Gerson Lehrman Group

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Gerson Lehrman Group
Type Private company
Foundation date 1998
Headquarters New York, United States
Area served Worldwide
Key people Mark Gerson (Co-Founder and Chairman); Alexander Saint-Amand, (CEO); Thomas D. Lehrman (Co-Founder and Director)
Industry Financial services
Services Knowledge Brokerage; Primary research; Expert network

Gerson Lehrman Group (GLG), founded in 1998 and headquartered in New York City, is a knowledge brokerage and primary research firm that operates an expert network platform of more than 500,000[1] subject matter experts who provide independent consulting services to companies around the world.

GLG primarily serves the investment community doing primary research and improving the decision-making process by putting clients in touch with relevant experts through a variety of consulting methods, including telephone conversations, surveys, written reports and in-person meetings. GLG clients also include professional services firms, corporations, and non-profit organizations.[2]

GLG members include consultants, physicians, scientists, engineers, lawyers, senior current and former c-level executives,[3] and former government members.[4][5][6]

The company divides its experts by field of expertise, focusing on specific industries or disciplines. GLG practice areas include: Accounting and Financial Analysis; Consumer Goods and Services; Energy and Industrials; Financial and Business Services; Healthcare; Legal, Economic and Regulatory Affairs; Real Estate; and Technology, Media and Telecommunications.

Origins

Gerson Lehrman Group, once called the "most valuable NYC company no one outside of Wall Street has ever heard of",[7] was founded by Duke University and Yale Law School graduate Thomas Lehrman and fellow Yale Law School graduate Mark Gerson, who had worked at the leading NYC hedge fund Tiger Management, that led to a generation of spinoffs (known as Tiger Cubs).[8] GLG, initially funded by a friends and family round,[9] was formed as a publishing house to produce industry guidebooks for institutional investors, a business they abandoned a year later when they could find no buyers for their product. The two retooled their business model a year later to offer a matchmaking service (later called expert network) to connect investors with independent consultants. Its services filled a research gap by providing timely, proprietary insights and to capture the long-tail of expertise that were increasingly difficult to get from large brokerage firms and other traditional research providers.

Business model

GLG operates a technology-enabled platform for institutions to consult and collaborate with experts in various industries and disciplines around the globe. Clients work with Research Managers who, with the help of a proprietary set of online profiling and compliance tools, identify, find, vet and connect relevant experts with users. Clients can also identify appropriate experts from the network and manage the logistics around the consulting session via a Web-based software tool called the Research Management Platform (RMP). GLG connects clients with relevant experts in a variety of consulting methods, such as:

  • telephone consultations
  • educational events
  • written reports
  • live meetings, including seminars, round tables, master classes and private visits
  • research trips and summits

The company’s approach of connecting people and allowing for ranking of the experience involves a number of elements associated with social networking sites. There are some who consider the GLG model to be part of the evolving social network collaboration trend.[10]

Experts are usually invited by GLG researchers to join the network based on their expertise or association with industry organizations. Experts can also submit their profiles online, including biographical descriptions and other background information and choose their own honorariums. GLG home page states that it has more than 250,000 experts in its network. A competitor, Vista Research, is said to have a network of 90,000.[11]

According to GLG website[12] the company serves asset managers, private equity, investment banks, and venture capital clients as well as consultancies, corporations, law firms, life sciences companies, marketing agencies, nonprofit and public sectors.[13] Some of its best clients include 15 of the leading 20 global investment banks, 9 of the world's leading 10 private equity firms and Fortune 500 clients in virtually all sectors. According to a report from Integrity Research, over 2/3 of all institutional investors use expert networks to obtain market and company background pertaining to the various investment theses they are researching" [14] Goldman Sachs and Och-Ziff Capital Management Group were mentioned to be some of GLG's clients.[15] The Economist recently reported that GLG’s clients spend on average $170,000 a year and that GLG keeps a record of "who talks to whom, about what, down to the minute".[16] Gerson Lehrman Group claims it facilitates more than 18,000 transactions a month on average.[17] A typical phone consultation with an expert lasts for approximately 60 minutes.[18] with the experts, who aren't GLG employees.[19]

Non Profit

In 2006, GLG worked with U.S. Department of Housing and Urban Development to provide new primary data and analysis relevant for any other recovery plans in the rebuilding of Louisiana following Hurricane Katrina and Hurricane Rita.[20][21] It has been on the news that it has also done some other philanthropy work with smaller charities.[22]

Compliance Framework

Before joining GLG platform and become able to participate in consultations, all experts are required to complete an interactive tutorial and agree to its Terms and Conditions contract. According to their website,[23] among other things, all Council Members need to sign the contract in where they agree to:

  • Decline any project that presents a conflict of interest
  • Not discuss confidential information
  • Not discuss or to speak on behalf of their employer
  • Consult only in accordance with other obligations

As internal policy, experts without the written consent from their employers may also only speak with the same client no more than three times in one year, and the expert cannot earn more than $2,500 in a year from a single client.[24]

GLG has recently won an award for its compliance framework.[25]

Spinoffs

Recently GLG has created Hightable (formerly known as G+),[26] a professional question-and-answer website, edited and organized by its community of users to compete with Quora[27] and to attract more experts to their platform.

Partnerships

As the use of alternative research providers within the financial industry has grown, brokerages themselves have been partnering with firms such as GLG.[28]

On September 10, 2008, the company announced a deal with Credit Suisse, whereby analysts from the financial services giant would be able to tap into GLG’s Council Members as part of their research process. About 300 Credit Suisse analysts became members of the GLG expert network.[29] In 2009 it has also announced a partnership with Frost & Sullivan's, making their over 800 market researchers available to consult with GLG clients.[30]

In July 2009, GLG announced that it has partnered with Amba Research, a leading financial services Knowledge Process Outsourcing (KPO) firm that provides equity and credit research.[31]

On July 8, 2010, GLG and Bloomberg announced a partnership that enables clients of the Bloomberg Professional platform to access the GLG expert network through the Bloomberg platform. Through the partnership, Bloomberg clients can view the bios of more than 50,000 GLG Members on the Bloomberg Terminal, request consultations with experts, and access news commentary, video, webcasts and teleconferences.[32]

In October 2011, GLG partnered with and acquired a minority stake in Ushi,[33] a leading China-based business social networking provider, and the largest competitor of Linkedin in the region[34] in order to boasts the GLG's network of more than 25,000 Chinese subject matter experts.

Offices

In addition to Gerson Lehrman Group's headquarters in New York City, the company operates globally. It has offices in Austin, Boston, Chicago, Los Angeles, San Francisco, Washington, D.C., London, Hong Kong, New Delhi, Mumbai, Beijing, Shanghai, Singapore, Munich, Sydney, Seoul, Tokyo, Zurich, Dublin, Paris and São Paulo.[35]

Expert Network Industry

Although GLG is still the "800 pound gorilla",[36] according to a 2008 report by Integrity Research[37] there were at least 25 expert network providers (such as ENG - Expert Network Group, Coleman Research Group, AlphaSights, CognoLink, DeMatteo Monness, ExpertView, Informed Edge and Public Insight LP)[38][39] with GLG having about 70% of the market. Estimates of the company’s value range from $875 million to $950 million.[40] A 12-month revenue figure of $220 million was included in a company press release in December 2007 that announced that technology investment firm Silver Lake had made an approximately $200 million investment in GLG.[41] An article published in Financial News in January 2009 reported that the company's revenues for 2008 were $284 million.[42]

Controversy

The expert network business model has drawn scrutiny for concerns relating to adherence to disclosure rules and sharing of insider information within the investment industry.[43] During 2005, for example, doctors who served as paid consultants to investment firms as a result of their role in an expert network generated a “fair share of controversy.”[44] GLG was part of a lawsuit filed by Biovail in March 2006, in which Biovail claimed that its shares had been manipulated.[45] In September 2006, GLG announced the creation of a proprietary system that helped identify and manage conflicts, leveraging its experience as a pioneer in its industry to craft risk-reducing rules for expert engagements[46][47]

In January 2007, it was reported that the company and Vista Research, then a Standard & Poor affiliate, were part of an inquiry by the New York State Attorney General’s office into the consulting practices of investment firm clients.[48] As of December 2007, the Attorney General had taken no action, and the investigation appeared to be dormant.[49]

Although GLG has not been implicated of any wrongdoing[50] the overall Experts Network industry has caught the eye of the regulators and is since the end of 2010 going through investigations by the American Regulators, after a consultant testified having used Primary Research Global, another expert network, to leak information to traders .[51]

Trivia

GLG business model has been used as case study at Harvard Business School [52][53][54]

References

  1. ↑ GLG Website Home Page
  2. ↑ Holly Hall, November 11, 2011. "Eye-Care Charity Gets Free Fund-Raising Insights", The Chronicle of Philanthropy. Retrieved December 3, 2011.
  3. ↑ Quora: Are there any drawbacks or risks to participating as an "expert" in the Gerson Lehrman Group Network?"", Retrieved April 15, 2012.
  4. ↑ John Bruton"John Bruton - Professional Activities"Retrieved April 15, 2012.
  5. ↑ GLG Research Council Members""Council Member - Hans Eichel, Retrieved April 15, 2012.
  6. ↑ German-British Chamber of Industry & Commerce "‘Austerity must be softened’ - former German Chancellor Gerhard Schröder", Retrieved April 15, 2012.
  7. ↑ Peter Kafka, December 18, 2007. "Expert Network Gerson Lehrman Sells Stake: $875 Million Valuation", Silicon Valley Insider. Retrieved August 13, 2008.
  8. ↑ The Wall Street Journal "Tiger sowing seeds of growth ", retrieved 21 Jul 2010.
  9. ↑ Steve Bodow, December 23, 2001. "It's Not What They Know, but Whom", The New York Times. Retrieved August 13, 2008.
  10. ↑ Robwebb2k, July 16, 2008. "User Value = Demographics + Tolerance", Robwebb2k. Retrieved August 13, 2008.
  11. ↑ BusinessWeek, August 1, 2005. "Have Experts, Will Hire Out", BusinessWeek. Retrieved August 13, 2008.
  12. ↑ Gerson Lehrman Group "" Gerson Lehrman Group Councils Brochure. Retrieved May 6, 2011.
  13. ↑ Steve Lewis, October 2, 2008 "Network of 200,000 experts provides IP evaluations", Intellectual Property Marketing Advisor. Retrieved November 12, 2008.
  14. ↑ Integrity Research, Nov 16, 2009 "", Retrieved April 15, 2012.
  15. ↑ Brody Mullins and Susan Pulliam, October 4, 2011 Hedge Funds Pay Top Dollar for Washington Intelligence. The Wall Street Journal, retrieved December 3, 2011
  16. ↑ Economist, June 16th 2011 "Linking expert mouths with eager ears", Retrieved June 25, 2011.
  17. ↑ GLG Web Site About US Page
  18. ↑ Integrity Research Web Site. Retrieved August 13, 2008.
  19. ↑ Brody Mullins and Susan Pulliam, October 4, 2011 Hedge Funds Pay Top Dollar for Washington Intelligence. The Wall Street Journal, retrieved December 3, 2011
  20. ↑ Louisiana Recovery Authority "Disaster Recovery Initiative", U.S. Department of Housing and Urban Development (HUD)Retrieved December, 2011.
  21. ↑ Gerson Lehrman Group report - "[www.swtlaw.com/PDFs/articles/realestate/RebuildingAfterKatrina.pdf Rebuilding after Katrina and Rita]", Schulten Ward & Turner LLP, Retrieved December, 2011.
  22. ↑ Holly Hall, November 11, 2011. "Eye-Care Charity Gets Free Fund-Raising Insights", The Chronicle of Philanthropy. Retrieved December 3, 2011.
  23. ↑ GLG Compliance "GLG Compliance Framework", Retrieved March 6, 2011.
  24. ↑ Stephen Taub, Jan 5, 2011 "How Will the Expert Networks Controversy Affect Gerson Lehrman?", Institutional Investor. Retrieved April 15, 2011.
  25. ↑ Investorside Research Association "Investorside Announces Excellence in the 2011 Research Awards"Retrieved April 6, 2011
  26. ↑ Hightable Website "", Retrieved April 15, 2012.
  27. ↑ Economist, June 16th 2011 "Linking expert mouths with eager ears", Retrieved June 25, 2011.
  28. ↑ Integrity Research, December 20, 2007. "Gerson Lehrman and Morgan Stanley Alphawise Tie Up", Integrity Research. Retrieved August 13, 2008.
  29. ↑ Greg Farrell, September 10, 2008. "Credit Suisse in alliance with consultancy firm", Financial Times. Retrieved September 17, 2008.
  30. ↑ PR News Wire, April 23, 2009 "Gerson Lehrman Group Announces Addition of Frost & Sullivan to the Council Partners Program", Retrieved December 3, 2011
  31. ↑ Amba Research, July 27, 2009 "Amba partners with Gerson Lehrman Group", Retrieved December 3, 2011
  32. ↑ Gerson Lehrman Group press release
  33. ↑ GLG Press Release, October 14, 2011 GLG and Ushi Announce Partnership", Retrieved December 3rd 2011
  34. ↑ Robin Wauters, October 13, 2011 Ushi, China’s Answer To LinkedIn, Raises $3 Million From GLG", TechCrunch, Retrieved December 3, 2011
  35. ↑ GLG Web Site Contact us Page
  36. ↑ Pascal-Emmanuel Gobry, December 21, 2010. "Twitter Investor Puts Money Into Expert Network", Business Insider, Retrieved April 15, 2012
  37. ↑ Integrity Research Web Site. Retrieved August 13, 2008.
  38. ↑ Gus Lubin, November 23, 2010 "How Many Of These Expert Networks Are Being Investigated By The Feds?". The Business Insider, Retrieved December 3, 2011.
  39. ↑ Simon Goodley, March 4th 2011 Wall Street's secretive 'expert networks'. The Guardian, Retrieved December 3, 2011.
  40. ↑ Integrity Research, December 20, 2007. "Silver Lake takes a Piece of Gerson Lehrman", Integrity Research. Retrieved August 13, 2008.
  41. ↑ GLG Press Release, December 19, 2007."Gerson Lehrman Group Announces an Agreement on Approximately $200 Million Equity Investment from Silver Lake", GLG Press Release. Retrieved August 13, 2008.
  42. ↑ Dominic Elliot, January 28, 2009. "", Financial News. Retrieved March 9, 2009.
  43. ↑ Dutton Associates Online Interview
  44. ↑ Marcy Tolkoff, April 21, 2006. Consult for Wall Street? Consulting for Wall Street may be lucrative, but some critics say such arrangements involve inherent conflicts of interest", Medical Economics. Retrieved August 13, 2008.
  45. ↑ Jenny Anderson, February 23, 2006. "", The New York Times. Retrieved August 13, 2008.
  46. ↑ GLG, November 1, 2006. "GLG Press Release Gerson Lehrman Group Launches Institutional Registry, A New Clearinghouse for Expert Consulting Restrictions and Conflicts", GLG Press Release. Retrieved August 13, 2008.
  47. ↑ GLG Web Site Compliance Framework Description. Retrieved August 13, 2008.
  48. ↑ Jenny Anderson, January 17, 2007. "Wall Street ‘Matchmakers’ Under a New York Inquiry", The New York Times. Retrieved August 13, 2008.
  49. ↑ Andrew Ross Sorkin, December 19, 2007. "Silver Lake Partners to Buy a Quarter of Research Firm", The New York Times. Retrieved August 13, 2008.
  50. ↑ Economist, June 16th 2011 "Linking expert mouths with eager ears", Retrieved June 25, 2011.
  51. ↑ Bloomberg, Nov 24, 2010 "", Retrieved June 25, 2011.
  52. ↑ Robert G. Eccles, David Lane, Feb 05, 2008 "Gerson Lehrman Group case study", Harvard Business School Case, Retrieved June 25, 2011.
  53. ↑ Robert G. Eccles, Laura Winig, Mar 05, 2009. "The Credit Suisse/Gerson Lehrman Group Alliance case study", Retrieved June 25, 2011.
  54. ↑ Boris Groysberg, Paul M. Healy, and Sarah L. Abbott, Feb 05, 2012. "Gerson Lehrman Group: Managing Risks" Harvard Business School Case, Retrieved April 15, 2012.

External links

Further reading

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