Forensic Engineering & Expert Witness Firm, 50-Year Litigation-Support Practice

$8.0M

Revenue

$2.5M

SDE

8.0x

Multiple

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Full Editorial Writeup

This is a 50-year-old forensic engineering and expert witness firm that serves attorneys, insurance companies, corporations, and other institutional clients who need technical answers when things go wrong. The core work spans accident reconstruction, biomechanics, human factors, premises liability, crash data retrieval, 3D modeling, simulation, imaging, and courtroom expert testimony, all backed by an in-house forensic laboratory. The firm runs on a team of 15 experienced forensic engineers and specialists plus an administrative bench, and the entire technical team is expected to stay after the sale.

The business does roughly $8M in revenue and $2.5M in cash flow, a 31 percent margin that reflects a high-value, expertise-driven service where the product is the credibility and testimony of licensed professionals. With 540+ corporate, insurance, and legal clients across an active and historical base, the firm sits in a defensible niche: litigation and insurance disputes require credentialed, independent experts whose prior testimony history and courtroom reputation are hard to replicate. That accumulated litigation record is a real asset because opposing counsel cannot easily disqualify a firm with decades of admitted testimony.

At $20M asking against $2.5M cash flow, this is priced at 8x, a full multiple for a people-dependent professional services firm. The premium is being paid for institutional goodwill, a specialized lab, and a stable engineering team, and the seller is signaling flexibility with up to a year of transition, an optional multi-year advisory role, and possible seller financing. The right buyer is a strategic engineering, forensic, or litigation-support consolidator that can bolt this onto an existing platform and cross-sell into a broader expert-witness network.

Why we like it

Earnings quality is strong for a service firm: $2.5M cash flow on $8M revenue is a 31 percent margin, and the client base of 540+ insurance carriers, corporations, and law firms is institutional rather than consumer. These are repeat buyers who route matters to trusted experts, which smooths revenue even though individual engagements are project-based.
The moat is 50 years of admitted courtroom testimony and reputation, which is genuinely hard to replicate. Opposing counsel routinely tries to disqualify experts, and a firm with decades of accepted testimony and a credentialed 15-person technical bench carries defensibility that a new entrant cannot buy or fake quickly.
Litigation and insurance disputes do not slow much in a downturn, and can even rise as claims and coverage fights increase. Forensic engineering demand is driven by accidents, liability claims, and lawsuits rather than discretionary spending, making this a durable, counter-cyclical service.
Operator advantage is real: all 15 engineers are expected to stay, the seller will provide up to a year of transition plus an optional 3 to 5 year advisory arrangement, and seller financing is on the table. That combination de-risks the classic professional-services key-person handoff more than most deals at this size.

How to improve it

Map revenue and margin by individual expert to find key-person concentration. Within 90 days, identify which engineers generate the most billings and structure retention and non-compete agreements so the practice does not walk out the door with one or two rainmakers.
Systematize business development beyond inbound reputation. Build a targeted outreach program to insurance claims departments and litigation practice groups, because a firm this established almost certainly under-invests in proactive sales and leaves referral revenue on the table.
Raise billing rates and audit utilization. Expert-witness hourly rates have strong pricing power and are rarely benchmarked, so a rate review plus tighter tracking of billable vs. non-billable time can lift margin meaningfully without adding headcount.
Expand into adjacent forensic disciplines through hiring or tuck-ins. Adding fire origin, electrical failure, or metallurgy specialists lets the firm capture more matters per client relationship and increases the value of the existing 540-client roster.
Formalize the marketing of the lab as a standalone revenue line. The specialized testing and imaging capability can be sold to outside firms and insurers as a service, turning fixed lab overhead into an incremental profit center.
Build a junior engineer development pipeline to reduce reliance on senior experts and lower blended cost. Leverage senior credibility on testimony while pushing investigation and analysis work down to lower-cost staff, widening margins over time.

Diligence notes

Quantify revenue concentration by client and by expert. With 540 clients the base looks diversified, but confirm no single insurer, law firm, or individual engineer drives an outsized share of the $8M, since expert-witness practices often hide heavy dependence on a few referral sources.
Scrutinize the cash flow definition and normalize owner add-backs. This is listed as SDE-style cash flow, so verify what the current owner personally bills as an expert and whether that testimony revenue leaves with them, because that directly hits the 8x multiple.
Verify the retention commitments of all 15 engineers in writing, not verbally. The listing says they are expected to stay, but the entire value rests on credentialed people, so confirm employment terms, tenure, non-competes, and any pending retirements.
Review the litigation and testimony track record for exposure. Check for any Daubert challenges, disqualifications, or malpractice claims against the firm or its experts, since a damaged testimony record can quietly erode the core asset you are paying a premium for.
Assess the 8x multiple against comparable engineering and litigation-support transactions. Professional-services firms of this size typically trade well below 8x SDE, so pressure-test the price against the durability of earnings and the availability of seller financing to bridge the gap.

Source

Originally listed on BizBuySell. View original listing →