for the partial year from March 22, 1999.
(6) Represents compensation for the partial year from May 4, 1998.
(7) Employment with the Company was terminated February 29, 2000.
</TABLE>

<PAGE>

EMPLOYMENT AND RELATED AGREEMENTS

          Malcolm L. Elvey was employed by the Company under an employment
agreement which expired in April 1999. Mr. Elvey entered into a severance
agreement with the Company which provided for the continued payment of his
salary through March 31, 2000. Mr. Elvey is entitled to sales commissions on new
business generated by him for the Company. The Company agreed to use its best
efforts to cause Mr. Elvey to be elected as a director as long as he continues
to own at least 200,000 shares of Common Stock. In addition, Mr. Elvey has
agreed not to compete with the Company for a period of two years following the
termination of his employment with the Company.

          David A. White was employed under an agreement which was terminated in
October 1999. Mr. White has agreed not to compete with the Company for a period
of one year following the termination of his employment with the Company.

          David A. Higson was employed under an agreement which was terminated
effective February 29, 2000. Mr. Higson entered into a severance agreement with
the Company which provides for the equivalent of six months salary and
associated benefits.

          Carole L. Hughes is employed under a three-year employment agreement
which expires November 2000 at an annual salary of $135,000. Ms. Hughes is also
entitled to a performance bonus of up to 50% of her annual salary if the Company
achieves financial and operating objectives agreed to by Ms. Hughes and the
Company, with Ms. Hughes to receive a minimum bonus of at least $60,000 for the
first year. Ms. Hughes has agreed not to compete with the Company for a period
of two years following the termination of her employment with the Company.

          The Company entered into change in control agreements with its key
executive officers, including, but not limited to, Mr. Higson, Mr. Welch, Mr.
Forbes and Ms. Hughes, which provide that if an executive's employment is
terminated within six months after a change in control of the Company, or the
executive terminates employment within such six month period of time, then the
executive shall be entitled to a lump sum severance payment and all of the
executive's options, if any, which are not then vested shall immediately vest.
All recipients of change in control agreements have been notified in writing
that the Company does not intend to renew any of these agreements beyond the
current term expiring June 30, 2000. The lump sum severance payment for Mr.
Higson is 150% of base salary and bonus at the time of termination and for the
other executives is 100% of base salary and bonus at the time of termination. At
December 31, 1999 and based on salary levels currently in effect, in the event
of a change in control, the above listed officers would have been entitled to
receive a lump sum of approximately $760,000. If the payments to be received
under the agreements would not be deductible for tax purposes by the Company as
the result of such payment constituting an excess parachute payment, the payment
would be reduced to an amount which would make the entire payment deductible for
tax purposes. As used in the agreements, change in control means a person or a
group of persons becomes the beneficial owner of more than 30% of the Company's
Common Stock, stockholders approve a merger of the Company into another entity
or a sale of substantially all the Company's assets or a change in the
composition of a majority of the members of the Board of Directors.

<PAGE>


STOCK OPTION PLAN

          In February 1993, the Board of Directors of the Company adopted the
1993 Stock Option Plan (the "Plan"), which was approved by stockholders of the
Company. The Plan was amended to increase the number of options which may be
granted thereunder to 1,750,000 shares of Common Stock. Incentive stock options,
intended to qualify under Section 422 of the Internal Revenue Code of 1986, as
amended, and nonqualified stock options may be granted under the Plan.

          The Plan is administered by the compensation committee of the Board of
Directors, which may grant options to key employees, directors, consultants and
independent contractors to the Company. The term of each option may not exceed
ten years from the date of grant. The exercise price of an option may not be
less than 100% of the fair market value of a share of Common Stock. The options
vest over a three-year period, commencing one year following their issuance.

          The table below sets forth information regarding the grant of stock
options made to the executive officers named in the Summary Compensation Table
during the fiscal year ended December 31, 1999. By terms of the Plan, options
granted Messrs. Higson, Welch, and Forbes expired and were cancelled March 15,
2000.

                      OPTION/SAR GRANTS IN LAST FISCAL YEAR
                               (Individual Grants)


                                  Percent of
                  Number of       Total
                  Securities      Options/SARs
                  Underlying      Granted to        Exercise or
                  Options/SARs    Employees in      Base Price        Expiration
Name              Granted (#)     Fiscal Year      ($/Sh)             Date

Malcolm L. Elvey      ---            ---             ---               ---
David A. White        ---            ---             ---               ---
Paul H. Bellamy       ---            ---             ---               ---
David A. Higson     25,000          8.26%          $1.03              9/2009
Steven N. Welch     50,000         16.53%           3.25              3/2009
                    50,000         16.53%           1.03              9/2009
William J. Forbes   22,500          7.44%           1.03              9/2009
Carole L. Hughes    10,000          3.31%           1.03              9/2009


          The table below sets forth information for the executive officers
named in the Summary Compensation Table concerning option exercises during 1999
and outstanding options at December 31, 1999.

 AGGREGATED OPTION/SAR EXERCISES IN 1999 AND DECEMBER 31, 1999 OPTION/SAR VALUES
<TABLE>
<CAPTION>

                                                Number of Securities                 Value of Unexercised
                                                Underlying Unexercised                  in-the-Money
                   Shares                       Options/SARs at                       Options/SARs at
                   Acquired                      December 31, 1999                     December 31, 1999
                   On             Value        --------------------------------    -----------------------------
Name               Exercise       Realized     Exercisable         Unexercisable   Exercisable     Unexercisable

<S>                 <C>            <C>          <C>                    <C>           <C>             <C>
Malcolm L. Elvey    0                -          127,500                30,000        0               0
David A. White      0                -                0                     0        0               0
Paul H. Bellamy     0                -                0                     0        0               0
David A. Higson     0                -           70,833               104,167        0               0
Steven N. Welch     0                -                0               100,000        0               0
William J. Forbes   0                -           10,000                42,500        0               0
Carole L. Hughes    0                -            4,000                18,000        0               0

------------------
</TABLE>

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

          The following table sets forth, as of March 15, 2000, certain
information with respect to the beneficial ownership of the Common Stock by: (i)
each of the Company's Directors, (ii) each officer named in the Summary
Compensation Table, (iii) all directors and executive officers of the Company as
a group, and (iii) each other person (including any "group," as that term is
used in Section 13(d)(3) of the Exchange Act) who is known by the Company to own
beneficially 5% or more of the Common Stock. The Company believes that the
beneficial owners of the Common Stock listed below, based on information
furnished by such owners, have sole voting and investment power with respect to
such shares, except as noted below. The address of each person listed below is
750 "B" Street, Suite 2350, San Diego, California 92101, unless otherwise
indicated.

                                                                     PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER             NUMBER OF SHARES    OF CLASS

Malcolm L. Elvey (1)                                  439,500          8.0%
  666 Fifth Avenue
  New York, NY 10103

The Sarnoff Trust (2)                                 375,000          7.0%
  P.O. Box 11079
  Zephyr Cove, Nevada 89448

Allied Investment Corporation (3)                     312,500          5.5%
  Allied Investment Corporation II
  Allied Capital Corporation II
  1666 K Street
  Washington, DC 20006

Mortimer R. Feinberg(4)                                 5,000           *

David J. Feldman (5)                                  312,950          5.8%
  100A Store Hill Road
  Old Westbury, NY 11568

Paul H. Bellamy (6)                                      ---           ---

Golder, Thoma, Cressey, Rauner Fund IV, L.P. (7)    4,275,000         46.3%

Joseph P. Nolan (7)                                      ---           ---

Cary A. Sarnoff (8)                                   478,890          8.8%

David A. Higson                                          ---           ---

Carole L. Hughes (9)                                  148,763          2.8%

Steven N. Welch                                          ---           ---

All directors and executive officers as a
  group (10) (5 persons)                            1,097,153         19.4%

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

*    Less than 1%

(1)  Includes options to purchase 157,500 shares of the Company's Common Stock
     granted to Mr. Elvey under the Plan.
(2)  The Sarnoff Trust is a revocable trust of which Cary A. Sarnoff and his
     wife, Michelle A. Sarnoff, are settlors, trustees and beneficiaries.
(3)  These entities in the aggregate own warrants to purchase an aggregate of
     312,500 shares of Common Stock at an exercise price of $5.80 per share,
     subject to adjustment.
(4)  Consists of options to purchase 5,000 shares of the Company's Common Stock
     granted to Mr. Feinberg under the Plan.
(5)  Includes options to purchase 62,500 shares of the Company's Common Stock
     granted to Mr. Feldman under the Plan.
(6)  Mr. Bellamy has no equity ownership.
(7)  GTCR is the direct owner of 19,012.5 shares of Series A Convertible
     Preferred Stock which are convertible into 3,656,250 shares of Common Stock
     and 2,437.50 shares of Series C Convertible Preferred Stock which are
     convertible into 243,750 shares of Common Stock. GTCR IV, L.P., a limited
     partnership, is the general partner of GTCR and Golder, Thoma, Cressey,
     Rauner, Inc. ("GTCR Inc.") is the general partner of GTCR IV, L.P. As such,
     they may be deemed to be the indirect beneficial owners of such securities.
     Mr. Nolan is a principal of GTCR Inc.
(8)  Includes shares owned by The Sarnoff Trust and options to purchase 100,000
     shares of the Company's Common Stock granted to Mr. Sarnoff under the Plan.
     See Note (2).
(9)  Includes options to purchase 22,000 shares of the Company's Common Stock
     granted to Ms. Hughes under the Plan.
(10) Includes options to purchase 309,500 shares of the Company's Common Stock
     granted under the Plan.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

          For as long as The Sarnoff Trust owns 20% or more of the Common Stock
issued in connection with the acquisition of Sarnoff Deposition Services
("SDS"), the Company has agreed to nominate, recommend and use its best efforts
to have Mr. Sarnoff elected as a director of the Company.

          SDS was a party to an agreement with Edward Sarnoff, the father of
Cary Sarnoff, pursuant to which SDS agreed to pay to Edward Sarnoff, in the
event of the sale of SDS, the amount of $1.0 million payable in equal monthly
installments over a period of five years. In connection with the Company's
acquisition of SDS, the Company assumed the obligations of SDS under this
agreement. (Additionally, a substantial portion of the goodwill associated with
the acquisition of SDS was written off as permanently impaired as of December
31, 1999.)

          In January 1999, the Company acquired all the stock of CAT-LINKS,
Inc., a corporation owned by Cary Sarnoff for a purchase price consisting of
50,000 shares of Common Stock of the Company and the assumption of a $170,000
promissory note payable to Cary Sarnoff. The promissory note was paid in full
during 1999. (Goodwill associated with this acquisition, of approximately
$381,000 was written off as permanently impaired as of December 31, 1999.)

          On October 23, 1996, the Company entered into a Purchase Agreement, as
amended (the "Purchase Agreement"), pursuant to which the Company sold to GTCR
and Antares Leveraged Capital Corp. (collectively, the "Investors") 21,937.5 and
562.5 shares of Series A Convertible Preferred Stock, respectively, for an
aggregate purchase price of $22.5 million. In addition, in January 1998, the
Investors were given the further right on or prior to December 2, 1999 to
acquire up to 5,000 shares of Series B Convertible Preferred Stock at a price of
$1,000 per share. In June 1998, GTCR acquired an option to acquire up to an
additional 2,500 shares of Series B Convertible Preferred Stock at a price of
$1,000 per share, which stock is convertible into an aggregate of 208,333 shares
of Common Stock at a conversion price of $12.00 per share. In August 1998, GTCR
converted its options to acquire 7,500 shares of Series B Convertible Preferred
Stock into 375,000 shares of Common Stock. In connection with the Company's
acquisition of Gregory & Gregory Associates and Gregory & Gregory Staffing in
August 1998, GTCR guaranteed the repayment of a $2.5 million overadvance made to
the Company under the Loan Agreement and received a fee of $125,000 in
consideration of such guarantee. In January 1999, GTCR paid $2,437,500 under the
guarantee and received a new series of convertible preferred stock (Series C
Convertible Preferred Stock) of the Company which is identical to the Series A
Convertible Preferred Stock except that it has a conversion price of $10.00 per
share. The liquidation value of this new series is $2.5 million. In February
1999, GTCR guaranteed the repayment of 50% of a $3 million overadvance made to
the Company under the Loan Agreement and is entitled to receive a fee of
$75,000. In April 1999, GTCR paid $1.5 million pursuant to its guaranty. GTCR
received a subordinated promissory note in the amount of such payment, which
note is due and payable, as extended, on October 16, 2000, together with
interest at the rate of 18% per annum.

          The Series A Convertible Preferred Stock is convertible into Common
Stock of the Company at a conversion price of $6.00 per share (subject to
anti-dilution adjustments) and bears cumulative annual dividends at the rate of
6% ($60.00) per annum. The holders of Series A Convertible Preferred Stock have
a liquidation preference of $1,000 per share, plus accrued dividends. Holders of
Series A Convertible Preferred Stock have the right to vote together with the
holders of Common Stock and are entitled to one vote for each whole share of
Common Stock into which the Series A Convertible Preferred Stock is convertible
(presently 166 2/3 votes per share). GTCR was granted various rights to ask for
registration under the Securities Act of any shares of Common Stock acquired by
it upon conversion of the Series A Convertible Preferred Stock. Without the
consent of the holders of a majority of the Series A Convertible Preferred
Stock, the Company may not take various actions, including paying dividends on
capital stock if there are any accrued but unpaid dividends on the Series A
Convertible Preferred Stock, issuing any equity securities which are senior to
or on a parity with the Series A Convertible Preferred Stock, merging with
another entity, selling or otherwise disposing of all or substantially all its
assets, or acquiring other entities. In addition, the Company may not issue in a
private offering any equity securities without first offering the holders of
Series A Convertible Preferred Stock the right to acquire their pro rata share.
In connection with the Purchase Agreement, the Investors and Malcolm L. Elvey,
Chairman of the Board of the Company, Cary A. Sarnoff, a director of the
Company, David J. Feldman, former President of the Company, CMNY Capital L.P.
and Allied entered into a Stockholder's Agreement dated as of October 23, 1996,
as amended (the "Stockholder's Agreement"), pursuant to which (a) the parties
agreed to vote their shares to elect as directors four representatives
designated by management, two representatives designated by GTCR and four
representatives jointly designated by GTCR and management; provided, however,
that if they are unable to agree on such joint designees within 90 days, then
GTCR may elect the joint designees; (b) management granted to the other
stockholders rights of first refusal to acquire their shares if they desire to
sell the same, subject to exceptions for public sales and for transfers to
family members; and (c) if the Company's Board of Directors approves a sale of
the Company's assets or capital stock (whether by merger or otherwise), each
stockholder other than Allied and CMNY Capital L.P. agreed to consent to such
transaction.

          The Series C Convertible Preferred Stock is identical to the Series A
Convertible Preferred Stock except that it is junior to the Series A Convertible
Preferred Stock, has a conversion price of $10.00 per share and has 100 votes
per share.

          In February 1997, the Company engaged Harlingwood Partners, L.P., a
partnership of which Mr. White is a principal ("Harlingwood Partners"), to
provide acquisition services for acquisitions other than in the court reporting
area. Harlingwood Partners was entitled to a fee of 1% of value of each
completed transaction. In connection with the acquisitions of A-L Associates and
A-L Attorneys on Assignment in May 1998 and Gregory & Gregory Associates and
Gregory & Gregory Staffing in August 1998, Harlingwood Partners received total
fees of $10,000 in 1999 and $162,500 in 1998. (Goodwill associated with A-L was
written off as permanently impaired as of December 31, 1999.)

          Additionally, in February 1997, the Company entered into a management
services agreement with Harlingwood Partners, L.P., pursuant to which
Harlingwood provided management services, including Mr. David White acting as
Chief Executive Officer of the Company. This agreement terminated effective in
June 1998 upon the Company entering into an employment agreement with David
White. Mr. White fulfilled all of Harlingwood's obligations under the management
agreement, including acting as Chief Executive Officer of the Company . In
connection with the management agreement, the Company granted options to
Harlingwood to purchase 75,000 shares of Common Stock at an exercise price of
$18.00 per share, which were forfeited during 1999, and sold to Harlingwood
125,000 shares of Common Stock at a price of $6.25 per share, which purchase
price was paid by Harlingwood issuing to the Company a promissory note in the
principal amount of $781,250, bearing interest at the rate of 7% per annum. The
note is secured by a pledge of the shares and is payable in full on April 15,
2001. On December 15, 1997, Harlingwood exercised options to purchase 50,000
shares of Common Stock at an exercise price of $7.50 per share and delivered to
the Company in payment of the exercise price a promissory note in the principal
amount of $375,000, bearing interest at the rate of 7% per annum. The note is
secured by a pledge of the shares and is payable in full on December 15, 2001.
As the result of the foregoing, at December 31, 1999, Harlingwood was indebted
to the Company in the principal amount of $1,156,250. In May 1998, the Company
granted to Harlingwood options to purchase 100,000 shares of Common Stock at an
exercise price of $12.00 per share, which were forfeited during 1999.

          The agreements with Harlingwood and Harlingwood Partners, excluding
the Harlingwood promissory notes discussed above, were terminated in October
1999 when Mr. White resigned as an officer and director of the Company.

<PAGE>


                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

          (a)(1). Financial Statements. The following consolidated financial
statements of Esquire Communications Ltd. and Subsidiaries, required by Part II,
Item 8, are included in Part IV of this report:

                  Independent Auditors' Reports

                  Consolidated Balance Sheets as of December 31, 1999 and
                  December 31, 1998.

                  Consolidated Statements of Operations for the years ended
                  December 31, 1999, 1998 and 1997.

                  Consolidated Statement of Stockholders' Equity for the years
                  ended December 31, 1999, 1998 and 1997.

                  Consolidated Statements of Cash Flows for the years ended
                  December 31, 1999, 1998 and 1997.

                  Notes to the Consolidated Financial Statements


Exhibits

         (a)(3).  Exhibits:

EXHIBIT NO.

     3.1       Certificate of Incorporation of the Company, as amended.
               Incorporated by reference to Exhibit 3.1 to the Company's Annual
               Report on Form 10-KSB for the year ended December 31, 1998 ("1998
               10-K").
     3.2       By-Laws of the Company. Incorporated by reference to Exhibit 3.2
               to the Current Report on Form 8-K reporting on an event which
               occurred October 28, 1996 ("October 1996 8-K").
     10.1      Severance Agreement dated as of April 30, 1999, between the
               Company and Malcolm L. Elvey.
     10.2      Employment Agreement dated November 7, 1997, between the Company
               and Carole L. Hughes. Incorporated by reference to Exhibit 10.3
               to the Company's Annual Report on Form 10-KSB for the year ended
               December 31, 1997 ("1997 10-K").
     10.3      Purchase Agreement dated October 23, 1996 by and between the
               Company, Golder, Thoma, Cressey, Rauner Fund IV, L.P. ("GTCR")
               and Antares Leveraged Capital Corp. (collectively with GTCR, the
               "Investors"). Incorporated by reference to Exhibit 10.4 to
               October 1996 8-K.
     10.4      Stockholders Agreement dated October 23, 1996 by and between the
               Investors, Malcolm L. Elvey, Cary A. Sarnoff, David J. Feldman,
               CMNY Capital L.P. and Allied Investment Corporation, Allied
               Investment Corporation II and Allied Capital Corporation II.
               Incorporated by reference to Exhibit 10.5 to October 1996 8-K.
     10.5      Registration Agreement dated October 23, 1996 among the Company
               and the Investors. Incorporated by reference to Exhibit 10.6 to
               October 1996 8-K.
     10.6      Agreement dated October 23, 1996 among the Company, GTCR, David
               J. Feldman, The Sarnoff Trust, Allied Investment Corporation I,
               Allied Investment Corporation II and Allied Capital Corporation
               II relating to registration rights. Incorporated by reference to
               Exhibit 10.7 to October 1996 8-K.
     10.7      Amended and Restated Credit Agreement dated as of August 10, 1998
               by and among Esquire Communications Ltd., as Borrower, Antares
               Leveraged Capital Corp., as Agent and the Other Financial
               Institutions Party Hereto, as Lenders. Incorporated by reference
               to Exhibit 10.10 of 1998 10-K.
     10.8      Amendment No. 2 dated as of January 8, 1998 to Purchase Agreement
               dated October 23, 1996, among the Company, Golder, Thoma,
               Cressey, Rauner Fund IV, L.P. and Antares Leveraged Capital Corp.
               Incorporated by reference to Exhibit 10.16 to 1997 10-K.
     10.9      Amendment No. 1 dated as of June 17, 1997 to Purchase Agreement
               dated October 23, 1996, among Esquire, Golder, Thoma, Cressey,
               Rauner Fund IV, L.P. and Antares Leveraged Capital Corp.
               Incorporated by reference to Exhibit 10.3 to June 1997 8-K.
     10.10     Amendments No. 1 and No. 2 to Stockholder's Agreement dated
               October 23, 1996, among Esquire and various stockholders of
               Esquire. Incorporated by reference to Exhibit 10.4 to June 1997
               8-K.
     10.11     Employment Agreement dated June 30, 1998 between the Company and
               David A. Higson. Incorporated by reference to Exhibit 10.19 to
               1998 10-K.
     10.12     Form of Change in Control Agreement between the Company and each
               of its key executive officers. Incorporated by reference to
               Exhibit 10.20 to 1998 10-K.
     21        Subsidiaries of the Registrant. Incorporated by reference to
               Exhibit 21 to 1998 10-K.
     23.1      Consent of independent accountants.
     23.2      Consent of independent accountants.

     (b)  Reports on Form 8-K.

          None

                           ESQUIRE COMMUNICATIONS LTD.
                                AND SUBSIDIARIES

                        Consolidated Financial Statements

                           December 31, 1999 and 1998

                   (With Independent Auditors' Reports Thereon)

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders
 of Esquire Communications Ltd.:

We have audited the accompanying consolidated balance sheet of Esquire
Communications Ltd. and subsidiaries (the "Company") as of December 31, 1999,
and the related consolidated statements of operations, stockholders' equity and
cash flows for the year then ended. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audit.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Esquire
Communications Ltd. and subsidiaries as of December 31, 1999 and the results of
its operations and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.

The accompanying consolidated financial statements for the year ended December
31, 1999 have been prepared assuming that the Company will continue as a going
concern. As discussed in Note 1 to the consolidated financial statements, the
Company's recurring losses from operations, negative working capital and
defaults under the Company's debt agreements raise substantial doubt about its
ability to continue as a going concern. Management's plans concerning these
matters are also described in Note 1. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.

                              DELOITTE & TOUCHE LLP

San Diego, California
April 12, 2000
<PAGE>
                          INDEPENDENT AUDITORS' REPORT

The Board of Directors
Esquire Communications Ltd.:

We have audited the accompanying consolidated balance sheet of Esquire
Communications Ltd. and subsidiaries as of December 31, 1998 and the related
consolidated statements of operations, stockholders' equity and cash flows for
each of the years in the two year period ended December 31, 1998. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Esquire
Communications Ltd. and subsidiaries as of December 31, 1998 and the results of
their operations and their cash flows for each of the years in the two year
period ended December 31, 1998, in conformity with generally accepted accounting
principles.


                                        KPMG LLP

San Diego, California
March 26, 1999



<PAGE>
                  ESQUIRE COMMUNICATIONS LTD. AND SUBSIDIARIES

                          Consolidated Balance Sheets
                           December 31, 1999 and 1998
                       (In thousands, except share data)
<TABLE>
<CAPTION>

                       Assets (Pledged)                                             1999            1998
                                                                                  ----------       ----------
Current assets:
<S>                                                                               <C>                   <C>
        Cash                                                                     $   1,554        $     933
        Accounts receivable, less allowance for doubtful accounts of
                $5,281 in 1999 and $2,098 in 1998                                   28,427           27,574
        Prepaid expenses and other current assets                                    1,311            2,944
                                                                                 -----------      ------------
                                        Total current assets                        31,292           31,451

Property and equipment, net                                                          5,451            5,937
Cost in excess of fair value of net identifiable assets of acquired
        businesses, less accumulated amortization of $7,100 in 1999
        and $6,039 in 1998                                                          86,079          112,840
Other assets, less accumulated amortization of  $2,612 in 1999
        and $769 in 1998                                                               321            1,028
                                                                                 -----------      ------------
                                                                                 $ 123,143        $ 151,256
                                                                                 ===========      ============
                            Liabilities and Stockholders' Equity

Current liabilities:
        Bank overdraft                                                           $   2,312        $     727
        Accounts payable                                                             7,629            8,826
        Accrued expenses                                                            14,709            6,798
        Current portion of long-term debt, including related parties                89,403            3,779
                                                                                 -----------      ------------
                                        Total current liabilities                  114,053           20,130

Long-term debt, including related parties, net of unamortized discount               5,657           90,329
Other liabilities                                                                      831              331
                                                                                 -----------      ------------
                                        Total liabilities                          120,541          110,790

Stockholders' equity:
  Preferred stock, $.01 par value, 1,000,000 shares authorized in series:
    Series A convertible preferred stock 22,500 shares authorized;
      22,500 shares issued and outstanding in 1999 and 1998;
      $22,500 aggregate liquidation preference in 1999 and 1998                        --              --
    Series C convertible preferred stock 2,500 shares authorized;
      2,500 shares issued and outstanding in 1999
      $2,500 aggregate liquidation preference in 1999;                                 --              --
  Common stock, $.02 par value, 100,000,000 shares authorized;
    5,426,229 and 5,213,729 shares issued in 1999 and 1998,
    respectively; 5,334,479 and 5,121,979 shares outstanding
    in 1999 and 1998, respectively                                                     105              104
  Additional paid-in capital                                                        51,556           48,041
  Treasury stock, at cost - 91,750 shares in 1999 and 1998                            (550)            (550)
  Notes receivable - stockholder                                                    (1,156)          (1,156)
  Accumulated deficit                                                              (47,353)          (5,973)
                                                                                 -----------      ------------
                               Total stockholders' equity                            2,602           40,466
                                                                                 -----------      ------------
Commitments and contingencies                                                          --              --

                                                                                 $ 123,143        $ 151,256
                                                                                 ===========      ============
</TABLE>

See accompanying notes to consolidated financial statements.

                  ESQUIRE COMMUNICATIONS LTD. AND SUBSIDIARIES

                     Consolidated Statements of Operations

                  Years ended December 31, 1999, 1998 and 1997

                (In thousands, except share and per share data)

<TABLE>
<CAPTION>
                                                                1999            1998              1997
                                                            -----------      ----------        -----------
                                                                                                (Note 3)
<S>                                                         <C>              <C>               <C>
Revenue                                                     $  144,264       $ 110,586         $   53,178
Costs and expenses:
        Operating expenses                                      86,534          63,470             30,284
        General and administrative expense                      53,313          37,214             20,046
        Depreciation and amortization                            6,719           4,753              2,522
        Asset writedown and other charges                       27,047             --                --
                                                            ------------      ---------         ------------
                                                               173,613         105,437             52,852
                                                            ------------      ---------         ------------
                 Income (loss) from operations                 (29,349)          5,149                326
                                                            ------------      ---------         ------------

Interest expense, net                                          (10,619)          (6,582)           (2,656)
                                                            ------------      ----------         ------------
                 Loss before provision (benefit)
                    for income taxes                           (39,968)          (1,433)           (2,330)

Provision (benefit) for income taxes                               (78)            (589)              125
                                                            ------------      -----------       ------------
                  Net loss                                     (39,890)        $   (844)           (2,455)

Dividends on preferred stock                                    (1,490)           (1,249)            (702)
                                                            ------------      -----------       ------------
                 Net loss applicable to common
                    stockholders                            $  (41,380)        $ (2,093)          $  (3,157)
                                                            ============      ===========       ============
Net loss per common share:
        Basic and diluted                                   $    (7.76)        $  (0.48)         $    (1.12)
                                                            ============      ===========       ============
Weighted-average shares outstanding:
        Basic and diluted                                     5,330,815       4,352,055            2,815,142
</TABLE>

See accompanying notes to consolidated financial statements.
                  ESQUIRE COMMUNICATIONS LTD. AND SUBSIDIARIES

                Consolidated Statements of Stockholders' Equity

                  Years ended December 31, 1999, 1998 and 1997

                        (In thousands, except share data)
<TABLE>
<CAPTION>

                                                                                           Addi-            Stock-
                                    Series A               Series C                        tional           holder          Total
                                   convertible            convertible         Common       paid-    Trea-   notes  Accumu-  stock
                                  preferred stock        preferred stock       stock       in       sury    rece-  lated    holders'
                                  Shares    Amount     Shares    Amount   Shares  Amount  capital  stock   ivable  deficit  equity

<S>                                <C>      <C>         <C>      <C>     <C>        <C>   <C>      <C>      <C>    <C>      <C>
Balance, January 1, 1997           7,500    $ --         --      $ --    2,375,878  $ 51  $ 14,903 $ (1,300) $--   $ (723) $ 12,931

Issuance of common stock in
 connection with acquisitions
  of businesses                     --        --         --         --     678,000    14     5,680      --    --      --      5,694
Issuance of common stock in
  connection with warrant
   exchange offering, net of
    issuance costs                  --        --         --         --       92,448    2      (177)     --    --      --       (175)
Exercise of nonemployee warrants    --        --         --         --       76,540    2       224      --    --      --        226
Exercise of employee stock options  --        --         --         --       35,333    1       278      --    --      --        279
Reissuance of treasury stock
  in connection with exercise of
   employee stock options for
   note receivable                  --        --         --         --      125,000    --       31      750   (781)   --         --
Issuance of stock options to
  non-employees                     --        --         --         --         --      --      632       --     --    --        632
Dividends on preferred stock        --        --         --         --         --      --      --        --     --   (702)     (702)
Exercise of employee stock
  options for note receivable       --        --         --         --       50,000    1       374       --    (375)  --        --
Issuance of 7,500 shares of
  Series A convertible preferred
    stock, net of issuance costs  7,500       --         --         --         --      --    7,110       --     --    --      7,110
Net loss                            --        --         --         --         --      --      --        --     --  (2,455)  (2,455)
                                 -------   --------   --------    ------  ---------  ------ -------   ------- ---- -------- -------
Balance, December 31, 1997       15,000       --         --         --    3,433,199   71    29,055     (550) (1,156)(3,880)  23,540
                                 =======   ========   ========    ======  =========  ====== =======   ======= ===== ======= =======
Issuance of common stock in
   connection with acquisitions
     of businesses                  --        --        --          --      739,290   15     7,066       --     --    --      7,081
Issuance of stock options in
  connection with business
   acquisitions                     --        --        --          --         --     --       514       --     --    --        514
Exercise of nonemployee warrants    --        --        --          --      570,615   11     3,894       --     --    --      3,905
Exercise of employee stock options  --        --        --          --        3,875   --        31       --     --    --         31
Exchange of options to purchase
  Series B convertible preferred
   stock for common stock           --        --        --          --      375,000    7        (7)      --     --    --        --
Dividends on preferred stock        --        --        --          --         --     --        --       --     --  (1,249)  (1,249)
Issuance of 7,500 shares of
  Series A convertible preferred
   stock, net of issuance costs   7,500       --        --          --         --     --     7,488       --     --    --      7,488
Net loss                            --        --        --          --         --     --        --       --     --    (844)    (844)
                                 -------   --------   --------    ------   --------  ------ -------   ------- ---- -------- --------
Balance, December 31, 1998       22,500       --        --          --    5,121,979  104    48,041     (550) (1,156)(5,973)  40,466
                                 =======   ========   =========   ======  =========  ====== =======   ======= ===== ======= ========
Issuance of common stock in
  connection with acquisitions
    of businesses                   --        --        --          --      212,500    1     1,025       --     --      --    1,026
Issuance of stock options to
  non-employees                     --        --        --          --         --     --         4       --     --      --        4
Dividends on preferred stock        --        --        --          --         --     --        --       --     --  (1,490)  (1,490)
Issuance of 2,500 shares of
  Series C convertible preferred    --        --      2,500         --         --     --     2,486       --     --      --    2,486
    stock, net of issuance costs    --        --        --          --         --     --        --       --     --      --      --
Net loss                            --        --        --          --         --     --        --       --     -- (39,890) (39,890)
                                 -------   --------   --------    ------   --------  ----- -------   -----  ------- ------- --------
Balance, December 31, 1999       22,500    $  --      2,500       $ --    5,334,479  $105  $51,556   $(550) $(1,156)$(47,353)$2,602
                                 =======   ========   ========    ======  =========  ===== =======   =====- ======= ======== =======
</TABLE>

See accompanying notes to consolidated financial statements.
                  ESQUIRE COMMUNICATIONS LTD. AND SUBSIDIARIES

                     Consolidated Statements of Cash Flows

                  Years Ended December 31, 1999, 1998 and 1997

                                 (In thousands)
<TABLE>
<CAPTION>
                                                                         1999            1998              1997
                                                                      -----------      -----------      ---------
<S>                                                                   <C>                <C>             <C>
Cash flows from operating activities:
    Net loss                                                      $  (39,890)          $ (844)         $ (2,455)
    Adjustments to reconcile net loss to net cash
        used in operating activities, excluding effect
        of business acquisitions:
            Depreciation and amortization                              6,719            4,753             2,522
            Loss on disposal of property and equipment                     5              --                --
            Asset writedown and other charges                         27,047              --                --
            Commission expense related to grant of
                  stock options                                            4              --                329
            Provision for deferred income taxes                         --                --                140
            (Increase) decrease in assets:
                  Accounts receivable, net                              (853)          (1,100)           (2,815)
                  Prepaid expenses and other current assets            1,221             (417)             (415)
            Increase (decrease) in liabilities:
                  Accounts payable, accrued expenses and
                     unearned revenue                                  5,224           (3,037)            1,753
                  Other liabilities                                      502              166               (95)
                                                                 -------------      --------------     ------------
                       Net cash used in operating activities           ( 21)             (479)           (1,036)
                                                                 -------------      --------------     ------------
Cash flows from investing activities:
    Acquisitions of businesses, net of cash acquired                 (1,283)          (43,683)          (34,866)
    Proceeds from sale of property and equipment                         96               --                --
    Purchases of property and equipment                              (2,795)           (3,324)             (737)
                                                                 -------------      --------------     ------------
                       Net cash used in investing activities         (3,982)          (47,007)          (35,603)
                                                                 -------------      --------------     ------------
Cash flows from financing activities:
    Change in bank overdraft                                          1,586               727                --
    Proceeds from long-term debt                                      5,311            39,650            31,846
    Payment of preferred stock dividends                                --               --                (627)
    Principal payments on long-term debt                             (4,360)           (3,110)           (1,552)
    Payment of deferred financing costs                                (399)             (388)             (538)
    Proceeds from exercise of employee stock
          options                                                       --                 31               279
    Warrant exchange offering issuance costs                            --                --               (175)
    Proceeds from issuance of Series A convertible
          preferred stock, net                                          --              7,488             7,110
    Proceeds from issuance of Series C convertible
          preferred stock, net                                        2,486
    Proceeds from exercise of warrants, net                             --              3,905                226
                                                                 -------------      --------------     ------------
                       Net cash provided by financing activities      4,624            48,303             36,569
                                                                 -------------      --------------     ------------
Net increase (decrease) in cash                                         621               817                (70)
Cash at beginning of year                                               933               116                186
                                                                 -------------      --------------     ------------
Cash at end of year                                               $   1,554          $    933            $   116
                                                                 =============      ==============     ============
</TABLE>

See accompanying notes to consolidated financial statements.
<PAGE>


(1)  BASIS OF PRESENTATION

     The accompanying financial statements have been prepared on a going concern
     basis.

     The Company, largely since its inception, has experienced a deficiency in
     working capital and recurring operating losses, which have been
     funded primarily through term debt financing.

     The Company is unable to repay principal, in the amount of $82,842 due
     January 3, 2000 under its Revolving Loan Agreement ("Loan Agreement") and
     suspended interest payments due thereunder effective November 1999. The
     lenders to the Loan Agreement have agreed to both forebear receiving the
     payment of interest for the period November 1999 to April 14, 2000 in the
     amount of approximately $3,300 and extend the maturity date of the Loan
     Agreement to April 14, 2000.

     The Company, presently and for the foreseeable future, is unable to pay
     interest or principal amounts outstanding under the Loan Agreement and is
     currently negotiating with the lenders thereunder to continue to forebear
     receiving principal and interest or otherwise restructure the terms
     thereof. In the event the Company is unable to successfully renegotiate an
     appropriate period of continued forebearance or other satisfactory
     restructuring of the Loan Agreement, the lenders thereunder have the right
     to accelerate the loan and exercise their remedies under the loan
     documents, including the foreclosure of their security interests in the
     Company's assets.

     Additionally, the Company may not be able to fund operations or repay
     certain other obligations as they become due without increased credit
     facilities and/or rescheduling payments. The Company's ability to acquire
     increased credit facilities and/or reschedule payment terms is highly
     uncertain and cannot be assured.

     One of the potential outcomes of the events described above could result in
     the ultimate liquidation of the Company.

     The financial statements do not include any adjustments that might be
     necessary should the Company be unable to continue as a going concern.

(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES

    (a)   PRINCIPLES OF CONSOLIDATION AND DESCRIPTION OF BUSINESS

          The accompanying consolidated financial statements include the
          financial statements of Esquire Communications Ltd. and its
          subsidiaries, all of which are wholly owned (collectively, the
          "Company"). All significant intercompany accounts and transactions
          have been eliminated.

          The Company is the nation's leading provider of court reporting
          services to law firms, insurance companies and major corporations
          through Company-owned offices located in 24 markets in 11 states and
          the District of Columbia. In addition, the Company provides permanent
          and temporary staffing of financial and legal professionals, legal
          video services, record retrieval, process service and document
          depository services in a limited number of markets.

    (b)   REVENUE RECOGNITION

          Revenue and the related direct costs of court reporters and
          transcribers are recognized when services rendered are billable, which
          generally occurs at the time the final documents are transcribed and
          completed.

          Permanent staffing income is recognized when a candidate is accepted
          for employment. Provisions are made for estimated losses in
          realization (principally due to failure of applicants to complete
          stipulated employment periods). Temporary staffing income is
          recognized when the temporary personnel provide the services.

    (c)   PROPERTY AND EQUIPMENT

          Property and equipment are recorded at cost. Depreciation is computed
          using both accelerated and straight-line methods over the estimated
          useful lives of the assets. Property and equipment held under capital
          leases and leasehold improvements are amortized on a straight-line
          basis over the shorter of the estimated useful lives of the assets or
          the lease terms. Maintenance and repairs are charged to expense as
          incurred while improvements are capitalized.

    (d)   GOODWILL AND OTHER INTANGIBLE ASSETS

          The cost in excess of the fair values of net identifiable tangible and
          intangible assets of acquired businesses (goodwill) is amortized using
          the straight-line method over periods ranging from 15 to 40 years.
          The Company periodically reviews goodwill to evaluate whether changes
          have occurred that would suggest that goodwill may be impaired based
          on the estimated undiscounted cash flows of the assets acquired over
          the remaining amortization period. If this review indicates that the
          remaining estimated useful life of goodwill requires revision or that
          the goodwill is not recoverable, the carrying amount of the goodwill
          is reduced by the estimated shortfall of cash flows on a discounted
          basis. Effective October 1, 1999, the Company changed the estimated
          period of benefit to 15 years for all of its goodwill (see discussion
          of impairment in Note (5)).

          Other intangible assets consisting primarily of customer lists,
          covenants not to compete and deferred financing costs are amortized
          using the straight-line method over the assets' respective estimated
          lives or terms, typically no more than ten years.

          Amortization expense for fiscal years 1999, 1998 and 1997 related to
          goodwill and other intangible assets was $4,886, $3,217 and $1,824,
          respectively.

    (e)   INCOME TAXES

          The Company utilizes the asset and liability method of accounting for
          income taxes. Under this method, deferred tax assets and liabilities
          are recognized for the future tax consequences attributable to
          differences between the financial statement carrying amounts of
          existing assets and liabilities and their respective tax bases and
          operating loss and tax credit carryforwards. Deferred tax assets and
          liabilities are measured using enacted tax rates expected to apply to
          taxable income in the years in which those temporary differences are
          expected to be recovered or settled. The effect on deferred tax assets
          and liabilities of a change in tax rates is recognized in income in
          the period that includes the enactment date.

    (f)   LOSS PER COMMON SHARE

          The following table sets forth the computation of basic and diluted
          net loss per share:
<TABLE>
<CAPTION>

                                                                      YEARS ENDED DECEMBER 31,
                                                         ----------------------------------------------------
                                                              1999              1998              1997
                                                         ----------------  ----------------  ----------------
Numerator:
<S>                                                       <C>                <C>               <C>
    Net loss                                              $   (39,890)      $      (844)      $   (2,455)
    Less dividends on preferred stock                          (1,490)           (1,249)            (702)
                                                         ----------------  ----------------  ----------------

    Numerator for basic and diluted net loss per
      share - loss available to common stockholders       $   (41,380)      $     (2,093)     $   (3,157)
                                                         ================  ================  ================

Denominator for basic and diluted net loss per
   share - weighted-average shares outstanding              5,330,815          4,352,055       2,815,142
                                                         ================  ================  ================

    Basic and diluted net loss per share                  $     (7.76)      $      (0.48)     $    (1.12)
                                                         ================  ================  ================

          Options, warrants, convertible preferred stock and debt and
          contingently issuable shares of common stock totaling approximately
          5,847,292, 4,280,818 and 2,717,216 shares were excluded from the
          computations of net loss per common share for the years ended December
          31, 1999, 1998 and 1997, respectively, as their effect is
          anti-dilutive.
</TABLE>

    (g)   ACCOUNTING FOR STOCK-BASED COMPENSATION

          The Company accounts for its stock option plan in accordance with the
          provisions of APB Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO
          EMPLOYEES, and the Company provides pro forma net income disclosures
          for employee stock option grants made as if the Company had adopted
          the fair value method under SFAS No. 123, ACCOUNTING FOR STOCK-BASED
          COMPENSATION.

    (h)   IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED
          OF

          Long-lived assets and certain identifiable intangibles are reviewed
          for impairment whenever events or change in circumstances indicate
          that the carrying amount of an asset may not be recoverable.
          Recoverability of assets to be held and used is measured by a
          comparison of the carrying amount of an asset to future cash flows
          (undiscounted and without interest charges) expected to be generated
          by the asset. If such assets are considered to be impaired, the
          impairment to be recognized is measured by the amount by which the
          carrying amount of the assets exceeds the fair value of the assets.
          Assets to be disposed of are reported at the lower of the carrying
          amount or fair value less selling costs.

    (i)   FAIR VALUE OF FINANCIAL INSTRUMENTS

          The carrying value of cash, accounts receivable, current maturities of
          long-term debt, accounts payable and accrued expenses approximates
          their fair value because of the short-term maturity of these
          instruments. The carrying value of long-term debt approximates its
          fair value as such amounts bear rates of interest which approximate
          the Company's current borrowing rate for instruments with similar
          terms.

    (j)   SEGMENT INFORMATION

          The Company adopted SFAS No. 131, DISCLOSURES ABOUT SEGMENTS OF AN
          ENTERPRISE AND RELATED INFORMATION, in 1998. This statement
          establishes standards for the reporting of information about operating
          segments in annual and interim financial statements and requires
          restatement of prior year information. Operating segments are defined
          as components of an enterprise for which separate financial
          information is available that is evaluated regularly by the chief
          operating decision maker(s) in deciding how to allocate resources and
          in assessing performance. SFAS No. 131 also requires disclosures about
          products and services, geographic areas and major customers. The
          adoption of SFAS No. 131 did not affect results of operations or
          financial position but did affect the disclosure of segment
          information, as presented in Note 11.

    (k)   ACCOUNTING STANDARDS

          In June 1998, Statement of Financial Standards No. 133, "Accounting
          for Derivative Instruments and Hedging Activities" ("SFAS No. 133"),
          was issued and is effective for all fiscal quarters of fiscal years
          beginning after June 15, 2000. This statement establishes accounting
          and reporting standards for derivative instruments and hedging
          activities.

          The Company anticipates that the adoption of SFAS No. 133 will not
          have a material effect on the financial position, results of
          operations or liquidity of the Company.

    (l)   USE OF ESTIMATES

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

    (m)   RECLASSIFICATIONS

          Certain reclassifications have been made to the 1998 and 1997
          balances in order to conform to the presentation for the year ended
          December 31, 1999.

(3) BUSINESS COMBINATIONS

          Between 1993 and 1999, the Company pursued an aggressive acquisition
          strategy of consolidating the highly fragmented court reporting
          industry. In pursuit of this strategy, since 1997 the Company acquired
          42 court reporting companies and 3 providers of permanent and
          temporary legal and financial professionals. Of these acquisitions, 17
          were acquired in 1997, 25 were acquired in 1998 and three were
          acquired in 1999. All but one of these acquisitions have been
          accounted for using the purchase method, and a substantial portion of
          each acquisition's purchase price was represented by goodwill in the
          amount of $121,276 before subsequent amortization and write-off.

    (a)   PURCHASE BUSINESS COMBINATIONS

          The financial statements include the operating results of each
          acquired business from the date of acquisition.

          During 1999, the Company acquired the assets and liabilities of 3
          court reporting service related companies. The aggregate consideration
          paid for these acquisitions consisted of $1,420 in cash, $220 in
          subordinated notes payable, and 50,000 unregistered shares of the
          Company's common stock valued at $170. The cost in excess of fair
          value of net identifiable assets acquired was approximately $1,787.

          During 1998, the Company acquired the assets and liabilities of 22
          court reporting agencies and three professional placement firms. The
          aggregate consideration paid for these acquisitions consisted of
          $44,792 in cash, $7,274 in subordinated notes payable, 901,794
          unregistered shares of the Company's common stock valued at $7,877 and
          120,000 stock options valued at $514. The cost in excess of fair value
          of net identifiable assets acquired was approximately $54,251.

          During 1997, the Company acquired the assets and liabilities of 17
          court reporting agencies. The aggregate consideration paid for these
          acquisitions consisted of $34,296 in cash, $5,829 in subordinated
          notes payable, and 678,000 unregistered shares of the Company's common
          stock valued at $5,694. The cost in excess of fair value of net
          identifiable assets acquired was approximately $44,952.

          The following unaudited pro forma information assumes the acquisitions
          completed in 1998 and 1997 occurred on January 1, 1997. Acquisition
          pro forma information with respect to acquisitions completed in 1999
          is immaterial and thus not provided. These results are not necessarily
          indicative of future operations, nor of results that would have
          occurred had the acquisitions and other transactions been consummated
          as of the beginning of the periods presented:

                                                          1998          1997
                                                     ------------   -----------
          Revenue                                    $  135,979      $  135,590
          Net (loss) income applicable to common
              stockholders                               (1,827)           (489)
          Net (loss) income per common share - basic      (0.40)          (0.13)
          Net (loss) income per common share - diluted    (0.40)          (0.13)

    (b)   POOLING OF INTERESTS BUSINESS COMBINATION

          On November 7, 1997, the Company merged with Jurist-Begley Reporting
          Services, Inc., Jurist, Inc. and Aarons & Associates, Inc.
          (collectively Jurist) in exchange for 427,214 shares of the Company's
          common stock. Jurist is a Philadelphia, Pennsylvania-based court
          reporting company.

          The merger constituted a tax-free reorganization and has been
          accounted for as a pooling of interests, and accordingly, the
          accompanying consolidated financial statements have been restated to
          include the results of Jurist for all periods presented. The fiscal
          year-end of Jurist was conformed to the Company's.

          Revenue and net loss from continuing operations of the combining
          companies for the periods preceding the acquisition are as follows:

                                                     JANUARY 1, 1997
                                                      TO NOVEMBER 6,
                                                           1997
                                                     ---------------
          Revenue:
            Esquire                                  $  37,010
            Jurist                                       3,952
                                                     --------------
                                                     $  40,962
                                                     ==============

          Net loss before extraordinary item:
            Esquire                                  $  (1,475)
            Jurist                                        (511)
                                                     --------------
                                                     $  (1,986)
                                                     ==============

          The combined financial results presented above include adjustments
          made to conform to the accounting policies of the two companies. In
          connection with the merger, the Company recorded charges of $922 in
          the year ended December 31, 1997. These charges include legal,
          accounting and other fees.

(4) PROPERTY AND EQUIPMENT

    Property and equipment consists of the following as of December 31, 1999
and 1998:
                                                                  Depreciable
                                     1999           1998            Lives
                              -------------    --------------   --------------
Buildings                       $   184         $     208            31 years
Equipment                         9,427             8,128        5 to 7 years
Leasehold improvements            1,970             1,782        5 to 10 years
                               -------------    --------------
                                 11,581            10,118
Less accumulated depreciation
 and amortization                (6,130)           (4,181)
                              --------------   ---------------
                               $  5,451         $   5,937
                              ==============   ===============

Depreciation and amortization expense, exclusive of the charge for fixed asset
write off of $350, for property and equipment amounted to $1,833, $1,537 and
$698 for the years ended December 31, 1999, 1998 and 1997, respectively.

<PAGE>

(5)  ASSET WRITE DOWN AND OTHER CHARGES

     Goodwill related to certain operating locations was deemed impaired and a
     charge to operating earnings for $25,700 was recognized at December 31,
     1999. The Company determined the goodwill impairment by measuring the
     difference between the carring amount of goodwill to fair value (calculated
     as the discounted projected cash flows for disaggregated locations using a
     discount rate commensurate with the risk involved). The discount rate used
     for 1999 was 18%. The Company believes that this is the appropriate method
     of measurement of the remaining fair value of goodwill, considering the
     Company's circumstances, particularly with the continuing exposure to the
     decline in revenues and margins in certain disaggregated locations.

     As of December 31, 1999, fixed assets in the amount of $710, with
     accumulated depreciation of $360, were written off and charged to operating
     earnings in the amount of $350.

     As of December 31, 1999, a charge to operating earnings in the amount of
     $997 was recognized to write off capitalized costs associated with the
     development of a new management information system for scheduling, billing
     and paying independent contractors due to the discontinuance of the
     project during the fourth quarter.

(6)  LONG-TERM DEBT

     Long-term debt consists of the following as of December 31, 1999 and 1998:

                                                    1999             1998
                                              ---------------   --------------

     Revolving loan agreement (a)              $  82,842        $      79,715
     Promissory notes (b)                          4,183                8,402
     Contract obligation (c)                         253                  341
     Other notes and obligations (d)               1,531                  815
     Convertible notes (e)                         4,476                4,560
     Common stock repurchase guaranty (f)            275                  275
     Loan from preferred stockholder (g)           1,500                  ---
                                             ---------------   ---------------
                                                  95,060               94,108

     Less current portion of long-term debt      (89,403)              (3,779)
                                             ---------------   ---------------

                                               $   5,657        $      90,329
                                            ================   ===============

     (a)  The Company is presently, and for the foreseeable future, unable to
          repay the three-year revolving Loan Agreement entered into in December
          1996, as amended, which became due January 3, 2000. The lenders to the
          Loan Agreement have agreed to both forebear receiving the payment of
          interest for the period November 1999 to April 14, 2000 in the amount
          of approximately $3,300 and extend the maturity date of the Credit
          Agreement to April 14, 2000. The Company, presently and for the
          foreseeable future, is unable to pay interest or principal amounts
          outstanding under the Loan Agreement and may not be able to
          renegotiate or enter into a replacement facility.

          The Loan Agreement, which is secured by substantially all the assets
          of the Company, restricts future indebtedness, investments,
          distributions, acquisitions or sale of assets and capital expenditures
          and also required the maintenance of certain financial ratios and
          covenants. During 1999 and 1998, the Company did not comply with
          certain covenant requirements and exceeded permitted capital
          expenditures, for which the Company received lender waivers and
          executed amendments to the Loan Agreement.

          Borrowings under the Loan Agreement bear interest at either prime rate
          or London Inter-Bank Offered Rate (LIBOR), at the Company's election,
          plus an applicable margin rate. The effective rate at December 31,
          1999 and 1998 was 10.8% and 8.7%, respectively.

          Substantially all other lenders to the Company have entered into a
          subordination agreement with this financial institution.

          The Loan Agreement, as amended, consists of two segments. Segment A
          consists of revolving loans totaling $77,000. The interest rate on the
          borrowings under this segment is prime rate or LIBOR, plus an
          applicable margin rate of 1.75% and 3.25%, respectively, plus a PIK
          (interest which is accrued but not payable until loan maturity) margin
          of 0.75% and an additional PIK margin of 1.25% on outstanding
          borrowings in excess of the available borrowing capacity based upon
          operating cash flows, if any. Segment B consists of revolving loans
          totaling $3,800 through May 31, 1999 and $6,500 thereafter. The
          interest rate on the borrowings under this segment is prime rate, plus
          an applicable margin rate of 1.75%, plus a PIK margin of 1.50% from
          January 1, 1999 through June 30, 1999, 2.25% from July 1, 1999 through
          September 30, 1999 and 3.75% thereafter. No payments with respect to
          the PIK margin are due until January 3, 2000, subject to certain
          provisions. The lenders have agreed to forbear receiving payments with
          respect to the PIK margin and extend the due date to April 14, 2000.

     (b)  Promissory notes with former owners of acquired businesses are
          generally payable in quarterly installments plus interest at rates
          ranging from no interest to 10% through August 2003. In December 1998
          and January and February 1999, the Company amended certain of these
          promissory notes. These amendments contained provisions to defer all
          payments until June 30, 1999 and provide an interest rate of 9% on all
          deferred amounts. The Company was current on these obligations as of
          December 31, 1999.

     (c)  Contract obligation -- an agreement with a former employee of an
          acquired company, who is related to an officer/director of the
          Company, provides for monthly payments of $9 through June 2002. The
          Company was current on this obligation as of December 31, 1999.

     (d)  Other notes and obligations -- outstanding amounts relate to various
          equipment capital leases and are payable in aggregate monthly
          installments with interest ranging from 8% to 15% through October
          2003. The Company was current on these obligations as of December 31,
          1999.

     (e)  Convertible promissory notes with former owners of acquired
          businesses, with due dates ranging from November 2000 through June
          2003. The notes are convertible at any time at the option of the
          Company into shares of the Company's common stock at conversion prices
          ranging from $16.00 - $20.00 per share only if certain conditions are
          met.

     (f)  Common stock repurchase guaranty -- contractual obligation to
          repurchase 13,750 shares of the Company's common stock at $20.00 per
          share from former owners of an acquired business in May 2000. The
          obligation is at the option of the former owners.

     (g)  In February 1999, a preferred stockholder guaranteed $1,500 of an
          over-advance made to the Company under the Loan Agreement, and
          received a fee of $75 in consideration of such guaranty. In April
          1999, the preferred stockholder paid $1,500 pursuant to this
          guarantee, which is evidenced by a subordinated promissory note
          bearing interest at the rate of 18% per annum, which was due October
          1999 and subsequently extended until October 16, 2000. The Company,
          presently and for the foreseeable future, is unable to pay interest or
          principal outstanding on this note.

          In connection with an acquisition in August 1998, a preferred
          stockholder guaranteed the repayment of a $2,500 over-advance made to
          the Company under the Loan Agreement and received a fee of $125 in
          consideration of such guaranty. In January 1999, preferred
          stockholders paid $2,500 pursuant to this guaranty and received 2,500
          shares of the Company's Series C Convertible Preferred Stock.


     Scheduled annual principal payments of long-term debt are as follows:

             2000                         $      89,403
             2001                                 3,880
             2002                                 1,308
             2003                                   388
             2004                                    32
             Thereafter                              49
                                       -----------------
                                          $      95,060
                                       =================

(7)  STOCKHOLDERS' EQUITY

    (a)   COMMON STOCK

          Effective November 30, 1998, the Company's stockholders voted to amend
          the Company's Certificate of Incorporation and effect a 1-for-2
          reverse stock split of all outstanding common stock, and to increase
          the par value of the Company's common stock from $.01 to $.02. All
          share and per share amounts have been restated to give effect to the
          reverse stock split.

          On April 15, 1997, as provided for in the Management Agreement dated
          February 13, 1997 between Esquire Communications Ltd., Harlingwood &
          Company, LLC (Harlingwood) and David A. White, Harlingwood acquired
          125,000 shares of common stock at a price of $6.25 per share. Payment
          by Harlingwood was with a promissory note, due on April 15, 2001, in
          the amount of $781. The note accrues interest at the rate of 7% per
          annum, and the interest is payable on April 15, 2001. The amount due
          under the note is secured by a pledge of the 125,000 shares of common
          stock issued. The 125,000 shares of common stock were issued out of
          the Company's treasury stock.

          On December 15, 1997, Harlingwood exercised 50,000 stock options
          granted under the Company's stock option plan at the exercise price of
          $7.50 per share, resulting in the issuance of 50,000 shares of common
          stock. Payment by Harlingwood was with a promissory note due on
          December 15, 2001 in the amount of $375. The note accrues interest at
          the rate of 7% per annum, and the interest is payable on December 15,
          2001. The amount due under the note is secured by a pledge of the
          50,000 shares of common stock issued.

          In connection with the 1999, 1998 and 1997 acquisitions, the Company
          issued 212,500, 739,290 and 678,000 shares of common stock,
          respectively, valued at approximately $1,026, $7,081 and $5,694,
          respectively.

     (b)  PREFERRED STOCK

          The Series A Convertible Preferred Stock is convertible into common
          stock of the Company at a conversion price of $6.00 per share (subject
          to anti-dilution adjustments) and bears cumulative annual dividends at
          the rate of 6% ($60.00 per share) per annum. The holders of Series A
          Convertible Preferred Stock have a liquidation preference of $1,000
          per share, plus accrued dividends. Holders of Series A Convertible
          Preferred Stock have the right to vote together with the holders of
          common stock and are entitled to one vote for each whole share of
          common stock into which the Series A Convertible Preferred Stock is
          convertible (presently 166 2/3 votes per share).

          In January 1999, pursuant to a guarantee agreement entered into by the
          Company with a preferred stockholder (Note 6(g)), the Company issued
          2,500 shares of Series C convertible preferred stock. The Series C
          Convertible Preferred Stock is identical to the Series A Convertible
          Preferred Stock, except that it has a conversion price of $10.00 per
          share and has 100 votes per share.

(8)  STOCK OPTIONS AND WARRANTS

     (a)  STOCK OPTION PLAN

          In 1993, the Company adopted a stock option plan (the Plan) pursuant
          to which the Company's Board of Directors may grant stock options to
          officers, employees, directors, consultants and independent
          contractors of the Company. The Plan was amended in 1998 to increase
          the number of shares of common stock issued under the Plan. The Plan,
          as amended, authorizes grants of options to purchase up to 1,750,000
          shares of authorized but unissued common stock. Stock options are
          granted with an exercise price equal to the stock's fair market value
          at the date of grant. Stock options have ten-year terms and generally
          vest and become fully exercisable over a three-year period, commencing
          one year from the date of grant.

          The per share weighted-average fair value of stock options granted
          during 1999, 1998 and 1997 was $.87, $5.69 and $3.16, respectively, on
          the date of grant using the Black-Scholes option-pricing model with
          the following weighted-average assumptions: 1999 - expected volatility
          of 71%, expected dividend rate of 0%, risk-free interest rate of
          5.875% and expected life of five years; 1998 - expected volatility of
          51%, expected dividend yield of 0%, risk-free interest rate of 4.69%,
          and an expected life of five years; 1997 - expected volatility of 30%,
          expected dividend yield of 0%, risk-free interest rate of 6%, and an
          expected life of five years.

          The Company applies APB Opinion No. 25 in accounting for its Plan, and
          accordingly, no compensation cost has been recognized for its employee
          stock options in the consolidated financial statements. Had the
          Company determined compensation cost based on the fair value at the
          grant date for its employee stock options under SFAS No. 123, the
          Company's net loss would have been adjusted to the pro forma amounts
          indicated below:

                                                1999         1998        1997
                                             -----------  -----------  ---------
            Net loss applicable to common
                stockholders:
                  As reported                $ (41,380)   $ (2,093)   $ (3,157)
                  Pro forma                    (41,984)     (3,279)     (3,511)

            Basic and diluted net loss per
                common share:
                  As reported                $   (7.76)   $  (0.48)   $  (1.12)
                  Pro forma                      (7.88)      (0.75)      (1.25)

          Pro forma net loss reflects only options granted in 1998, 1997 and
          1996. Therefore, the full impact of calculating compensation cost for
          stock options under SFAS No. 123 is not reflected in the pro forma net
          loss amounts presented above because compensation cost is reflected
          over the options' vesting period of three years, and compensation cost
          for options granted prior to January 1, 1996 is not considered.

          Stock option activity during the periods indicated is as follows:

                                                               WEIGHTED-AVERAGE
                                          NUMBER OF SHARES     EXERCISE PRICE
                                          -----------------   ----------------
     Balance at January 1, 1997              364,250           $  7.52
     Granted                                 349,000              9.96
     Exercised                               (85,333)             7.68
     Forfeited                                (7,683)             8.00
                                           ----------          -------

     Balance at December 31, 1997            620,234              8.84
     Granted                                 319,500             11.44
     Exercised                                (3,875)             8.00
     Forfeited                               (40,625)             8.25
                                           ----------          -------

     Balance at December 31, 1998            895,234              9.80
     Granted                                 302,500              1.76
     Exercised                                    --               --
     Forfeited                              (273,442)            11.72
                                           ----------          -------

     Balance at December 31, 1999            924,292           $  6.48
                                           ==========          =======

          The following table summarizes information about Plan options
          outstanding at December 31, 1999:

                          WEIGHTED-                             WEIGHTED-
                          AVERAGE           NUMBER OF           AVERAGE EXERCISE
                          REMAINING         OPTIONS             PRICE OF OPTIONS
                          CONTRACTUAL       CURRENTLY           CURRENTLY
      EXERCISE PRICE      LIFE              EXERCISABLE         EXERCISABLE
     ----------------    ------------     ---------------  -------------------
      $1.03 - $8.00       5.76 years          363,790         $    7.43
     $10.63 - $13.50      8.22 years           71,335             11.89


          At December 31, 1999, 1998 and 1997, the number of options exercisable
          was 435,125, 479,837 and 251,983, respectively, and the
          weighted-average exercise price of those options was $8.16, $9.25 and
          $7.75, respectively.

     (b)  OPTIONS GRANTED OUTSIDE THE PLAN

          During the year ended December 31, 1999, the Company granted to
          non-employees options to purchase 30,000 shares of the Company's
          common stock outside the plan at a price of $8.00, which was also the
          fair value of the stock options granted at the date of grant. The
          Company recognized $4 of commission expense relating to these options
          during the year ended December 31, 1999 using the Black-Scholes
          option-pricing model. The following weighted-average assumptions were
          included in this method for 1999: expected volatility of 71%; expected
          dividend yield of 0%; risk-free interest rate of 5.875%; and an
          expected life of five years.

          During the year ended December 31, 1998, the Company granted to
          non-employees options to purchase 120,000 shares of the Company's
          common stock outside the Plan at prices ranging from $12.50 to $18.00.
          The Company capitalized as goodwill $514 for these options which were
          granted in connection with certain business acquisitions accounted for
          as a purchase, using the Black-Scholes option-pricing model. The
          Company determined that the per share weighted-average fair value of
          stock options granted outside the Plan during 1998 was $12.25 on the
          date of grant. The following weighted-average assumptions were
          included in this method for 1998: expected volatility of 51%; expected
          dividend yield of 0%; risk-free interest rate of 4.69%; and an
          expected life of five years.

          During the year ended December 31, 1997, the Company granted to
          non-employees options to purchase 175,000 shares of the Company's
          common stock outside the Plan at a price range of $8.00 to $9.00. The
          Company recognized $329 of commission expense relating to these
          options during the year ended December 31, 1997, and capitalized as
          goodwill $303 of commission expense for options granted in connection
          with a business acquisition accounted for as a purchase, using the
          Black-Scholes option-pricing model. The Company determined that the
          per share weighted-average fair value of stock options granted outside
          the Plan during 1997 was $8.83 on the date of grant. The following
          weighted-average assumptions were included in this method for 1997:
          expected volatility of 30%; expected dividend yield of 0%; risk-free
          interest rate of 6% and an expected life of five years.

          The following table summarizes information about options granted
          outside the Plan at December 31, 1999:

<TABLE>
<CAPTION>

                                            WEIGHTED-AVERAGE      NUMBER OF OPTIONS        WEIGHTED-AVERAGE
                                            REMAINING             CURRENTLY                EXERCISE PRICE OF
                                            CONTRACTUAL LIFE      EXERCISABLE              OPTIONS CURRENTLY
                    EXERCISE PRICE                                                           EXERCISABLE
              ----------------------------  -------------------  -------------------    ----------------------
                  <S>                           <C>                   <C>                     <C>
                     $8.00 - $9.00              7.93 years             205,000               $   8.71
                    $12.50 - $18.00             7.58 years             120,000                  17.23
</TABLE>

    (c)   WARRANTS

          At December 31, 1999, 1998 and 1997, the Company had outstanding,
          312,500, 354,500 and 951,284 warrants, respectively, at exercise
          prices ranging from $5.28 to $9.00 per warrant. At December 31, 1999,
          1998 and 1997, the weighted-average exercise price of those warrants
          was $5.80, $6.18 and $7.14, respectively, and the weighted-average
          remaining contractual life of those warrants was 3.00, 3.59 and 2.86
          years, respectively. All warrants outstanding are exercisable at
          December 31, 1999.

(9)  PROFIT SHARING PLAN

     In September 1995, the Company adopted a 401(k) savings plan covering all
     eligible employees. The plan allows employees to voluntarily contribute up
     to l5% of their compensation. The Company may make discretionary matching
     contributions prior to the end of each plan year. The current matching
     percentage is 10%. The Company may also make additional discretionary
     contributions to the plan. The Company's total contributions to the plan
     for 1999, 1998 and 1997 amounted to $291, $34 and $15, respectively.

(10) INCOME TAXES

     The income tax provision (benefit) for the years ended December 31, 1999,
     1998 and 1997 is as follows:

<TABLE>
<CAPTION>
                                                                  1999               1998              1997
                                                             ----------------   ---------------   ----------------
      Current tax expense (benefit):
<S>                                                              <C>                   <C>               <C>
          Federal                                                $  (108)              (604)               --
          State and city                                              30                 15               (15)
                                                             ----------------   ---------------   ----------------
              Total current                                          (78)              (589)              (15)
                                                             ----------------   ---------------   ----------------
      Deferred tax (benefit) expense:
          Federal                                                     --                 --               101
          State and city                                              --                 --                39
                                                             ----------------   ---------------   ----------------
              Total deferred                                          --                 --               140
                                                             ----------------   ---------------   ----------------
              Total income tax provision (benefit)               $   (78)          $   (589)          $   125
                                                             ================   ===============   ================


       The income tax provision (benefit) for the years ended December 31, 1999,
       1998 and 1997 differs from the amount computed by applying the combined
       federal and state statutory rate of 40% as follows:

                                                                  1999                   1998            1997
                                                          -------------------    --------------      --------------
      Computed at combined federal and state                     $(15,987)         $   (487)          $  (792)
          statutory rate
      State tax                                                        18                15                24
      Change in the valuation allowance                            15,660              (329)              489
      Amortization of goodwill                                        207               210               157
      Nondeductible expenses                                          116                --                38
      Pre-acquisition earnings                                                           --               174
      Other                                                           (92)                2                35
                                                             --------------      ---------------      -------------
                                                                 $    (78)         $   (589)          $   125
                                                             ==============      ===============      =============
</TABLE>

<PAGE>

     Significant components of the Company's net deferred tax assets and
     liabilities as of December 31, 1999 and 1998 are as follows:

                                                    1999                 1998
                                              ---------------   --------------
  Deferred tax assets:
     Contract obligation                        $    110           $   136
     Allowances and accrued expenses               1,752               202
     Net operating loss (NOL) carryforwards        7,245             1,869
     Goodwill write down                          10,279                --
     Other                                          188
                                               -----------       ------------

         Total gross deferred tax assets         19,574              2,207

     Less valuation allowance                   (15,820)              (160)
                                               ------------      ------------

         Net deferred tax assets                  3,754              2,047

  Deferred tax liabilities - depreciation and
       amortization                              (3,754)            (2,047)
                                              -------------     --------------

         Net deferred tax asset                 $   --            $    --
                                              =============     ==============

     At December 31, 1999, the Company has approximately $17,581 in net
     operating loss carryforwards, which begin to expire in 2017.

     In accordance with Internal Revenue Code Section 382, the annual
     utilization of net operating loss carryforwards and credits existing prior
     to a change in control may be limited.

     In assessing the realizability of deferred tax assets, management considers
     whether it is more likely that some portion or all of the deferred tax
     assets will not be realized. The ultimate realization of deferred tax
     assets is dependent upon the generation of future taxable income in the
     periods in which those temporary differences become deductible. Management
     believes that there is a risk that certain of these NOL, tax credit
     carryforwards and other deferred tax assets may expire unused and,
     accordingly, has established a valuation allowance against them.

(11) REPORTABLE SEGMENT DATA

     The Company believes that all of its material operations are part of the
     legal services industry, and it currently reports as a single industry
     segment. The Company's reportable segments are geographically aligned
     business units and include three regions within the United States, the
     Western region, the Northeast region and the Southeast region. The Western
     region includes the Company's operations in California, Colorado and Texas,
     the Northeast region includes the Company's operations in Illinois,
     Michigan, New Jersey, New York, Pennsylvania and Washington, D.C. and the
     Southeast Region includes the Company's operations in Florida and Georgia.

     The geographic reportable segments of the Company's revenues, operating
     income and identifiable assets are summarized in the following table. The
     "Other" column includes corporate related items, income, and expense not
     allocated to reportable segments.

<PAGE>
<TABLE>
<CAPTION>

                                         WESTERN          NORTHEAST        SOUTHEAST
                                          REGION           REGION           REGION            OTHER         CONSOLIDATED
                                       -------------    --------------   --------------   --------------   ----------------
       1999:
<S>                                    <C>              <C>              <C>              <C>              <C>
           Revenue                     $     42,459     $     68,241     $     33,564    $          --     $     144,264
           Operating income                   7,139            8,087            2,764          (47,339)          (29,349)
           Identifiable assets               24,524           23,631            8,954           66,034           123,143

       1998:
           Revenue                           36,975           56,661           16,950               --           110,586
           Operating income                   6,413            7,715            1,352          (10,331)            5,149
           Identifiable assets               16,830           16,835            5,490          112,101           151,256

       1997:
           Revenue                           23,813           26,536            2,829               --            53,178
           Operating income                   3,473            2,380              551           (6,078)              326
           Identifiable assets                9,547            4,521            2,306           66,477            82,851
</TABLE>

     No single customer accounted for as much as 10% of consolidated revenue in
     1999, 1998 and 1997.

(12) SUPPLEMENTAL CASH FLOW INFORMATION

     Cash payments for the years ended December 31, 1999, 1998 and 1997 have
     included:

                          1999                 1998                 1997
                       --------------   ------------------   ------------------

      Interest          $  7,599            $   6,636            $   2,687
      Income taxes            30                   15                   78

     During 1999, 1998 and 1997, the Company issued 222,920, 739,290 and 678,000
     shares of common stock, respectively, in connection with the acquisitions.

     During 1998 and 1997, the Company issued 72,120 and 50,313 shares of common
     stock, respectively, in connection with noncash exercises of warrants.

     During 1997, $627 in preferred stock dividends was paid. At December 31,
     1999, 1998 and 1997, accrued and unpaid preferred stock dividends were
     $2,888, $1,399 and $150, respectively.

     During 1997, 175,000 shares of the Company's common stock were issued for
     notes receivable of which 125,000 shares were issued from the Company's
     treasury stock.

     During 1997, the Company issued 92,448 shares of common stock in connection
     with a warrant exchange offering.

<TABLE>
<CAPTION>
                                                                1999               1998               1997
                                                           ---------------    ---------------    ---------------

   Supplemental noncash investing and financing activities:
<S>                                                         <C>                     <C>               <C>
              Acquisitions:
              Fair value of assets acquired                 $      (194)            14,359              7,144
              Liabilities assumed                                    (2)            (8,156)            (6,674)
              Cash paid for acquisitions                          2,693             43,683             34,866
              Stock issued                                       (1,026)            (7,081)            (5,694)
              Stock options issued                                   --               (514)                --
              Notes issued                                         (535)            (7,359)            (4,707)
</TABLE>


(13) COMMITMENTS

    (a)   EMPLOYMENT AGREEMENTS

          The Company has employment agreements and arrangements with certain of
          its executive officers and management personnel. The agreements
          generally continue until terminated by expiration of time, the
          executive or the Company, and provide for severance payments under
          certain circumstances. The majority of the agreements include a
          covenant against competition with the Company, which extends for a
          period of time after termination. As of December 31, 1999, if all
          employees under contract were to be terminated by the Company without
          good cause, under these contracts the Company's liability would be
          approximately $4,450 payable over the remaining terms of the
          employment agreements.

          In addition, the Company has entered into change in control agreements
          with certain key executive officers which provide that if an
          executive's employment is terminated within six months after a change
          in control of the Company, or the executive terminates employment
          within such six month period of time, then the executive is entitled
          to a lump sum severance payment ranging from $117 to $263 based upon
          salary levels currently in effect, and all of the executive's options
          shall immediately vest. Written notice has been provided that all
          change of control agreements will expire by their terms and will not
          be renewed beyond June 30, 2000. As of December 31, 1999, if a change
          of control were to occur, the Company's liability would be
          approximately $760.

          Effective May 1, 1997, the Company reached an agreement with David
          Feldman, the then President of the Company, whereby the Company bought
          out the remaining term of the employment agreement. Total compensation
          earned under the employment agreement prior to termination amounted to
          $230. The Company recognized a $1,000 expense in 1997 related to the
          future costs associated with the termination agreement.

          On February 13, 1997, the Company entered into a management agreement
          with Harlingwood, whereby Harlingwood would provide the services of a
          Chief Executive Officer. David White, an employee of Harlingwood,
          became the Chief Executive Officer effective February 13, 1997. The
          agreement expired on June 30, 1998, and provided for an annual
          management fee of $175. During 1999 and 1998, the Company paid $10 and
          $163, respectively, to Harlingwood for services rendered in connection
          with business acquisitions.

          During 1999, the Company recognized a $1,516 expense related to the
          costs of certain terminated key executives and other personnel.

     (b)  LEASE COMMITMENTS

          The Company is obligated under operating leases for office facilities,
          which expire through June 2009. The leases provide, among other
          things, that the Company is responsible for its share of increases in
          certain utilities, maintenance and property taxes over a base amount.
          In addition, the Company is also obligated under various equipment and
          vehicle leases that expire through September 2003. Total lease expense
          for 1999, 1998 and 1997 under the above leases amounted to
          approximately $4,578, $3,170 and $1,641, respectively.

          The anticipated future annual lease payments under operating leases at
          December 31, 2000, inclusive of the base utility, maintenance and
          property tax charges for the office facilities, are as follows:

             2000                               $     4,035
             2001                                     3,983
             2002                                     3,597
             2003                                     3,168
             2004                                     2,286
             Thereafter                               5,963
                                               -------------
                                                $    23,032
                                               =============

          Future annual rental income under remaining noncancelable subleases is
          as follows: 2000 - $392, 2001 - $392, 2002 - $127, and 2003 - $101.

      (c) LEGAL PROCEEDINGS

          The Company is involved in various claims and legal actions in the
          ordinary course of business. In the opinion of management, the
          ultimate disposition of these matters will not have a material adverse
          effect on the Company's consolidated financial statements taken as a
          whole.

(14) RELATED PARTIES

     In January 1999, the Company acquired all the stock of CAT-LINKS, Inc., a
     corporation owned by Cary Sarnoff, a director of the Company, for a
     purchase price consisting of 50,000 shares of common stock of the Company
     and the assumption of a $170 promissory note payable to Cary Sarnoff.  The
     promissory note was paid in full during 1999.


<PAGE>

                                   SIGNATURES

          Pursuant to the requirements of Section 13 or 15(d) 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.


                                         ESQUIRE COMMUNICATIONS LTD.


April 14, 2000                            By: /s/ Paul H. Bellamy
                                              ------------------------
                                              Chief Executive Officer


          Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

NAME                           TITLE                              DATE


/s/ Malcolm L. Elvey     Chairman of the Board               April 14, 2000
--------------------
Malcolm L. Elvey

/s/ Paul H. Bellamy      Chief Executive                     April 14, 2000
-------------------      Officer and Director
Paul H. Bellamy

/s/ Steven Wolkenstein   Vice President/Treasurer            April 14, 2000
----------------------   Corporate Secretary
Steven Wolkenstein       Principal Accounting Officer

                         Director                            April __, 2000
---------------------
Mortimer R. Feinberg

/s/ Cary A. Sarnoff      Director                            April 14, 2000
---------------------
Cary A. Sarnoff

/s/ Joseph P. Nolan      Director                            April 14, 2000
---------------------
Joseph P. Nolan