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[LETTERHEAD OF LAW COMPANIES GROUP, INC. APPEARS HERE]
April 23, 1997
Dear Shareholder:
Earlier today, Law Companies Group, Inc. (the "Company") filed
disclosure with the Securities and Exchange Commission relating to recent
developments affecting the Company. I have enclosed the filing to inform you of
these developments which you may want to consider in connection with the
Company's Proxy Statement, dated April 10, 1997, the contents of which to the
extent not superseded hereby, are incorporated herein by reference. The Board
of Directors of the Company continues to believe that approval of the Williams
transaction is in the best interest of the Company and its shareholders. I
would ask that you carefully review the enclosed disclosure as well as the Proxy
Statement in connection with your consideration of the proposals to be presented
at the 1997 Annual Meeting of Shareholders.
If you have not voted, I encourage you to submit your proxy as soon as
practicable. If you have misplaced or lost your proxy or wish to change your
vote, please contact Darryl B. Segraves at Law Companies Group, Inc., 3 Ravinia
Drive, Atlanta, Georgia 30346 (770-396-8000).
Sincerely yours,
/s/ Bruce C. Coles
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Bruce C. Coles
Chief Executive Officer,
President and Chairman of
the Board
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On April 22, 1997, the Board of Directors of Law Companies Group, Inc. (the
"Company"), acting upon the recommendations of an ad hoc committee of the Board
of Directors composed of all of the independent members of the Board of
Directors (the "Ad Hoc Committee") and the previously constituted Special
Committee of the Board of Directors (which includes the independent members of
the Board of Directors voting separately as a class) (the "Special Committee"),
reaffirmed its approval of the proposed equity investment in the Company by
Virgil R. Williams and James M. Williams (the "Williams Transaction") and
reconfirmed that the Williams Transaction is in the best interest of the Company
and its shareholders.
The Board of Directors of the Company (the "Board"), the Ad Hoc Committee
and the Special Committee met for the purpose of considering unsolicited
correspondence from PSI Holdings, Inc. ("PSIHI"), which stated that PSIHI was
"prepared to propose" a transaction in which it would acquire all of the
outstanding capital stock of the Company, subject to a number of conditions and
contingencies. Following a thorough discussion and analysis of the PSIHI
correspondence, consideration of the Company's prior dealings with PSIHI, the
terms and provisions of the Williams Transaction that have been fully negotiated
and agreed upon, and following consultation with the Company's financial
advisor, Alex. Brown & Sons Incorporated, and with special counsel to the Ad Hoc
Committee and the Special Committee, it was unanimously recommended by the Ad
Hoc Committee that the Company reaffirm its long-standing position that it is
not in the best interest of the Company or its shareholders to sell a majority
or greater interest in the Company, and that, as a result, it was not in the
best interest of the Company or its shareholders to pursue the transaction which
PSIHI indicated it was "prepared to propose" subject to contingencies. The
Special Committee unanimously adopted recommendations substantially similar to
those adopted by the Ad Hoc Committee.
Thereafter, the Board, in reliance upon the separate recommendations of the
Ad Hoc Committee and the Special Committee and acting by unanimous vote of those
Directors present, reconfirmed that it is not in the best interest of the
Company or its shareholders for the Company to be sold, that the possible
transaction which PSIHI was contingently "prepared to propose" would not be in
the best interest of the Company or of its shareholders, and that it is in the
best interest of the Company and its shareholders for the shareholders to
approve and for the Company to effectuate as contemplated the Williams
Transaction. In taking these actions, the Ad Hoc Committee, the Special
Committee and the Board took into account all factors they deemed relevant to
reach the conclusions described above, including, without limitation, the
factors listed on pages 15 and 16 of the Company's proxy statement dated April
10, 1997, each of which factors were discussed and carefully considered by the
Ad Hoc Committee, the Special Committee and the Board.
