Hello everyone. Thank you for Nafeesah

and Verbit for giving

me the opportunity to speak to you all in this webinar.

I'm going to be presenting as Nafeesah mentioned,

a market research that we did cooperating with Verbit.

I'm going to first of

all tell you what the research is about,

and then presented to

you the main or the key findings that we

thought would be most relevant for

the audience here with us today.

Our research was focused

on the court reporting industry in the United States.

More specifically, we focused

on the smaller court reporting agencies in the market.

I'll explain exactly what we mean by that and what

we found for this population.

We conducted this research via

conducting about 70 interviews

with different stakeholders in the market.

The vast majority of the interviews,

like you can see here,

was with actual smaller court reporting agency,

owners, or people working in these agencies,

court reporters themselves,

digital transcribers and reporters.

They gave us really a lot of different angles and

material to work through in the research.

We also talks to some great people

from Verbit who gave us a lot of insights and

a few additional industry experts that we reached

through the PricewaterhouseCoopers network.

We really found some interesting things

that I'll be sharing with you today.

Of course, jump in if I'm having

any technical issues and like Nafeesah said,

all questions will be answered

at the end of the presentation.

When we're looking at the US court

reporting market as a whole,

we're seeing that there are

three different serotypes to watch out for.

We have on the one side,

the smaller court reporting agencies

who might be small individually,

but are actually representing a big part of the market,

about 60 percent of

the total market when you're looking

at the value in dollars.

Of course we also have national players,

we're talking about to

the very large agencies you all know,

we're talking about Veritext,

Esquire or US legal, etc.

Right next to them we have the regional players.

Were also very large,

operating in several states

or even at the national level,

but aren't individually quite

as big as the national ones.

You can also see that these two groups

are roughly 40 percent of the market

with smaller agencies still

representing the largest part.

Then we have another segmentation that we did it,

so not all smaller agencies are the same.

There are three different sized groups

that we were able to identify.

I know that this slide can sometimes be confusing,

so I'll walk you through it.

At the left side,

we can see the number of smaller agencies by size groups.

We divided smaller agencies,

which is a vague term to

three different size groups: smaller agencies,

medium ones and larger ones.

The small ones are really the typical,

we went to court reporters

who got together and formed an agency,

working with several freelancers.

That's the vast majority of agencies.

We know that we have

roughly 50 - 60 percent

of smaller agencies are actually very small ones.

Then we have the medium ones which are a bit larger.

We're talking about up to six

direct employees and of course,

a number of freelancers

they're working with to create transcripts,

and that is a smaller part

of agencies that we're looking at 15 - 35 percent.

Then we have the large court reporting agencies.

We're not talking about large,

like in the national ones.

But when we're looking at this segment of

the smaller ones who aren't regional or national players,

there are quite a few larger ones to look out for.

We're talking about 600 - 700 shots in the US as a whole.

On the right side, we can see that this division really

changes when we're looking at the same size groups,

but we're not looking at the number

of agencies from each size group.

We're looking at the overall size of the market.

We see that large,

smaller court reporting agencies are

generating a faraway of revenues,

then the rest or than the other groups,

and despite the fact that these are only 600 out of

3,000 agencies in the smaller agencies in US,

they represented where 50 percent of

the market in terms of US dollars.

That's the key thing to take from here.

Now, another division to watch for when we're

looking at the smaller agencies is not only the size,

but of course also the way in which they

are creating or producing the transcripts.

Now we have three groups.

On the left side, we have the traditional ones.

These are of course based on

stenographers or stenographer only and they

represent a vast majority of smaller agencies so

70 - 80 percent of the small agencies who I remind you,

make up over 50 percent of the total cooperating market

in the United States are still traditional in 2021.

Then of course we have another group

which is the hybrid ones.

These, as you can guess from the name,

mixed stenography with digital transcription.

Those tend to, or a lot

of the times they're predominantly

stenography-based and they use

digital for the overflow or for

the demand that they

can't provide for using stenographers alone.

In the right side we have a new group,

which is also a lot smaller than the other two,

and that is the purely digital small agencies.

These are of course are usually new players,

innovative players who don't rely on

sonography at all and are only using

a digital recorder transcribers and

voice recognition and tools to produce the transcripts.

That's the third group we looked at.

When we did the report

and that's something that I failed to mention earlier.

We looked at five states in particular,

or we did a deep dive on these five states to look

at the different circumstances that each of them has.

We equate or we compared them

on a scale of digital adoption level.

You can see here very clearly

that on the left side we have Florida,

which is the most digitally adopted of the five and also

is considered to be the most digitally adoptive state

as a whole of all states in the US.

On the right side,

at the opposite side,

the least digital state is California,

which is still predominantly

or almost exclusively stenographer-based.

We have in the middle of New York which is having

or at least that's what we

heard from the interviews that we conducted,

has a very large or strong trend of

digital adoption in recent years and months and is

moving closer to the left side

of the scale and Massachusetts in

Texas were still more digital than California,

but are still very much predominantly stenography-based.

Obviously we don't have the time to really

dive into each of the states and

the whole different circumstances in each of them,

I did list here

the foreign key parameters that we

think influence the placement

of each state on this scale.

We have, of course,

the regulation and the certification requirements,

where in California we have

a CSR requirement and for all transcripts.

In Florida there is no central parliament and you have

the freedom to digital if you want to.

We had the court level adoption

of digital, where in Florida,

the court system uses a lot of

digital vendors for the transcripts

where as in California,

this is not something that's happening and of

course in the other states as well.

We also looked at to the concentration

of larger small agencies.

Now when we look at the

smaller agencies and each of the states,

we recognize that in Texas and California,

and New York there is a difference in the typical sizes.

In New York, smaller agency

will usually be quite large or there

is a higher rate of

large small agencies compared to the other states.

It's also true in Texas, by the way, of course,

that alone is not enough to change the picture.

Of course, another thing

that is an inhibitor to digital adoption in each of

the states is the resistance of stenographers and

court reporters for this digital adoption.

That's another thing that we chose to list here as well.

Now also when we're looking at the state level,

another major trend that we wanted to check

out how each state is

doing in is of course the consolidation.

Now we know that in recent years and I'm sure

all of you guys have heard about this,

the market is undergoing some serious consolidation

with larger and national firms and regional players,

buying smaller agencies and

taking over a larger portion of the market.

While this is happening in all states and is

very much present in all of these different markets,

we did see that in New York.

This is a bit slower than in

other places with mergers and acquisitions less frequent,

whereas in Florida, it is happening in

Massachusetts it is happening at a very, very fast rate.

In Texas and California,

you can see that they're a bit brighter

and the colors are meant

to show you

how big consolidation is in each of the states.

In Texas and California whereas there

are quite a lot of mergers and acquisitions,

there are so many agencies that we're

still seeing this process happening,

and we're still seeing a lot of

independent agencies in each of these states.

Moving on to conclude this chapter, of course,

in the original research we

had a lot more insights to share.

We asked a lot of these agency owners

and stake holders and the agencies what their pain

points or whatever the thing is that they're feeling

are bothering them in their day-to-day work.

A lot of them, one of the first things that they say,

depending of course on the area and how much it's

present there is this stenographer shortage.

Now, I don't want to go too deep into this

because I know that a lot of you

already know of this topic and have

heard of this in different forums.

But this is definitely

something that we're hearing people

addressing and think that it is hard for them

to provide for the demand that they're seeing.

The second thing is

the increasing competition from larger agencies.

Now a lot of owners

and court reporters are mentioning that

there is this increased phenomenon

of competition from larger agencies,

which is a result of them lowering prices,

having a third party contracts,

and a lot of different reasons that we'll go

into in a second.

That's the second thing that we heard.

The third thing that we heard is that there's

some technological difficulty about

integration between different systems and software,

this especially came from

larger to smaller agencies who said that

they use only these different systems and it's hard to

integrate between them and transfer the files, etc.

The fourth thing is

the shortage and high-quality transcribers.

Now this of course came from

those agencies who are either hybrid or

digital and do work with recorders and transcribers.

Very much like the stenographer shortage,

that's something that it's hard to train and be able to

reach high-quality transcribers to

really provide for the demand.

Now, having heard of the paying points and

different segmentations in the market

and the trends at each state,

of course, we can't ignore COVID and how

it impacts the industry as a whole.

This slide is actually updated to a few months back,

so maybe some of the things that are

listed here as the projection may have already happened.

Now on the left side, we can see of course that

during the start of the pandemic in 2020,

there was a decrease in demand that was sensed throughout

the industry both for smaller agencies

and larger ones alike.

We know that different things led to this going down.

Of course, courts were closed in

some of the states and some of

them haven't really returned to full action as of yet.

A lot of proceedings were postponed

and there was less volume in

the legal industry as a whole in the US.

Now, due to all of

these different proceedings being postponed, of course,

the projection is that demand is forecasted to

rise when we go out of the pandemic,

so in the coming months,

and the industry will have

a hard time to really provide for

the demand for all the transcripts

that this is going to lead to.

Now another thing that we know that COVID brought to us,

and of course all of you know this as well,

is the transfer or the switch to remote work.

Now of course before COVID,

we're all used to depositions

taking place in-person, face-to-face.

Everybody in the industry were forced to suddenly switch

to new digital means like Zoom,

Teams, Google Hangouts, and whatnot.

The key thing that we

wanted to emphasize here is that when we were

asking people a few months back

on what they think will happen after COVID,

the vast majority of them were

saying this is going to stay this way.

No, of course not all depositions

are going to stay remote.

Some of them are going to go back to being in person.

But everybody said that the advantages of this house to

all the stakeholders in

the process, including the agencies,

the attorneys, and even the clients at the end who are

now benefiting from a lower bill and some of the cases.

Everybody is going to have an interest in keeping

it at least partially that way.

This is the first thing.

The second thing is that this switch

to remote actually also served as a driver

for the adoption of ASR and of

digital reporting in general because first of all,

out of sight, out of mind phenomenon,

the breaking of this barrier of having to have

a reporter for physically typing

in the room during a deposition.

People were used to the fact that this is not happening

anymore, meaning of course,

the attorneys and clients at the end of the day,

they are more accepting of newer different means.

The second thing is that

the technological tools we use for the conferences,

like Zoom for example,

provide us an opportunity to better integrate

with voice recognition add-ins and services.

That is another trend that we're seeing in

some of the areas in the industry.

Now, earlier when we

talked about the paying points for the agencies,

we mentioned that they're facing

increasing competition from

national and regional players.

I promised you that we would dive deeper into this and

this is one of the last slides

that I will be presenting today.

When we asked them what they mean when they're saying

the competition is rising or what is

causing competition to rise,

there are four main factors that they mentioned.

The first thing is the lower prices.

Top national firms have

rates that are cheaper than the smaller agencies,

and that serves, of course,

as an incentive for customers to

switch vendors and some of the cases.

Then we have the natural contracts, of course,

the phenomenon where large national firms are

signing third-party contracts with companies like

insurance companies and are

really making it clear that they will be the ones who

get the reporting work

for all cases related to this third party.

The third thing is

the geographical presence and the fact that

when you have a large attorney clients,

some of the times, they're going to prefer firm that has

a broad geographical presence around the US.

The last thing is, of course,

customer development and generally the fact that

larger agencies can sometimes put

more of an effort into creating or getting new customers.

These were the four key factors that we heard from

agency owners that were causing competition to rise.

Now, when we looked at all of this data

and incorporated it together to find a conclusion,

we realized that digital and ASR-based transcription

holds multiple advantages for smaller agencies.

The top three ones,

and we're going to keep it high level and not really go

into the detail but of course feel free to ask,

is one, lower costs; two,

scalability; and three, faster turnaround.

Now lower costs, we

just talked about the fact that this competition is

rising from national firms

who are able to lower their rates.

We all know that stenographer rates or fees

have gone up for agencies due to the shortage.

In some of the cases, this is very severe

like in California and Texas.

This is a phenomenon that is

really hitting the agencies hard.

We know that digital can actually provide

an opportunity to lower

the costs for the agency and maybe,

in turn, lower the rates.

The second thing is scalability.

Of course, this is also

a problem as a result of the shortage

and the hard time that agencies

have supplying for the demand.

Digital serves as an opportunity to really

get a new method or incorporate a new additional method

for agencies to provide for demand that they can't

get to with the usual means that they're used to.

The third thing is the faster turnaround and the fact

that a lot of digital agencies,

they actually point this out as one of

the advantages that they can offer their customers

a faster final transcript quickly and at a lower cost.

This sometimes serves as

a competitive advantage or

something that they can be proud of.

Really, these are the three key opportunities that we're

recognizing in the industry now when it

comes to smaller agencies adopting digital.

This is also the last slide

that I chose to show you here today.

Now of course, this was far more robust study,

so feel free to ask in your questions.

Nefeesah, I'm going back to you.

Thanks for the presentation, Noa.

I'll try to speak a little bit louder because I received

the message that you guys can't hear me clearly.

Please feel free and go ahead,

put your questions in the Q&A box.

We would love to hear from you.

If you have anything else that you can add to this,

please put anything in the Q&A box.

We left about 7-8 minutes for this.

The first question that we have here is,

are most Zoom depositions being

recorded by the court reporting agencies?

Now, thank you, Jeff. I think that at least

from a few dozen interviews

that I conducted on the topic,

I can say that yes,

this also served as an opportunity for agencies to start

offering video as well as the traditional transcript.

That is, of course,

an incentive for them to also record

the depositions if the client

is authorizing them to do so.

Thanks for that answer, Noa.

Sure.

I see a question from Peter here.

Peter, I will forward this to our team

and they will be in touch with you.

I'm not really sure what the processes

are for the transcribers,

so I'll take your contact information and pass it on

to the team and someone will be in touch with you.

Any other questions? There we go.

Do we have any other data on

other states adopting digital court reporting?

Noa, I can take this one for you.

We actually deep dived

into just those states that Noa I mentioned,

so mainly Florida, Texas,

California, Massachusetts, and New York.

As of right now, we don't have any of the other states.

We might be expanding our research and hopefully,

we can share that on a future webinar with you, guys.

Thanks for your question, Sheila.

I'll give it another minute or two

to see if anyone else has a question for us.

I'd like to say we have another session starting,

our third session for the Virtual Summit.

I'd encourage you all to go back to

the lobby and then rejoin the third session.

It's another interesting one we have

on selling your brand.

With that, I'll wrap it up.

I don't have any further questions.

Noa, thank you so much for

your time in presenting some of our research.

Thanks everyone for joining our second session.

We hope to see you in the third session.

Have a nice rest of your day. Thank you.

Thank you, Nefeesah, and to everyone who listened. Bye.

Bye.