Great. Why don't we get started here? I'm Kevin McVeigh, part of the UBS research effort here. We're thrilled to kick off. This is my first fireside chat. We're thrilled to have Charles River. We've got their CEO, Paul Maleh. First year, I think, on our account that Charles River's attending. So we're thrilled to have Charles River as part of this process. Really appreciate all you folks coming out. I guess with that said, Paul, maybe just a little bit about the company. I think we're entering year 60 of Charles River, which, you know, just in and of itself is an achievement, 60 years, just to be able to continue to evolve and thrive. Maybe just a little bit about Charles River, the then and the now, and maybe we'll start there just for the benefit of the audience. Part of the goal, I'm gonna try to keep this as iterative as possible. If anyone wants to ask any questions, I can get them through the iPad or through my email, kevin.mcveigh@ubs.com or bloomberg.i.m. Okay. Thank you, Kevin. Thank you to UBS for having us. This is our first year presenting at this conference, and we appreciate that opportunity. As Kevin said, CRA is celebrating its 60th anniversary this year. We were founded back in 1965 from some professors from Harvard and MIT who had the grand theory of bringing, you know, academic quality research into, you know, in economics, finance, strategy to help business leaders make more informed decisions by providing insights into information. That was the mission of the firm back in 1965 and, quite frankly, still remains the core mission of the firm today. We are a consulting company of about 1,000 consulting professionals. Of that, about 80% of the business is in legal regulatory, something probably no one has ever heard of, and about 20% more traditional management consulting. That's great. Paul, maybe a little bit amazing. Obviously, we don't cover the stock, but I think if you look at the stock chart, you folks have thrived, just looking at the stock chart relative to a lot of Gen AI uncertainty. I wonder if maybe you can help us understand how you're able to differentiate yourself both across the legal and on the management consulting side. You know, I think for most of you folks know, part of our core thesis, and again, we don't cover CRA AI, but it's the data differentiation is really what insulates a lot of the companies we cover in a post-Gen AI world. We're still very early in terms of trying to navigate through that process, but maybe a little bit of the differentiation that you folks offer. Sure. I've been at CRA for 36 years. I stepped into the CEO role back in 2009. 2009, for those who can remember, was not necessarily a wonderful business environment. It was right with the financial crisis that was happening. My first job as CEO was to restructure about a third of the company away. That was really hard for a company that I grew up in and a company that I love. The last restructuring action was in the summer of 2012. I think if you look at our growth as a firm, we've been growing at about 9%-10% a year since then. We've been growing profits at a faster rate. The stock appreciation, as Kevin has said, I would, you know, challenge all of you to compare it to any company you want, whether you want to compare it to Google, Meta. We have been performing quite admirably. I think kind of that kind of sustained longevity of excellence goes to the differentiation of the products that we offer, and the value that clients see in our offering. We are, you know, we do not have any annuity-type revenue streams. Even though Amazon or Google or Apple or, you know, these large players may be repeat clients, they are on a project-by-project basis. We have to prove our worth on every single assignment that comes through the door. I think the value that is being provided is, you know, bar none. We are one of the top two, three providers in the world. I think we're the best in terms of economic consulting services to these kind of companies. That is the hallmark, is the functional expertise of economics. We're using that same expertise to help clients on industry verticals of life sciences and electric utilities. Helpful. You mentioned part made to 8% revenue growth. Maybe help us. I said nine to ten. Nine to 10. Nine to 10. Nine to 10. Nine to 10. nine to 10. Yeah. Should have said high single digits. Maybe help us dimensionalize how much of that is pricing versus, you know, international expansion as opposed to volume, maybe. Any thoughts around just to build up on that? Sure. About 80% of CRA's total revenue comes from legal regulatory, with the 20% being the management consulting. Of the 9%-10% growth over the last dozen years, about two-thirds of that is organic. We view inorganic additions as a way to supplement the portfolio, but the core driver is the organic services and expansion. Rate increases, there are some years in which we may be able to be more aggressive on rate increases, but on average, it is in that 2%-4% range of net increase associated with bill rates increase. Still, the substantive part of our growth comes from selling more hours, selling more services. As you think about the two segments from a competitive perspective, 60 years is a long time. Who do you think of in terms of, in having covered this sector a long time, not CRA, but, you know, the broader sector, I've always appreciated the core of these models related to differentiation, and there's no two pure play public comps. As you think about competitive dynamics across the industry, you know, where do you sit today? Other companies, just help us dimensionalize a little bit how the competitive landscape sits and, you know, has that shifted over time? You know, with the shift in technology, do you see a new, new suite of competitors emerging? Sure. Lots of different parts of that question. Sure. Our competitor set differs whether you're looking at legal regulatory services or you're looking at the management consulting services. I'll start with the management consulting services. There are clearly boutiques, and there are clearly the behemoths that we all know of, whether they're coming from the Big Four, or the Big Three management consulting firms. We stay in that cross-section of economics and regulations within life sciences and energy as our differentiator. We're not trying to compete head-on with these large players. We're trying to stay in our core competency area. In the legal regulatory side, as you mentioned, there is no perfect comparable. In fact, the majority of our comparables are privately held, whether privately held by the partners of the firm or privately held by PE-backed institutions, with that. It's hard to say what is the direct competitor. There are a handful of publicly traded firms. Some have overlapping services, FTI Consulting, Huron, have some overlapping services, but that's really about it, in terms of things you can readily observe. What I can say is if I look at the industry as a whole and we track growth of law firms, we track growth in the information we can observe. We've been taking share over these last dozen years. I just can't tell you from what parties we've been taking share, but our aggregate growth has been in far excess of what we observe for the industry as a whole on both legal and regulatory and the management consulting side. If you want, I could try to move into the whole AI piece, or do you have any specific questions you have there for me? No, I think that that's gonna obviously be a common theme through. Yeah. Through this conference. Maybe it's probably not the first or last time in this discussion we'll talk about it, but that it's probably a good segue. Yeah. I've been waiting for that huge price pop. You know, we were visionaries when we went public back in 1999, having the ticker of CRAI. That hasn't happened yet. We'll wait to see whether AI now becomes a revenue driver. AI is a wonderful opportunity, in that it enables us to undertake the initial parts of our research projects more efficiently, more rapidly, and get to higher value-added services across our institution. With that, there are limitations to that, both limitations of accuracy of the tools, limitation to contractual limitations on how we can use our clients' data, and then there's the human element of the limitation. I'll quickly try to touch upon that. AI is constantly getting better, right? Still, the estimation errors, right, or the predictive errors are about 85% right. If we're 85% right as a consultancy and legal regulatory, we're gonna be out of business on that. A big part of using the tool is knowing how to test it, as far as to its accuracy, as to the information it's relying on to form its opinion. It's as to its ability to be replicated. When you submit evidence to a courtroom, it needs to be replicated. As all of you have played around or probably a lot more sophisticatedly than I have, I ask the same question one day, then I do it another day, and I get a different answer to that. That's a problem with respect to the communication of results. The accuracy of the tool is always a concern. One way to improve accuracy is to increase the information flow into your various tools. That sometimes is problematic, particularly in the legal regulatory side, in that I may have a half a dozen different engagements with Google, but I can't use Google's information from project one on Google's, on project three, for it because the attorneys and the client have fought vigorously to keep that information from project one out of project three. I can't combine even like clients' information to make the tools more efficient. That's what I mean by limitations to the tool. Even we have seen on the management consulting side, we do a lot of work for the pharmaceutical companies, on marketing, pricing and market access. Pfizer doesn't want us to use their information in any means to help better the accuracy or, of projects we may be doing for another pharmaceutical company. There are limitations to the use of the information that we become privy to, for value-adding. The part that I'm probably losing the most sleep on is the human element. We are a consulting company. Our asset are our people. Is the use of the tool, and does it, put in jeopardy thinking by my colleagues? A lot of times, knowledge of a case, testing of the theories of the case come from working with the data. When information is so quickly synthesized, are you gonna lose that element of learning, or how do you replicate it, later down on the discovery chain on that? The other part, there's been a lot of research, organizational research that sometimes innovation suffers from the use of AI. Clients come to us for creativity. When they have a multi-billion dollar merger being contemplated, they want creative solutions, right? It's not as simple as combine them and let the regulatory bodies approve or reject it for it. Are you, are we jeopardizing that innovation, that creativity with the tools? That comes into the training we're trying to do, real time at CRA, trying to, you know, not just training of how to use the tool, but how to learn by using the tool. Those are evolutions that we're quite excited with the tools. Also, AI, despite how wonderful it is, is leading to a lot of litigation. There's also been a bit of a driver for our demand side of the equation that we don't think is going away anytime soon. Property right disputes are gonna be very prevalent, the better these tools become. We're already seeing a lot of these matters cross our desks now. Not to mention on the energy side, the utility side, all of these data centers, we haven't seen true expansion of demand capacity in the utility sector for decades. They're facing it now. How exactly do you meet this new need for energy? How do you meet this need for greater transmission of it? These are things that are being asked to be done instantaneously. As we know, utilities are necessarily the fastest moving entities. Also, when you're talking about such long-lived assets with what could potentially be a very short-lived entry or exit into a particular data center. That has given rise to a lot of different demand opportunities, both on behalf of the tech companies who are retaining us to help them in negotiating and picking the locations of the data centers, and also on behalf of the utilities that are trying to negotiate. Critical topic and theme. Maybe I'll see if there's any questions from the audience around this or any other questions. If not, we can keep going. Okay. Hey, Paul, maybe just to follow up, 'cause I think, and again, part of our view on the GenAI side is, you know, the differentiation of the data. And I think for most of the folks that we serve, we cover Thomson Reuters, we cover Intapp. Yep. Which are, you know, have we also think of meaningful data moats. Is in, in this may be tough to quantify, but of the data that your clients are offering to you, how much of that is internal, kinda hard to source as opposed to readily available, right? Because if there's any way to even dimensionalize that, I mean, because obviously the software's only as good as the data you're overlaying on top of it. So does that come into the conversation as, as it 'cause again, it's you're seeing the revenue increase as opposed to any impact from it. Clearly you're a net beneficiary as far as. Yeah. I can say. The majority of information that I'm talking about is privately held by the company itself. You know, Google has been in various litigations, whether in the ad tech revenue, the search revenue, and you could, you know, replace Microsoft in there or any other party. They're providing us, you know, transaction, or second-by-second, data on that. That is not readily available. So it's a huge amount of data being provided to us, and solely to us, on that particular matter. Can it be supplemented with public information, to test, the validity of it? Absolutely. But the majority of the analysis being performed is on privately, disseminated information. That's helpful. Just to shift because there's the revenue side of it, there's obviously the human element of it too. You've enjoyed incredibly low voluntary attrition. I think the number's around 10% or so over the last five years or so. Maybe talk to that, right, in an environment where there's a, again, I came out of, I should say, half-jokingly, half serious, I'm a recovering CPA, so I was at Deloitte, the Big Four at the time, and turnover was much higher than that, right? Maybe talk about the go-to-market, how you're able to retain folks, and really maybe weave into that this GenAI because part of what you alluded to, I think, I think's important. People from an entry level need to know how to think, right? If the machines think for you. Yeah. There becomes an information void over time. Maybe I know there's a lot there, but it's an incredibly important topic. I always try to take a client mentality when thinking about my different constituent groups, right? We have the ultimate clients who are paying for our services here, but the consultants I have within CRA are also my set of clients. My job as a CEO is to create an environment that creates value for those individuals because when you wanna hire the best and brightest, guess what? They have choices. They can go elsewhere and oftentimes get a premium overpay for the switching costs with it. We have a couple of statistics that Kevin is referencing. Could I throw it up there? I'm gonna break the piece. There is something in the upper right-hand portion, and this is the 10%. Every year, I present to the board our top 30 revenue generators. We show them where the practices, the geographies, what they're getting paid. If I look at the union of the top 30 revenue generators over a five-year period of time, it's roughly 55-60 people. The 10% is not 10% per annum. It's 10%, less than 10% in total. That means over a five-year period of time, we're losing less than one of our top revenue generators. I highlight this because I'm probably most proud of the statistic, is that their decision to stay at CRA and continue to prosper, I think speaks to the value created by being on the CRA platform 'cause they can go anywhere they want. They're choosing to stay at a firm, because of the quality of their colleagues, because of the quality of the client relationships we have, and because, you know, if you think they're all rational investors, it's because it's the highest NPV that they can have, even with the potential for payments for switching costs to go to a competitor. It's helpful. And I think, you know, when I think about professional services, you're only as good as your people and your clients. Absolutely. I think you service 85 of the Fortune 100, 98 of them, well, 100. You probably could not have a more unbeatable client base. Maybe talk to those relationships. Have they evolved over 60 years? You know, how are you able to stay? 'Cause again, to me, as I think about business models, right, they get expressed through their clients and their people, right? Maybe talk to that a little bit. Absolutely. The next these two slides are wonderful in that you have law firms and you have ultimate clients. On the legal regulatory side of the house, we usually have retention involving two parties. The ultimate client who we're working to help them address their challenges, and the law firm acts as an intermediary. Here, this is just the past two years of the Am Law 100 law firms, right? We've worked for 98 of those firms. With respect to the ultimate clients, 85 of the Fortune 100 companies. We're working for all the prominent players. That's the good news. The other piece of good news, and I guess, I'm gonna pitch it this way to our board in a couple of weeks. It's 85 of the 100, but we still capture a very small percentage of their purse. That's the growth opportunity, right? When I joined CRA, there was the idea is what's marketing at CRA? It's picking up the phone after one ring, not two, right? There was sort of an arrogance of just intellect, the phone will ring. Markets have become more competitive. During my time as CEO, we've tried to increase the number of individuals helping us with the client penetration. We've been pretty successful, as you can see from the financial results, growing and growing profitably. I think the next phase of our growth is trying to be a bit more client-centric instead of consulting-centric, in the next five to 10 years, right? It's trying to capture a bit more of the share of wallet of both the Fortune 100 companies and the Am Law 100 companies. That's the opportunity. There is a slight cultural change that happens is trying to convince my colleagues that making the pie bigger is better for everyone and not worrying about how to slice up that pie. It's very helpful. With 60 years of history, you've obviously seen pretty meaningful shifts in technology, right? Arguably even before computers existed. Yeah. If you think about kinda where we are from a GenAI perspective in terms of impact on the business model, are there any other periods of time you'd parallel where, you know, there were such levels of the f and by the way, the revenue continues to grow, which is true. Yeah. Terrific. Just so it's clearly the value you're adding, just maybe to help the audience dimensionalize any other shifts in, in terms of whether it's technolo, whether it's internet, or, you know, just. There's been a lot. I mean, I hate to even start with the internet, but internet was just coming aboard when I joined CRA, right? Or the idea that I used to go to our library to use a laptop. We didn't have laptops to use the computer. You used to sign up time to use that device. So there's clearly been large technology introduced into our industry that has changed the way we've operated. One example is I used to bring documents, boxes of documents home every day. And what did I get paid to do? Make binders, highlight the key passages, right? E-discovery totally commoditized that. It's electronic discovery and manipulation of data, right? The precursor to some of these AI engines on it. AI is clearly far more sophisticated, say, than e-discovery, but I don't know whether it's as monumental as the advent of the internet or the access of information at that time. The tool is wonderful. For me, it's the human adaption or adoption of that tool that is really the test of how rapid the integration will be in a firm like CRA, right? It's being used, data intake, early data manipulation. It's being used, the ease of programming and manipulating these large data sets. Never been better with that. All of those aspects are being used. Can I go from just the first tier of consulting services to bringing the AI tool to the second tier? That remains to be seen, yet, right? That's the evolution for a firm like CRA, for any consulting company. The other thing I'll highlight is CRA is very much of an expert-led firm. Our ratio of vice presidents to non-vice presidents, four or five to one, okay? If you look at most consulting companies, they're about 10 or 12 to one. The idea that we're at risk of, you know, commoditizing or eliminating a lot of our junior resources, one, we don't have a lot of junior resources. It's not the service that we provide, right? We're a more senior-led, expert-led firm. If you believe what at least what I'm reading is that the value of expertise increases with the continued proliferation of the tools. We've seen that to date. Hopefully, it will continue to evolve. Fascinating debate because part of our view too is a lot of the lower-end work your clients probably weren't paying for to begin with, right? So some of that gets, you know, more efficiently delivered. Net, net, you're probably in a better position. I guess from a delivery perspective and maybe a revenue perspective, have clients shifted in terms of how they wanna pay or, you know, the deliverables? I know that's probably we could spend three hours on that alone, but. We're really expensive, right? Bill rates of undergrads straight out of university are $450-$500 an hour. Vice presidents are $1,500-$2,000 an hour. When you're really expensive, you better be delivering value, and whether the clients are gonna demand it, you better be finding ways to demonstrate your differentiation and demonstrate your value to it. Clearly, AI is—people are asking, "Are you being as efficient as you can on the delivery of your services?" It's not like those questions didn't exist previously for a firm like CRA. Probably a little more waiting on the management consulting side for the efficiency given the fact that a lot of projects are fixed priced. We may be, you know, what you may forego on revenue, you're gaining on efficiency with profit enhancements on that side of the house. On the legal regulatory, the to-do lists on those engagements tends to be so long that if you're able to do the lower-level work more rapidly, you just get to, you know, higher levels of your to-do list, hopefully by the end of the matter. Okay. Any, I may put it back to the audience. The question that you don't have to really is, so how do you gain visibility into your forecasting? You know, how long your typical engagement, you have on the corporate delivery? Sure. Sure. If I'm sitting at any point in time during the year, with the projects that I currently have in-house, this is not a predictive statement. This is just based on what my experience has been. At any point in time, I have about 55%-60% of the preceding 12 months' revenue in-house, okay? That still means that I need to come up with a lot of projects in order to deliver on the revenue expectations. That has always been the case on it. Things that we look at, we look for industry trends. What is the M&A activity? What is the legal case filings, the large antitrust investigations, general GDP growth, right? Consultants are still discretionary spend. If clients are tightening their wallets, it's gonna impact us no matter how differentiated you are in your service, with it. Internally, we'll always communicate to our shareholders lead flow, lead flow conversion to new projects. Typically, revenue growth is highly correlated with leads coming into the firm. So those are a number of the variables. What I can say is that we've been tremendously consistent over the time. I think 2025 will be our eighth consecutive record year of revenue, and will be a record year of profits, too. Even with the fact that only about 60% is so-called in the bank, the momentum that comes with having clients like our listed here has fed the demand quite nicely over the past decade. International. Yeah. The international makes up roughly about 20%. If anything, the regulatory environment internationally, particularly in Europe, has been much more vigorous than that here in the U.S., so we're actually seeing a lot of growth opportunities there, with a lot of the segmentation that happens with Brexit or the U.K. operating differently than the European Union. That's other revenue opportunities that exist for us. And even better, a lot of these large mergers or investigations are multinational. They're not single jurisdiction matters, which adds to the complexity and the revenue opportunities. Anyone else?