CHARLES RIVER ASSOCIATES INC, 424B1, 1998-04-24

CHARLES RIVER ASSOCIATES INC
424B1, 1998-04-24
MANAGEMENT CONSULTING SERVICES

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<PAGE> 1

Filed pursuant to Rule 424(b)(1)
Registration Number 333-46941

2,188,000 SHARES

[LOGO] CHARLES RIVER ASSOCIATES INCORPORATED

COMMON STOCK

Of the 2,188,000 shares of Common Stock offered hereby (the "Offering"),
1,562,500 shares are being sold by Charles River Associates Incorporated ("CRA"
or the "Company") and 625,500 shares are being sold by the Selling Stockholders.
The Company will not receive any of the proceeds from the sale of shares by the
Selling Stockholders. See "Principal and Selling Stockholders."

Prior to the Offering, there has been no public market for the Common Stock
of the Company. See "Underwriting" for a discussion of the factors considered in
determining the initial public offering price. The Common Stock has been
approved for quotation on the Nasdaq National Market under the symbol "CRAI."

SEE "RISK FACTORS" COMMENCING ON PAGE 6 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.

----------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
==============================================================================================================
Proceeds to
Price Underwriting Proceeds to Selling
to Public Discount (1) Company (2) Stockholders
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share.................... $18.50 $1.295 $17.205 $17.205
Total (3).................... $40,478,000 $2,833,460 $26,882,813 $10,761,728
==============================================================================================================
</TABLE>

(1) See "Underwriting" for information concerning indemnification of the
Underwriters and other matters.
(2) Before deducting expenses payable by the Company, estimated at $900,000.
(3) The Company and the Selling Stockholders have granted the Underwriters a
30-day option to purchase up to 328,200 additional shares of Common Stock,
solely to cover over-allotments, if any. If the Underwriters exercise this
option in full, the Price to Public will total $46,549,700, the Underwriting
Discount will total $3,258,479, the Proceeds to Company will total
$30,915,234, and the Proceeds to Selling Stockholders will total
$12,375,987. See "Underwriting."

The shares of Common Stock are offered by the several Underwriters named
herein, subject to receipt and acceptance by them, and subject to their right to
reject any order in whole or in part. It is expected that delivery of the
certificates representing such shares will be made against payment therefor at
the office of NationsBanc Montgomery Securities LLC on or about April 29, 1998.

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

NationsBanc Montgomery Securities LLC William Blair & Company

April 23, 1998
<PAGE> 2

CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK. SUCH
TRANSACTIONS MAY INCLUDE STABILIZING, THE PURCHASE OF COMMON STOCK TO COVER
SYNDICATE SHORT POSITIONS AND THE IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION
OF THESE ACTIVITIES, SEE "UNDERWRITING."

Charles River Associates Incorporated, Charles River Associates, CRA and
the CRA logo are federally registered trademarks of the Company. All rights are
reserved. This Prospectus includes trademarks of companies other than the
Company.
<PAGE> 3

PROSPECTUS SUMMARY

This following summary should be read in conjunction with, and is qualified
in its entirety by, the more detailed information, including "Risk Factors" and
the Consolidated Financial Statements and Notes thereto, appearing elsewhere in
this Prospectus. The terms "fiscal 1993," "fiscal 1994," "fiscal 1995," "fiscal
1997" and "fiscal 1998" refer to the 52-week periods ended November 27, 1993,
November 26, 1994, November 25, 1995, November 29, 1997 and November 28, 1998,
respectively, and the term "fiscal 1996" refers to the 53-week period ended
November 30, 1996. Unless otherwise indicated, all information in this
Prospectus (i) reflects the amendment and restatement of the Company's articles
of organization, (ii) reflects a 52-for-1 stock split effected in the form of a
dividend of 51 shares of Common Stock per share of Common Stock outstanding
before the closing of the Offering and (iii) assumes no exercise of the
Underwriters' over-allotment option. See "Underwriting."

THE COMPANY

Charles River Associates Incorporated ("CRA" or the "Company") is a leading
economic and business consulting firm that applies advanced analytic techniques
and in-depth industry knowledge to complex engagements for a broad range of
clients. Founded in 1965, the Company provides original and authoritative advice
for clients involved in many high-stakes matters, such as multi-billion dollar
mergers and acquisitions, new product introductions, major capital investment
decisions, and complex litigation, the outcome of which often has significant
implications or consequences for the parties involved. The Company offers two
types of services: legal and regulatory consulting and business consulting.
Through its legal and regulatory consulting practice, CRA provides law firms and
businesses involved in litigation and regulatory proceedings with expert advice
on highly technical issues such as the competitive effects of mergers and
acquisitions, damages calculations, measurement of market share and market
concentration, liability analysis in securities fraud cases, and the impact of
increased regulation. In addition, the Company uses its expertise in economics,
finance and business analysis to offer clients business consulting services for
strategic issues such as establishing pricing strategies, estimating market
demand, valuing intellectual property and other assets, assessing competitors'
actions, and analyzing new sources of supply. To complement its analytical
expertise in advanced economic and financial methods, the Company offers its
clients in-depth industry expertise in specific vertical markets, including
chemicals, electric power and other energies, healthcare, materials,
media/telecommunications, and transportation.

The Company's services are provided by its highly credentialed and
experienced staff of consultants. As of February 20, 1998, CRA employed 120
full-time professional consultants, including 47 consultants with Ph.D.s and 26
consultants with other advanced degrees, who have backgrounds in a wide range of
disciplines, including economics, business, corporate finance, materials
sciences and engineering. Since maintaining its reputation is paramount and its
engagements are typically complex, the Company is extremely selective in its
hiring of consultants, recruiting individuals from leading universities,
industry and government. Many of the Company's consultants are nationally
recognized as experts in their respective fields, having published scholarly
articles, lectured extensively and been quoted in the press. To enhance the
expertise it provides to its clients, CRA maintains close working relationships
with a select group of renowned academic and industry experts ("Outside
Experts").

Through its offices in Boston, Massachusetts, Washington, D.C. and Palo
Alto, California, CRA has completed more than 2,500 engagements for clients,
including major law firms, domestic and foreign corporations, federal, state and
local government agencies, governments of foreign countries, public and private
utilities, and national and international trade associations. While the Company
has particular expertise in certain vertical markets, the Company provides
services to a diverse group of clients in a broad range of industries. During
its last three fiscal years, the Company had over 1,200 engagements for clients
that included 59 of the 100 largest U.S. law firms (ranked by The American
Lawyer based on 1996 revenues) and 109 Fortune 500 companies (based on 1996
revenues). During that period, the Company's clients included Cravath, Swaine &
Moore; Ford Motor Company; Jones, Day, Reavis & Pogue; Procter & Gamble Company

3
<PAGE> 4

Inc.; Skadden, Arps, Slate, Meagher & Flom LLP; and Time Warner Inc. No single
client accounted for over 10% of the Company's revenues in fiscal 1997.

The environment in which businesses operate is becoming increasingly
complex due to the broader application of technology, the globalization of many
industries and increased competition. This increasing complexity and the
changing nature of the business environment are also forcing governments to
adjust their regulatory strategies, resulting in more frequent and more complex
litigation and increased interaction with government agencies. In response to
these trends, companies are increasingly relying on sophisticated economic and
financial analysis to solve complex problems and improve decision-making. As the
need for complex economic and financial analysis becomes more widespread, CRA
believes that companies will increasingly turn to outside consultants for access
to specialized expertise, experience and prestige that are not available to them
internally.

CRA intends to capitalize on these industry trends and enhance its position
as a leading economic and business consulting firm by pursuing a multi-pronged
growth strategy. Since its consultants are its most important asset, CRA will
continue to aggressively recruit and retain high quality consultants. In
addition, the Company will continue to expand its expertise by establishing
relationships with additional Outside Experts. The Company also intends to
expand its current client base by increasing marketing activities and expanding
its current service offerings. Finally, the Company plans to pursue strategic
acquisitions and alliances in order to gain access to additional consultants,
new service offerings, additional industry expertise, a broader client base or
an expanded geographic presence.

Officers and directors of the Company completed a management buy-out in
March 1995, resulting in a broad expansion of the Company's ownership
principally from its three founders to all of its officers and directors at that
time. In order to align each officer's interest with the overall interests and
profitability of CRA, the Company adopted, as part of the management buy-out, a
policy requiring that each of its officers have an equity interest in CRA. As of
the date of this Prospectus, the Company's stock is broadly held among over 30
officers and directors. In connection with the management buy-out, the Company
refocused its efforts on improving profitability and expanding its areas of
expertise and its client base. The Company's revenues and income from operations
have increased from $31.8 million and $2.5 million in fiscal 1995 to $44.8
million and $4.7 million in fiscal 1997, respectively, representing compound
annual growth rates of 18.6% and 37.8%, respectively.

The Company was incorporated in the Commonwealth of Massachusetts on
February 19, 1965. The Company's principal executive offices are located at 200
Clarendon Street, Boston, Massachusetts 02116 and its telephone number is (617)
425-3000.

THE OFFERING

<TABLE>
<S> <C>
Common Stock offered by the Company......................... 1,562,500 shares
Common Stock offered by the Selling Stockholders............ 625,500 shares
Common Stock to be outstanding after the Offering........... 8,081,740 shares (1)
Use of proceeds............................................. Payment of dividends and general
corporate purposes, including working
capital and possible acquisitions. See
"Use of Proceeds."
Proposed Nasdaq National Market symbol...................... CRAI
</TABLE>

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

(1) Excludes 970,000 shares of Common Stock reserved for issuance under the 1998
Incentive and Nonqualified Stock Option Plan and 243,000 shares of Common
Stock reserved for issuance under the 1998 Employee Stock Purchase Plan. At
the time of the Offering, there are outstanding under such Option Plan
options to purchase an aggregate of 345,000 shares of Common Stock at
exercise prices equal to the initial public offering price. See
"Management--Benefit Plans."

4
<PAGE> 5

SUMMARY CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
------------------------------------------------------------------------
NOVEMBER 27, NOVEMBER 26, NOVEMBER 25, NOVEMBER 30, NOVEMBER 29,
1993 1994 1995 1996 1997
------------ ------------ ------------ ------------ ------------
(53 WEEKS)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENTS OF
OPERATIONS DATA:
Revenues.................... $25,937 $26,249 $31,839 $37,367 $44,805
Costs of services........... 15,446 16,160 19,760 23,370 28,374
Supplemental compensation
(1)....................... -- -- 1,212 1,200 1,233
------- ------- ------- ------- -------
Gross profit................ 10,491 10,089 10,867 12,797 15,198
Income from operations...... 2,002 1,885 2,470 3,737 4,689
Net income (2).............. $ 1,848 $ 1,545 $ 2,414 $ 3,588 $ 4,967
======= ======= ======= ======= =======
Basic and diluted net income
per share................. $0.23 $0.19 $0.40 $0.59 $0.78
===== ===== ===== ===== =====
Pro forma net income (3).... $3,134
======
Pro forma net income per
share (3)................. $0.48
=====
Weighted average number of
common shares outstanding
used in basic and diluted
net income per share...... 7,902,752 7,935,512 5,987,384 6,091,384 6,355,873
Weighted average number of
common shares outstanding
used in pro forma net
income per share (4)...... 6,505,873

<CAPTION>
QUARTER ENDED
---------------------------
FEBRUARY 21, FEBRUARY 20,
1997 1998
------------ ------------

<S> <C> <C>
CONSOLIDATED STATEMENTS OF
OPERATIONS DATA:
Revenues.................... $9,648 $11,137
Costs of services........... 6,106 6,486
Supplemental compensation
(1)....................... 280 --
------ -------
Gross profit................ 3,262 4,651
Income from operations...... 1,128 1,897
Net income (2).............. $1,061 $ 1,875
====== =======
Basic and diluted net income
per share................. $0.17 $0.29
===== =====
Pro forma net income (3).... $1,181
======
Pro forma net income per
share (3)................. $0.18
======
Weighted average number of
common shares outstanding
used in basic and diluted
net income per share...... 6,212,440 6,519,240
Weighted average number of
common shares outstanding
used in pro forma net
income per share (4)...... 6,669,240
</TABLE>

<TABLE>
<CAPTION>
FEBRUARY 20, 1998
-----------------------------------------
PRO FORMA
ACTUAL PRO FORMA(5) AS ADJUSTED(6)
------- ------------ --------------
<S> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Working capital........................................ $ 9,558 $ 1,836 $26,333
Total assets........................................... 23,828 17,325 41,822
Total long-term debt................................... 773 773 773
Total stockholders' equity............................. 10,522 2,800 27,297
</TABLE>

- ---------------
(1) Represents discretionary payments of bonus compensation to officers and
certain Outside Experts under a bonus program that has been discontinued
after fiscal 1997. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Overview" and Note 7 of Notes to
Consolidated Financial Statements.
(2) Since fiscal 1988, the Company has been taxed under subchapter S of the
Internal Revenue Code of 1986, as amended (the "Code"). As an S corporation,
the Company is not subject to federal and some state income taxes. The
Company's S corporation status will terminate on the closing of the
Offering. See "S Corporation Distributions and Termination of S Corporation
Status."
(3) Pro forma net income and pro forma net income per share for fiscal 1997 and
the quarter ended February 20, 1998 have been computed by adjusting net
income, as reported, to record income tax expense that would have been
recorded had the Company been a C corporation during those periods, assuming
effective tax rates for the year ended November 29, 1997 and the quarter
ended February 20, 1998 of 43% and 42%, respectively. See Note 11 of Notes
to Consolidated Financial Statements.
(4) See Note 1 of Notes to Consolidated Financial Statements for a description
of the computation of the number of shares used in the per share
calculation.
(5) Pro forma balance sheet data has been adjusted to reflect (i) an increase in
the Company's net deferred income tax liability, which increase would have
been approximately $1.2 million as of February 20, 1998, that will be
recognized as a result of the termination of the Company's S corporation
status and (ii) the declaration and payment of the S Corporation
Distribution (as defined below), which would have been approximately $6.5
million as of February 20, 1998. The amounts of the increase in the net
deferred income tax liability and the S Corporation Distribution will be
revised based upon the results of operations and financial condition of the
Company between February 20, 1998 and the date of the closing of the
Offering and may be significantly larger or smaller than the foregoing
amounts. See "Use of Proceeds," "S Corporation Distributions and Termination
of S Corporation Status" and Note 11 of Notes to Consolidated Financial
Statements.
(6) Adjusted to reflect (i) the sale of the 1,562,500 shares of Common Stock
offered by the Company hereby, after deducting the underwriting discount and
estimated offering expenses payable by the Company, (ii) the declaration and
payment of the Dividend (as defined below) of $2.4 million and (iii) the
receipt of payments of $914,000 on notes receivable from stockholders. See
"Use of Proceeds" and "Capitalization."

5
<PAGE> 6

RISK FACTORS

In addition to the other information contained in this Prospectus, the
following risk factors should be carefully considered in evaluating the Company
and its business before purchasing any of the shares of Common Stock offered
hereby. Certain of the statements contained in this section and elsewhere in
this Prospectus that are not purely historical, such as statements regarding the
Company's expectations, beliefs, intentions, plans and strategies regarding the
future, are forward-looking statements that involve risks, uncertainties and
assumptions that could cause the Company's actual results to differ materially
from those expressed in the forward-looking statements. Important factors that
could cause or contribute to these differences include those discussed below, as
well as those discussed elsewhere in this Prospectus. All forward-looking
statements are based on information available to the Company on the date hereof
and the Company assumes no obligation to update any forward-looking statement.
The cautionary statements made in this Prospectus should be read as being
applicable to all related forward-looking statements wherever they appear in
this Prospectus.

DEPENDENCE UPON KEY EMPLOYEES

The Company's business consists primarily of the delivery of professional
services and, accordingly, its future success is highly dependent upon the
efforts, abilities, business generation capabilities and project execution of
its consultants. The Company's success is also dependent upon the managerial,
operational and administrative skills of its officers, particularly James C.
Burrows, the Company's President and Chief Executive Officer. Engagements
generated primarily through the efforts of the Company's consultants accounted
for approximately 79% of the Company's revenues in fiscal 1997, with
approximately 33% of revenues generated primarily through the efforts of five of
the Company's consultants. The Company has no employment or non-competition
agreement with any consultant and, accordingly, each consultant may terminate
his or her relationship with the Company at will and without notice and
immediately begin to compete with the Company. The loss of the services of any
consultant or the failure of the Company's consultants to generate business or
otherwise perform at or above historical levels could have a material adverse
effect on the Company's business, financial condition and results of operations.
The Company intends to permit its key-person life insurance to lapse following
the closing of the Offering. See "Business--Human Resources--Consultants" and
"Management--Executive Officers and Directors."

NEED TO ATTRACT QUALIFIED CONSULTANTS

The Company's business involves the delivery of sophisticated economic and
other consulting services which only highly qualified, highly educated
consultants can provide. In order to meet its growth objectives, the Company
will need to hire increasing numbers of highly qualified, highly educated
consultants. The Company primarily hires as senior consultants individuals who
have obtained a Ph.D. or master's degree in economics or a related discipline
from a select group of universities. As a result, the number of potential
employees that meet the Company's hiring criteria is relatively small, and the
Company faces significant competition for these employees, from not only the
Company's direct competitors but also academic institutions, government
agencies, research firms, investment banking firms and other enterprises. Many
of these competing employers are able to offer potential employees significantly
greater compensation and benefits or more attractive lifestyle choices, career
paths or geographic locations than the Company. Moreover, increasing competition
for these consultants may also result in significant increases in the Company's
labor costs, which could have a material adverse effect on the Company's margins
and results of operations. The failure to recruit and retain a significant
number of qualified consultants could have a material adverse effect on the
Company's business, financial condition and results of operations. See
"Business--Human Resources--Consultants."

MAINTENANCE OF PROFESSIONAL REPUTATION

The Company's ability to secure new engagements and hire qualified
consultants is highly dependent upon the Company's overall reputation as well as
the individual reputations of its consultants and principal Outside Experts.
Because the Company obtains a majority of its new engagements from existing
clients,

6
<PAGE> 7

including both businesses and law firms, or from referrals by those clients, the
dissatisfaction of any such client with the Company's performance on a single
matter could have a disproportionately large adverse impact on the Company's
ability to secure new engagements. Any factor that diminishes the reputation of
the Company or any of its personnel or Outside Experts, including poor
performance, could make it substantially more difficult for the Company to
compete successfully for both new engagements and qualified consultants and
could therefore have a material adverse effect on the Company's business,
financial condition and results of operations. See "Business--Competitive
Strengths."

FLUCTUATIONS IN QUARTERLY RESULTS OF OPERATIONS

The Company has experienced, and may continue to experience, significant
period-to-period fluctuations in revenues and results of operations. The
Company's results of operations in any quarter can fluctuate depending upon,
among other things, the number of weeks in the quarter, the number and scope of
ongoing client engagements, the commencement, postponement and termination of
engagements in the quarter, the mix of revenue, the extent of discounting or
cost overruns, employee hiring, the ability to reassign consultants efficiently
from one engagement to the next, severe weather conditions and other factors
affecting employee productivity. Because the Company generates substantially all
of its revenues from consulting services provided on an hourly-fee basis, the
Company's revenues in any period are directly related to the number of its
consultants, their billing rates and the number of billable hours worked during
that period. The Company's ability to increase any of these factors in the short
term is limited and, accordingly, the Company may be unable to compensate for
periods of underutilization during one part of a fiscal period by augmenting
revenues during another part of that period. In addition, the Company intends to
hire additional consultants who may not be fully utilized immediately,
particularly in the quarter in which the consultants are hired. Moreover, a
significant majority of the Company's operating expenses, primarily rent and the
base salaries of the Company's consultants, are fixed in the short term, and as
a result the failure of revenues to meet the Company's projections in any
quarter could have a disproportionate adverse effect on the Company's net
income. For these reasons, the Company believes that its historical results of
operations should not be relied upon as an indication of future performance. If
the Company's revenues or net income in a quarter fall below the expectations of
securities analysts or investors, the market price of the Common Stock could be
materially adversely affected. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Overview" and "--Quarterly
Results of Operations."

DEPENDENCE UPON OUTSIDE EXPERTS

The Company's future success depends upon the continuation of the Company's
existing relationships with four principal Outside Experts. Engagements
generated primarily through the efforts of these four Outside Experts accounted
for approximately 18% of the Company's revenues in fiscal 1997. The Company
believes that these Outside Experts are highly regarded in their respective
fields and that each offers a combination of knowledge, experience and expertise
that would be very difficult to replace. The Company's ability to compete
successfully for certain engagements in the past has derived in substantial part
from its ability to offer the services of these Outside Experts to potential
clients. In general, these Outside Experts may limit their relationships with
the Company at any time for any reason, including, among other things,
affiliations with universities whose policies prohibit accepting certain
engagements, the pursuit of other interests and retirement. Each of these
Outside Experts is a party to an agreement with the Company that restricts his
right to compete with the Company. The limitation or termination of any of their
relationships with the Company or competition from any of them following the
termination of their respective agreements with the Company could have a
material adverse effect on the Company's business, financial condition and
results of operations. See "Business--Human Resources."

In order to meet the Company's growth objectives, the Company believes that
it will be necessary to establish ongoing relationships with additional Outside
Experts having established reputations as leading experts in their fields. There
can be no assurance that the Company will be successful in establishing
relationships with any additional Outside Experts or that any such relationship
would enable the Company to meet its objectives or generate anticipated revenues
or earnings, if any.

7
<PAGE> 8

MANAGEMENT OF GROWTH

The Company has recently experienced and may continue to experience
significant growth in its revenues and employee base. This growth has resulted,
and any future growth would continue to result, in new and increased management,
consulting and training responsibilities for the Company's consultants as well
as increased demands on the Company's internal systems, procedures and controls,
and its managerial, administrative, financial, marketing and other resources.
These new responsibilities and demands may adversely affect the overall quality
of the Company's work. No member of the Company's management team has experience
in managing a public company. Moreover, the Company may open offices in new
geographic locations, which would entail certain start-up and maintenance costs
that could be substantial. The failure of the Company to continue to improve its
internal systems, procedures and controls, to attract, train, motivate,
supervise and retain additional professional, managerial, administrative,
financial, marketing and other personnel, or otherwise to manage growth
successfully could have a material adverse effect on the Company's business,
financial condition and results of operations. See "Business--Growth Strategy."

CONCENTRATION OF REVENUES; DEPENDENCE ON LIMITED NUMBER OF LARGE ENGAGEMENTS

As an economic and business consulting firm, the Company has derived, and
expects to continue to derive, a significant portion of its revenues from a
limited number of large engagements. The Company estimates that, in each of the
last three fiscal years, it has had an average of approximately 260 engagements
generating over $10,000 in revenues. The Company's 10 largest engagements
accounted for approximately 37%, 28% and 23% of the Company's revenues in fiscal
1995, fiscal 1996 and fiscal 1997, respectively, and the Company's 10 largest
clients accounted for approximately 46%, 42% and 29% of the Company's revenues
in those years, respectively. One client accounted for approximately 11% of the
Company's revenues in fiscal 1995. The volume of work performed for any
particular client is likely to vary from year to year and a major client in one
year may decide not to use the Company's services in any subsequent year.
Accordingly, the failure to obtain anticipated numbers of new large engagements
could have a material adverse effect on the Company's business, financial
condition and results of operations.

TERMINATION OF ENGAGEMENTS

Engagements generally depend upon the initiation and continuation of
disputes, proceedings or transactions involving the Company's clients, who may
at any time decide to seek to resolve the dispute or proceeding or abandon the
transaction. Engagements can therefore terminate suddenly and without prior
notice to the Company. Clients typically incur no penalty for terminating an
engagement. The unexpected termination of an engagement could result in the
underutilization of the consultants working on the engagement until they are
assigned to other projects. Accordingly, the termination or significant
reduction in the scope of a single large engagement could have a material
adverse effect on the Company's business, financial condition and results of
operations.

POTENTIAL CONFLICTS OF INTERESTS

The Company provides its services primarily in connection with significant
or complex transactions, disputes or other matters that are usually adversarial
or that involve sensitive client information. The Company's engagement by a
client frequently precludes the Company from accepting engagements with the
client's competitors or adversaries because of direct or indirect conflicts
between their interests or positions on disputed issues, clients' expectations
of loyalty or other reasons. Accordingly, the number of both potential clients
and potential engagements is limited. Moreover, in many of the industries in
which the Company provides consulting services, and in the telecommunications
industry in particular, there has been a continuing trend toward business
consolidations and strategic alliances. These consolidations and alliances
reduce the number of potential clients for the Company's services and increase
the likelihood that the Company will be unable to continue certain ongoing
engagements or accept certain new engagements as a result of conflicts of
interests. Any such result could have a material adverse effect on the Company's
business, financial condition and results of operations. See "Business--Clients"
and "--Marketing."

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<PAGE> 9

DEPENDENCE UPON ANTITRUST AND MERGERS AND ACQUISITIONS CONSULTING BUSINESS

In fiscal 1995, fiscal 1996 and fiscal 1997, the Company derived
approximately 28%, 36% and 35%, respectively, of its revenues from engagements
in the Company's antitrust and mergers and acquisitions practice areas.
Substantially all of these revenues are derived from engagements relating to
enforcement of United States antitrust laws. Changes in the federal antitrust
laws, changes in judicial interpretations of these laws or less vigorous
enforcement of these laws by the United States Department of Justice (the "DOJ")
and the United States Federal Trade Commission (the "FTC") as a result of
changes in political appointments or priorities or for other reasons could
substantially reduce the number, duration or size of engagements available to
the Company in this area. In addition, adverse changes in general economic
conditions, particularly conditions influencing the merger and acquisition
activity of larger companies, could also have an impact on engagements in which
the Company assists clients in proceedings before the DOJ and the FTC in
connection with proposed mergers and acquisitions. Any substantial reduction in
the number of the Company's antitrust and mergers and acquisitions consulting
engagements could have a material adverse effect on its business, financial
condition and results of operations. See "Business--Areas of
Practice--Antitrust" and "--Mergers and Acquisitions."

INTENSE COMPETITION

RISKS RELATED TO POSSIBLE ACQUISITIONS

An element of the Company's strategy is to expand its operations through
the acquisition of complementary businesses or consulting practices. The Company
has never acquired another business, and there can be no assurance that the
Company will be able to identify, acquire, successfully integrate into the
Company or profitably manage any businesses without substantial expense, delay
or other operational or financial problems. Moreover, there is competition for
acquisition opportunities in the economic and business consulting industries,
which could result in an increase in the price of acquisition targets and a
decrease in the number of attractive companies available for acquisition. There
can be no assurance that the financial, operational and other anticipated
benefits of any acquisition will be achieved. Further, acquisitions may involve
a number of special risks, including adverse short-term effects on the Company's
results of operations, diversion of management's time, attention and resources,
failure to retain key acquired personnel, increased costs to improve or
coordinate managerial, operational, financial and administrative systems,
dilutive issuances of equity securities, the incurrence of debt, legal
liabilities, amortization of acquired intangible assets, difficulties in
integrating diverse corporate cultures, client dissatisfaction or performance
problems at the acquired business, additional conflicts of interests, and
unanticipated events or circumstances. The occurrence of any of these events
could have a material adverse effect on the Company's business, financial
condition and results of operations. The Company does not have any binding
agreement or other commitment to acquire any business at this time. See
"Business--Growth Strategy."

RISKS RELATED TO ENTRY INTO NEW LINES OF BUSINESS

An element of the Company's growth strategy is to continue to develop new
practice areas and complementary lines of business. For example, in June 1997,
the Company established and purchased a controlling interest in NeuCo LLC
("NeuCo"), which provides applications consulting services and a family of
neural network software solutions and complementary applications for
fossil-fired electric utilities. To date, NeuCo has not been profitable, and
there can be no assurance that it will become profitable. The development

9
<PAGE> 10

by the Company of new practice areas or lines of business outside its core
economic and business consulting services carries inherent risks, including
risks associated with inexperience and competition from mature participants in
those markets. The Company's inexperience may result in costly decisions that
could have a material adverse effect on the Company's business, financial
condition and results of operations. There can be no assurance that the
Company's attempts to develop NeuCo or any other new practice area or line of
business will be successful. See "Business--Growth Strategy" and "--New
Opportunities."

PROFESSIONAL LIABILITY

The Company's services typically involve difficult analytical assignments
and carry risks of professional and other liability. Many of the Company's
engagements involve matters that, if not successfully resolved in the client's
favor, could have a severe impact on the client's business, cause the client to
lose significant sums of money or prevent the client from pursuing desirable
business opportunities. Accordingly, the failure of the Company to perform to a
client's satisfaction could induce the client to commence or threaten litigation
in order to recover damages or to reduce or eliminate its obligation to pay the
Company's fees, or both. Litigation against the Company alleging that the
Company performed negligently or otherwise breached its obligations to the
client could expose the Company to significant liabilities and tarnish its
reputation, either of which could have a material adverse effect on the
Company's business, financial condition and results of operations.

BROAD MANAGEMENT DISCRETION IN USE OF PROCEEDS

The net proceeds to the Company from the Offering are estimated to be
approximately $26.0 million (approximately $30.0 million if the Underwriters'
over-allotment option is exercised in full). The Company intends to use
approximately $23.6 million, or 90.8%, of the total net proceeds from the
Offering (approximately $27.6 million, or 92.0%, if the Underwriters'
over-allotment option is exercised in full), for working capital and general
corporate purposes, including potential acquisitions. Accordingly, the Company
will have broad discretion with respect to the use of the net proceeds of the
Offering. Purchasers of Common Stock in the Offering will not have the
opportunity to evaluate the economic, financial or other information that the
Company will use to determine the application of such proceeds. See "Use of
Proceeds."

DISTRIBUTIONS TO CURRENT STOCKHOLDERS; TERMINATION OF S CORPORATION STATUS

In connection with the termination of the Company's status as an S
corporation under the Internal Revenue Code of 1986, as amended (the "Code"),
the Company intends to pay a dividend equal to the amount of the Company's
aggregate undistributed taxable earnings up to the date of the closing of the
Offering (the "S Corporation Distribution"). As of February 20, 1998, the
Company's aggregate undistributed taxable earnings were approximately $6.5
million. The Company also intends to pay an additional dividend of $2.4 million
(the "Dividend") out of the proceeds of the Offering. Purchasers of Common Stock
in the Offering will not receive any portion of the S Corporation Distribution
or the Dividend. In addition, as a result of the termination of the Company's
status as an S corporation, the Company will recognize an increase in its net
deferred income tax liability, which increase would have been approximately $1.2
million as of February 20, 1998, that will reduce the Company's net income in
the period in which the Offering is consummated by an amount equal to the
increase in the net deferred income tax liability. The amounts of the S
Corporation Distribution and the increase in the net deferred income tax
liability will be revised based upon the results of operations and financial
condition of the Company between February 20, 1998 and the date of the closing
of the Offering and may be significantly larger or smaller than the foregoing
amounts. See "Use of Proceeds" and "S Corporation Distributions and Termination
of S Corporation Status."

POSSIBLE VOLATILITY OF STOCK PRICE

Many factors may cause the market price of the Common Stock to fluctuate
significantly, including factors such as variations in the Company's quarterly
results of operations, the hiring or departure of key personnel or Outside
Experts, changes in the professional reputation of the Company, the introduction
of new services of the Company, its competitors or third parties, acquisitions
or strategic alliances by the Company,

10
<PAGE> 11

its competitors or third parties, changes in accounting principles, changes in
estimates of the performance of the Company or recommendations by securities
analysts, and market conditions in the industry and the economy as a whole. In
addition, the stock market in general has recently experienced extreme price and
volume fluctuations, which are often unrelated to the operating performance of
particular companies. These broad market fluctuations may also adversely affect
the market price of the Common Stock offered hereby. Following periods of
volatility in the market price of a company's securities, securities class
action litigation has often been instituted against the company. Any such
litigation against CRA could result in substantial costs and the diversion of
the time and attention of management and other resources, which could have a
material adverse effect on the Company's business, financial condition and
results of operations.

SHARES ELIGIBLE FOR FUTURE SALE; POSSIBLE ADVERSE EFFECT ON MARKET PRICE

Sales of a substantial number of shares of Common Stock in the public
market could materially adversely affect the market price of the Common Stock
and could impair the Company's ability to raise capital through a sale of its
equity securities. Following the closing of the Offering, there will be
8,081,740 shares of Common Stock outstanding, of which the 2,188,000 shares of
Common Stock offered hereby will generally be freely tradable in the public
market. Upon the expiration of "lock-up" agreements between the existing
stockholders of the Company and the Representatives of the Underwriters 180 days
after the date of this Prospectus (or earlier with the consent of NationsBanc
Montgomery Securities LLC in certain cases), approximately 3,081,630 of the
remaining shares of outstanding Common Stock will be eligible for immediate sale
in the public market under Rule 144(k) and approximately an additional 2,447,880
shares will be eligible for immediate sale subject to the volume and other
restrictions of Rule 144. In addition to the foregoing lock-up agreements, each
existing stockholder of the Company has agreed that he or she will not sell or
otherwise transfer any shares of Common Stock acquired by him or her prior to
the Offering without the consent of the Board of Directors for a period of two
years after the Offering, except in a public offering, and will transfer only
limited portions of such shares in subsequent years. The Board of Directors may
release any stockholder from the restrictions imposed by the Company at any
time. Immediately after the closing of the Offering, the Company intends to
register on Forms S-8 1,213,000 shares of Common Stock reserved for issuance
under the Company's stock option and stock purchase plans, which would permit
the immediate resale in the public market of any shares of Common Stock issued
pursuant to such plans. See "Management--Benefit Plans," "Certain
Transactions--Stock Restriction Agreement," "Shares Eligible for Future Sale"
and "Underwriting."

ANTI-TAKEOVER EFFECT OF CHARTER PROVISIONS, BY-LAWS AND MASSACHUSETTS LAW

The Company's Amended and Restated Articles of Organization, its Amended
and Restated By-Laws and Massachusetts law contain provisions that could be
deemed to have anti-takeover effects and that could discourage, delay or prevent
a change in control of the Company or an acquisition of the Company at a price
which many stockholders may find attractive. These provisions may also
discourage proxy contests and make it more difficult for stockholders of the
Company to effect certain corporate actions, including the election of
directors. The existence of these provisions could limit the price that
investors might be willing to pay in the future for shares of Common Stock. See
"Description of Capital Stock--Anti-Takeover Effects of the Company's Amended
and Restated Articles of Organization and Amended and Restated By-Laws and of
Massachusetts Law."

DILUTION

Purchasers in the Offering will experience immediate and substantial
dilution in the net tangible book value per share of the Common Stock. See
"Dilution."

NO DIVIDENDS

Other than the S Corporation Distribution and the Dividend, the Company
does not intend to declare or pay cash dividends on the Common Stock in the
foreseeable future. Following the closing of the Offering, the Company intends
to retain all earnings for the development of its business. See "Dividend
Policy."

11
<PAGE> 12

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 1,562,500 shares of
Common Stock offered by the Company hereby, after deducting the underwriting
discount and estimated offering expenses payable by the Company, are estimated
to be approximately $26.0 million (approximately $30.0 million if the
Underwriters' over-allotment option is exercised in full).

The Company intends to use a portion of its net proceeds from the Offering
to pay the Dividend in the amount of $2.4 million. The Company intends to use
its remaining net proceeds for general corporate purposes, including working
capital and possible acquisitions of and investments in complementary
businesses, and accordingly, the Company will have broad discretion in the
application of such net proceeds. The Company is not currently involved in
negotiations with respect to, and has no agreement or understanding regarding,
any such acquisition or investment. Pending these uses, the Company intends to
invest its net proceeds from the Offering in investment-grade, short-term,
interest-bearing instruments. The Company will not receive any proceeds from the
sale of shares of Common Stock by the Selling Stockholders. See "Risk
Factors--Broad Management Discretion in Use of Proceeds."

S CORPORATION DISTRIBUTIONS AND TERMINATION OF S CORPORATION STATUS

Since fiscal 1988, the Company has been treated for federal and certain
state income tax purposes as an S corporation under the Code. As a result, the
Company's stockholders, rather than the Company, have been and are required to
pay federal and certain state income taxes based on the Company's taxable
earnings, whether or not these amounts have been distributed to the Company's
stockholders. The Company has made periodic distributions to its stockholders in
amounts equal to the stockholders' estimated aggregate tax liabilities
associated with the Company's taxable earnings, as well as other dividend
distributions. The Company made distributions to its stockholders of
approximately $1.5 million, $1.6 million and $1.8 million based on the Company's
results of operations in fiscal 1995, fiscal 1996 and fiscal 1997, respectively.

The Company has declared the S Corporation Distribution payable to its
stockholders of record as of the close of business on April 9, 1998 in an amount
equal to the Company's aggregate undistributed taxable earnings up to the date
of the closing of the Offering. The S Corporation Distribution will be paid
before and after the closing of the Offering from available cash balances.
Purchasers of Common Stock in the Offering will not receive any portion of the S
Corporation Distribution.

Following the closing of the Offering, the Company will be subject to
corporate income taxation as a C corporation under the Code and will be required
to change its method of accounting for tax purposes from the cash method to the
accrual method. In accordance with Statement of Financial Accounting Standards
No. 109, "Accounting for Income Taxes," the termination of the Company's S
corporation status will increase its net deferred income tax liability for
financial reporting purposes, which increase would have been approximately $1.2
million as of February 20, 1998. The amount of the increase in the net deferred
income tax liability will be revised based upon the results of operations and
financial condition of the Company between February 20, 1998 and the date of the
closing of the Offering and may be significantly larger or smaller than the
foregoing amount. This increase in the net deferred income tax liability will be
in addition to income tax expense otherwise incurred in the quarter in which
such termination occurs. See Note 11 of Notes to Consolidated Financial
Statements.

12
<PAGE> 13

DIVIDEND POLICY

Since fiscal 1988, the Company has made periodic distributions to its
stockholders in amounts equal to the stockholders' aggregate tax liabilities
associated with the Company's taxable earnings attributable to them, as well as
other dividend distributions. Except with respect to the S Corporation
Distribution and the Dividend, the Company currently intends to retain any
future earnings to finance operations and therefore does not anticipate paying
any cash dividends in the foreseeable future. In addition, the terms of the
Company's bank line of credit place certain restrictions on the Company's
ability to pay cash dividends on its Common Stock.

13
<PAGE> 14

CAPITALIZATION

The following table sets forth the capitalization of the Company as of
February 20, 1998: (i) on an actual basis; (ii) on a pro forma basis, giving
effect to the declaration and payment of a dividend of $6.5 million (the amount
the S Corporation Distribution would have been as of February 20, 1998), and an
increase of $1.2 million in the Company's net deferred income tax liability
resulting from the termination of the Company's S corporation status (the amount
by which the Company's net deferred income tax liability would have increased
had the Company terminated its S corporation status on February 20, 1998); and
(iii) on a pro forma basis, as adjusted to reflect the sale of the 1,562,500
shares of Common Stock offered by the Company hereby, after deducting the
underwriting discount of $2,023,438 and estimated offering expenses payable by
the Company of $900,000, the declaration and payment of the Dividend of $2.4
million and the receipt of payments of $914,000 on notes receivable from
stockholders. See "Use of Proceeds," "S Corporation Distributions and
Termination of S Corporation Status" and "Description of Capital Stock." This
information should be read in conjunction with the Company's Consolidated
Financial Statements and the Notes thereto appearing elsewhere in this
Prospectus.

<TABLE>
<CAPTION>
FEBRUARY 20, 1998
---------------------------------
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
------- --------- -----------
(IN THOUSANDS)
<S> <C> <C> <C>
Current portions of notes payable to former stockholders
and capital lease obligations(1).......................... $ 323 $ 323 $ 323
======= ======= =======
Notes payable to former stockholders and capital lease
obligations, net of current portions(1)................... $ 773 $ 773 $ 773
Stockholders' equity:
Preferred Stock, without par value; none authorized or
outstanding, actual; 1,000,000 shares authorized and
none outstanding, pro forma and pro forma as
adjusted............................................... -- -- --
Common Stock, without par value; 25,000,000 shares
authorized and 6,519,240 shares outstanding, actual and
pro forma; 25,000,000 shares authorized and 8,081,740
shares outstanding, pro forma as adjusted(2)........... 1,977 1,977 27,483
Retained earnings......................................... 9,645 1,923 --
Less:
Notes receivable from stockholders(3).................. (1,100) (1,100) (186)
------- ------- -------
Total stockholders' equity........................... 10,522 2,800 27,297
------- ------- -------
Total capitalization.............................. $11,295 $ 3,573 $28,070
======= ======= =======
</TABLE>

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

(1) See Notes 4 and 8 of Notes to Consolidated Financial Statements.

(2) Excludes 970,000 shares of Common Stock reserved for issuance under the 1998
Incentive and Nonqualified Stock Option Plan and 243,000 shares of Common
Stock reserved for issuance under the 1998 Employee Stock Purchase Plan. At
the time of the Offering, there are outstanding under such Option Plan
options to purchase an aggregate of 345,000 shares of Common Stock at
exercise prices equal to the initial public offering price. See
"Management--Benefit Plans."

(3) See Note 9 of Notes to Consolidated Financial Statements.

14
<PAGE> 15

DILUTION

The pro forma net tangible book value of the Company as of February 20,
1998, was $2,741,000, or $0.42 per share of Common Stock. Pro forma net tangible
book value per share represents the amount of the Company's total tangible
assets less its total liabilities, after giving effect to the declaration and
payment of the estimated S Corporation Distribution and the estimated increase
in its net deferred income tax liability resulting from the termination of the
Company's S corporation status, divided by the total number of shares of Common
Stock outstanding. After giving effect to (i) the sale of the 1,562,500 shares
of Common Stock offered by the Company hereby, after deducting the underwriting
discount and estimated offering expenses payable by the Company, (ii) the
declaration and payment of the Dividend and (iii) the receipt of payments of
$914,000 on notes receivable from stockholders, the adjusted pro forma net
tangible book value of the Company as of February 20, 1998 would have been
$27,238,000, or $3.37 per share of Common Stock. This represents an immediate
increase in pro forma net tangible book value of $2.95 per share to existing
stockholders and an immediate dilution in pro forma net tangible book value of
$15.13 per share to purchasers of Common Stock in the Offering. The following
table illustrates the dilution in pro forma net tangible book value per share to
new investors:

<TABLE>
<S> <C> <C>
Initial public offering price per share..................... $18.50
Pro forma net tangible book value per share as of February $0.42
20, 1998...............................................
Increase per share attributable to new investors.......... 2.95
-----
Adjusted pro forma net tangible book value per share after 3.37
the Offering..............................................
------
Dilution per share to new investors......................... $15.13
======
</TABLE>

The following table summarizes, on a pro forma basis as of February 20,
1998, the number of shares of Common Stock purchased from the Company, the total
consideration paid and the average price per share paid by existing stockholders
and new investors, before deducting the underwriting discount and estimated
offering expenses payable by the Company:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
-------------------- --------------------- PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
--------- ------- ----------- ------- ---------
<S> <C> <C> <C> <C> <C>
Existing stockholders.................... 6,519,240 80.7% $ 1,977,000(1) 6.4% $ 0.30
New investors............................ 1,562,500 19.3 28,906,250 93.6 $18.50
--------- ----- ----------- -----
Total............................... 8,081,740 100.0% $30,883,250 100.0%
========= ===== =========== =====
</TABLE>

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

(1) Includes notes receivable from stockholders in the amount of $1.2 million,
of which $914,000 will be paid in connection with the closing of the
Offering. See Note 9 of Notes to Consolidated Financial Statements.

The net effect of sales by the Selling Stockholders in the Offering will be
to reduce the number of shares held by existing stockholders to 5,893,740 or
72.9% of the total number of shares Common Stock to be outstanding after the
Offering (5,799,915 or 69.7% if the Underwriters' over-allotment option is
exercised in full) and to increase the number of shares held by new investors to
2,188,000 or 27.1% of the total number of shares of Common Stock to be
outstanding after the Offering (2,516,200 or 30.3% if the Underwriters'
overallotment option is exercised in full). See "Principal and Selling
Stockholders."

15
<PAGE> 16

SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT SHARE DATA)

The following selected consolidated financial data of the Company as of
November 30, 1996 and November 29, 1997 and for each of the fiscal years in the
three-year period ended November 29, 1997 have been derived from the
consolidated financial statements of the Company included elsewhere in this
Prospectus, which have been audited by Ernst & Young LLP, independent auditors.
The following selected consolidated financial data of the Company as of November
27, 1993, November 26, 1994 and November 25, 1995 and for the fiscal years ended
November 27, 1993 and November 26, 1994 have been derived from consolidated
financial statements of the Company not included in this Prospectus, which have
also been audited by Ernst & Young LLP. The selected consolidated financial data
as of February 20, 1998 and for the quarters ended February 20, 1998 and
February 21, 1997 have been derived from the unaudited consolidated financial
statements of the Company. The unaudited consolidated financial statements have
been prepared on the same basis as the audited financial statements and, in the
opinion of management of the Company, include all adjustments, consisting only
of normal recurring adjustments, necessary for a fair presentation of the
information set forth therein. The results of operations for the quarter ended
February 20, 1998 are not necessarily indicative of future operating results.
The selected consolidated financial data should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Company's Consolidated Financial Statements and Notes
thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
FISCAL YEAR ENDED QUARTER ENDED
---------------------------------------------------------- ---------------------
NOV. 27, NOV. 26, NOV. 25, NOV. 30, NOV. 29, FEB. 21, FEB. 20,
1993 1994 1995 1996 1997 1997 1998
--------- --------- --------- ---------- --------- --------- ---------
(53 WEEKS)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENTS OF OPERATIONS
DATA:
Revenues................................. $25,937 $26,249 $31,839 $37,367 $44,805 $9,648 $11,137
Costs of services........................ 15,446 16,160 19,760 23,370 28,374 6,106 6,486
Supplemental compensation(1)............. -- -- 1,212 1,200 1,233 280 --
------- ------- ------- ------- ------- ------ -------
Gross profit............................. 10,491 10,089 10,867 12,797 15,198 3,262 4,651
General and administrative............... 8,489 8,204 8,397 9,060 10,509 2,134 2,754
------- ------- ------- ------- ------- ------ -------
Income from operations................... 2,002 1,885 2,470 3,737 4,689 1,128 1,897
Interest income, net..................... 16 106 118 124 302 9 46
------- ------- ------- ------- ------- ------ -------
Income before provision for income taxes
and minority interest.................. 2,018 1,991 2,588 3,861 4,991 1,137 1,943
Provision for income taxes(2)............ (170) (446) (174) (273) (306) (76) (120)
------- ------- ------- ------- ------- ------ -------
Net income before minority interest...... 1,848 1,545 2,414 3,588 4,685 1,061 1,823
Minority interest........................ -- -- -- -- 282 -- 52
------- ------- ------- ------- ------- ------ -------
Net income(2)............................ $ 1,848 $ 1,545 $ 2,414 $ 3,588 $ 4,967 $1,061 $1,875
======= ======= ======= ======= ======= ====== ======
Basic and diluted net income per share... $0.23 $0.19 $0.40 $0.59 $0.78 $0.17 $0.29
===== ===== ===== ===== ===== ===== =====
Weighted average number of common shares
outstanding used in basic and diluted
net income per share................... 7,902,752 7,935,512 5,987,384 6,091,384 6,355,873 6,212,440 6,519,240

Pro forma net income(3).................. $3,134 $1,181
====== ======
Pro forma net income per share(3)........ $0.48 $0.18
===== =====
Weighted average number of common shares
outstanding used in pro forma net
income per share(4).................... 6,505,873 6,669,240
</TABLE>

16
<PAGE> 17

<TABLE>
<CAPTION>
NOV. 27, NOV. 26, NOV. 25, NOV. 30, NOV. 29, FEB. 20,
1993 1994 1995 1996 1997 1998
-------- -------- -------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEETS DATA:
Working capital........................................ $ 4,673 $ 2,908 $ 4,782 $ 6,554 $ 7,732 $ 9,558
Total assets........................................... 11,601 10,057 12,307 15,468 20,435 23,828
Total long-term debt................................... 304 222 324 550 781 773
Total stockholders' equity............................. 5,138 2,697 4,282 6,202 8,536 10,522
</TABLE>

- ---------------
(1) Represents discretionary payments of bonus compensation to officers and
certain Outside Experts under a bonus program that will be discontinued
after fiscal 1997. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Overview" and Note 7 of Notes to
Consolidated Financial Statements.

(2) Since fiscal 1988, the Company has been taxed under subchapter S of the
Code. As an S corporation, the Company is not subject to federal and some
state income taxes. The Company's S corporation status will terminate on the
closing of the Offering. See "S Corporation Distributions and Termination of
S Corporation Status."

(3) Pro forma net income and pro forma net income per share for fiscal 1997 and
the first quarter of fiscal 1998 have been computed by adjusting net income,
as reported, to record income tax expense that would have been recorded had
the Company been a C corporation during those periods, assuming effective
tax rates for the year ended November 29, 1997 and the quarter ended
February 20, 1998 of 43% and 42%, respectively. See Note 11 of Notes to
Consolidated Financial Statements.

(4) See Note 1 of Notes to Consolidated Financial Statements for a description
of the computation of the number of shares used in the per share
calculation.

17
<PAGE> 18

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

The Company derives revenues principally from professional services
rendered by its consultants. In most instances, clients are charged on a
time-and-materials basis and revenues are recognized in the period when services
are provided. Consultants' time is charged at hourly rates, which vary from
consultant to consultant depending on a consultant's position, experience and
expertise, and other factors. Outside Experts typically bill clients directly
for their services. As a result, substantially all of the Company's professional
services fees are generated from the work of its own full-time consultants.
Factors that affect the Company's professional services fees include the number
and scope of client engagements, the number of consultants employed by the
Company, the consultants' billing rates, and the number of hours worked by the
consultants. In addition to professional services fees, a portion of the
Company's revenues represents expenses billed to clients, such as travel and
other out-of-pocket expenses, charges for support staff and outside contractors,
and other reimbursable expenses.

The Company's costs of services include the salaries, bonuses and benefits
of the Company's consultants. Consultants are compensated on a salary and bonus
basis. The Company currently has one bonus program. This program awards
discretionary bonuses based on the Company's revenues and profitability and
individual performance. Amounts paid under this bonus program to consultants are
included in costs of services, and the Company expects to continue this bonus
program after the Offering. During fiscal 1995, fiscal 1996 and fiscal 1997, the
Company also had another bonus program, which consisted of discretionary
payments to officers and certain Outside Experts based primarily on the
Company's cash flows. These bonus payments are shown as "supplemental
compensation" in the Company's statements of income, and the Company does not
intend to make additional payments under this bonus program after fiscal 1997.
Costs of services also include out-of-pocket and other expenses that are billed
to clients, and the salaries, bonuses and benefits of certain support staff
whose time is billed directly to clients, such as librarians, editors and
computer programmers. The Company's gross profit, which equals revenues less
costs of services and supplemental compensation, is affected by changes in the
mix of revenues. The Company experiences significantly higher gross margins on
revenues from professional services fees than revenues from expenses billed to
clients. General and administrative expenses include salaries, bonuses and
benefits of the Company's administrative and support staff, performance payments
to Outside Experts for generating new business, rent, and marketing and certain
other costs.

Since fiscal 1988, the Company has been treated for federal and certain
state income tax purposes as an S corporation under the Code. As a result, the
Company's stockholders, rather than the Company, have been and are required to
pay federal and certain state income taxes based on the Company's taxable
earnings. The state income taxes that the Company does pay are shown as
"provision for income taxes" in the Company's statements of income. Upon the
closing of the Offering, the Company's status an S corporation will cease and,
thereafter, it will be subject to corporate taxation as a C corporation under
the Code.

The Company will recognize an increase in its net deferred income tax
liability resulting from the termination of the Company's S corporation status,
which will result in a significant non-cash charge against earnings during the
quarter in which the Offering is completed. Based upon the Company's audited
results of operations and financial information as of and for the year ended
November 29, 1997 and its unaudited results

18
<PAGE> 19

of operations and financial information as of and for the quarter ended February
20, 1998, the net charge to earnings would have been approximately $1.2 million.
The actual net charge to earnings may be larger or smaller than the foregoing
amount, depending on the Company's results of operations and financial condition
from February 20, 1998 through the closing of the Offering. See "S Corporation
Distributions and Termination of S Corporation Status" and Note 11 of Notes to
Consolidated Financial Statements.

In June 1997, the Company invested approximately $650,000 for a majority
interest in NeuCo. NeuCo was established by the Company and an affiliate of
Commonwealth Energy Systems as a start-up entity to develop and market a family
of neural network software tools and complementary applications consulting
services for electric utilities. The Company's financial statements are
consolidated with the financial statements of NeuCo. For the period from
inception (June 19, 1997) to November 29, 1997 and for the first quarter of
fiscal 1998, NeuCo sustained a net loss after taxes of $564,000 and $104,000,
respectively. There can be no assurance that NeuCo will become profitable. The
portion of this loss allocable to NeuCo's minority owners is shown as "minority
interest" in the Company's statements of income, and that amount, together with
the capital contributions to NeuCo of its minority owners, is shown as "minority
interest" in the Company's balance sheets. See "Business--New
Opportunities--NeuCo," "Risk Factors--Risks Related to Entry into New Lines of
Business," and Note 1 of Notes to Consolidated Financial Statements.

The Company's fiscal year ends on the last Saturday in November and,
accordingly, the Company's fiscal year will periodically contain 53 weeks rather
than 52 weeks. For example, fiscal 1996 contains 53 weeks. This additional week
of operations in the fiscal year will affect the comparability of results of
operations of these 53-week fiscal years with other fiscal years. Historically,
the Company has managed its business based on a four-week billing cycle to
clients and, consequently, has established quarters that are divisible by
four-week periods. As a result, the first, second and fourth quarters of each
fiscal year are 12-week periods and the third quarter of each fiscal year is a
16-week period. However, the fourth quarter in 53-week fiscal years is 13 weeks
long. Accordingly, quarter to quarter comparisons of the Company's results of
operations are not necessarily meaningful if the quarters being compared are of
different lengths.

19
<PAGE> 20

RESULTS OF OPERATIONS

The following table sets forth certain operating information as a
percentage of revenues for the periods indicated:

<TABLE>
<CAPTION>
FISCAL YEAR ENDED QUARTER ENDED
-------------------------------- --------------------
NOV. 25, NOV. 30, NOV. 29, FEB. 21, FEB. 20,
1995 1996 1997 1997 1998
-------- -------- -------- -------- --------
(53 WEEKS)
<S> <C> <C> <C> <C> <C>
Revenues.................................... 100.0% 100.0% 100.0% 100.0% 100.0%
Costs of services........................... 62.1 62.6 63.3 63.3 58.2
Supplemental compensation................... 3.8 3.2 2.8 2.9 --
----- ----- ----- ----- -----
Gross profit................................ 34.1 34.2 33.9 33.8 41.8
General and administrative.................. 26.4 24.2 23.5 22.1 24.7
----- ----- ----- ----- -----
Income from operations...................... 7.7 10.0 10.4 11.7 17.1
Interest income, net........................ 0.4 0.3 0.7 0.1 0.4
----- ----- ----- ----- -----
Income before provision for income taxes and
minority interest......................... 8.1 10.3 11.1 11.8 17.5
Provision for income taxes.................. 0.5 0.7 0.7 0.8 1.1
----- ----- ----- ----- -----
Net income before minority interest......... 7.6 9.6 10.4 11.0 16.4
Minority interest........................... -- -- 0.6 -- 0.4
----- ----- ----- ----- -----
Net income.................................. 7.6% 9.6% 11.0% 11.0% 16.8%
===== ===== ===== ===== =====
</TABLE>

FIRST QUARTER FISCAL 1998 COMPARED TO FIRST QUARTER FISCAL 1997

Revenues. Revenues increased $1.5 million, or 15.4%, from $9.6 million for
the first quarter of fiscal 1997 to $11.1 million for the first quarter of
fiscal 1998. The increase in revenues was due primarily to increased consulting
services performed for new and existing clients during the period and higher
billing rates. The Company experienced revenue increases during the first
quarter of fiscal 1998 in both its legal and regulatory consulting services and
business consulting services, and in particular generated significant revenue
increases in its antitrust and mergers and acquisitions practices.

Costs of Services. Costs of services increased by $380,000, or 6.2%, from
$6.1 million in the first quarter of fiscal 1997 to $6.5 million in the first
quarter of fiscal 1998. As a percentage of revenues, costs of services decreased
from 63.3% in the first quarter of fiscal 1997 to 58.2% in the first quarter of
fiscal 1998. The decrease as a percentage of revenues was due primarily to
discretionary cash compensation to consultants not increasing at as fast a rate
as the rate of increase of revenues during the first quarter of fiscal 1998.
This is in anticipation of the Company granting stock options from time to time
to certain of its consultants pursuant to its stock option plan.

Supplemental Compensation. The Company does not intend to pay supplemental
compensation after fiscal 1997, and consequently, did not have supplemental
compensation in the first quarter of fiscal 1998. Supplemental compensation was
$280,000 in the first quarter of fiscal 1997.

General and Administrative. General and administrative expenses increased
by $620,000, or 29.1%, from $2.1 million in the first quarter of fiscal 1997 to
$2.8 million in the first quarter of fiscal 1998. As a percentage of revenues,
general and administrative expenses increased from 22.1% in the first quarter of
fiscal 1997 to 24.7% in the first quarter of fiscal 1998. The increase as a
percentage of revenues was due primarily to increased rent expense resulting
from the Company's expansion of each of its three offices in Boston,
Massachusetts, Washington, D.C. and Palo Alto, California.

Interest Income, Net. Net interest income increased from $9,000 in the
first quarter of fiscal 1997 to $46,000 in the first quarter of fiscal 1998.
This increase was due primarily to the Company maintaining higher cash balances
during the first quarter of fiscal 1998 as compared to the first quarter of
fiscal 1997.

20
<PAGE> 21

Minority Interest. Minority interest was $52,000 in the first quarter of
fiscal 1998, and represents the portion of NeuCo's net loss after taxes
allocable to its minority owners.

FISCAL 1997 COMPARED TO FISCAL 1996

Revenues. Revenues increased by $7.4 million, or 19.9%, from $37.4 million
for fiscal 1996 to $44.8 million for fiscal 1997. The increase in revenues was
due primarily to increased consulting services performed for new and existing
clients during the period. In fiscal 1997, the Company experienced revenue
increases in both its legal and regulatory consulting services and its business
consulting services, and in particular generated significant revenue increases
in its mergers and acquisitions, finance, and auctions practices. During fiscal
1997, the Company increased the number of its consultants from 112 to 121. The
increase in revenues during fiscal 1997 was also due in part to increased
billing rates of the Company's consultants.

Costs of Services. Costs of services increased by $5.0 million, or 21.4%,
from $23.4 million in fiscal 1996 to $28.4 million in fiscal 1997. As a
percentage of revenues, costs of services increased from 62.6% in fiscal 1996 to
63.3% in fiscal 1997. The increase as a percentage of revenues was due primarily
to slightly lower utilization rates for the Company's consultants during fiscal
1997, which resulted in part from certain consultants of the Company spending
time developing new practice areas that are complementary to the Company's core
practice areas.

Supplemental Compensation. Supplemental compensation was $1.2 million for
each of fiscal 1996 and fiscal 1997. As a percentage of revenues, supplemental
compensation decreased from 3.2% in fiscal 1996 to 2.8% in fiscal 1997. The
Company has paid supplemental compensation of $1.2 million in each of its last
three fiscal years and intends to discontinue these payments after fiscal 1997.

General and Administrative. General and administrative expenses increased
by $1.4 million, or 16.0%, from $9.1 million in fiscal 1996 to $10.5 million in
fiscal 1997. As a percentage of revenues, general and administrative expenses
decreased from 24.2% in fiscal 1996 to 23.5% in fiscal 1997. General and
administrative expenses decreased as a percentage of revenues primarily because
the Company increased its administrative and support staff at a lower rate than
the rate of increase of its consultants.

Interest Income, Net. Net interest income increased from $124,000 for
fiscal 1996 to $302,000 for fiscal 1997. This increase was due primarily to the
Company generating more cash from operations during fiscal 1997, which resulted
in the Company maintaining higher cash balances during the year.

Minority Interest. Minority interest was $282,000 for fiscal 1997, and
represents the portion of NeuCo's net loss after taxes allocable to its minority
owners.

FISCAL 1996 COMPARED TO FISCAL 1995

Revenues. Revenues increased by $5.5 million, or 17.4%, from $31.8 million
for fiscal 1995 to $37.4 million for fiscal 1996. The increase in revenues was
due primarily to increased consulting services performed for new and existing
clients during the period. In fiscal 1996, the Company experienced revenue
increases in both its legal and regulatory consulting services and its business
consulting services, and in particular, generated increased revenues in its
antitrust and mergers and acquisitions practices. As part of its growth strategy
following the management buy-out, and to service additional client engagements,
the Company increased the number of its consultants from 90 at the end of fiscal
1995 to 112 at the end of fiscal 1996. Increases in consultants' billing rates
during fiscal 1996 also contributed to increased revenues for the period.

Costs of Services. Costs of services increased by $3.6 million, or 18.3%,
from $19.8 million for fiscal 1995 to $23.4 million for fiscal 1996. As a
percentage of revenues, costs of services increased slightly from 62.1% in
fiscal 1995 to 62.6% in fiscal 1996. The increase as a percentage of revenues
was due primarily to a higher percentage of reimbursable expenses in fiscal 1996
as compared to fiscal 1995, which have lower gross margins than professional
services fees.

21
<PAGE> 22

Supplemental Compensation. Supplemental compensation was $1.2 million in
each of fiscal 1996 and fiscal 1995. As a percentage of revenues, supplemental
compensation decreased from 3.8% in fiscal 1995 to 3.2% in fiscal 1996.

General and Administrative. General and administrative expenses increased
by $663,000, or 7.9%, from $8.4 million in fiscal 1995 to $9.1 million in fiscal
1996. As a percentage of revenues, general and administrative expenses decreased
from 26.4% for fiscal 1995 to 24.2% for fiscal 1996. The decrease as a
percentage of revenues was primarily a result of the Company's strategy after
the management buy-out to improve the productivity and efficiency of its
administrative and support staff, which resulted in the Company reducing its
hiring of administrative and support staff during fiscal 1996.

Interest Income, Net. Net interest income was $124,000 in fiscal 1996 as
compared to $118,000 in fiscal 1995.

UNAUDITED QUARTERLY RESULTS

The following table presents certain unaudited quarterly statements of
income information for each of the quarters in fiscal 1996 and fiscal 1997 and
the first quarter of fiscal 1998. This information is derived from and is
qualified by reference to the audited and unaudited consolidated financial
statements included elsewhere in this Prospectus and, in the opinion of
management of the Company, includes all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of that information.
The first, second and fourth quarters of each fiscal year are 12-week periods
and the third quarter of each fiscal year is a 16-week period. However, the
fourth quarter in 53-week fiscal years is 13 weeks long. Accordingly, quarter to
quarter comparisons of the Company's results of operations are not necessarily
meaningful if the quarters being compared are of different lengths. The results
of operations for any quarter are not necessarily indicative of the results to
be expected for any future period.

<TABLE>
<CAPTION>
QUARTER ENDED
----------------------------------------------------------------------------------------------------
FEB. 16, MAY 10, AUG. 30, NOV. 30, FEB. 21, MAY 16, SEPT. 5, NOV. 29, FEB. 20,
1996 1996 1996 1996 1997 1997 1997 1997 1998
-------- ------- ---------- ---------- -------- ------- ---------- -------- --------
(16 WEEKS) (13 WEEKS) (16 WEEKS)
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues................... $6,990 $8,334 $11,356 $10,687 $9,648 $9,171 $14,498 $11,488 $11,137
Costs of services.......... 4,386 5,021 6,888 7,075 6,106 5,912 9,135 7,221 6,486
Supplemental
compensation............. 280 280 373 267 280 280 373 300 --
------ ------ ------- ------- ------ ------ ------- ------- -------
Gross profit............... 2,324 3,033 4,095 3,345 3,262 2,979 4,990 3,967 4,651
General and
administrative........... 1,811 2,087 2,890 2,272 2,134 2,162 3,361 2,852 2,754
------ ------ ------- ------- ------ ------ ------- ------- -------
Income from operations..... 513 946 1,205 1,073 1,128 817 1,629 1,115 1,897
Interest income, net....... 19 34 21 50 9 84 41 168 46
------ ------ ------- ------- ------ ------ ------- ------- -------
Income before provision for
income taxes and minority
interest................. 532 980 1,226 1,123 1,137 901 1,670 1,283 1,943
Provision for income
taxes.................... (37) (69) (86) (81) (76) (60) (112) (58) (120)
------ ------ ------- ------- ------ ------ ------- ------- -------
Net income before minority
interest................. 495 911 1,140 1,042 1,061 841 1,558 1,225 1,823
Minority interest.......... -- -- -- -- -- -- 198 84 52
------ ------ ------- ------- ------ ------ ------- ------- -------
Net income................. $ 495 $ 911 $ 1,140 $ 1,042 $1,061 $ 841 $ 1,756 $ 1,309 $ 1,875
====== ====== ======= ======= ====== ====== ======= ======= =======
</TABLE>

22
<PAGE> 23

provided on an hourly-fee basis, the Company's revenues in any period are
directly related to the number of its consultants, their billing rates and the
number of billable hours worked during that period. The Company's ability to
increase any of these factors in the short term is limited and, accordingly, the
Company may be unable to compensate for periods of underutilization during one
part of a fiscal period by augmenting revenues during another part of that
period. In addition, the Company intends to hire additional consultants who may
not be fully utilized immediately, particularly in the quarter in which such
consultants are hired. Moreover, a significant majority of the Company's
operating expenses, primarily rent and the base salaries of the Company's
consultants, are fixed in the short term, and as a result the failure of
revenues to meet the Company's projections in any quarter could have a
disproportionate adverse effect on the Company's net income.

LIQUIDITY AND CAPITAL RESOURCES

The Company's operating activities provided cash of $1.4 million, $2.2
million and $3.6 million in fiscal 1995, fiscal 1996 and fiscal 1997,
respectively. In each of these years, the cash from operating activities was
generated primarily from net income earned for the period, which increased from
$2.4 million in fiscal 1995 to $3.6 million in fiscal 1996 to $4.9 million in
fiscal 1997. Cash generated from operating activities was partially offset by
increases in unbilled services and accounts receivable, reflecting increased
services performed by the Company in each of fiscal 1995, fiscal 1996 and fiscal
1997.

Cash used in investing activities during fiscal 1995, fiscal 1996 and
fiscal 1997 was $698,000, $476,000 and $2.3 million, respectively, and was
primarily attributable to purchases by the Company of property and equipment and
leasehold improvements. The increased use of cash for investing activities in
fiscal 1997 was due primarily to the Company's expansion of its three offices
during that year.

The Company's financing activities used cash of $251,000, $1.3 million and
$708,000 in fiscal 1995, fiscal 1996 and fiscal 1997, respectively. A principal
use of cash for financing activities in each year was payment of dividends,
which totaled $245,000, $1.5 million and $1.6 million in fiscal 1995, fiscal
1996 and fiscal 1997, respectively. In fiscal 1997, the Company's use of cash
for financing activities was partially offset by collection of notes receivable
from stockholders, the sale of Common Stock to officers of the Company and the
investment in NeuCo by minority interest owners.

In the first quarter of fiscal 1998, the Company's operating activities
provided cash of $6.6 million consisting primarily of a decrease in accounts
receivable and increases in accounts payable and accrued expenses. Cash used in
investing activities for the purchase of property and equipment during the first
quarter of fiscal 1998 was $243,000. The Company's financing activities used
cash of $1.4 million in the first quarter of fiscal 1998, which consisted
primarily of the 1997 Distribution.

As of February 20, 1998, the Company had cash and cash equivalents of $7.0
million and working capital of $9.6 million. The Company presently has available
a $2.0 million revolving line of credit with BankBoston Corporation
("BankBoston"), which is secured by the Company's accounts receivable. This line
of credit automatically renews each year on June 30 unless earlier terminated by
either the Company or BankBoston. No borrowings were outstanding under this line
of credit as of February 20, 1998 or as of the date hereof. The Company had
outstanding standby letters of credit under this line of credit as of February
20, 1998 amounting to $76,000, which expire between March and June 1998.

The Company believes that the net proceeds of the Offering, together with
funds generated by operating activities, existing cash balances and credit
available under its bank line of credit, will be sufficient to meet the
Company's working capital and capital expenditure requirements for at least the
next 12 months.

The Company is currently assessing the potential impact of the Year 2000 on
the processing of date-sensitive information by the Company's computerized
information systems and on products sold by the Company. While there can be no
assurance that all issues arising from the Year 2000 will be identified and
resolved satisfactorily, the Company presently believes that Year 2000 issues
will not pose significant operational problems for the Company or have a
material adverse effect on the Company's business, financial condition or
results of operations.

To date, inflation has not had a material impact on the Company's financial
results. There can be no assurance, however, that inflation may not adversely
affect the Company's financial results in the future.

23
<PAGE> 24

BUSINESS

INTRODUCTION

The Company is a leading economic and business consulting firm that applies
advanced analytic techniques and in-depth industry knowledge to complex
engagements for a broad range of clients. Founded in 1965, the Company provides
original and authoritative advice for clients involved in many high-stakes
matters, such as multi-billion dollar mergers and acquisitions, new product
introductions, major capital investment decisions, and complex litigation, the
outcome of which often has significant implications or consequences for the
parties involved. The Company offers two types of services: legal and regulatory
consulting and business consulting. Through its legal and regulatory consulting
practice, CRA provides law firms and businesses involved in litigation and
regulatory proceedings with expert advice on highly technical issues such as the
competitive effects of mergers and acquisitions, damages calculations,
measurement of market share and market concentration, liability analysis in
securities fraud cases, and the impact of increased regulation. In addition, the
Company uses its expertise in economics, finance and business analysis to offer
clients business consulting services for strategic issues such as establishing
pricing strategies, estimating market demand, valuing intellectual property and
other assets, assessing competitors' actions, and analyzing new sources of
supply. To complement its analytical expertise in advanced economic and
financial methods, the Company offers its clients in-depth industry expertise in
specific vertical markets, including chemicals, electric power and other
energies, healthcare, materials, media/telecommunications, and transportation.

24
<PAGE> 25

INDUSTRY OVERVIEW

The environment in which businesses operate is becoming increasingly
complex. Expanding access to powerful computers and software is providing
companies with almost instantaneous access to a wide range of internal
information, such as supply costs, inventory values, and sales and pricing data,
as well as external information such as market demand forecasts and customer
buying patterns. At the same time, markets are becoming increasingly global,
offering companies the opportunity to expand their presences throughout the
world and exposing them to increased competition and the uncertainties of
foreign operations. Many industries are rapidly consolidating as companies are
pursuing mergers and acquisitions in response to increased competitive pressures
and to expand their market opportunities. In addition, companies are relying to
a greater extent on technological and business innovations to improve
efficiency, thus increasing the importance of strategically analyzing their
businesses and developing and protecting new technology. As a result of this
increasingly competitive and complex business environment, companies are
required to constantly gather, analyze and utilize available information to
enhance their business strategies and operational efficiencies.

The increasing complexity and changing nature of the business environment
is also forcing governments to adjust their regulatory strategies. For example,
certain industries such as healthcare are subject to frequently changing
regulations while other industries such as telecommunications and electric power
are experiencing trends toward deregulation. These constant changes in the
regulatory environment are leading to frequent litigation and interaction with
government agencies as companies attempt to interpret and react to the
implications of this changing environment. Furthermore, as the general business
and regulatory environment becomes more complex, litigation has also become more
complicated, protracted, expensive and important to the parties involved.

As business, legal and regulatory environments undergo rapid change and
become more complex, companies are increasingly relying on sophisticated
economic and financial analysis to solve complex problems and improve
decision-making. Economics and finance provide the tools necessary to analyze a
variety of issues confronting businesses, such as interpretation of sales data,
effects of price changes, valuation of assets, assessment of competitors'
activities, evaluation of new products and analysis of supply limitations.
Governments are also relying to an increasing extent on economic and finance
theory to measure the effects of anti-competitive activity, evaluate mergers and
acquisitions, change regulations, implement auctions to allocate resources, and
establish transfer pricing rules. Finally, litigants and law firms are using
economic and finance theory to help determine liability and to calculate damages
amounts in complex and high-stakes litigation. As this need for complex economic
and financial analysis becomes more widespread, CRA believes that companies will
increasingly turn to outside consultants for access to specialized expertise,
experience and prestige that are not available to them internally.

COMPETITIVE STRENGTHS

Since 1965, the Company has been committed to providing sophisticated
consulting services to its clients. The Company believes that the following
factors have been critical to its success:

Strong Reputation for High Quality Consulting. For over 30 years, the
Company has been a leader in providing sophisticated economic analysis and
original, authoritative studies for clients involved in complex litigation and
regulatory proceedings. As a result, the Company believes that it has
established a strong reputation among leading law firm and business clients as a
preferred source of expertise in economics and finance, as evidenced by the
Company's high level of repeat business and significant referrals from existing
clients. Approximately 60% of the Company's revenues from new engagements in
fiscal 1997 were derived from engagements for existing clients. In addition, the
Company believes that its significant name recognition, developed as a result of
its work on many high profile litigation and regulatory engagements, has
enhanced the development of its business consulting practice. While reputation
for high quality consulting and name recognition are critical in attracting new
clients, CRA believes that these factors are equally important to its ability to
recruit and retain both consultants and renowned Outside Experts.

Highly Educated, Experienced and Versatile Consulting Staff. The Company
believes that its most important asset is its base of full-time consultants,
particularly its senior consultants. Of the Company's

25
<PAGE> 26

120 consultants as of February 20, 1998, 69 are either officers, principals or
senior associates, substantially all of whom have a Ph.D. or a master's degree.
Many of these senior consultants are nationally recognized as experts in their
respective fields, having published scholarly articles, lectured extensively and
been quoted in the press. In addition to their expertise in a particular field,
most of the Company's consultants are able to apply their skills across numerous
practice areas. This flexibility in staffing engagements is critical to the
Company's ability to apply its resources as needed to meet the demands of its
clients. As a result, the Company seeks to hire consultants who not only have
strong analytical skills but also are creative, intellectually curious and
driven to develop expertise in new practice areas and industries.

Vertical Market Expertise. By maintaining expertise in certain industries,
the Company is able to offer clients creative and pragmatic advice tailored to
their specific markets. This vertical market expertise, developed by CRA over
decades of providing sophisticated consulting services to a diverse group of
clients in industries such as chemicals, electric power and other energies,
healthcare, materials, media/telecommunications, and transportation,
differentiates the Company from many of its competitors. CRA believes that it
has developed a strong reputation and substantial name recognition within these
specific industries, which leads to repeat business and new engagements from
clients in those markets.

Broad Range of Services. By offering clients both legal and regulatory
consulting services and business consulting services, CRA is able to satisfy a
broad array of client needs, ranging from expert testimony for complex lawsuits
to designing global business strategies. This broad range of expertise enables
the Company to take an interdisciplinary approach to certain engagements,
combining economists and experts in one area with specialists in another
discipline. The Company emphasizes its diverse capabilities to clients and
regularly cross-markets across its service areas. For example, it is not unusual
for a client that the Company assists in a litigation matter to later retain the
Company for a business consulting matter. In addition, the Company believes that
consultants and Outside Experts are attracted by the opportunity to work on a
diverse array of matters.

Access to Leading Academic and Industry Experts. To enhance the expertise
it provides to its clients, CRA maintains close working relationships with a
select group of Outside Experts. Depending on client needs, the Company uses
Outside Experts for their specialized expertise, assistance in conceptual
problem-solving and expert witness testimony. CRA works regularly with renowned
professors at Harvard University, the Massachusetts Institute of Technology,
Georgetown University, The University of California, Stanford University, The
University of Virginia and other leading universities. Outside Experts also
generate business for CRA and provide the Company access to other leading
academic and industry experts. By establishing affiliations with prestigious
Outside Experts, the Company further enhances its reputation as a leading source
of sophisticated economic and financial analysis.

GROWTH STRATEGY

CRA intends to enhance its position as a leading economic and business
consulting firm by pursuing the following growth strategy:

Attract and Retain High Quality Consultants. Since its consultants are its
most important asset, the Company's ability to attract and retain highly
credentialed and experienced consultants both to work on engagements and to
generate new business is crucial to the Company's success. In order to attract
highly qualified consultants, the Company offers competitive compensation and
benefits and has developed a career enhancement program that offers consultants
career enrichment opportunities and access to individualized training. While
competitive compensation and benefits are important, CRA believes that
consultants are attracted to CRA because of its strong reputation, the
credentials, experience and reputation of its consultants, the opportunity to
work on a diverse array of matters, the opportunity to work with renowned
Outside Experts, and the collegial atmosphere of the Company. The Company
believes that its attractiveness as an employer is reflected in its low turnover
rate among employees and that its status as a public company will further
enhance its ability to recruit and retain employees. The Company intends to
grant stock options to certain employees as part of its efforts to attract and
retain consultants.

26
<PAGE> 27

Increase Marketing Activities. Historically, the Company has primarily
relied on its reputation and client referrals for new business. As a result, the
Company believes there is an opportunity to expand significantly its marketing
activities in order to attract new clients and increase the overall exposure of
its consultants. For example, the Company intends to increase its presence at
selected conferences, seminars and public speaking engagements to increase
client referrals and lead generation. The Company also intends to increase
circulation of its client publications, which highlight emerging trends and
noteworthy CRA engagements, as well as to encourage its consultants to publish
articles more frequently in the trade press and academic journals.

Expand Services. While the Company currently offers a broad range of
services, CRA believes there are opportunities to expand the services and
expertise it provides to its clients. For example, applying the expertise of
several of its consultants in game theory, the Company recently began offering
consulting services in auction design and implementation. Similarly, the Company
believes that it can expand into other related areas of business with its
existing consultants, most of whom have experience in a wide variety of fields.
To encourage the development of new ideas and expertise, the Company fosters an
environment that rewards creativity and innovation.

Establish Relationships with Additional Outside Experts. The Company
intends to establish relationships with additional leading academic and industry
experts. In addition to helping the Company serve its clients better, Outside
Experts often provide the Company with new sources of business and expand the
Company's network of academic affiliations. Moreover, the Company believes that
affiliations with additional, prestigious Outside Experts will further enhance
its reputation and aid in its recruiting of consultants. The Company may grant
stock options to attract additional Outside Experts.

Pursue Strategic Acquisitions and Alliances. The Company will seek to
expand its operations through the acquisition of complementary businesses and by
establishing strategic alliances. Given the highly fragmented nature of the
consulting industry, CRA believes that there are numerous opportunities to
acquire small consulting firms. The Company believes the acquisition of
complementary businesses and the establishment of strategic alliances, such as
it has done for its auctions consulting practice, will provide it with
additional consultants, new service offerings, additional industry expertise, a
broader client base or an expanded geographic presence. As of the date of this
Prospectus, the Company has no agreement or understanding regarding any
acquisitions.

Open New Offices. The Company may expand its geographic presence by
opening one or more additional offices, particularly in major metropolitan areas
that have leading universities. The Company believes this strategy will help to
attract consultants and Outside Experts and provide it with additional marketing
opportunities for clients located in those regions.

There can be no assurance that the Company will be successful in any of the
elements of its growth strategy.

SERVICES

The Company offers services in two broad areas: legal and regulatory
consulting and business consulting. In its legal and regulatory practice, the
Company usually works closely with law firms on behalf of one or more companies
involved in litigation or regulatory proceedings. Many of the lawsuits and
regulatory proceedings in which the Company is involved are high-stakes matters,
such as obtaining regulatory approval of a pending merger or analyzing possible
damages awards in a securities fraud case, the outcome of which often has
significant implications or consequences for the parties involved. In the
business consulting practice, CRA typically provides services directly to
companies seeking assistance with strategic issues that require expert economic
or financial analysis. Many of these matters involve "mission-critical"
decisions for the client, such as positioning and pricing a new product or
developing a new technological process. Engagements in the Company's two service
areas often involve similar areas of expertise and address related issues, and
it is common for CRA's consultants to work on engagements in both service areas.
The Company estimates that it derived approximately two-thirds of its revenues
in fiscal 1997 from legal and regulatory consulting and approximately one-third
from business consulting.

27
<PAGE> 28

LEGAL AND REGULATORY CONSULTING. The ability to formulate and effectively
communicate powerful economic and financial arguments to courts and regulatory
agencies is often critical to a successful outcome in litigation and regulatory
proceedings. Through its highly educated and experienced consulting staff, the
Company applies advanced analytic techniques in economics and finance to complex
engagements for a diverse group of clients. The Company offers its clients a
wide range of legal and regulatory consulting services, including the following:

Antitrust. CRA has expertise in a variety of issues arising in antitrust
litigation, including collusion, price signaling, monopolization, tying,
exclusionary conduct, resale price maintenance, predatory pricing and price
discrimination. Expert testimony and analysis by economists play an increasingly
important role in antitrust litigation. For the past three decades, the Company
has provided expert assistance to law firms in a wide variety of antitrust
lawsuits, including supporting IBM in landmark antitrust litigation brought by
the DOJ and others.

Mergers and Acquisitions. The Company assists clients involved in mergers
and acquisitions in their interactions with domestic and foreign antitrust
regulatory authorities. By applying economic methods and tools, CRA helps
clients simulate the effects of mergers on prices, estimate demand elasticities,
design and administer customer and consumer surveys, and study the efficiencies
that motivate or result from acquisitions. In addition, the Company regularly
assists clients in proceedings before the FTC and DOJ, including helping them
obtain termination of the waiting period imposed by the Hart-Scott-Rodino
Antitrust Improvements Act of 1976.

Finance. The Company offers clients a variety of financial advisory
services, including valuations, securities fraud analysis, and risk assessments
for options, futures, swaps and other derivatives. For clients involved in
litigation and regulatory proceedings, CRA values businesses, products,
contracts and securities, and provides expert testimony on a variety of
valuation issues. The financial analysis performed by the Company encompasses
cash-flow estimates, "but-for" analyses of revenues, complex analytical models
and estimates of appropriate discount rates. The Company also assists clients in
securities fraud cases by estimating damages computations and analyzing
potential liability.

Intellectual Property. The Company provides expert consulting and
testimony on a broad array of issues arising from intellectual property rights
and valuations of intellectual property, cost-sharing arrangements, royalty
rates, and determinations of fair market value of intellectual property
transferred between related parties. For example, CRA estimates damages and
provides expert testimony in patent, trademark, copyright, trade secret and
unfair competition disputes. Its services include estimating lost profits,
reasonable royalties, unjust enrichment and prejudgment interest.

Transfer Pricing. CRA provides transfer pricing advice for companies that
are establishing foreign operations and for companies with existing foreign
operations seeking to improve their tax positions. The Company helps clients to
analyze their affiliates' functions and risks, the value of tangible and
intangible assets, precedents set by comparable industry transactions, and the
specifics of the tax laws in the relevant countries. In addition, CRA assists
clients in preparing for Internal Revenue Service and foreign tax authority
audits and provides expert testimony and litigation support in lawsuits related
to transfer pricing disputes.

Environment. CRA regularly assists clients involved in environmental
disputes both in litigation proceedings and before government agencies. For
example, the Company helps clients determine responsibility for environmental
cleanups, including Superfund sites, and advises clients on damages calculations
resulting from oil spills, hazardous waste disposal and other environmental
torts. As part of its work in this area, the Company's consultants and Outside
Experts have assisted clients in developing innovative techniques for
environmental regulatory compliance, such as emissions trading and regulatory
cost-benefit analysis and risk assessment.

BUSINESS CONSULTING. The business consulting practice of CRA applies a
highly analytical, quantitative approach to help companies analyze and respond
to market forces and competitive pressures that affect their businesses. The
Company advises its clients in many of the same areas in which it provides legal
and regulatory consulting, such as finance and mergers and acquisitions.
Applying its in-depth knowledge of

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specific vertical markets, the Company is able to provide insightful,
value-added advice to its clients. CRA offers clients practical and creative
advice by challenging conventional approaches and generally avoiding
predetermined solutions or methodologies. Recognizing the importance that
clients place in maintaining confidentiality, CRA does not disclose the identity
of its clients unless the Company's engagement with the client is already
publicly disclosed. CRA's business consulting services can be grouped into three
broad areas, as follows:

Business Strategy. CRA offers a broad range of strategy-related consulting
services designed to help companies evaluate strategic opportunities and
increase shareholder value. For example, CRA helps clients to identify
investment opportunities, implement cost reduction programs, execute turnaround
strategies, improve risk management, make capital investment decisions, complete
due diligence, value intellectual property rights and other assets, and
establish pricing strategies. The Company also assists clients with acquisitions
by assessing the strategic and financial fit of an acquisition candidate. As it
does in its legal and regulatory consulting practice, CRA advises clients on the
competitive advantages and efficiencies, if any, resulting from acquisitions, as
well as any potential antitrust concerns.

Market Analysis. CRA uses its vertical market expertise and analytical
skills to assist its clients in identifying, understanding and reacting to
market trends, including measuring market size, estimating supply and demand
balances, evaluating growth opportunities, and analyzing procurement strategies.
This type of analysis is particularly useful for companies that are launching a
new product, repositioning an existing product or operating in an industry
undergoing significant change. CRA uses complex computer models to predict the
market impact of certain potential actions by the client or third parties. This
information is then used to advise the client on product positioning, pricing
strategies, competitive threats and probable market reactions. Using its
regulatory and legal consulting expertise, CRA assists clients in evaluating the
market impact of existing and proposed government policies.

Technology Management. CRA assists clients in managing their industrial
technologies, including analyzing the processes used to develop their products
and services. The Company helps clients with their technology needs from
assessment through implementation. For example, CRA completes competitive
analyses for clients by analyzing competitors' technology and processes through
statistical comparisons of raw material costs, sales, productivity measurements
and other factors. In addition, CRA helps clients to assess commercialization of
new technology by quantifying the costs and benefits of obtaining and
implementing new technology, including evaluation of engineering and employee
training costs. Finally, the Company assists clients in implementing technology,
including helping to coordinate the efforts of research and development
organizations and conducting pre-feasibility studies.

VERTICAL MARKET EXPERTISE

The Company believes its ability to combine expertise in advanced economic
and financial methods with in-depth knowledge of particular vertical markets is
one of its key competitive strengths. By maintaining expertise in certain
industries, the Company provides clients practical advice in both legal and
regulatory consulting and business consulting that is tailored to their specific
markets. This vertical market expertise, developed by CRA over decades of
providing sophisticated consulting services to a diverse group of clients in
leading industries, differentiates the Company from many of its competitors. CRA
believes that it has developed a strong reputation and substantial name
recognition within specific industries, which leads to repeat business and new
engagements from clients in those markets. While the Company provides services
to clients in a wide variety of industries, it has particular expertise in the
following vertical markets:

Chemicals. The Company has a long history of providing consulting services
to chemical companies. For example, CRA has assisted leading chemical companies
in improving their research and development capabilities, investing in new
businesses, assessing acquisition possibilities, and restructuring their
facilities. CRA's industry experience enables it to offer advice to clients
regarding pricing and profitability relative to supply, demand and competition
within the chemicals industry.

Electric Power and Other Energies. CRA is a leading provider of economic
testimony and analysis of the competitive impacts of electric utility, natural
gas, and petroleum mergers and acquisitions. In addition,

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the Company offers advice to energy clients about the effects of deregulation in
the electric power and natural gas industries. In order to help energy clients
address frequent regulatory changes, CRA represents them in proceedings before
the Federal Energy Regulatory Commission, the Interstate Commerce Commission,
state public regulatory commissions, and other international, federal and state
administrative agencies. The Company has recently published a comprehensive
study analyzing trading in electricity futures contracts.

Healthcare. CRA advises hospitals, pharmaceutical and medical product
companies, and other healthcare clients by combining its in-depth knowledge of
the unique and rapidly changing features of healthcare markets with its
expertise in antitrust assessment, merger evaluations, measurement of damages
and valuation of intellectual property. The Company assists its clients in
responding to current competitive pricing trends and incentives created for
vertical and horizontal consolidation. For pharmaceutical and medical product
companies, CRA helps develop research, development, marketing and reimbursement
strategies that highlight the clinical and economic advantages of their
pharmaceuticals and medical technologies.

Materials. Led by a group of consultants with extensive experience and
academic backgrounds in the materials and manufactured parts industries, CRA
offers advice on a broad array of issues confronting clients selling and using
materials such as minerals, metals and polymers. For example, CRA helps
companies to analyze potential strategic acquisitions, evaluate capital
investment opportunities, define and segment markets, assess new technology,
respond to changing regulations, gauge competitors' actions and design business
strategies. CRA also has expertise and experience in guiding materials and
manufactured parts companies through antidumping proceedings before government
agencies.

Media/Telecommunications. By providing a wide range of consulting services
to a diverse group of media and telecommunications clients, the Company has
developed a strong reputation as a leading source of expert economic and
financial advice for media and telecommunications companies. CRA has been
retained by clients involved in some of the largest media/telecommunications
mergers, including the acquisitions of Turner Broadcasting System Inc. by Time
Warner Inc. and Capital Cities/ABC Inc. by Walt Disney Company. Applying its
expertise in the media/telecommunications industry, CRA has helped clients
address the dramatic developments in their industry resulting from rapid
technological change, deregulation and the globalization of their markets.

Transportation. The Company assists transportation industry clients by
providing services in travel demand forecasting, market assessment, public
policy analysis and business strategy. Through the use of sophisticated models
for estimating travel demand developed by the Company, CRA helps transportation
clients assess the feasibility of entering new markets and consults with
governments considering infrastructure improvements. In addition, the Company
has advised airline clients on the effects of deregulation and has consulted
with automotive companies on the effects of increased government regulation.

NEW OPPORTUNITIES

An element of the Company's growth strategy is to expand into new practice
areas that are complementary to its core practice areas. The Company intends to
continue to encourage its consultants to develop expertise in new areas. Two
examples of new areas of business that the Company recently developed are
described below.

Auction Consulting. Several of CRA's consultants used their expertise in
game theory to develop an auctions consulting practice. CRA is collaborating
with Market Design, Inc. ("MDI"), a corporation owned and operated by a group of
leading academic experts in the field of auction theory, to provide consulting
services for the design and implementation of complex auctions, such as
simultaneous ascending-bid auctions in which multiple objects are available for
bid at the same time. Using jointly developed, sophisticated software, the
Company and MDI help businesses and governments formulate rules for auctions,
run auctions and track auction results. In addition, CRA and MDI provide bidder
support services prior to and during an auction, including competitive
evaluations, optimal bidding strategies and assessments of the competition's
behavior. CRA typically charges clients a license fee for its auction software
(a portion of which is shared with MDI) in addition to charging for its
consulting services.

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The Company's auction consulting work began in 1995 and was initially
focused primarily on auctions of telecommunications spectrum licenses. For
example, CRA and MDI were hired by Mexico's Comision Federal de
Telecomunicaciones to design and help implement auctions for paging spectrum,
microwave bands and personal communication services. While still focusing on
telecommunications auctions, the Company has also provided auction consulting
services to electric utilities, and intends to expand its auction consulting
work into other industries, such as minerals and chemicals, that are beginning
to use auctions more frequently to allocate resources and property rights.

NeuCo. In June 1997, the Company invested approximately $650,000 for a
majority interest in NeuCo. NeuCo was established by the Company and an
affiliate of Commonwealth Energy Systems as a start-up entity to develop and
market a family of neural network software tools and complementary applications
consulting services for electric utilities. NeuCo's products and services are
designed to help utilities improve their power plants by improving heat rate,
reducing emissions, overcoming operating constraints and increasing output
capability. NeuCo was established in connection with the Company's consulting
engagement with Commonwealth Energy.

While NeuCo is currently operating at a loss, and there can be no assurance
that it will become profitable, the Company believes that demand exists for
NeuCo's products and services. As of the date of this Prospectus, NeuCo has
implemented its software and services solution at one of Commonwealth Energy's
electric utility plants, and it is providing consulting services to another
client. Although NeuCo's initial products and services are designed for electric
utilities, the Company believes that NeuCo's neural network software tools can
be adapted and combined with consulting services to form a solutions package to
meet the efficiency needs of companies outside the electric power industry,
particularly for gas and other combustion companies. The software engine that
NeuCo utilizes to build its software applications is licensed by the Company
from a third party and sublicensed to NeuCo. In addition to the sublicense, the
Company provides NeuCo with general, administrative and other services for
agreed-upon fees.

CLIENTS

The Company has completed more than 2,500 engagements for clients including
major law firms, domestic and foreign corporations, federal, state and local
government agencies, governments of foreign countries, public and private
utilities, and national and international trade associations. While the Company
has particular expertise in certain vertical markets, the Company provides
services to a diverse group of clients in a broad range of industries. During
its last three fiscal years, CRA worked with 59 of the 100 largest U.S. law
firms (ranked by The American Lawyer based on 1996 revenues) and 109 Fortune 500
companies (based on 1996 revenues). No single client accounted for over 10% of
the Company's revenues in fiscal 1997. CRA's policy is to keep the identities of
its clients confidential unless the Company's work for the client is already
publicly disclosed.

The following are examples of the Company's engagements:

Legal and Regulatory Consulting

- The Company assisted Procter & Gamble Company Inc. ("P&G") and its
counsel in assessing the antitrust implications of P&G's acquisition of
Tambrands Inc. The DOJ was concerned that the proposed merger might
reduce competition and lead to price increases for feminine protection
products. CRA reviewed P&G's and Tambrands' internal planning documents,
which indicated that the two companies' products did not compete directly
against each other. CRA confirmed this by applying sophisticated
econometric techniques to consumer purchase data. CRA presented its
findings, together with its extensive supporting data, to the DOJ's
investigative staff to demonstrate that the two companies' products were
either in distinct markets, or if in the same market, not substitutes for
each other. After considering CRA's analysis and data, the DOJ allowed
the acquisition to proceed.

- CRA assisted Polaroid Corporation in its instant-camera patent
infringement lawsuit against Eastman Kodak Company. Working closely with
two Outside Experts, CRA developed estimates of reasonable royalties and
the value of lost profits on the basis of lost sales and price erosion
resulting from Eastman

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Kodak's infringement. CRA formulated its damages calculations using a
non-linear model of consumer demand for a durable good. This model,
developed by two Outside Experts working in conjunction with CRA
consultants, analyzed consumer buying patterns, price movements and other
factors in the context of a new product introduction. CRA assisted the
Outside Experts with their trial testimony and worked closely with
Polaroid's lawyers in preparing witnesses and critiquing the opposing
parties' experts. CRA's analysis contributed to Polaroid obtaining a
significant damages award.

- Exxon Company, USA retained CRA to assist in preparing for litigation
related to the oil spill from the tanker Exxon Valdez. CRA examined a
number of theoretical and empirical issues regarding the reliability of
measures of natural resource damages. Working with a team of survey
researchers, economists, psychologists, and statisticians, CRA developed
and conducted a number of experiments after gathering and interpreting
data from questionnaires administered to several thousand respondents
throughout the United States. The studies specifically addressed the
reliability and sensitivity of contingent valuation methods in measuring
damages to environmental resources. CRA's study results indicated that
slight variations in survey techniques and methodologies could lead to
dramatically different results. For example, by isolating the "budget
context" bias that arises in one traditional method of measuring natural
resource damages, CRA's research demonstrated that the traditional method
tended to overstate damages by a factor of almost 300 as compared to a
survey method that CRA designed to mitigate the bias. Exxon used CRA's
analysis to prepare for settlement negotiations.

- When several major oil companies were accused of conspiring to depress
the prices of North Sea or Brent crude oil, they hired CRA to perform a
number of sophisticated statistical tests to determine whether Brent
prices had been affected by their purchases and sales. CRA's statistical
tests demonstrated that there was no pattern of trading by the clients at
below-market prices. Rather, the prices of a majority of the clients'
trades fell within the range of non-defendants' prices prevailing for the
corresponding delivery month and transaction day; the remaining trades
were evenly distributed above and below the non-defendants' reported
price range. Furthermore, statistical tests revealed no relationship
between the relative level of the clients' prices and the direction of
change in non-defendants' prices, contrary to what would be expected if
the clients' trading activities were designed to drive market prices
down. CRA's tests also showed that the volume of trading by its clients
was not related to movements in market price and that changes in Brent
prices did not lead to changes in prices of other crude oils. CRA's
analysis was used by the clients to help settle the matter.

Business Consulting

- CRA evaluated the prospects and mechanisms of privatization for a major
international oil and gas company. The Company developed a matrix of
privatization efforts of companies around the world and determined the
factors that contributed to their success or failure. CRA identified and
evaluated financial, competitive and shareholder value concerns, and
determined key management tradeoffs. In particular, the Company developed
recommendations for the preliminary steps necessary for the client to
achieve its privatization objectives and assisted with the implementation
of the privatization, including the formation of four new operating
companies. In addition, CRA advised the client on dividing the
enterprise's assets among the four operating companies and establishing
transfer prices.

- CRA developed a turnaround strategy for a nonferrous alloy manufacturing
division of a large mining company that was losing money and having
production problems. The strategy was based on an analysis of its
production problems, costs, competitive positioning, product portfolio
and customer mix. The Company identified the inherent potential of the
division and explained to the client's board of directors the reasons not
to divest the business. The client implemented the turnaround strategy
developed by CRA, and the division has since become profitable and is
growing.

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HUMAN RESOURCES

Consultants

On February 20, 1998, the Company had 120 full-time consultants, consisting
of 28 officers, 15 principals, 26 senior associates, 36 associates and 15
research assistants, and had over 55 full-time administrative \staff members.
Officers and principals generally work closely with clients, supervise junior
consultants, provide expert testimony on occasion and seek to generate business
for the Company. Senior associates and associates typically serve as project
managers and handle complex research assignments. Research assistants gather and
analyze data sets and complete statistical programming and library research.

Most of the Company's revenues are derived directly from the services
provided by its full-time consultants. The Company's consultants have
backgrounds in many disciplines, including economics, business, corporate
finance, materials sciences and engineering. Substantially all of CRA's senior
consultants, consisting of officers, principals and senior associates, have
either a Ph.D. or a master's degree in addition to substantial management,
technical or industry expertise. Of the Company's total senior consulting staff
of 69 as of February 20, 1998, 41 have Ph.D.s in economics, six have Ph.D.s in
other disciplines and 18 have other advanced degrees. The Company believes that
its financial results, reputation and growth are directly related to the number
and quality of its consultants.

The Company is highly selective in its hiring of consultants, recruiting
primarily from leading universities, industry and government. CRA carefully
screens candidates and usually arranges for candidates seeking a senior
consulting position to interview in at least two of CRA's offices. Prior to
hiring a candidate for a senior consulting position, CRA requires that the
candidate make a technical presentation to a group of CRA consultants. The
Company believes that consultants choose to work at CRA and that turnover is low
because of its strong reputation, the credentials, experience and reputation of
its consultants, the opportunity to work on a diverse array of matters, the
opportunity to work with renowned Outside Experts, and the collegial atmosphere
of the Company. The Company believes that its attractiveness as an employer is
reflected in its low turnover rate among employees and that its status as a
public company will further enhance its ability to recruit and retain employees.

CRA's training and career development program for its consultants focuses
on three areas: supervision, seminars and scheduled courses. This program is
designed to complement on-the-job experience and an employee's pursuit of his or
her own career development. New consultants participate in a structured program
in which they are partnered with an assigned mentor. Through CRA's ongoing
seminar program, outside speakers make presentations and conduct discussions
with the consultants on various topics. In addition, consultants are expected to
present papers, discuss significant cases, or outline new analytical techniques
or marketing opportunities periodically at in-house seminars. CRA also provides
scheduled courses designed to improve an employee's professional skills, such as
presentation and sales and marketing techniques. Consultants are also encouraged
to pursue their academic interests by authoring articles for economic and other
journals.

Each of CRA's senior consultants has signed a non-solicitation agreement
which generally prohibits the employee from soliciting clients of CRA for a
period of six months following termination of the person's employment with the
Company and from soliciting CRA's employees for a period of two years after
termination of the person's employment. Each of the Company's current
stockholders, including each of CRA's officers, has entered into an agreement
with CRA (the "Stock Restriction Agreement"), pursuant to which each stockholder
has agreed, among other things, not to sell or otherwise transfer any shares of
Common Stock of the Company owned by the stockholder prior to the Offering
without the consent of the Board of Directors of the Company for a period of two
years following the closing of the Offering. For more information regarding the
Stock Restriction Agreement, see "Certain Transactions--Stock Restriction
Agreement."

Outside Experts

The Company works closely with a select group of Outside Experts from
leading universities and industry, who supplement the work of the Company's
consultants and generate business for the Company. The Company believes that
Outside Experts choose to work with the Company on engagements because of the

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interesting and challenging nature of the work involved, the opportunity to work
with CRA's highly educated consultants and the financially rewarding nature of
the work. Four Outside Experts, each of whom is a stockholder of the Company
(see "Principal and Selling Stockholders") and a party to the Stock Restriction
Agreement, have entered into agreements with the Company that restrict their
right to compete with the Company.

MARKETING

The Company relies to a significant extent on the efforts of its
consultants, particularly its officers and principals, to market the Company's
services. Consultants are encouraged to generate new business from both existing
and new clients, and are rewarded with increased compensation and promotions for
obtaining new business. In pursuing new business, the Company's consultants
emphasize CRA's institutional reputation and experience, while also promoting
the expertise of the particular employees who will work on the matter. Many of
the Company's consultants have published articles in industry, business,
economic, legal and scientific journals and have made speeches and presentations
at industry conferences and seminars, which serve as a means of attracting new
business and enhancing their reputations. Consultants on occasion work with one
or more Outside Experts to market the Company's services.

The personal marketing efforts of the Company's consultants are
supplemented by firm-wide initiatives. Historically, the Company has primarily
relied on its reputation and client referrals for new business. Since the
management buy-out in 1995, the Company has increased its marketing activities
and intends to continue to expand its current marketing programs. CRA regularly
organizes seminars for existing and potential clients featuring panel members
that include the Company's consultants, Outside Experts and leading government
officials. The Company has an extensive set of brochures organized around CRA's
service areas, which outline the Company's experience and capabilities. In
addition, the Company periodically distributes publications to existing and
potential clients highlighting emerging trends and noteworthy CRA engagements.
Because existing clients are an important source of repeat business and
referrals, the Company communicates regularly with its existing clients to keep
them informed of developments that affect their markets and industries.

In its legal and regulatory consulting practice, much of the Company's new
business is derived from referrals by existing clients. The Company has worked
with leading law firms across the country and believes it has developed a
reputation among law firms as a preferred source of sophisticated economic
advice for litigation and regulatory work. For its business consulting practice,
the Company also relies on referrals from existing clients, but supplements
referrals with a significant amount of direct marketing to new clients through
conferences, publications, presentations and direct solicitations.

It is important to the Company that it conduct business ethically and in
accordance with industry standards and the Company's own rigorous professional
standards. The pursuit of specific markets, clients and bids on specific
requests for proposals are carefully considered. Before a new client or matter
is accepted, the Company determines whether a conflict of interests exists by
circulating a client development report among its officers and by checking the
Company's internal client database.

COMPETITION

The market for economic and business consulting services is intensely
competitive, highly fragmented and subject to rapid change. In general, the
barriers to entry into the Company's markets are few, and the Company expects to
face additional competition from new entrants into the economic and business
consulting industries. In the legal and regulatory consulting market, the
Company competes primarily with other economic consulting firms and individual
academics. The Company believes that the principal competitive factors in this
market are reputation, analytical ability, industry expertise and service. In
the business consulting market, the Company competes primarily with other
business and management consulting firms, specialized or industry-specific
consulting firms, the consulting practices of large accounting firms, and the
internal professional resources of existing and potential clients. The Company
believes that the principal competitive factors in this market are reputation,
industry expertise, analytical ability, service and price. Many of the Company's
competitors have national and international reputations as well as significantly
greater

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personnel, financial, managerial, technical and marketing resources than the
Company. Certain of the Company's competitors also have a significantly broader
geographic presence than the Company. There can be no assurance that the Company
will compete successfully with its existing competitors or with any new
competitors.

FACILITIES

The Company's headquarters is located in Boston, Massachusetts in a leased
facility consisting of approximately 41,000 square feet, under a 15-year lease
that expires in 2008. The Company also occupies leased office space in
Washington, D.C. and Palo Alto, California. The Company believes that its
existing facilities are adequate to meet its current requirements and that
suitable space will be available as needed.

LEGAL PROCEEDINGS

As of the date of this Prospectus, the Company is not a party to any legal
proceedings the outcome of which, in the opinion of management of the Company,
would have a material adverse effect on the Company's business, financial
condition or results of operations.

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MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

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

<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------------------------ --- ----------------------------------------------------
<S> <C> <C>
Franklin M. Fisher (1)(2)................. 63 Chairman of the Board
Rowland T. Moriarty (1)(2)(3)............. 51 Vice Chairman of the Board
James C. Burrows.......................... 54 President, Chief Executive Officer and Director
Laurel E. Morrison........................ 47 Chief Financial Officer, Vice President,
Finance and Administration, and Treasurer
Firoze E. Katrak (3)...................... 46 Vice President, Director
William B. Burnett (2).................... 49 Vice President, Director
Carl Kaysen (1)(3)........................ 78 Director
</TABLE>

- ---------------
(1) Member of the Compensation Committee
(2) Member of the Governance Committee
(3) Member of the Audit Committee

FRANKLIN M. FISHER has served as an Outside Expert and a director of the
Company since 1967. Since April 1997, Dr. Fisher has served as Chairman of the
Board of Directors. Dr. Fisher has been a professor of economics at the
Massachusetts Institute of Technology since 1965, and the president and sole
employee of FMF, Inc., an economic consulting firm, since 1980. Dr. Fisher is
also a director of the National Bureau of Economic Research and a member of the
Steering Committee of the Institute for Social and Economic Policy in the Middle
East at Harvard University's John F. Kennedy School of Government. He received
his Ph.D. in economics in 1960 from Harvard University.

ROWLAND T. MORIARTY has served as a director of the Company since 1986 and
as Vice Chairman of the Board since December 1992. Dr. Moriarty is also Chairman
of the Board of Managers and a member of NeuCo. Dr. Moriarty has served as
Chairman and Chief Executive Officer of Cubex Inc., an international marketing
consulting firm, since 1992. Dr. Moriarty was a professor at the Harvard
Business School from 1981 to 1992, where he received his D.B.A. in Marketing in
1980. He is a director of Staples, Inc. and Trammel Crow Corporation.

JAMES C. BURROWS joined the Company in 1967 and has served as its President
and Chief Executive Officer since March 1995 and as a director since April 1993.
Since December 1992, Dr. Burrows has directed the Company's legal and regulatory
consulting practice. From 1971 to March 1995, Dr. Burrows served as a Vice
President of the Company and from June 1987 to December 1992 also directed the
Company's economic litigation program. Dr. Burrows received his Ph.D. in
economics from the Massachusetts Institute of Technology in 1970.

LAUREL E. MORRISON has served as Chief Financial Officer, Vice President of
Finance and Administration, and Treasurer of the Company since December 1996.
Ms. Morrison served as Controller of the Company from May 1993 until December
1996. Ms. Morrison previously served as Controller of MicroMentor, Inc., a
software company, from November 1992 to May 1993. Ms. Morrison is a certified
public accountant.

FIROZE E. KATRAK has served as Vice President of the Company since 1986 and
as a director of the Company since April 1993. Since June 1987, he has served as
head of the Company's materials and manufacturing consulting practice. Dr.
Katrak received his Ph.D. in materials engineering from the Massachusetts
Institute of Technology in 1978 and has been an employee of the Company since
that time.

WILLIAM B. BURNETT joined the Company as Vice President in 1988 and has
served as a director since June 1994. From 1982 to 1988, Mr. Burnett served as a
Vice President of Glassman-Oliver Economic Consultants, Inc., a consulting firm.
Prior to joining the Company, Mr. Burnett served in the Bureau of Economics at
the FTC from 1976 to 1982. Mr. Burnett received his M.A. in economics from
Cornell University in 1975.

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CARL KAYSEN has served as a director of the Company since 1986. From
December 1992 until April 1997, Dr. Kaysen served as Chairman of the Board of
Directors. Since 1990, Dr. Kaysen has been professor emeritus of political
economy in the School of Humanities and Social Science at the Massachusetts
Institute of Technology. Dr. Kaysen received his Ph.D. in economics from Harvard
University in 1954.

The Board of Directors is divided into three classes, one class of which is
elected each year at the annual meeting of stockholders to hold office for a
term of three years. Dr. Moriarty and Mr. Burnett serve as Class I directors;
their terms of office expire in 1999. Drs. Katrak and Kaysen serve as Class II
directors; their terms of office expire in 2000. Drs. Fisher and Burrows serve
as Class III directors; their terms of office expire in 2001. Each director also
continues to serve as a director until his successor is duly elected and
qualified. Executive officers of the Company are elected by and serve at the
discretion of the Board of Directors.

The Board of Directors has a Compensation Committee, which provides
recommendations concerning salaries and incentive compensation for employees of
and consultants to the Company. The Board of Directors also has an Audit
Committee, which reviews the scope and results of the audit and other services
provided by the Company's independent auditors. The Board of Directors also has
a Governance Committee, which nominates persons to serve as directors of the
Company.

There are no family relationships among the directors and executive
officers of the Company.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation Committee currently consists of Drs. Fisher, Kaysen and
Moriarty. Dr. Moriarty is Chairman of the Board of Managers and a member of
NeuCo, a subsidiary of the Company. For information concerning a stock
restriction agreement to which Drs. Fisher, Kaysen and Moriarty are parties as
well as certain payments by the Company to Drs. Fisher and Moriarty, see
"Certain Transactions."

DIRECTOR COMPENSATION

The Company pays its non-employee directors an annual fee of $13,000 for
their services as directors, plus $2,000 for each regular Board meeting attended
and $1,000 for each special Board meeting attended. Directors who are also
employees of the Company do not receive separate fees for their services as
directors. See "Certain Transactions" for information concerning consulting fees
paid by the Company to certain directors for their services as Outside Experts
to the Company.

Under the 1998 Incentive and Nonqualified Stock Option Plan (the "Option
Plan"), each Outside Director (as defined below) who shall be re-elected as a
director of the Company or whose term shall continue after the annual meeting of
stockholders will on the date of the annual meeting receive a Nonqualified
Option (as defined below) to purchase 5,000 shares of Common Stock at an
exercise price equal to the fair market value of the Common Stock on that date.
Each such option will have a term of five years and will vest in full on the
first anniversary of the date of grant. Each person who shall be first elected
an Outside Director of the Company after the adoption of the Plan will receive
on the date of his or her election as a director a Nonqualified Option to
purchase 10,000 shares of Common Stock at an exercise price equal to the fair
market value of the Common Stock on that date. Each such option will have a term
of five years and will vest in three equal annual installments, commencing on
the first anniversary of the date of grant. Under the terms of the Option Plan,
an "Outside Director" is a director who (i) is not an employee of the Company or
any parent or subsidiary of the Company and (ii) is not a consultant who
provides economic consulting services to or in conjunction with the Company or
any parent or subsidiary of the Company. Currently, the Outside Directors of the
Company are Drs. Moriarty and Kaysen. In accordance with the terms of the Option
Plan, in April 1998 in connection with the Company's annual meeting of
stockholders, each of Drs. Moriarty and Kaysen was granted a stock option to
purchase 5,000 shares of Common Stock at an exercise price equal to the initial
public offering price.

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<PAGE> 38

EXECUTIVE COMPENSATION

Compensation Summary. The following table sets forth certain information
concerning the compensation earned by the Company's Chief Executive Officer and
other executive officers for services rendered in all capacities to the Company
for the fiscal year ended November 29, 1997.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION
--------------------------------------------
OTHER ANNUAL ALL OTHER
NAME AND PRINCIPAL POSITION SALARY($) BONUS($)(1) COMPENSATION($)(2) COMPENSATION($)(3)
--------------------------- --------- ----------- ------------------ ------------------
<S> <C> <C> <C> <C>

James C. Burrows...................... $285,000 $615,000 -- $22,371
President and Chief Executive
Officer

Laurel E. Morrison.................... 100,000 55,000 -- 20,418
Chief Financial Officer, Vice
President, Finance and
Administration, and Treasurer

Firoze E. Katrak...................... 220,000 300,000 -- 21,331
Vice President

William B. Burnett.................... 220,000 490,000 -- 22,776
Vice President
</TABLE>

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

(1) Includes supplemental compensation bonuses of $115,000, $5,000, $100,000 and
$65,000 for Dr. Burrows, Ms. Morrison, Dr. Katrak and Mr. Burnett,
respectively.

(2) Other annual compensation in the form of perquisites and other personal
benefits has been omitted because the aggregate amount of such perquisites
and other personal benefits was less than $50,000 and constituted less than
10% of the executive officers' respective total annual salary and bonus.

(3) Represents contributions by the Company on behalf of the executive officer
to the Company's Savings & Retirement Plan and Trust and premiums paid by
the Company for term life insurance for the benefit of the executive
officer.

BENEFIT PLANS

1998 Incentive and Nonqualified Stock Option Plan

The Company has adopted the 1998 Incentive and Nonqualified Stock Option
Plan. A total of 970,000 shares of Common Stock are reserved for issuance under
the Option Plan. At the time of the Offering, there are outstanding under the
Option Plan options to purchase an aggregate of 345,000 shares of Common Stock
at exercise prices equal to the initial public offering price. The Option Plan
authorizes (i) the grant of options to purchase Common Stock intended to qualify
as incentive stock options ("Incentive Options"), as defined in Section 422 of
the Code and (ii) the grant of options that do not so qualify ("Nonqualified
Options"). The exercise price of Incentive Options granted under the Option Plan
must be at least equal to the fair market value of the Common Stock of the
Company on the date of grant. The exercise price of Incentive Options granted to
an optionee who owns stock possessing more than 10% of the voting power of the
Company's outstanding capital stock must be at least equal to 110% of the fair
market value of the Common Stock on the date of grant. The exercise price of
Nonqualified Options granted under the Option Plan must be at least equal to 85%
of the fair market value of the Common Stock on the date of grant.

The Option Plan may be administered by the Board of Directors or the
Compensation Committee. Except in the case of certain formula grants to Outside
Directors described above under "Director Compensation," the Board or the
Compensation Committee selects the individuals to whom options will be granted
and determines the option exercise price and other terms of each award, subject
to the provisions of the Option Plan. Incentive Options may be granted under the
Option Plan to employees, including officers and

38
<PAGE> 39

directors who are also employees. Nonqualified Options may be granted under the
Option Plan to officers and other employees and to directors and other
individuals providing services to the Company, whether or not they are employees
of the Company. No participant in the Option Plan may be granted options to
purchase more than 150,000 shares of Common Stock in any calendar year.

1998 Employee Stock Purchase Plan

The Company has adopted the 1998 Employee Stock Purchase Plan (the "Stock
Purchase Plan"). The Stock Purchase Plan authorizes the issuance of up to an
aggregate of 243,000 shares of Common Stock to participating employees. The
Stock Purchase Plan may be administered by the Board of Directors or the
Compensation Committee.

Under the terms of the Stock Purchase Plan, all employees of the Company
(other than seasonal employees) who have completed one year of employment with
the Company and whose customary employment is more than part-time (i.e., more
than 20 hours per week and more than five months in the calendar year) are
eligible to participate in the Stock Purchase Plan. Employees who own five
percent or more of the outstanding Common Stock of the Company and directors who
are not employees are not eligible to participate in the Stock Purchase Plan.

The right to purchase Common Stock under the Stock Purchase Plan will be
made available through a series of one year offerings (each, an "Offering
Period"). On the first day of an Offering Period, the Company will grant to each
eligible employee who has elected in writing to participate in the Stock
Purchase Plan an option to purchase shares of Common Stock. The employee will be
required to authorize an amount (between one and ten percent of the employee's
base compensation) to be deducted by the Company from the employee's pay during
the Offering Period. On the last day of the Offering Period, the employee will
be deemed to have exercised the option, at the option exercise price, to the
extent of accumulated payroll deductions. Under the terms of the Stock Purchase
Plan, the option exercise price is an amount equal to 85% of the fair market
value of one share of Common Stock on either the first or last day of the
Offering Period, whichever is lower.

No employee may be granted an option that would permit the employee's
rights to purchase Common Stock to accrue at a rate in excess of $25,000 of the
fair market value of the Common Stock, determined as of the date the option is
granted, in any calendar year.

The Company has made no determination as to when the first Offering Period
under the Stock Purchase Plan will commence.

Bonus Program

The Company maintains a discretionary bonus program, pursuant to which the
Company grants performance-based bonuses to its officers and other employees.
The Compensation Committee, in its discretion, determines the bonuses to be
granted to the Company's officers, and the Company's Chief Executive Officer, in
his discretion, determines the bonuses to be granted to the Company's other
employees, based upon recommendations of the various committees of officers
supervising the employees' work.

The Charles River Associates Savings & Retirement Plan and Trust

The Company maintains the Charles River Associates Savings & Retirement
Plan and Trust (the "Savings & Retirement Plan"), qualified under Section 401(a)
of the Code. All employees of the Company who are 21 years of age are eligible
to make salary reduction contributions pursuant to the Savings & Retirement
Plan, and those who have also completed at least one year of service (consisting
of at least 1,000 hours of service) are eligible to receive profit-sharing
contributions from the Company. A participant may contribute a maximum of 20% of
his or her pre-tax salary, commissions and bonuses through payroll deductions
(up to the statutorily prescribed annual limit of $10,000 in 1998) to the
Savings & Retirement Plan. The percentage elected by more highly compensated
participants may be required to be lower. The Company may make discretionary
matching contributions under the Savings & Retirement Plan on behalf of
participants whose annual rate of pay does not exceed $44,500 in an amount up to
a maximum of 4% of the

39
<PAGE> 40

participant's pre-tax salary, commissions and bonuses. The Company may also make
discretionary profit-sharing contributions on behalf of eligible participants
who have completed at least 1,000 hours of service during the fiscal year and
are employed by the Company on the last day of the fiscal year. Any
profit-sharing contribution is allocated to eligible participants as a
percentage of their total compensation (up to the statutorily prescribed maximum
of $160,000 in 1998) with a larger percentage allocated to compensation in
excess of the Social Security wage base in accordance with rules set forth in
the Code. The Company determines the level of the discretionary contributions on
an annual basis. In fiscal 1997, the Company made aggregate matching and
profit-sharing contributions of approximately $1.2 million.

40
<PAGE> 41

CERTAIN TRANSACTIONS

STOCK RESTRICTION AGREEMENT

Each person who is a stockholder of the Company before the closing of the
Offering (a "Pre-Offering Stockholder") is subject to a Stock Restriction
Agreement with the Company. The Stock Restriction Agreement prohibits each
Pre-Offering Stockholder from selling or otherwise transferring shares of Common
Stock held immediately before the Offering (collectively, "Pre-Offering Stock")
as follows: (i) in the first two years after the Offering, no Pre-Offering
Stockholder may sell any of his or her Pre-Offering Stock except in a public
offering; (ii) in the third, fourth and fifth years after the Offering, each
Pre-Offering Stockholder will be able to sell up to an aggregate of 50% of his
or her Pre-Offering Stock, less any shares previously sold in public offerings;
(iii) in the sixth and seventh years after the Offering, each Pre-Offering
Stockholder will be able to sell up to an aggregate of an additional 20% of his
or her Pre-Offering Stock; and (iv) thereafter, each Pre-Offering Stockholder
will be able to sell, in any 12-month period, an amount equal to the greater of
(A) 10% of his or her Pre-Offering Stock or (B) one-third of the Pre-Offering
Stock held by him or her at the end of the seventh year after the Offering. Upon
the death or retirement for disability of any Pre-Offering Stockholder in
accordance with the Company's policies, the foregoing restrictions will
terminate with respect to his or her Pre-Offering Stock. The Board of Directors
will have the discretion to waive any of the restrictions imposed by the Stock
Restriction Agreement.

Under the terms of the Stock Restriction Agreement, if any Pre-Offering
Stockholder shall leave the Company (other than for death or retirement for
disability in accordance with the Company's policies), the Company (i) will have
the right until the second anniversary of the Offering to repurchase up to 85%
of his or her Pre-Offering Stock, (ii) will have the right after the second
anniversary of the Offering until the fifth anniversary of the Offering to
repurchase up to 50% of his or her Pre-Offering Stock, and (iii) will have the
right after the fifth anniversary of the Offering to repurchase all of the
Pre-Offering Stock that the Pre-Offering Stockholder shall not have already
become entitled to sell. The purchase price will be equal to 70% of the fair
market value of the repurchased stock (95% in the case of Pre-Offering
Stockholders who retire after the fifth anniversary of the Offering), or, if the
Pre-Offering Stockholder shall compete with the Company, 40% of such fair market
value. The purchase price will be payable in three equal annual installments.
The Stock Restriction Agreement will terminate ten years after the Offering or
earlier with the approval of the Board of Directors of the Company.

PAYMENTS TO AFFILIATED PARTIES

The Company has made payments to Dr. Fisher, a director of the Company, and
Steven C. Salop, a former director of the Company, for their services as Outside
Experts, including for consulting services to clients and for the generation of
engagements for the Company. Each of Drs. Fisher and Salop also holds more than
five percent of the Common Stock of the Company outstanding before the Offering.
In fiscal 1995, fiscal 1996 and fiscal 1997, the Company paid Dr. Fisher an
aggregate of $459,673, $202,107 and $167,357, respectively. In fiscal 1995,
fiscal 1996 and fiscal 1997, the Company paid Dr. Salop an aggregate of
$545,658, $806,855 and $766,114, respectively. The foregoing amounts include
payments made to companies wholly owned by the respective Outside Experts.

In fiscal 1997, the Company paid Dr. Moriarty, a director and five percent
stockholder of the Company, an aggregate of $60,000 for consulting services. In
addition, the Company has made certain office space and support services
available to Cubex Inc., a company wholly owned by Dr. Moriarty. The portion of
the Company's expenses, including rent, labor costs and insurance, allocable to
the resources made available to Cubex Inc., net of reimbursements, was $22,436,
$55,275 and $69,310 in fiscal 1995, fiscal 1996 and fiscal 1997, respectively.

SALE OF STOCK

In August 1997, the Company sold 26,000 shares of Common Stock to Laurel E.
Morrison, the Chief Financial Officer, Vice President, Finance and
Administration, and Treasurer of the Company, at a purchase

41
<PAGE> 42

price of approximately $2.71 per share, which represented the fair market value
per share at that time, as determined by the Company's Board of Directors. Ms.
Morrison paid $24,000 at the time of purchase and the remainder of the purchase
price is payable in five annual installments as set forth in the stock purchase
agreement.

REPURCHASE OF STOCK

In May 1995, the Company repurchased 59,800 shares of Common Stock from
each of Dr. Fisher and Alan R. Willens, a former director of the Company, in
each case for a purchase price equal to the sum of (i) $33,695, payable in three
equal annual installments, (ii) an amount, payable in five annual installments,
equal to his pro rata portion of 25% of the Company's earnings before bonuses,
supplemental compensation and amortization of goodwill for each of fiscal 1995,
fiscal 1996, fiscal 1997, fiscal 1998 and fiscal 1999, of which the Company had
paid $36,797 as of February 20, 1998, and (iii) $2,020, paid in April 1996.

SUPPLEMENTAL COMPENSATION PROGRAM

Pursuant to the Company's supplemental compensation bonus program, the
Company paid each of Drs. Fisher and Salop $100,000 in each of fiscal 1995,
fiscal 1996 and fiscal 1997 and paid Dr. Moriarty $50,000 in each of those
years. Payments under this bonus program were discretionary and were based
primarily on the Company's cash flows. The Company does not intend to make
additional payments under this bonus program after fiscal 1997.

42
<PAGE> 43

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock as of February 20, 1998, and
as adjusted to reflect the sale by the Company and the Selling Stockholders of
the shares of Common Stock offered by this Prospectus by (i) each person known
by the Company to be the beneficial owner of more than five percent of the
Common Stock, (ii) each of the Company's directors, (iii) each of the Company's
executive officers, (iv) all directors and executive officers of the Company as
a group and (v) each Selling Stockholder.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED SHARES TO BE BENEFICIALLY
PRIOR TO OFFERING(1) NUMBER OF OWNED AFTER OFFERING(1)
------------------------- SHARES TO --------------------------
NAME NUMBER PERCENT(2) BE OFFERED NUMBER PERCENT(3)
---- ---------- ----------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
5% STOCKHOLDERS, DIRECTORS AND
EXECUTIVE OFFICERS:
Franklin M. Fisher(4)(5)................. 653,588 10.0% 72,248 581,340 7.2%
James C. Burrows(4)...................... 620,256 9.5 -- 620,256 7.7
Steven C. Salop(4)(6).................... 585,000 9.0 52,000 533,000 6.6
Firoze E. Katrak(4)(7)................... 438,100 6.7 48,427 389,673 4.8
Rowland T. Moriarty(4)(8)................ 410,800 6.3 41,080 369,720 4.6
William B. Burnett(9).................... 312,000 4.8 34,488 277,512 3.4
Carl Kaysen(10).......................... 67,600 1.0 7,473 60,127 *
Laurel E. Morrison....................... 26,000 * -- 26,000 *
All directors and executive officers as a
group (7 persons)(11).................. 2,528,344 38.8% 203,716 2,324,628 28.8%
OTHER SELLING STOCKHOLDERS(12):
Richard S. Ruback........................ 312,000 4.8% 31,200 280,800 3.5%
Jagdish C. Agarwal....................... 208,000 3.2 22,993 185,007 2.3
Thomas R. Overstreet..................... 208,000 3.2 22,993 185,007 2.3
Alan R. Willens.......................... 188,188 2.9 20,803 167,385 2.1
Stanley M. Besen......................... 182,000 2.8 20,119 161,881 2.0
Michael A. Kemp.......................... 182,000 2.8 20,119 161,881 2.0
Bridger M. Mitchell...................... 182,000 2.8 20,119 161,881 2.0
Deloris R. Wright........................ 182,000 2.8 20,119 161,881 2.0
Raju Patel(13)........................... 130,000 2.0 14,370 115,630 1.4
Daniel Brand............................. 119,600 1.8 13,221 106,379 1.3
Steven R. Brenner........................ 119,600 1.8 13,221 106,379 1.3
George C. Eads........................... 119,600 1.8 13,221 106,379 1.3
W. David Montgomery...................... 119,600 1.8 13,221 106,379 1.3
Gary L. Roberts.......................... 119,600 1.8 13,221 106,379 1.3
Louis L. Wilde........................... 119,600 1.8 13,221 106,379 1.3
Stephen H. Kalos......................... 104,000 1.6 11,496 92,504 1.1
Arnold J. Lowenstein..................... 104,000 1.6 11,496 92,504 1.1
C. Christopher Maxwell................... 104,000 1.6 11,496 92,504 1.1
Robert M. Spann.......................... 104,000 1.6 11,496 92,504 1.1
John R. Woodbury......................... 104,000 1.6 11,496 92,504 1.1
Monica G. Noether........................ 98,800 1.5 10,921 87,879 1.1
Robert J. Larner and Anne M. Larner...... 89,700 1.4 9,916 79,784 *
Joen E. Greenwood........................ 88,608 1.4 9,795 78,813 *
William R. Hughes........................ 78,000 1.2 8,622 69,378 *
Gregory K. Bell.......................... 65,000 * 7,185 57,815 *
Paul R. Milgrom.......................... 52,000 * 5,200 46,800 *
Douglas R. Bohi.......................... 26,000 * 2,874 23,126 *
</TABLE>

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

* Less than one percent.

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<PAGE> 44

(1) The persons named in this table have sole voting and investment power with
respect to the shares listed, except as otherwise indicated. The inclusion
of shares listed as beneficially owned does not constitute an admission of
beneficial ownership. The description of shares owned after the Offering
assumes none of the listed stockholders will purchase additional shares in
the Offering.

(2) The total number of shares of Common Stock outstanding as of February 20,
1998 was 6,519,240.

(3) The number of shares of Common Stock deemed outstanding after the Offering
includes the additional 1,562,500 shares being offered by the Company
hereby.

(4) The address for Drs. Fisher, Burrows, Katrak and Moriarty is in care of the
Company, 200 Clarendon Street, Boston, Massachusetts 02116, and the address
for Dr. Salop is in care of the Company, Suite 700, 600 13th Street, N.W.,
Washington, D.C. 20005.

(5) Dr. Fisher is Chairman of the Board of Directors of the Company.

(6) Dr. Salop is an Outside Expert.

(7) Includes 130,000 shares of Common Stock held by Raju Patel, as to which Ms.
Patel has sole investment power and Dr. Katrak has sole voting power. Dr.
Katrak is a Vice President and director of the Company. The number of
shares to be offered by Dr. Katrak consists of 34,057 shares to be offered
by Dr. Katrak and 14,370 shares to be offered by Raju Patel.

(8) Dr. Moriarty is Vice Chairman of the Board of Directors of the Company and
Chairman of the Board of Managers and a member of NeuCo.

(9) Mr. Burnett is a Vice President and director of the Company.

(10) Dr. Kaysen is a director of the Company.

(11) See notes 5, 6 and 8 through 12.

(12) With the following exceptions, the persons listed under "Other Selling
Stockholders" are employees of the Company: Richard S. Ruback and Paul R.
Milgrom are Outside Experts; Alan R. Willens is a former director of the
Company; and Raju Patel is not an employee of the Company.

(13) Represents shares of Common Stock as to which Ms. Patel has sole investment
power and Dr. Katrak has sole voting power.

44
<PAGE> 45

DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of the Company consists of 25,000,000 shares
of common stock, without par value (the "Common Stock"), and 1,000,000 shares of
preferred stock, without par value (the "Preferred Stock"). As of February 20,
1998, there were 6,519,240 shares of Common Stock outstanding and held of record
by 36 stockholders, and no shares of Preferred Stock outstanding.

COMMON STOCK

Holders of Common Stock are entitled to one vote per share for each share
held of record on all matters submitted to a vote of stockholders. Subject to
preferences that may be applicable to the holders of outstanding Preferred
Stock, if any, the holders of Common Stock are entitled to receive such lawful
dividends as may be declared by the Board of Directors. In the event of a
liquidation, dissolution or winding up of the affairs of the Company, whether
voluntary or involuntary, and subject to the rights of the holders of
outstanding Preferred Stock, if any, the holders of Common Stock will be
entitled to receive pro rata all of the remaining assets of the Company
available for distribution to its stockholders. The Common Stock has no
preemptive, redemption, conversion or subscription rights. All outstanding
shares of Common Stock are fully paid and non-assessable, except for certain
installments not yet due and payable by certain stockholders of the Company. As
of February 20, 1998, the aggregate amount of future installments receivable by
the Company was $1.1 million. The shares of Common Stock to be issued by the
Company in the Offering will be fully paid and non-assessable.

PREFERRED STOCK

The Board of Directors is authorized, subject to any limitations prescribed
by Massachusetts law, to provide for the issuance of Preferred Stock in one or
more series, to establish from time to time the number of shares to be included
in each series and to fix the preferences, voting powers, qualifications, and
special or relative rights or privileges thereof. The Board of Directors is
authorized to issue Preferred Stock with voting, conversion, and other rights
and preferences that could adversely affect the voting power or other rights of
the holders of Common Stock. Although the Company has no current plans to issue
any Preferred Stock, the issuance of Preferred Stock or of rights to purchase
Preferred Stock could have the effect of making it more difficult for a third
party to acquire, or of discouraging a third party from attempting to acquire, a
majority of the outstanding voting stock of the Company.

ANTI-TAKEOVER EFFECTS OF PROVISIONS OF THE COMPANY'S AMENDED AND RESTATED
ARTICLES OF ORGANIZATION AND AMENDED AND RESTATED BY-LAWS AND OF MASSACHUSETTS
LAW

The Company's Amended and Restated Articles of Organization (the
"Articles") and Amended and Restated By-Laws (the "By-Laws") and Massachusetts
law contain certain provisions that could be deemed to have anti-takeover
effects and that could discourage, delay or prevent a change in control of the
Company or an acquisition of the Company at a price which many stockholders may
find attractive. These provisions may also discourage proxy contests and make it
more difficult for stockholders of the Company to effect certain corporate
actions, including the election of directors. The existence of these provisions
could limit the price that investors might be willing to pay in the future for
shares of Common Stock.

Articles and By-Laws

The By-Laws provide that nominations for directors may not be made by
stockholders at any annual or special meeting thereof unless the stockholder
intending to make a nomination notifies the Company of the nomination a
specified number of days in advance of the meeting and furnishes to the Company
certain information regarding such stockholder and the intended nominee. The
By-Laws also require advance notice of any proposal to be brought by a
stockholder before any annual or special meeting of stockholders and the
provision of certain information to the Company regarding such stockholder and
others known to support the proposal and any material interest they may have in
the proposal.

45
<PAGE> 46

The By-Laws require the Company to call a special meeting of stockholders
only at the request of stockholders holding at least 40% of the voting power of
the Company. The provisions in the By-Laws pertaining to stockholders and
directors (including the provisions described above pertaining to nominations
and the presentation of business before a meeting of the stockholders) may not
be amended and no provision inconsistent therewith may be adopted without the
approval of either the Board of Directors or the holders of at least 80% of the
voting power of the Company.

The Articles provide that certain transactions, such as the sale, lease or
exchange of all or substantially all of the Company's property and assets and
the merger or consolidation of the Company into or with any other corporation,
may be authorized by the approval of the holders of a majority of the shares of
each class of stock entitled to vote thereon, rather than by two-thirds as
otherwise provided by statute, provided that the transaction has been authorized
by a majority of the members of the Board of Directors and the requirements of
any other applicable provisions of the Articles have been met.

The Articles contain a "fair price" provision (the "Fair Price Provision")
that provides that certain Business Combinations with any Interested Stockholder
(as each such term is defined in the Fair Price Provision) may not be
consummated without the approval of the holders of at least 80% of the voting
power of the Company, unless approved by at least a majority of the
Disinterested Directors (as defined in the Fair Price Provision) or unless
certain minimum price and procedural requirements are met. A significant purpose
of the Fair Price Provision is to deter a purchaser from using two-tiered
pricing and similar unfair or discriminatory tactics in an attempt to acquire
control of the Company. The affirmative vote of the holders of 80% of the voting
power of the Company is required to amend or repeal the Fair Price Provision or
adopt any provision inconsistent with it.

Massachusetts Law

Following the Offering, the Company expects that it will have more than 200
stockholders, as a result of which it will be subject to the provisions of
Chapter 110F of the Massachusetts General Laws, an anti-takeover law. In
general, this statute prohibits a publicly held Massachusetts corporation from
engaging in a "business combination" with an "interested stockholder" for a
period of three years after the date of the transaction in which the person
becomes an interested stockholder, unless either (i) prior to that date, the
Board of Directors approved either the business combination or the transaction
in which the person became an interested stockholder, (ii) the interested
stockholder acquires 90% of the outstanding voting stock of the corporation
(excluding shares held by certain affiliates of the corporation) at the time it
becomes an interested stockholder or (iii) the business combination is approved
by the Board of Directors and by the holders of two-thirds of the outstanding
voting stock of the corporation (excluding shares held by the interested
stockholder) voting at a meeting. In general, an "interested stockholder" is a
person who owns 5% (15% in the case of a person eligible to file a Schedule 13G
under the Securities Act with respect to the Common Stock) or more of the
outstanding voting stock of the corporation or who is an affiliate or associate
of the corporation and was the owner of 5% (15% in the case of a person eligible
to file a Schedule 13G under the Securities Act with respect to the Common
Stock) or more of the outstanding voting stock within the prior three years. A
"business combination" includes mergers, consolidations, stock and asset sales,
and other transactions with the interested stockholder resulting in a financial
benefit (except proportionately as a stockholder of the corporation) to the
interested stockholder. The Company may at any time amend its Articles or
By-Laws to elect not to be governed by Chapter 110F by a vote of the holders of
a majority of its voting stock. Such an amendment would not be effective for
twelve months and would not apply to a business combination with any person who
became an interested stockholder prior to the date of the amendment.

Upon the closing of the Offering, the Company will be subject to Section
50A of Chapter 156B of the Massachusetts General Laws, which requires that any
publicly held Massachusetts corporation have a classified (staggered) Board of
Directors unless the corporation opts out of the statute's coverage. The Company
has elected not to opt out of the statute's coverage. Section 50A requires that
the classified board consist of three classes as nearly equal in size as
possible and provides that directors may be removed only for cause, as defined
in the statute. See "Management--Executive Officers and Directors."

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<PAGE> 47

The By-Laws include a provision that excludes the Company from the
applicability of Chapter 110D of the Massachusetts General Laws, entitled
"Regulation of Control Share Acquisitions." In general, this statute provides
that any stockholder who acquires 20% or more of the outstanding voting stock of
a corporation subject to this statute may not vote that stock unless the
disinterested stockholders of the corporation so authorize. In addition, Chapter
110D permits a corporation to provide in its articles of organization or by-laws
that the corporation may redeem (for fair value) all of the shares acquired in a
control share acquisition if the interested stockholder does not deliver a
control share acquisition statement or if the interested stockholder delivers a
control share acquisition statement but the stockholders of the corporation do
not authorize voting rights for those shares. The Board of Directors may amend
the By-Laws at any time to subject the Company to this statute prospectively.

Under Section 43 of Chapter 156B of the Massachusetts General Laws, any
action taken by written consent of the stockholders requires the unanimous
written consent of the stockholders entitled to vote on the matter.

LIMITATION OF LIABILITY

The Company's Articles provide that no director of the Company shall be
personally liable to the Company or to its stockholders for monetary damages for
breach of fiduciary duty as a director, except that the limitation shall not
eliminate or limit liability (i) for any breach of the director's duty of
loyalty to the Company or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 61 or 62 of Chapter 156B of the Massachusetts General
Laws, dealing with liability for unauthorized distributions and loans to
insiders, respectively, or (iv) for any transaction from which the director
derived an improper personal benefit.

The Company's Articles and By-Laws further provide for the indemnification
of the Company's directors and officers to the fullest extent permitted by
Section 67 of Chapter 156B of the Massachusetts General Laws, including
circumstances in which indemnification is otherwise discretionary.

A principal effect of these provisions is to limit or eliminate the
potential liability of the Company's directors for monetary damages arising from
breaches of their duty of care, unless the breach involves one of the four
exceptions described in (i) through (iv) above. These provisions may also shield
directors from liability under federal and state securities laws.

STOCK TRANSFER AGENT

The transfer agent and registrar for the Common Stock is Boston EquiServe,
L.P.

47
<PAGE> 48

SHARES ELIGIBLE FOR FUTURE SALE

Upon the closing of the Offering, the Company will have 8,081,740 shares of
Common Stock outstanding. Of these shares, the 2,188,000 shares of Common Stock
sold in the Offering will be freely tradeable in the public market without
restriction under the Securities Act, unless they are purchased by an
"affiliate" of the Company (as that term is defined in Rule 144 under the
Securities Act ("Rule 144")), who would generally be able to sell such shares
only in accordance with Rule 144. The remaining 5,893,740 shares will be
"restricted securities" as defined in Rule 144 (the "Restricted Shares").
Restricted securities generally may be sold in the public market only if they
are registered under the Securities Act or sold in compliance with Rule 144. The
Restricted Shares are subject to lock-up agreements pursuant to which they may
not be sold or transferred without the prior written consent of NationsBanc
Montgomery Securities LLC for a period of 180 days after the date of this
Prospectus. See "Underwriting." The Restricted Shares are also subject to the
Stock Restriction Agreement, which prohibits the sale or other transfer of
Restricted Shares without the consent of the Board of Directors for a period of
two years after the Offering and imposes other restrictions on sale in
subsequent years. See "Certain Transactions--Stock Restriction Agreement."

SALES OF RESTRICTED SHARES

All of the Restricted Shares are subject to the lock-up agreements
described below and, following the expiration of the lock-up period (or earlier
with the consent of the Representatives in certain cases), approximately
3,081,630 shares will be eligible for sale under Rule 144(k) and approximately
an additional 2,447,880 shares will be eligible for sale subject to the
restrictions of Rule 144.

In general, under Rule 144 as currently in effect, any person (or persons
whose shares are aggregated), who has beneficially owned Restricted Shares for
at least one year is entitled to sell, within any three-month period, a number
of Restricted Shares that does not exceed the greater of (i) 1% of the
then-outstanding number of shares of Common Stock (approximately 80,800 shares,
based on the number of shares to be outstanding after the Offering) or (ii) the
average weekly trading volume of the Common Stock in the public market during
the four calendar weeks preceding the filing of the seller's Form 144, provided
that certain requirements concerning the availability of public information
concerning the Company, manner of sale and notice of sale are satisfied. A
person who is not an affiliate of the Company, has not been an affiliate within
three months prior to the sale and has beneficially owned the Restricted Shares
for at least two years is entitled to sell those Restricted Shares under Rule
144(k) without regard to the limitations described above. Rule 144 also provides
that affiliates of the Company who are selling shares of Common Stock that are
not Restricted Shares must nonetheless comply with the same restrictions
applicable to Restricted Shares with the exception of the holding-period
requirement. The one-year and two-year holding periods described above do not
begin to run until the full purchase price or other consideration is paid by the
person acquiring the Restricted Shares from the Company or an affiliate of the
Company and, in certain cases, may include the holding period of a prior owner.

Rule 144A under the Securities Act permits current holders of Restricted
Shares to sell, subject to certain conditions, all or a portion of their shares
to certain "qualified institutional buyers," as defined in Rule 144A.

OPTIONS

Any employee or director of or consultant to the Company who, prior to the
effective date of the registration statement of which this Prospectus forms a
part, was granted options to purchase shares of Common Stock pursuant to Rule
701 will be entitled to rely on the resale provision of Rule 701 with respect to
shares of Common Stock acquired upon exercise of such options ("Rule 701
Shares"). This resale provision permits non-affiliates to sell Rule 701 Shares
without having to comply with the public information, holding-period,
volume-limitation or notice requirements of Rule 144 and permits affiliates to
sell Rule 701 Shares without having to comply with the holding-period
requirement of Rule 144, in each case commencing 90 days after such effective
date.

48
<PAGE> 49

As soon as practicable after the date of this Prospectus, the Company
intends to file registration statements on Form S-8 under the Securities Act to
register all shares of Common Stock issuable under the Option Plan and the Stock
Purchase Plan. See "Management--Benefit Plans." The Company expects that those
registration statements will become effective immediately upon filing. Shares
covered by either registration statement will be eligible for sale in the public
market after the effective date of the applicable registration statement,
subject to Rule 144 limitations applicable to affiliates and to the lock-up
agreements described below, if applicable.

LOCK-UP AGREEMENTS; STOCK RESTRICTION AGREEMENT

The directors and executive officers of the Company and the holders of the
Restricted Shares have agreed that, subject to certain exceptions, for a period
of 180 days after the date of this Prospectus, they will not, without the prior
written consent of NationsBanc Montgomery Securities LLC, directly or
indirectly, sell, offer, contract or grant any option to sell, pledge, transfer,
establish an open put equivalent position or otherwise dispose of any shares of
Common Stock, options or warrants to acquire shares of Common Stock or
securities exchangeable or exercisable for or convertible into shares of Common
Stock. See "Underwriting." In addition to the foregoing lock-up agreements, each
existing stockholder of the Company has agreed that he or she will not sell or
otherwise transfer any Restricted Shares without the consent of the Board of
Directors for a period of two years after the Offering except in a public
offering. In subsequent years, holders of Restricted Shares will be entitled to
sell limited portions of their Restricted Shares as described in "Certain
Transactions--Stock Restriction Agreement." The Board of Directors may consent
to the sale or transfer of any or all of the Restricted Shares at any time,
subject to the restrictions of the lock-up agreements.

EFFECT OF SALES OF SHARES

Prior to the Offering, there has been no public market for the Common Stock
of the Company. No prediction can be made as to the effect, if any, that sales
of shares of Common Stock in the public market, or the perception that such
sales could occur, will have on the market price of the Common Stock prevailing
from time to time. Sales of substantial numbers of shares of Common Stock in the
public market could materially adversely affect the market price of the Common
Stock and could impair the Company's ability to raise capital through a sale of
its equity securities. See "Risk Factors--Shares Eligible for Future Sale;
Possible Adverse Effect on Market Price."

49
<PAGE> 50

UNDERWRITING

The Underwriters named below (the "Underwriters"), represented by
NationsBanc Montgomery Securities LLC and William Blair & Company, L.L.C. (the
"Representatives"), have severally agreed, subject to the terms and conditions
set forth in the Underwriting Agreement, to purchase from the Company and the
Selling Stockholders the aggregate number of shares of Common Stock indicated
below opposite their respective names at the initial public offering price less
the underwriting discount set forth on the cover page of this Prospectus. The
Underwriting Agreement provides that the obligations of the Underwriters are
subject to certain conditions precedent and that the Underwriters are committed
to purchase all of the shares of Common Stock if they purchase any.

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
------------ ---------
<S> <C>
NationsBanc Montgomery Securities LLC....................... 714,000
William Blair & Company, L.L.C.............................. 714,000
BancAmerica Robertson Stephens.............................. 80,000
BT Alex. Brown Incorporated................................. 80,000
Donaldson, Lufkin & Jenrette Securities Corporation......... 80,000
Hambrecht & Quist LLC....................................... 80,000
Lehman Brothers Inc......................................... 80,000
Smith Barney Inc............................................ 80,000
Adams, Harkness & Hill, Inc................................. 40,000
Cruttenden Roth Incorporated................................ 40,000
John G. Kinnard & Company, Incorporated..................... 40,000
Legg Mason Wood Walker, Incorporated........................ 40,000
Raymond James & Associates, Inc............................. 40,000
Tucker Anthony Incorporated................................. 40,000
H.C. Wainwright & Co., Inc.................................. 40,000
---------
Total............................................. 2,188,000
=========
</TABLE>

The Representatives have advised the Company and the Selling Stockholders
that the Underwriters propose initially to offer the Common Stock to the public
on the terms set forth on the cover page of this Prospectus. The Underwriters
may allow selected dealers a concession of not more than $0.75 per share; and
the Underwriters may allow, and such dealers may reallow, a concession of not
more than $0.10 per share to certain other dealers. After the Offering, the
offering price and other selling terms may be changed by the Representatives.
The Common Stock is offered subject to receipt and acceptance by the
Underwriters and to certain other conditions, including the right to reject
orders in whole or in part.

The Company and the Selling Stockholders have granted an option to the
Underwriters, exercisable during the 30-day period after the date of this
Prospectus, to purchase up to a maximum of 328,200 additional shares of Common
Stock in the aggregate to cover over-allotments, if any, at the same price per
share as the initial shares to be purchased by the Underwriters. To the extent
the Underwriters exercise this option, each of the Underwriters will be
committed, subject to certain conditions, to purchase such additional shares in
approximately the same proportion as set forth in the above table. The
Underwriters may purchase such shares only to cover over-allotments made in
connection with the Offering.

The Underwriting Agreement provides that the Company and the Selling
Stockholders will indemnify the several Underwriters against certain
liabilities, including civil liabilities under the Securities Act, or will
contribute to payments the Underwriters may be required to make in respect
thereof.

At the request of the Company, the Underwriters have reserved for sale to
certain employees of the Company and certain other persons, at the initial
public offering price, up to 109,400 of the shares of Common Stock offered
hereby. The number of shares available for sale to the general public will be
reduced to the extent such persons purchase such reserved shares. Any reserved
shares not so purchased will be offered by the Underwriters to the general
public on the same basis as the other shares offered hereby.

50
<PAGE> 51

All of the Company's stockholders have agreed that, subject to certain
exceptions, for a period of 180 days after the date of this Prospectus, they
will not, without the prior written consent of NationsBanc Montgomery Securities
LLC, directly or indirectly, sell, offer, contract or grant any option to sell,
pledge, transfer, establish an open put equivalent position or otherwise dispose
of any shares of Common Stock, options or warrants to acquire shares of Common
Stock or securities exchangeable or exercisable for or convertible into shares
of Common Stock. In addition, subject to certain exceptions, the Company has
agreed that, for a period of 180 days after the date of this Prospectus, it will
not, without the prior written consent of NationsBanc Montgomery Securities LLC,
directly or indirectly, sell, offer, contract or grant any option to sell,
pledge, transfer, establish an open put equivalent position or otherwise dispose
of any shares of Common Stock, options or warrants to acquire shares of Common
Stock, or securities exchangeable or exercisable for or convertible into shares
of Common Stock.

The Underwriters are permitted to engage in certain transactions that
stabilize the price of the Common Stock. Such transactions consist of bids or
purchases for the purpose of pegging, fixing or maintaining the price of the
Common Stock. If the Underwriters create a short position in the Common Stock in
connection with the Offering, i.e., if they sell more shares of Common Stock
than are set forth on the cover page of this Prospectus, the Underwriters may
reduce that short position by purchasing Common Stock in the open market. The
Underwriters may also elect to reduce any short position by exercising all or
part of the over-allotment option described above. In addition, the
Representatives may impose "penalty bids" under contractual arrangements with
the Underwriters whereby they may reclaim from an Underwriter (or dealer
participating in the Offering) for the account of the other Underwriters, the
selling concession with respect to the Common Stock that is distributed in the
Offering but subsequently purchased for the account of the Underwriters in the
open market.

In general, purchases of Common Stock for the purpose of stabilization or
to reduce a short position could cause the price of the Common Stock to be
higher than it might be in the absence of such purchases. None of the Company,
the Selling Stockholders and the Underwriters makes any representation or
predictions as to the direction or magnitude of any effect that the transactions
described above may have on the price of the Common Stock. In addition, none of
the Company, the Selling Stockholders and the Underwriters makes any
representation that the Representatives will engage in such transactions or that
such transactions, once commenced, will not be discontinued without notice.

The Representatives have informed the Company and the Selling Stockholders
that the Underwriters do not expect to make sales of Common Stock offered by
this Prospectus to accounts over which they exercise discretionary authority in
excess of 5% of the number of shares of Common Stock offered hereby.

Prior to the Offering, there has been no public market for the Common
Stock. Consequently, the initial public offering price was determined by
negotiations among the Company, the Selling Stockholders and the
Representatives. Among the factors considered in such negotiations were the
history of, and the prospects for, the Company and the industry in which it
competes, an assessment of the Company's management, its past and present
earnings and the trend of such earnings, the prospects for future earnings of
the Company, the present state of the Company's business, the general condition
of the securities markets at the time of the Offering and the market prices of
publicly traded stock of comparable companies in recent periods.

LEGAL MATTERS

The validity of the shares of Common Stock offered hereby will be passed
upon for the Company and the Selling Stockholders by Foley, Hoag & Eliot LLP,
Boston, Massachusetts. Certain legal matters will be passed upon for the
Underwriters by Hale and Dorr LLP, Boston, Massachusetts.

EXPERTS

The consolidated financial statements of the Company at November 30, 1996
and November 29, 1997, and for each of the fiscal years in the three-year period
ended November 29, 1997, appearing in this Prospectus and Registration Statement
have been audited by Ernst & Young LLP, independent auditors, as
51
<PAGE> 52

set forth in their reports thereon appearing herein and in the Registration
Statement and are included in reliance upon such reports given upon the
authority of such firm as experts in accounting and auditing.

CHANGE IN INDEPENDENT AUDITORS

On January 29, 1998, the Board of Directors, upon the recommendation of the
Audit Committee, authorized the Company to retain Ernst & Young LLP as its
independent auditors and dismissed the Company's former independent auditors.
The consolidated financial statements of the Company at November 30, 1996 and
November 29, 1997, and for each of the fiscal years in the three-year period
ended November 29, 1997, appearing elsewhere in this Prospectus, were audited by
Ernst & Young LLP and its report is included herein. The report of the Company's
former independent auditors on the financial statements of the Company at
November 30, 1996 and for each of the fiscal years in the two-year period ended
November 30, 1996 contained no adverse opinion or disclaimer of opinion and was
not qualified or modified as to uncertainty, audit scope or application of
accounting principles. During the fiscal years in the three-year period ended
November 29, 1997 and the subsequent interim period up to and including the date
of dismissal, the Company had no disagreements with its former independent
auditors on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure related to the financial
statements on which the former independent auditors reported, which, if not
resolved to the satisfaction of the former independent auditors, would have
caused it to make reference to the subject matter of the disagreement in
connection with its report. The Company did not consult with Ernst & Young LLP
during fiscal 1996, fiscal 1997 or any subsequent period prior to retaining
Ernst & Young LLP regarding the application of accounting principles to any
transaction or the type of audit opinion that might be rendered on the Company's
financial statements.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-1 (including all amendments
thereto, the "Registration Statement") under the Securities Act with respect to
the Common Stock offered hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement and the exhibits and
schedules thereto. For further information with respect to the Company and the
Common Stock, reference is made to the Registration Statement and the exhibits
and schedules filed as a part thereof. Statements contained in this Prospectus
as to the contents of any contract or any other document referred to contain the
information required to be disclosed in this Prospectus pursuant to the
Securities Act and the rules and regulations thereunder, and, in each instance,
if the contract or document is filed as an exhibit, reference is made to the
copy of the contract or document filed as an exhibit to the Registration
Statement. Each such statement is qualified in all respects by reference to the
exhibit. The Registration Statement, including the exhibits and schedules
thereto, may be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549 and at the Regional Offices of the Commission at
Suite 1400, 500 West Madison Street, Chicago, Illinois 60661 and 7 World Trade
Center, Thirteenth Floor, New York, New York 10048. Copies may also be obtained
from the Public Reference Section of the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington D.C. 20549, at prescribed rates. The
Commission also maintains a Web site at http://www.sec.gov that contains
reports, proxy and information statements and other information regarding
registrants, such as the Company, that make electronic filings with the
Commission.

The Company intends to furnish its stockholders with annual reports
containing audited financial statements and a report thereon provided by
independent certified public accountants, and to make available to its
stockholders quarterly reports containing unaudited financial information for
the first three quarters of each fiscal year.

52
<PAGE> 53

CHARLES RIVER ASSOCIATES INCORPORATED

CONSOLIDATED FINANCIAL STATEMENTS

Fiscal years ended November 29, 1997,
November 30, 1996 and November 25, 1995

Quarters ended February 20, 1998
and February 21, 1997 (Unaudited)

CONTENTS

<TABLE>
<S> <C>
Report of Independent Auditors.............................. F-2
Consolidated Balance Sheets................................. F-3
Consolidated Statements of Income........................... F-4
Consolidated Statements of Stockholders' Equity............. F-5
Consolidated Statements of Cash Flows....................... F-6
Notes to Consolidated Financial Statements.................. F-7
</TABLE>

F-1
<PAGE> 54

REPORT OF INDEPENDENT AUDITORS

Board of Directors
CHARLES RIVER ASSOCIATES INCORPORATED

We have audited the accompanying consolidated balance sheets of Charles River
Associates Incorporated (the "Company") as of November 29, 1997 and November 30,
1996, and the related consolidated statements of income, stockholders' equity,
and cash flows for each of the three years in the period ended November 29,
1997. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these 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 financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Charles River
Associates Incorporated as of November 29, 1997 and November 30, 1996, and the
consolidated results of its operations and its cash flows for each of the three
years in the period ended November 29, 1997, in conformity with generally
accepted accounting principles.

/s/ ERNST & YOUNG LLP

Boston, Massachusetts
February 25, 1998

F-2
<PAGE> 55

CHARLES RIVER ASSOCIATES INCORPORATED

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
PRO FORMA
NOVEMBER 30, NOVEMBER 29, FEBRUARY 20, FEBRUARY 20,
1996 1997 1998 1998
------------ ------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................. $ 1,434 $ 2,054 $ 6,988 $ 485
Accounts receivable, net of allowances of
$578 in 1996 and $394 in 1997 and $430
in 1998 for doubtful accounts.......... 7,361 10,140 7,653 7,653
Unbilled services......................... 4,856 4,731 5,216 5,216
Prepaid expenses.......................... 224 280 476 476
------- ------- ------- -------
Total current assets........................ 13,875 17,205 20,333 13,830
Property and equipment, net................. 1,321 2,890 2,897 2,897
Other assets................................ 272 340 598 598
------- ------- ------- -------
Total assets................................ $15,468 $20,435 $23,828 $17,325
======= ======= ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.......................... $ 925 $ 902 $ 1,244 $ 1,244
Accrued expenses.......................... 4,265 5,729 8,495 8,495
Deferred revenue.......................... 636 225 250 250
Current portions of notes payable to
former stockholders and capital lease
obligations............................ 262 325 323 323
Dividends payable......................... 800 1,764 260 260
Deferred income taxes..................... 433 528 203 1,422
------- ------- ------- -------
Total current liabilities................... 7,321 9,473 10,775 11,994
Notes payable to former stockholders, net of
current portion........................... 428 707 707 707
Capital lease obligations, net of current
portion................................... 122 74 66 66
Deferred rent............................... 1,395 1,302 1,467 1,467
Minority interest........................... -- 343 291 291
Commitments and contingencies
Stockholders' equity:
Common Stock (voting); no par value;
25,000,000 shares authorized; 6,228,040
shares in 1996 and 6,519,240 shares in
1997 and 1998 issued................... 902 1,977 1,977 1,977
Retained earnings......................... 5,989 7,770 9,645 1,923
------- ------- ------- -------
6,891 9,747 11,622 3,900
Notes receivable from stockholders.......... (660) (1,211) (1,100) (1,100)
Treasury stock (15,600 shares in 1996, at
cost)..................................... (29) -- -- --
------- ------- ------- -------
Total stockholders' equity.................. 6,202 8,536 10,522 2,800
------- ------- ------- -------
Total liabilities and stockholders'
equity.................................... $15,468 $20,435 $23,328 $17,325
======= ======= ======= =======
</TABLE>

See accompanying notes.
F-3
<PAGE> 56

CHARLES RIVER ASSOCIATES INCORPORATED

CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
YEARS ENDED QUARTER ENDED
------------------------------------------ ---------------------------
NOVEMBER 25, NOVEMBER 30, NOVEMBER 29, FEBRUARY 21, FEBRUARY 20,
1995 1996 1997 1997 1998
------------ ------------ ------------ ------------ ------------
(53 WEEKS) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues............................ $31,839 $37,367 $44,805 $ 9,648 $11,137
Costs of services................... 19,760 23,370 28,374 6,106 6,486
Supplemental compensation........... 1,212 1,200 1,233 280 --
---------- ---------- ---------- ---------- ----------
Gross profit........................ 10,867 12,797 15,198 3,262 4,651
General and administrative.......... 8,397 9,060 10,509 2,134 2,754
---------- ---------- ---------- ---------- ----------
Income from operations.............. 2,470 3,737 4,689 1,128 1,897
Interest income, net................ 118 124 302 9 46
---------- ---------- ---------- ---------- ----------
Income before provision for income
taxes and minority interest....... 2,588 3,861 4,991 1,137 1,943
Provision for income taxes.......... (174) (273) (306) (76) (120)
---------- ---------- ---------- ---------- ----------
Net income before minority
interest.......................... 2,414 3,588 4,685 1,061 1,823
Minority interest................... -- -- 282 -- 52
---------- ---------- ---------- ---------- ----------
Net income.......................... $ 2,414 $ 3,588 $ 4,967 $ 1,061 $ 1,875
========== ========== ========== ========== ==========
Basic and diluted net income per
share............................. $0.40 $0.59 $0.78 $0.17 $0.29
===== ===== ===== ===== =====
Weighted average number of common
shares............................ 5,987,384 6,091,384 6,355,873 6,212,440 6,519,240
========= ========= ========= ========= =========
Pro forma income data (unaudited):
Net income as reported............ $ 4,967 $1,875
Pro forma adjustment.............. (1,833) (694)
------- ------
Pro forma net income.............. $ 3,134 $1,181
======= ======
Pro forma net income per share.... $0.48 $0.18
===== =====
Weighted average number of common
shares......................... 6,505,873 6,669,240
========= =========
</TABLE>

See accompanying notes.
F-4
<PAGE> 57

CHARLES RIVER ASSOCIATES INCORPORATED

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
COMMON STOCK
------------------------------------------------------------
CLASS A CLASS B SINGLE CLASS
------------------- ----------------- ------------------ ADDITIONAL
SHARES SHARES SHARES PAID-IN RETAINED
ISSUED AMOUNT ISSUED AMOUNT ISSUED AMOUNT CAPITAL EARNINGS
---------- ------ -------- ------ --------- ------ ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT NOVEMBER 26, 1994........... 5,598,840 $325 490,360 $46 -- -- $ 82 $2,280
Net income............................ 2,414
Issuance of Class A Common Stock...... 36,400 51
Purchase of treasury stock............
Sale of treasury stock................ (14)
Retirement of treasury stock.......... (128,960) (12) (24)
Conversion to single class of common
stock............................... (5,635,240) (376) (361,400) (34) 5,996,640 $ 410
Distributions to stockholders......... (778)
Collection on notes receivable........
---------- ---- -------- --- --------- ------ ---- ------
BALANCE AT NOVEMBER 25, 1995........... -- -- -- -- 5,996,640 410 44 3,916
Net income (53 weeks)................. 3,588
Issuance of Common Stock.............. 257,400 495
Purchase of treasury stock............ (22)
Sale of treasury stock................ 87
Adjustments to purchase price of
treasury stock...................... (93) (19)
Retirement of treasury stock.......... (26,000) (3) (16)
Distributions to stockholders......... (1,496)
Collection on notes receivable........
---------- ---- -------- --- --------- ------ ---- ------
BALANCE AT NOVEMBER 30, 1996........... -- -- -- -- 6,228,040 902 -- 5,989
Net income............................ 4,967
Issuance of Common Stock.............. 400,400 1,085
Distributions to stockholders......... (2,600)
Collection on notes receivable from
stockholders........................
Purchase of treasury stock............
Adjustment to purchase price of
treasury stock...................... (220)
Sale of treasury stock................
Retirement of treasury stock.......... (109,200) (10) (366)
Accrued interest on notes receivable
from stockholders...................
---------- ---- -------- --- --------- ------ ---- ------
BALANCE AT NOVEMBER 29, 1997........... -- -- -- -- 6,519,240 1,977 -- 7,770
Net income............................ 1,875
Collection on notes receivable from
stockholders........................
---------- ---- -------- --- --------- ------ ---- ------
BALANCE AT FEBRUARY 20, 1998
(UNAUDITED)........................... -- -- -- -- 6,519,240 $1,977 -- $9,645
========== ==== ======== === ========= ====== ==== ======

<CAPTION>
TREASURY STOCK
------------------------------------------------------------
CLASS A CLASS B SINGLE CLASS
------------------ ------------------ ------------------ TOTAL
NOTES STOCKHOLDERS'
RECEIVABLE SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT EQUITY
---------- -------- ------- -------- ------- -------- ------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT NOVEMBER 26, 1994........... -- -- -- (128,960) $(36) -- -- $ 2,697
Net income............................ 2,414
Issuance of Class A Common Stock...... 51
Purchase of treasury stock............ (119,600) $(182) (182)
Sale of treasury stock................ $ (110) 119,600 182 58
Retirement of treasury stock.......... 128,960 36 --
Conversion to single class of common
stock............................... --
Distributions to stockholders......... (778)
Collection on notes receivable........ 22 22
------- -------- ----- -------- ---- -------- ----- -------
BALANCE AT NOVEMBER 25, 1995........... (88) -- -- -- -- -- -- 4,282
Net income (53 weeks)................. 3,588
Issuance of Common Stock.............. (254) 241
Purchase of treasury stock............ (228,800) $(390) (412)
Sale of treasury stock................ (322) 187,200 342 107
Adjustments to purchase price of
treasury stock...................... (112)
Retirement of treasury stock.......... 26,000 19 --
Distributions to stockholders......... (1,496)
Collection on notes receivable........ 4 4
------- -------- ----- -------- ---- -------- ----- -------
BALANCE AT NOVEMBER 30, 1996........... (660) -- -- -- -- (15,600) (29) 6,202
Net income............................ 4,967
Issuance of Common Stock.............. (715) 370
Distributions to stockholders......... (2,600)
Collection on notes receivable from
stockholders........................ 264 264
Purchase of treasury stock............ (119,600) (444) (444)
Adjustment to purchase price of
treasury stock...................... (220)
Sale of treasury stock................ (58) 26,000 97 39
Retirement of treasury stock.......... 109,200 376 --
Accrued interest on notes receivable
from stockholders................... (42) (42)
------- -------- ----- -------- ---- -------- ----- -------
BALANCE AT NOVEMBER 29, 1997........... (1,211) -- -- -- -- -- -- 8,536
Net income............................ 1,875
Collection on notes receivable from
stockholders........................ 111 111
------- -------- ----- -------- ---- -------- ----- -------
BALANCE AT FEBRUARY 20, 1998
(UNAUDITED)........................... $(1,100) -- -- -- -- -- -- $10,522
======= ======== ===== ======== ==== ======== ===== =======
</TABLE>

See accompanying notes.

F-5
<PAGE> 58

CHARLES RIVER ASSOCIATES INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

Investing activities:
Purchases of property and
equipment........................ (400) (774) (2,290) (279) (243)
Sale (purchase) of short-term
investments...................... (298) 298 -- -- --
------ ------ ------ ------ ------
Net cash used in investing
activities......................... (698) (476) (2,290) (279) (243)

Financing activities:
Payments on notes payable to former
shareholders and capital lease
obligations...................... (86) (96) (370) (15) (10)
Purchase of treasury stock......... -- (19) -- -- --
Issuance of common stock........... -- 172 370 -- --
Sale of treasury stock............. 58 107 39 -- --
Collection of notes receivable from
stockholders..................... 22 4 264 54 111
Dividends paid..................... (245) (1,474) (1,636) (588) (1,504)
Proceeds from minority interest.... -- -- 625 -- --
------ ------ ------ ------ ------
Net cash used in financing
activities......................... (251) (1,306) (708) (549) (1,403)

Net increase in cash and cash
equivalents........................ 490 436 620 2,879 4,934
Cash and cash equivalents at
beginning of year.................. 508 998 1,434 1,434 2,054
------ ------ ------ ------ ------
Cash and cash equivalents at end of
year............................... $ 998 $1,434 $2,054 $4,313 $6,988
====== ====== ====== ====== ======
Supplemental cash flow information:
Cash paid for income taxes......... $29 $120 $275 -- $18
====== ======= ======= ======
Notes receivable in exchange for
common stock....................... $110 $576 $773 -- --
======= ======= =======
Notes payable in exchange for
treasury stock..................... $182 $412 $444 -- --
======= ======= =======
</TABLE>

See accompanying notes.

F-6
<PAGE> 59

CHARLES RIVER ASSOCIATES INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

Charles River Associates Incorporated (the "Company") is an economic and
business consulting firm that applies advanced analytical techniques and
in-depth industry knowledge to complex engagements for a broad range of
clients. The Company offers two types of services: legal and regulatory
consulting and business consulting.

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 and
disclosure of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.

UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

The consolidated balance sheet as of February 20, 1998 and the consolidated
statements of income, stockholders' equity and cash flows for the quarters
ended February 20, 1998 and February 21, 1997 are unaudited and in the
opinion of management, include all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the Company's
consolidated financial position, results of operations and cash flows.

FISCAL YEAR

The Company's fiscal year ends on the last Saturday in November. The fiscal
year ended November 30, 1996 consisted of 53 weeks; the fiscal years ended
November 25, 1995 and November 29, 1997 consisted of 52 weeks.

REVENUE RECOGNITION

Revenues from most engagements are recognized as services are provided
based upon hours worked and contractually agreed-upon hourly rates. The
Company's revenues also include expenses billed to clients, which include
travel and other out-of-pocket expenses, charges for support staff and
outside contractors and other reimbursable expenses. An allowance is
provided for any amounts considered uncollectible.

Unbilled services represent balances accrued by the Company for services
performed but not yet billed to the client.

CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

Cash equivalents consist principally of money-market funds, commercial
paper, bankers' acceptances and certificates of deposit with maturities
when purchased of 90 days or less. Short-term investments consist of
commercial paper and certificates of deposit with maturities when purchased
of more than 90 days but less than one year.

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost. The Company provides for
depreciation of equipment using the straight-line method over its estimated
useful life, generally three to five years. Amortization of

F-7
<PAGE> 60
CHARLES RIVER ASSOCIATES INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
leasehold improvements is provided using the straight-line method over the
shorter of the lease term or the estimated useful life of the leasehold
improvements.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company
and NeuCo LLC, a limited liability company founded by the Company and an
affiliate of Commonwealth Energy Systems in June 1997. The Company has a
50.1% interest in NeuCo LLC. The portion of the results of operations of
NeuCo LLC allocable to its minority owners is shown as "minority interest"
in the Company's statement of income for fiscal 1997 and that amount along
with the capital contributions to NeuCo LLC of its minority interest owners
is shown as "minority interest" on the Company's balance sheet as of
November 29, 1997. All significant intercompany accounts have been
eliminated.

CONCENTRATION OF CREDIT RISK

The Company's accounts receivable base consists of a broad range of clients
in a variety of industries located throughout the United States and in
certain other countries The Company performs a credit evaluation of each of
its clients to minimize its collectibility risk. Historically, the Company
has not experienced significant write-offs. In fiscal 1995, one client
accounted for approximately 11% of the Company's revenues.

The Company provides an allowance for doubtful accounts to provide for
potentially uncollectible amounts. Activity in the accounts is as follows
(in thousands):

<TABLE>
<CAPTION>
YEAR ENDED
------------------------------------------ QUARTER ENDED
NOVEMBER 25, NOVEMBER 30, NOVEMBER 29, FEBRUARY 20,
1995 1996 1997 1998
------------ ------------ ------------ -------------
(53 WEEKS) (UNAUDITED)
<S> <C> <C> <C> <C>
Balance at beginning of period $370 $207 $578 $394
Charge to cost and expenses 13 412 -- 36
Amounts written off (176) (41) (184) --
---- ---- ---- ----
Balance at end of period $207 $578 $394 $430
==== ==== ==== ====
</TABLE>

DEFERRED REVENUE

Deferred revenue represents amounts paid to the Company in advance of
services rendered.

INCOME TAXES

Since fiscal 1988, the Company has been treated for federal and state
income tax purposes as an S corporation under the Internal Revenue Code of
1986, as amended (the "Code"). As a result, the Company's stockholders,
rather than the Company, have been and are required to pay federal and
certain state income taxes based on the Company's taxable earnings. The
Company files its returns using the cash method of accounting. Upon closing
of the proposed initial public offering of common stock, the Company's
status as an S corporation will terminate and thereafter, it will be
subject to corporate taxation as a C corporation under the Code.
Concurrently with the termination of the Company's status as an S
corporation, the Company will adopt the accrual method of accounting. A pro
forma provision for income taxes has been presented as if the Company had
been taxed as a C corporation for the fiscal year ended November 29, 1997
and the quarter ended February 20, 1998. For that period, Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes"
(Statement 109) was used to calculate

F-8
<PAGE> 61
CHARLES RIVER ASSOCIATES INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
pro forma income taxes and the pro forma effect of the termination of the
Company's S corporation status on deferred income taxes.

Under the asset and liability method of Statement 109, the Company must
recognize deferred tax assets and liabilities to reflect the future tax
consequences attributable to differences between the consolidated financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases. 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 of a change in tax rates on deferred tax assets and liabilities
is recognized in income in the period that includes the date on which the
change in the tax rate occurs.

At the time of the termination of the Company's status as an S corporation,
the Company will record a net deferred income tax liability and a one-time
additional provision for income taxes. The amounts to be recorded will
depend upon differences between the financial reporting and tax bases of
the Company's assets and liabilities at the time. If the Company's S
corporation status had been terminated as of February 20, 1998, the net
deferred income tax liability would have increased by approximately $1.2
million to approximately $1.4 million. (See Note 11)

IMPAIRMENT OF LONG-LIVED ASSETS

In the first quarter of 1997, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of," which
establishes criteria for the recognition and measurement of impairment
losses associated with long-lived assets. The adoption of this standard had
no impact on the Company's consolidated financial statements.

NET INCOME PER SHARE AND PRO FORMA NET INCOME PER SHARE

In 1997, the Financial Accounting Standards Board issued Statement No. 128,
Earnings per Share. Statement No. 128 replaced the calculation of primary
and fully diluted earnings per share with basic and diluted earnings per
share. Unlike primary earnings per share, basic earnings per share excludes
any dilutive effects of options, warrants and convertible securities.
Diluted earnings per share is very similar to the previously reported fully
diluted earnings per share. Pursuant to the previous requirements of the
Securities and Exchange Commission (SEC), common shares and common share
equivalents issued by the Company during the twelve-month period prior to
the initial public offering of the Company's common stock would have been
included in the calculations as if they were outstanding for all periods
prior to the offering whether or not they were anti-dilutive. In February
1998, the SEC issued Staff Accounting Bulletin 98 which, among other
things, conformed prior SEC requirements to Statement 128 and eliminated
inclusion of such shares in the computation of earnings per share.

Pro forma net income per share is computed using pro forma net income and
the pro forma weighted average number of shares of common stock. The
weighted average number of shares of common stock for the purpose of
computing pro forma net income per share has been increased by the number
of shares that would be required to pay a dividend in the amount of $2.4
million (assuming an initial public offering price of $16.00 per share)
that is expected to be paid upon the completion of the initial public
offering.

ACCOUNTING PRONOUNCEMENTS

In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income," and SFAS No. 131, "Disclosures About Segments of an Enterprise and
Related Information." Both SFAS No. 130 and SFAS No. 131 are effective for
fiscal years beginning after December 15, 1997. The

F-9
<PAGE> 62
CHARLES RIVER ASSOCIATES INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Company believes that the adoption of these new accounting standards will
not have a material impact on the Company's consolidated financial
statements.

In December 1997, The Accounting Standards Executive Committee of the
American Institute of Certified Public Accountants issued a Statement of
Position (SOP), "Reporting on the Costs of Start-up Activities," which will
require companies upon adoption to expense start-up costs, including
organization costs, as incurred. In addition, the SOP will require
companies upon adoption to write off as a cumulative change in accounting
principle any previously recorded start-up or organization costs. The SOP
is effective for fiscal years beginning after December 15, 1998. At
February 20, 1998, the Company had deferred start-up costs of $59,000. The
Company believes that the adoption of this SOP will not have a material
impact on the Company's consolidated financial statements.

2. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
NOVEMBER 30, NOVEMBER 29, FEBRUARY 20,
1996 1997 1998
------------ ------------ ------------
(IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C>
Furniture and equipment......................... $3,508 $4,731 $4,793
Leasehold improvements.......................... 316 1,311 1,193
------ ------ ------
3,824 6,042 5,986
Accumulated depreciation and amortization....... 2,503 3,152 3,089
------ ------ ------
$1,321 $2,890 $2,897
====== ====== ======
</TABLE>

3. ACCRUED EXPENSES

Accrued expenses consist of the following:

<TABLE>
<CAPTION>
NOVEMBER 30, NOVEMBER 29, FEBRUARY 20,
1996 1997 1998
------------ ------------ ------------
(IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C>
Compensation and related expenses $4,059 $5,410 $7,547
Other 206 319 948
------ ------ ------
$4,265 $5,729 $8,495
====== ====== ======
</TABLE>

4. NOTES PAYABLE TO FORMER STOCKHOLDERS

Notes payable to former stockholders represent amounts owed by the Company
to former stockholders in connection with the Company's repurchase of
shares of common stock from such stockholders upon their separation from
the Company pursuant to an Exit Agreement.

Under the Exit Agreement, the Company repurchased shares of common stock
from certain stockholders at a purchase price based upon a formula that
uses the book value of the Company at the date the stockholder separates
from the Company (the "Fixed Amount") and an amount (the "Contingent
Pay-Out Amount") equal to the stockholder's pro rata portion of 25% of the
Company's earnings before bonuses, supplemental compensation and
amortization of goodwill, if any, for each of the five fiscal years
commencing with the fiscal year in which the repurchase was made. The Fixed
Amount is payable in three equal installments and the Contingent Pay-Out
Amount is payable in five equal annual install-

F-10
<PAGE> 63
CHARLES RIVER ASSOCIATES INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. NOTES PAYABLE TO FORMER STOCKHOLDERS (CONTINUED)
ments. The Fixed Amount bears interest at an average prime rate (8.5% at
February 20, 1998) determined in accordance with the terms of the Exit
Agreement.

For financial reporting purposes, the Company initially estimates the
Contingent Pay-Out Amount owed to each former stockholder for the full five
year payment period based on the actual amount of the contingent payment
for the first year. In subsequent years, the Company adjusts the estimate
annually based on actual amounts of the contingent payment for all
preceding years. The related adjustments are made to treasury stock and
additional paid in capital and to the extent additional paid in capital is
not available, retained earnings. Annual principal payments to former
stockholders are estimated as of November 29, 1997 to be $280,000 in fiscal
1998; $279,000 in fiscal 1999; $246,000 in fiscal 2000; $114,000 in fiscal
2001; and $68,000 in fiscal 2002. The Company believes the recorded value
of the notes payable to former stockholders approximates fair market value.

5. FINANCING ARRANGEMENTS

The Company has a line of credit which permits borrowings of up to $2.0
million with interest at the bank's base rate (8.5% at November 29, 1997)
and is secured by the Company's accounts receivable. The terms of the line
of credit includes certain operating and financial covenants. No borrowings
were outstanding as of November 29, 1997. The Company had outstanding
standby letters of credit at February 20, 1998 amounting to $76,000, which
expire between March and June 1998.

6. EMPLOYEE BENEFIT PLANS

The Company maintains a profit-sharing retirement plan that covers
substantially all full-time employees. Contributions are made at the
discretion of the Company and its subsidiary and cannot exceed the maximum
amount deductible under applicable provisions of the Code. Contributions
were approximately $1.1 million in each of fiscal 1995 and 1996,
approximately $1.2 million in fiscal 1997 and $269,000 and $227,000 for the
quarters ended February 21, 1997 and February 20, 1998, respectively.

7. SUPPLEMENTAL COMPENSATION

The Company currently has one bonus program. This program awards
discretionary bonuses based on the Company's revenues and profitability and
individual performance. Amounts paid under this bonus program are included
in costs of services and the Company expects to continue this bonus program
after the proposed initial public offering. During fiscal 1995, fiscal 1996
and fiscal 1997, the Company also had another bonus program, which
consisted of discretionary payments to officers and certain Outside Experts
based primarily on the Company's cash flows. These bonus payments are shown
as supplemental compensation in the Company's statements of income. The
Company does not intend to make additional payments under this bonus
program after fiscal 1997.

F-11
<PAGE> 64
CHARLES RIVER ASSOCIATES INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. LEASES

The Company leases its facilities under operating lease arrangements and
certain equipment under capital lease agreements. Assets held under capital
lease agreements amounted to $418,000 at November 30, 1996 and November 29,
1997. Accumulated amortization amounted to $259,000 at November 30, 1996
and $304,000 at November 29, 1997. At November 29, 1997, the minimum rental
commitments under all noncancellable operating and capital leases with
initial or recurring terms of more than one year were as follows (in
thousands):

<TABLE>
<CAPTION>
OPERATING CAPITAL
FISCAL YEAR LEASES LEASES
----------- --------- -------
<S> <C> <C>
1998........................................................ $ 1,687 $ 52
1999........................................................ 1,907 48
2000........................................................ 1,925 33
2001........................................................ 1,941
2002........................................................ 1,821
Thereafter.................................................. 8,011
------- ----
$17,292 133
=======
Less amount representing interest........................... 14
----
Present value of net minimum lease payments................. 119
Less current portion of obligations under capital leases.... 45
----
Long-term obligations under capital leases.................. $ 74
====
</TABLE>

Rent expense amounted to $1.5 million for each of fiscal 1995 and 1996 and
$1.8 million for fiscal 1997 and $314,000 and $487,000 for the quarters
ended February 21, 1997 and February 20, 1998, respectively.

9. NOTES RECEIVABLE FROM STOCKHOLDERS

In 1995, in an effort to align each officer's interest with the overall
interests of the Company, the Company adopted a policy requiring that each
of its officers have an equity interest in the Company. The Company sold
shares of common stock to new or existing members of the management team at
the fair market value of the common stock on the date of purchase as
determined by the Company's Board of Directors. A portion of the purchase
price is payable at the time of purchase and the remainder is payable in
installments over a period of five years. The portion of the purchase price
not paid at the time of purchase bears interest at an average prime rate
described in the stock purchase agreement (8.5% at February 20, 1998).

10. STOCKHOLDERS' EQUITY

In February 1995, the Company converted all outstanding shares of Class A
and Class B common stock to a single class of common stock. In addition,
the Company terminated its Stock Distribution and Redemption Plan, and
established a new agreement with its stockholders called the Exit
Agreement, which defines the rights of the Company and its stockholders if
any stockholder ceases for any reason to be an employee, director, officer,
consultant or independent contractor of the Company. Under the Exit
Agreement, subject to certain restrictions, the Company has the right to
repurchase all of the shares of an inactive stockholder and, the inactive
stockholder has the right to cause the Company to purchase his or her
shares of stock, at a formula price which is subject to annual adjustment
(see note 4).

F-12
<PAGE> 65
CHARLES RIVER ASSOCIATES INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

11. PRO FORMA FINANCIAL INFORMATION (UNAUDITED)

The following pro forma adjustments have been made to the historical
consolidated balance sheet as of February 20, 1998 and to the consolidated
statement of income for the year then ended:

a) The pro forma consolidated statements of income for the year ended
November 29, 1997 and the quarter ended February 20, 1998 reflect the
provision for income taxes that would have been recorded had the Company
and NeuCo LLC been C corporations during those periods, assuming
effective tax rates for the year ended November 29, 1997 and the quarter
ended February 20, 1998 of 43% and 42%, respectively.

b) Prior to the consummation of the proposed initial public offering, the
Company expects to declare an S corporation distribution to its existing
stockholders in an amount representing all undistributed cash earnings
through the termination of the Company's S corporation status but not to
exceed the cash available as of that date. At February 20, 1998, the S
corporation distribution is estimated to be approximately $6.5 million.
The declaration and payment of this distribution is reflected on the
February 20, 1998 pro forma consolidated balance sheet. The amount of
this distribution will be higher or lower than the foregoing amount
based upon actual cash-basis earnings between February 20, 1998 and the
closing date of the initial public offering.

At the time of the termination of the Company's status as an S
corporation, the Company will record a net deferred income tax liability
and a one-time additional provision for income taxes. The amounts to be
recorded will depend upon differences between the financial reporting
and tax bases of the Company's assets and liabilities at the time. If
the Company's S corporation status had been terminated as of February
20, 1998, the net deferred income tax liability would have been $1.4
million, resulting from differing methods of accounting for financial
reporting and tax purposes for the following items (in thousands):

<TABLE>
<S> <C>
Deferred tax liabilities:
Cash to accrual adjustment.......................... $ 843
Profit sharing...................................... 93
Deferred rent....................................... 605
Other............................................... 111
------
1,652
Deferred tax assets:
Allowance for doubtful accounts..................... (176)
Excess tax over book depreciation and
amortization...................................... (54)
------
(230)
------
$1,422
======
</TABLE>

A reconciliation of the Company's pro forma tax rate with the federal
statutory rates is as follows:

<TABLE>
<CAPTION>
YEAR ENDED QUARTER ENDED
NOVEMBER 29, FEBRUARY 20,
1997 1998
------------ -------------
<S> <C> <C>
Federal statutory rate...................................... 34.0% 34.0%
State income taxes, net of federal income tax benefit....... 6.2 6.2
Other....................................................... 2.8 1.7
---- ----
43.0% 41.9%
==== ====
</TABLE>

F-13
<PAGE> 66
CHARLES RIVER ASSOCIATES INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

12. RELATED PARTY TRANSACTIONS

The Company made payments to stockholders of the Company who performed
consulting services for the Company in the amounts of $1.7 million in
fiscal 1995, $1.6 million in fiscal 1996 and $1.8 million in fiscal 1997
and $506,000 and $645,000 for the quarters ended February 21, 1997 and
February 20, 1998, respectively.

13. QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>
QUARTER ENDED
--------------------------------------------------------
FEBRUARY 16, MAY 10, AUGUST 30, NOVEMBER 30,
1996 1996 1996 1996
------------ ---------- ------------- ------------
(12 WEEKS) (12 WEEKS) (16 WEEKS) (13 WEEKS)
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Revenues.................................... $6,990 $8,334 $11,356 $10,687
Gross profit................................ 2,324 3,033 4,095 3,345
Income from operations...................... 513 946 1,205 1,073
Income before provision for income taxes.... 532 980 1,226 1,123
Net income.................................. 495 911 1,140 1,042
</TABLE>

<TABLE>
<CAPTION>
QUARTER ENDED
--------------------------------------------------------
FEBRUARY 21, MAY 16, SEPTEMBER 5, NOVEMBER 29,
1997 1997 1997 1997
------------ ---------- ------------- ------------
(12 WEEKS) (12 WEEKS) (16 WEEKS) (12 WEEKS)
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Revenues.................................... $9,648 $9,171 $14,498 $11,488
Gross profit................................ 3,262 2,979 4,990 3,967
Income from operations...................... 1,128 817 1,629 1,115
Income before provision for income taxes and
minority interest......................... 1,137 901 1,670 1,283
Minority interest........................... -- -- 198 84
Net income.................................. 1,061 841 1,756 1,309
</TABLE>

14. SUBSEQUENT EVENTS

STOCK SPLIT

Subsequent to November 29, 1997, the Company's Board of Directors
authorized (i) the declaration of a 52-for-1 stock split to be effected in
the form of a dividend of 51 shares of Common Stock per share of Common
Stock outstanding before the closing of the Offering and (ii) an increase
in the number of shares of authorized Common Stock to 25,000,000. These
actions are subject to approval by the Company's stockholders. The
accompanying consolidated financial statements have been adjusted
retroactively to give effect to these actions.

F-14
<PAGE> 67
CHARLES RIVER ASSOCIATES INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

14. SUBSEQUENT EVENTS (CONTINUED)
STOCK RESTRICTION AGREEMENT

On February 20, 1998, the Company's Board of Directors authorized the
Company to amend and restate the Exit Agreement (as so amended and
restated, the "Stock Restriction Agreement"). The Stock Restriction
Agreement is subject to approval by the Company's stockholders and, if
approved, will take effect upon the closing of the Offering. The Stock
Restriction Agreement will prohibit each person who is a stockholder of the
Company before the closing of the Offering from selling or otherwise
transferring shares of Common Stock held immediately before the Offering
without the consent of the Board of Directors of the Company for two years
after the Offering. In addition, the Stock Restriction Agreement will allow
the Company to repurchase a portion of such stockholder's shares of Common
Stock at a percentage of market value should the stockholder leave the
Company (other than for death or retirement for disability).

F-15
<PAGE> 68

================================================================================

No dealer, sales representative or any other person has been authorized to
give any information or to make any representations in connection with the
Offering other than those contained in this Prospectus, and, if given or made,
such information or representations must not be relied upon as having been
authorized by the Company, any of the Selling Stockholders or any of the
Underwriters. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any securities other than the shares of Common
Stock to which it relates or an offer to, or a solicitation of, any person in
any jurisdiction where such an offer or solicitation would be unlawful. Neither
the delivery of this Prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that there has been no change in the
affairs of the Company or that the information contained herein is correct as of
any time subsequent to the date hereof.

--------------------------------
TABLE OF CONTENTS
--------------------------------

<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary................. 3
Risk Factors....................... 6
Use of Proceeds.................... 12
S Corporation Distributions and
Termination of S Corporation
Status........................... 12
Dividend Policy.................... 13
Capitalization..................... 14
Dilution........................... 15
Selected Consolidated Financial
Data............................. 16
Management's Discussion and
Analysis of Financial Condition
and Results of Operations........ 18
Business........................... 24
Management......................... 36
Certain Transactions............... 41
Principal and Selling
Stockholders..................... 43
Description of Capital Stock....... 45
Shares Eligible for Future Sale.... 48
Underwriting....................... 50
Legal Matters...................... 51
Experts............................ 51
Change in Independent Auditors..... 52
Additional Information............. 52
Index to Consolidated Financial
Statements....................... F-1
</TABLE>

Until May 18, 1998 (25 days after the date of this Prospectus), all dealers
effecting transactions in the registered securities offered hereby, whether or
not participating in this distribution, may be required to deliver a Prospectus.
This is in addition to the obligation of dealers to deliver a Prospectus when
acting as Underwriters and with respect to their unsold allotments or
subscriptions.
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2,188,000 SHARES

[CHARLES RIVER LOGO]

CHARLES RIVER ASSOCIATES INCORPORATED

COMMON STOCK

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PROSPECTUS
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NationsBanc Montgomery
Securities LLC

William Blair & Company

April 23, 1998

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