Stenographic Services in the US Stenographic... · Stenographers typically use stenograph machines,...

WWW.IBISWORLD.COM Stenographic Services in the US August 2019 1

IBISWorld Industry Report OD5843Stenographic Services in the USAugust 2019 Marisa Lifschutz

Jotting it down: Digital recording systems will likely threaten demand for courtroom stenographers

2 About this Industry2 Industry Definition

2 Main Activities

2 Similar Industries

2 Additional Resources

3 Industry at a Glance

4 Industry Performance4 Executive Summary

4 Key External Drivers

6 Current Performance

8 Industry Outlook

10 Industry Life Cycle

12 Products and Markets12 Supply Chain

12 Products and Services

13 Demand Determinants

13 Major Markets

14 International Trade

15 Business Locations

17 Competitive Landscape17 Market Share Concentration

17 Key Success Factors

17 Cost Structure Benchmarks

19 Basis of Competition

19 Barriers to Entry

20 Industry Globalization

21 Major Companies21 Veritext Legal Solutions

21 Planet Depos LLC

22 Operating Conditions22 Capital Intensity

23 Technology and Systems

23 Revenue Volatility

24 Regulation and Policy

24 Industry Assistance

25 Key Statistics25 Industry Data

25 Annual Change

25 Key Ratios

26 Jargon & Glossary

www.ibisworld.com | 1-800-330-3772 | [email protected]

This report was provided toSeattle Pacific University (2134529962)by IBISWorld on 31 December 2019 in accordance with their license agreement with IBISWorld


This industry provides verbatim reporting and stenotype reporting of live legal proceedings and then transcribes

subsequent recorded materials. Noncourt stenography services for depositions and related proceedings are included.

The primary activities of this industry are

Stenotype recording

Voice writing

Taking depositions

Closed captioning

54111 Law Firms in the USEstablishments in this industry provide expertise on a range of areas or specific areas of law, such as criminal, corporate, family and estate, patent, real estate or tax.

54193 Translation Services in the USEstablishments in this industry translate written material, interpret speech from one language to another and provide sign language services.

56141 Document Preparation Services in the USEstablishments in this industry provide letter or resume writing; document editing or proofreading; typing, word processing or desktop publishing; transcription and other secretarial services.

56143 Business Service Centers in the USEstablishments in this industry provide photocopying, duplicating and other document copying services.

Industry Definition

Main Activities

Similar Industries

Additional Resources

About this Industry

For additional information on this industry

www.nad.org National Association of the Deaf

www.ncra.org National Court Reporters Association

www.uscra.org United States Court Reporters Association

The major products and services in this industry are

Additional services

Local government stenographic services

State government stenographic services

Other stenographic services

Provided to: Seattle Pacific University (2134529962) | 31 December 2019


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Revenue Employment

Revenue vs. employment growth

Products and services segmentation (2019)

35.3%State government

stenographic services

32.2%Other stenographic services

27.0%Local government

stenographic services

5.5%Additional services

Key Statistics Snapshot

Industry at a GlanceStenographic Services in 2019

Industry Structure Life Cycle Stage Decline

Revenue Volatility Low

Capital Intensity Low

Industry Assistance High

Concentration Level Low

Regulation Level Medium

Technology Change Medium

Barriers to Entry Low

Industry Globalization Low

Competition Level High

Revenue

$2.7bnProfit

$336.1mWages

$615.2mBusinesses

4,494

Annual Growth 19–24

0.7%Annual Growth 14–19

2.7%

Key External DriversGovernment consumption and investmentDemand from law firmsPrivate investment in computers and softwareCrime rate

Market ShareThere are no major players in this industry

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FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 25




Key External Drivers Government consumption and investmentDemand for stenographic services is heavily dependent on government expenditure, as stenographers are hired and paid for by local, state and federal courts. As government expenditure decreases, courthouses have to reduce spending to balance their budgets. In light of budget cuts, courts have increasingly

sought cost-saving methods, moving away from in-person stenographers toward digital recording systems, thus hampering industry demand. Government consumption and investment is expected to rise moderately in 2019.

Demand from law firmsDemand for stenographic services is heavily dependent on legal activity. Legal

Executive Summary Stenographers have played an important role in the courtroom process for centuries. Stenographers attend legal proceedings and other public speaking events and create transcriptions. Over the five years to 2019, demand for the Stenographic Services industry has been mixed as courts have increasingly cut back expenses amid massive budget cuts. More courts have outfitted their courtrooms with digital recording systems, removing the need for in-person stenographers. However, despite mounting external competition, an uptick

in legal activity over the past five years is expected to support a moderate expansion for the industry. As a result, IBISWorld only forecasts industry revenue to rise at an annualized rate of 2.7% to $2.7 billion over the five years to 2019. This includes an expected 1.5% boost in 2019.

The industry is highly competitive and fragmented, exhibiting low market share concentration. The industry relies heavily on labor for industry services and therefore does not benefit from economies of scale. The industry’s low barriers to entry limit consolidation, and

online platforms that enable workers to act as nonemployers and easily reach contacts have further solidified such trends. Larger companies have nonetheless lowered their dependency on labor through stenographic machines and related technology, leading industry wages to fall slightly as a share of revenue. Falling relative labor costs have enabled a minor expansion in industry profit during the current period, with the average margin, measured as earnings before interest and taxes, reaching 12.2% of revenue in 2019.

Over the five years to 2024, the industry will continue to endure challenges amid heightened competition and rapid technological change. As federal and state courts struggle to balance their budgets in light of budget cuts, these markets will increasingly seek new cost-saving measurements. More courts are consequently expected to move away from in-person stenographers toward digital recording systems, thus reducing demand for stenographers in the courtroom. Demand from other opportunities outside of the courtroom, including providing closed captioning for TV programs and aiding students with hearing impairments, is expected to likewise decrease during the period. Overall, IBISWorld estimates that industry revenue will rise a sluggish annualized 0.7% over the five years to 2024 to total $2.8 billion.

Industry PerformanceExecutive Summary | Key External Drivers | Current Performance Industry Outlook | Life Cycle Stage

More courts have outfitted their courtrooms with digital recording systems, removing the need for in-person stenographers



Industry Performance

Key External Driverscontinued

activity can include lawsuits, criminal cases, intellectual property cases and civil cases. Increased legal activity helps boost industry demand, as more courts require stenographers to record proceedings. In addition, stenographers can take depositions for law firms. Demand from legal services is expected to increase in 2019, representing a potential opportunity for the industry.

Private investment in computers and softwareVoice captioning technology has improved and limited demand for

stenographic services in recent years. Demand for industry services wanes as investment improves such software. Private investment in computers and software is anticipated to rise in 2019.

Crime rateAn increase in the rate of reported crimes leads to higher demand for legal advice, increasing industry revenue as a result. Throughout the past 20 years, the crime rate has declined, mainly because of the aging population. The crime rate is expected to continue to decline in 2019, posing a potential threat to the industry.

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Current Performance

The Stenographic Services industry has encountered a mixed operating environment over the five years to 2019. Demand for in-person stenographic services is largely dependent on government expenditure and legal activity, as stenographers are hired and paid by local, state and federal courts. Stenographers attend legal proceedings and other public speaking events and create transcriptions, as well as provide closed captioning for individuals with hearing imparities.

Over the five years to 2019, industry demand has improved overall amid an uptick in legal activity and recovering state budgets. However, demand conditions have been mixed as courts trimmed expenses by outfitting courtrooms with digital recording devices to replace the need for stenographers, reducing demand for in-person stenographic services in the courtroom. Rising competition from these digital recording systems has hampered more

robust industry growth. However, despite challenging conditions over the past five years, an increasing level of legal activity has precipitated an expansion in demand for industry services. As a result, over the five years to 2019, IBISWorld forecasts industry revenue to rise at an annualized rate of 2.7% to $2.7 billion, including a 1.5% boost in 2019.

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Going digital The proliferation of technology has continued to make big waves within the Stenographic Services industry. Stenographers typically use stenograph machines, which have existed, mostly unchanged, since 1913. Technological advancements have equipped modern stenograph machines with memory cards that are capable of holding a full day’s work. These new technological developments help improve the quality and efficiency of a stenographer’s work and yield more accurate results. Nevertheless, over the past five years, industry operators have struggled to remain afloat as more courts have moved away from in-person stenographers toward digital recording systems. Due to severe budget cuts, courts are seeking ways to implement cost-saving techniques. Underfunded courts are

increasingly looking into using audio and video recording in place of a court reporter for hearings. According to the US Bureau of Labor Statistics, a salaried stenographer can cost the court more than $100,000 annually, with the median salary estimated at $55,120. Comparatively, the average cost of new mid-level audio and video equipment falls between $20,000 and $25,000 per courtroom, respectively.

Although digital recording systems are considered to yield significant cost savings in the long run, high reliance on these technologies poses some potential risks. One strain associated with these systems includes the difficulty to monitor discussions in the courtroom. For example, stenographers can let attorneys know when they talk over each other or stop witnesses to answer questions before




Industry landscape The Stenographic Services industry exhibits a relatively low level of market share concentration, with no singular operator accounting for above 5.0% of total revenue for the industry. The industry is highly competitive and fragmented, primarily composed of small companies. According to the US Census Bureau, more than 90.0% of industry operators employ fewer than 10 people. Due to the high level of accuracy required when recording court cases, delivering quality and efficiency becomes crucial for industry operators to stand out from competitors. Stenographers are required to receive a license and must be able to type at least 225 words per minute to transcribe legal proceedings. Operators that successfully use voice-capture software and other web-based technologies to help improve accuracy and efficiency are able to gain a competitive advantage.

Although the industry exhibits relatively low barriers to entry, primarily in the form of minimal upfront capital requirements, the number of industry operators is expected to contract at an annualized rate of 0.6% to 4,494

independent businesses over the five years to 2019. Due to mounting competition and subdued demand for in-person stenographic services, industry operators have been consolidating or exiting the industry. The remaining operators are leveraging technology to improve employee output and reduce wage costs. Consequently, industry employment is expected to decline at an annualized rate of 0.3% during the same five-year period to reach 13,015 workers.

Industry operator exits have reduced internal competition and enabled industry operators to charge higher prices for services that cannot be replaced by technological substitutes. Accelerated by decreasing wage costs, the average industry profit margin, measured as earnings before interest and taxes, is expected to improve marginally during the current period, reaching an estimated 12.2% of revenue in 2019.

Industry operator exits have reduced internal competition

the attorney is finished talking, whereas audio recordings are unable to interact. Furthermore, glitches in digital systems may delay the workflow of courts and even increase operating costs. For example, in Kentucky, where courts have used video recordings for more than 30

years, a judge in Jefferson County had to rehear a murder case due to the malfunction of the court’s digital recording system. However, stenographers can still be brought into a courtroom when an attorney requests one and pays for the service.

Going digital continued




Alternative markets In addition to courts’ subdued demand for stenographic services, stenographers will likely find reduced relief from outside markets. Stenographers can provide real-time closed captioning for those with hearing imparities or take depositions for law firms or agencies. Stenographers who work with deaf individuals and those with hearing imparities use communication access real-time translation (CART) to convert speech to text. According to the National Association of the Deaf (NAD), CART services enable instant translation of spoken words into text by using a stenotype machine, computer or real-time software on a local or remote basis. Stenographers accompany their clients to various events, physician’s appointments or any other place where their services are needed. While applications such as Google voice-enabled translators have limited capabilities, their use for informal translations has limited industry demand.

Other stenographers are employed by high schools and college campuses and provide closed captioning of lectures to students with hearing imparities or those learning English as a second language. Despite being a threat, new technological advancements can also enhance stenographers’ work, enabling them to work remotely over an internet or phone connection.

Under federal laws, broadcasting and cable companies and other satellite TV service providers must provide closed captioning for all new English-language programs, without exception. In some locations, closed captioning is also required for televised emergency messages. The Federal Communications Commission reinforces closed captioning rules. In addition, associations such as the NAD are making efforts to provide millions of hearing-impaired individuals with access to radio, one of the most popular forms of entertainment and communication. For example, National Public Radio (NPR) has tested real-time captioning streamed over the internet for some of its programs. In addition to making these captions accessible through the internet, NPR tested the use of HD radio technology to display the captions on specialized receivers, which could be used anywhere. These efforts are anticipated to facilitate demand for stenographic services over the next five years.

Industry Outlook

Over the five years to 2024, the Stenographic Services industry is anticipated to continue its expansionary trajectory, albeit at a decelerated pace. The trends that have affected demand for industry services over the previous five years are expected to continue to shape the industry during the five-year outlook period. Federal and state courts will likely find new ways to save on costs, including replacing in-person stenographers with digital recording

systems that consequently decrease demand for stenographers in the courtroom. Additionally, an anticipated acceleration in the decline of the crime rate from the previous five-year period will likely reduce the amount of legal activity, hindering demand for the industry’s courtroom services. As a result of these trends, IBISWorld forecasts industry revenue will grow at a slower rate, rising an estimated annualized 0.7% to total $2.8 billion.

Closed-captioning efforts are anticipated to facilitate demand for stenographic services




Industry landscape The Stenographic Services industry will likely continue to remain highly competitive and fragmented. Over the five years to 2024, the number of industry operators is projected to stagnate as companies continue to consolidate their operations or exit the industry. Overall, this trend will lead industry enterprises to total 4,492 independent operators by 2024. However, despite increasingly competitive conditions, industry employment is forecast to rise slightly during the five-year outlook period, increasing at an annualized rate of 0.4% during the period to total 13,278 workers. While significant outside competition from technology is expected to persist, an overall uptick in industry services provided will

necessitate a small increase in the industry’s workforce. Meanwhile, the average industry profit margin, measured as earnings before interest and taxes, is anticipated to improve modestly over the five years to 2024. While demand conditions for the industry will remain mixed, consolidation of operations will enable a rise in the average industry profit margin, which is expected to reach 12.3% of annual revenue by 2024.

An uptick in industry services provided will necessitate a small increase in the industry’s workforce



Industry PerformanceIndustry value added is contracting

The number of industry operators is declining

Substitute technologies are siphoning industry demand

Life Cycle Stage




Industry Life Cycle IBISWorld estimates that the Stenographic Services industry is in the declining stage of its life cycle. Over the 10 years to 2024, the industry’s value added (IVA), or its contribution to the overall economy, is expected to rise at a relatively sluggish annualized rate of 1.1%. Comparatively, US GDP is projected to rise at an annualized rate of 2.0% during the same 10-year period. Sluggish IVA growth amid an expanding national economy is highly indicative of a declining industry life cycle stage.

Although there has been a wide acceptance and adoption of stenographic services, voice-caption technology has captured a growing share of the market. Due to subdued demand for in-person stenographic services, many industry operators have been forced to consolidate their operations or exit the market. Consequently, IBISWorld estimates that the number of industry operators will decline at an annualized rate of 0.3% over the next 10 years to 2024 to total 4,492 independent businesses.

This industry is in Decline



Products and Services

Stenographic servicesStenotype recording refers to the activity in which a court reporter transcribes the court proceedings using a stenograph machine. A stenograph machine is an electronic device, similar to a keyboard, with only 22 keys and a memory card that records the day’s typing. Stenotype is the most popular way for a court reporter to record the events of a trial, as it enables the court reporter to easily read back what was said earlier in the trial if called upon

by an attorney or judge. This segment’s share of revenue for the Stenographic Services industry has been declining over the past five years, however, as court reporters increasingly use advances in technology to aid in recording court cases.

OtherStenographers offer additional services such as making copies of transcripts. Typically, the attorneys will pay for copies of transcripts if they are required.

Products & MarketsSupply Chain | Products and Services | Demand Determinants Major Markets | International Trade | Business Locations

KEY BUYING INDUSTRIES

54111 Law Firms in the US Law firms will often purchase the transcript of the court case from the court stenographer.

92 Public Administration in the US Local, state and federal courts use stenography services to record what is said during a court case.

KEY SELLING INDUSTRIES

32311 Printing in the US Industry operators use printing services.

42342 Copier & Office Equipment Wholesaling in the US Industry operators use copiers and other various office equipment, such as fax machines.

42343 Computer & Packaged Software Wholesaling in the US Stenographers use computers and printers to transcribe court proceedings.

42411 Paper Wholesaling in the US Stenographers use paper to print the transcribed court proceedings.

Supply Chain

Products and services segmentation (2019)

Total $2.7bn

35.3%State government stenographic services

32.2%Other stenographic services

27.0%Local government stenographic services

5.5%Additional services




Products & Markets

Major Markets State courtsState courts are the largest market for the Stenographic Services industry, accounting for an estimated 37.4% of industry revenue in 2019. However, this market’s share of revenue has been declining over the past five years as state governments look for ways to cut costs to meet their budgets. Many state courts are turning to digital recording devices to replace stenographers and cut costs. State courts require stenographers to be licensed according to the state’s regulations, making it difficult for

stenographers to switch between states’ courts. The limitation imposed on state stenographers is also contributing to this segment’s declining share of revenue.

Local courtsLocal courts account for an estimated 28.6% of industry revenue, representing the second-largest market for industry services. Local courts have the highest salaries for stenographers, according to the Bureau of Labor Statistics. This segment’s market share has been slightly rising over the past five years, as local courts have been

Demand Determinants

Demand for the Stenographic Services industry is heavily dependent on government expenditure and legal activity. Stenographers are hired and paid for by local, state and federal courts, as well as private law firms and other customers. As government expenditure decreases, courthouses have to cut back on expenses to meet budget constraints. Over the past five years, state and local courts have been increasingly making cut backs in expenses. One of the ways these courts are cutting down is by outfitting courtrooms with digital recording devices to replace the need for stenographers. The audio and video recordings are able to record court proceedings more affordably than stenographers, lessening the demand for industry services.

Conversely, increasing legal activity helps boost industry demand since more court cases require more stenographers to record the proceedings. Legal activity

can include criminal cases, lawsuits, intellectual property cases and civil cases. Increasing legal activity translates to a higher number of court cases, boosting demand for stenographic services. Additionally, a rising crime rate will boost legal activity, as there will be more criminal trials. Stenographers typically record criminal trials; therefore, as the crime rate rises, so will industry demand.

Technological advances also play a major role in industry demand. As technological advances make stenographers more efficient and accurate, this increased efficiency helps boost industry demand. Over the past five years, voice silencers, the handheld electronic masks court reporters use to record court proceedings, have become increasingly advanced. Voice silencers are now capable of providing real-time services in the same manner as stenograph machines, boosting the court reporter’s speed and accuracy when recording court cases.

Products and Servicescontinued

Additionally, the courtroom will keep a copy of a transcript for public record. Stenographers also provide real-time closed captioning services, which enables deaf individuals in the courtroom to be able to read what is being discussed during the

proceedings in real time. While stenographers usually write down what is happening during the trial, real-time closed captioning enables the stenographers to transfer their typing from the stenograph machine to a TV monitor in the courtroom.



Products & Markets

International Trade As a service-based industry, the Stenographic Services industry does not participate in international trade, with industry operations being largely

domestic. However, as the industry is becoming more globalized, industry operators are increasingly offering their services in countries abroad.

Major Marketscontinued

slow to switch to digital recordings. Additionally, local courts are the most numerous out of local, state and federal courts. Due to the high volume of local courts and the high salaries that local courts pay to stenographers, this segment’s share of revenue has nearly caught up to state courts within the past five years.

Other customersOther customers for the industry include private law firms, nonprofit organizations

and other companies that require court reporting and other litigation support services, such as closed captioning for recorded and live events. Federal courts are also included within this segment and the most likely to need a stenographer to read back a transcription during a trial, as these cases tend to be high profile. Digital recordings do not have a feature to read back what was said in real time, therefore limiting technology substitutions in this segment.

Major market segmentation (2019)

Total $2.7bn

37.4%State courts

34.0%Other customers

28.6%Local courts




Products & Markets

Business Locations 2019

MO1.6

West

West

West

Rocky Mountains Plains

Southwest

Southeast

New England

VT0.3

MA1.4

RI0.3

NJ2.1

DE0.3

NH0.1

CT0.3

MD1.2

DC0.5

1

5

3

7

2

6

4

8 9

Additional States (as marked on map)

AZ2.5

CA12.2

NV1.7

OR0.9

WA2.2

MT0.6

NE0.6

MN2.0

IA0.6

OH1.9 VA

2.3

FL17.8

KS1.1

CO1.7

UT1.6

ID0.5

TX5.6

OK2.2

NC1.6

AK0.2

WY0.2

TN0.6

KY1.2

GA3.6

IL5.2

ME0.4

ND0.3

WI0.8 MI

2.5 PA2.6

WV0.6

SD0.3

NM0.7

AR0.6

MS0.7

AL1.0

SC1.3

LA2.9

HI0.4

IN1.7

NY5.1 5

67

8

321

4

9


Mid- Atlantic

Establishments (%)

Less than 3% 3% to less than 10% 10% to less than 20% 20% or more

Great Lakes



Products & Markets

Business Locations Establishments for the Stenographic Services industry are located largely in line with population trends. The industry is concentrated in the Southeast, Mid-Atlantic and Western regions of the United States, the three regions with the highest concentrations of the national population. Stenographers are also located in close proximity to law firms and courtrooms as these are the primary industries that stenographers work with.

The Southeast region accounts for an estimated 33.9% of industry establishments. Within the region, Florida alone is home to 17.8% total industry establishments. The Southeast is the most heavily concentrated region for this industry as it is also home to a significant proportion of law firms. This region additionally accounts for the greatest proportion of the US population at 25.7% of the total.

The West region is the second-most concentrated region of industry activity, accounting for 17.6% of industry establishments. California is the most population-dense state in this region and is expected to account for 12.2% of total establishments. There is a large concentration of corporate clients located in this region, especially healthcare and technology companies; these businesses often require legal services for intellectual property and copyright concerns, in turn requiring stenographers to record the court cases.

The Mid-Atlantic region is also home to a significant concentration of industry establishments, accounting for an estimated 11.7% of industry establishments. New York and Washington, DC are both home to high percentages of law firms due to the financial sector being based in New York and the federal court cases in Washington, DC requiring a high amount of law firms. As a result of the heavy court activity in this region, the Mid-Atlantic provides favorable demand conditions for stenographers located there, leading to its high share of industry establishments.

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Cost Structure Benchmarks

The following discussion represents the cost structure of an average operator in the Stenographic Services industry.

WagesAs a service-based industry, the industry is highly labor intensive, with wages representing an expected 22.7% of annual revenue in 2019. Despite increasing use of technology over the past five years, the industry remains highly labor intensive; this is unlikely to change soon. The cost of labor for this industry far outweighs the cost of capital because stenographers primarily require a stenograph machine, which is relatively inexpensive. Over the past five years, wages as a share of revenue have declined marginally in light of increasing use of digital recording services.

PurchasesPurchases are expected to account for 30.7% of annual revenue for the industry in 2019. Although the industry is primarily service-based, industry operators require equipment such as stenograph machines, cases, ribbon and ink; paper trays; chargers and adapters; key cushions and ergonomic wrist supports to assist with providing stenographic services. Additionally, industry stenographers use audio recording devices to double check the accuracy of their transcriptions. However, such devices are typically purchased by the courts and are installed in the courtrooms; industry operators do not have to purchase these devices. Over the past five years, industry purchase costs have risen slightly as a share of annual revenue.

Key Success Factors Access to highly skilled workforceThis industry requires highly skilled stenographers who are able to pass a rigorous certification process.

Access to the latest available and most efficient technology and techniquesStenographers need to be efficient when transcribing court cases. Industry operators need to have access to the latest technology and techniques to aid in these transcriptions.

Prompt delivery to marketStenographers are expected to have prompt and efficient services. Industry operators are also expected to produce transcripts on demand to their clients.

Having a good reputationThis industry is highly competitive due to how fragmented the market is. Due to the high competition it is important for industry operators to have a good reputation to gain market share.

Market Share Concentration

Market share concentration in the Stenographic Services industry is low, as no industry operator accounts for a notable share of industry revenue. Indeed, in 2019, the top two industry companies are expected to collectively control just 2.0% of annual revenue for the industry. This industry is highly fragmented and is composed of predominantly small companies, with

over 90.0% of industry operators employing fewer than 10 workers. This is in line with other service-based industries, which are typically fragmented because operators have low purchase costs and do not benefit from economies of scale. Market share concentration for the industry is anticipated to remain low over the next five years.

Competitive LandscapeMarket Share Concentration | Key Success Factors | Cost Structure Benchmarks Basis of Competition | Barriers to Entry | Industry Globalization

Level Concentration in this industry is Low

IBISWorld identifies 250 Key Success Factors for a business. The most important for this industry are:



Competitive Landscape

Cost Structure Benchmarkscontinued

ProfitIBISWorld estimates that operating profit, measured by earnings before interest and taxes, accounts for 12.2% of annual revenue for the Stenographic Services industry in 2019. The industry has a large number of small players due to its relatively low barriers to entry. The fragmented nature of the industry increases price competition, which ultimately hampers profit growth. Nonetheless, recent company exits have reduced internal competition for remaining industry operators. Consequently, industry margins have been able to improve modestly over the past five years, up from 12.1% in 2014.

DepreciationSignificant expenses include the lease or depreciation of equipment such as computers and office-related software. IBISWorld estimates that depreciation

expenses represent 1.4% of industry revenue in 2019.

MarketingMarketing costs are relatively minor for industry operators, accounting for an anticipated 2.4% of annual industry revenue.

RentRental costs consume an anticipated 5.9% of annual industry revenue. This category includes any office spaces leased by industry stenographers.

UtilitiesUtilities costs are relatively low for the industry, accounting for an estimated 2.3% of annual revenue in 2019.

OtherAdditionally, industry operators incur a variety of other expenses related to the

Sector vs. Industry Costs

n Profi tn Wagesn Purchasesn Depreciationn Marketingn Rent & Utilitiesn Other

Average Costs of all Industries in sector (2019)

Industry Costs (2019)

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Barriers to Entry The Stenographic Services industry is characterized by low barriers to entry due to the relatively minimal upfront capital costs required to operate in this market. The industry’s low level of capital intensity makes it comparatively easy for companies to enter the industry as there is no large initial investment. The primary capital required for industry operators are stenograph machines, which are relatively inexpensive compared with a stenographer’s salary. These machines are easily portable and do not require much space for storing; additionally, these machines do not change often, enabling an operator to continue using the same

stenograph machine for multiple years, keeping costs low.

Labor is the largest expense for this industry. The main barrier to entry for

Basis of Competition The Stenographic Services industry exhibits a high level of competition. The market for industry services is highly fragmented and digital recording is increasingly cutting into industry demand. The majority of industry operators are small companies that serve local or state courtrooms.

Internal competitionWith each industry operator accounting for a relatively negligible share of total industry revenue, competition is high among companies trying to enter the saturated and declining market. Industry competition is primarily based on quality and efficiency, as it is extremely important for court cases to be recorded accurately. Stenographers are required to be licensed and must have the ability to write at least 225 words per minute to be permitted to transcribe legal proceedings. Some companies are able to gain a

competitive advantage by using voice-recognition software and other web-based technologies to help improve the stenographer’s accuracy and efficiency.

External competitionOver the past five years, stenographers have experienced increasing competition from audio and video recording services. With stagnant state and local government funding, audio and video recordings are increasingly being placed into courtrooms to reduce the need for stenographers in an effort to cut costs. Consequently, the increasing level of digital recording in courtrooms is siphoning revenue away from industry operators. However, courts still rely on stenographers for felony and high-profile cases to be able to have the stenographer read back what was said in real time and ensure quality, a function currently not available with digital recordings.

Cost Structure Benchmarkscontinued

day-to-day costs of running a business. These costs include legal, administrative and insurance expenses. Communication costs in terms of telephones and high-

speed broadband access can also be significant. Overall, this category is anticipated to represent the remaining 36.0% of revenue in 2019.

Level & Trend Competition in this industry is High and the trend is Increasing

Level & Trend Barriers to Entry in this industry are Low and Steady

Barriers to Entry checklist

Competition HighConcentration LowLife Cycle Stage DeclineCapital Intensity LowTechnology Change MediumRegulation and Policy MediumIndustry Assistance High





Industry Globalization

Globalization in the Stenographic Services industry is low because the majority of industry operators only serve local courts. However, industry operators are increasingly expanding their operations overseas to record international court cases. For example, industry player Planet

Depos LLC maintains operations globally throughout the Americas, Europe, the Middle East and Asia-Pacific regions. Improving global telecommunications has made it easier for stenographers to operate internationally, increasing the industry’s level of globalization.

Barriers to Entrycontinued

industry operators is securing skilled and certified court reporters. Court reporters must be licensed in their state and able to type a minimum of 225 words per minute in order to record legal proceedings. Additionally, federal courts require

stenographers to have completed a training program credited by the National Court Reporters Association. The high level of skill required to become a stenographer can pose a potential barrier for new entrants.

Level & Trend Globalization in this industry is Low and the trend is Increasing



Other Company Performance

Planet Depos LLC (Planet Depos) is a global provider of court reporting, interpretation and trial services. Headquartered in Washington, DC, the company operates over 50 offices worldwide, with locations across North, Central and South America; Europe; Asia and the South Pacific; Africa and the Middle East. Additionally, Planet Depos

maintains more than 1,000 court reporters and has serviced more than 55,000 clients. The company provides domestic court reporting, videography, videoconferencing, interpretation and trial support services through its 40 US office locations. In 2019, Planet Depos is expected to account for less than 1.0% of annual revenue for the industry.

Other Company Performance

Veritext Legal Solutions (Veritext) is a leading provider of deposition and litigation support services. The company provides a range of services including court reporting services, deposition services, exhibition management services, client support, video technologies, training programs and privacy and data protection

services. The company also offers a suite of online and mobile management tools, such as case management and support and online scheduling. Veritext operates 52 brick-and-mortar offices nationwide, as well as several affiliate locations. In 2019, the company is expected to control just over 1.0% of annual industry revenue.

Other Companies The Stenographic Services industry is highly fragmented, with no industry operator accounting for more than 5.0% of industry revenue. Furthermore, an estimated 86.1% of establishments in this industry employ fewer than four workers, while less than 6.0% of industry

operators have more than 10 employees. Due to the small size of industry operators, there are no major players in this industry; however, there are a handful of companies operating on a national scale that manage to generate a small portion of industry revenue.

Major CompaniesThere are no Major Players in this industry | Other Companies

Veritext Legal Solutions Market Share: 1.1%

Planet Depos LLC Market Share: 0.9%



Capital Intensity Capital intensity in the Stenographic Services industry is low. IBISWorld estimates that for every $1.00 spent on wages, industry operators will allocate $0.06 toward capital investment. As a service-based industry, the cost of labor for this industry far outweighs the cost of capital; stenographers primarily only require a stenograph machine, which is relatively inexpensive. The industry’s low level of capital intensity enables small players and nonemployers to enter this industry with relatively minimal start-up costs. The use of technology, such as the increasing use of audio recordings, has increased within this industry over the past five years. Stenographers use

audio recordings to double check the accuracy of their transcriptions. However, the digital recording devices

Operating ConditionsCapital Intensity | Technology & Systems | Revenue VolatilityRegulation & Policy | Industry Assistance

Capital Intensity

0.5

0.0

0.1

0.2

0.3

0.4

SOURCE: WWW.IBISWORLD.COMDotted line shows a high level of capital intensity

Capital units per labor unit

Stenographic Services

Administration, Business Support and Waste Mgmt Services

Economy

Level The level of capital intensity is Low



Operating Conditions

Revenue Volatility The Stenographic Services industry has exhibited a low level of revenue volatility over the five years to 2019. Changes in government expenditure and legal activity largely affect demand for industry services. A decrease in government expenditure will prompt court houses to trim their expenses to balance their budgets, thus replacing in-person

stenographic services with digital recording systems. In addition, changes in legal activity and the crime rate also affect demand for stenographic services. Overall, changes in government expenditure and legal activity have exhibited some volatility over the past five years, leading industry revenue to fluctuate modestly.

Technology and Systems

Court reporters typically use a stenograph machine, which have existed without major changes since 1913. The most significant difference is that modern machines have memory cards to hold a full day’s work. Stenograph machines are similar to keyboards, but only have 22 keys to make it easier for court reporters to type at the same speed as speech.

The industry’s use of technology has increased over the past five years. Courtrooms in the United States are

increasingly being outfitted with audio and video equipment to record the events of a court case. Stenographers will sometimes use audio recordings to double check their transcriptions to ensure accuracy. However, many courts are using audio and video recordings instead of a court reporter as a way to cut costs and save money. Digital recordings are currently being increasingly used for misdemeanors, while felony cases still use the services of a stenographer.

Capital Intensitycontinued

are typically purchased by the courts and are installed in the courtrooms. Industry operators do not have to

purchase these devices, thus keeping the industry’s level of capital intensity low.

Level The level of technology change is Medium

Level The level of volatility is Low



Operating Conditions

Industry Assistance Government assistance is high in the Stenographic Services industry, as stenographers primarily generate their revenue through the government. Court reporters are hired by local, state and federal courts, in addition to private law firms and other customers, to transcribe what is said during a court case. In 2019, the industry is expected to generate just over 65.0% of its revenue from services to local, state and federal courts.

There are several national associations that assist industry operators. The National Court Reporters Association (NCRA) certifies training programs for court reporters, offers various certifications for industry operators and argues for legislation to help stenographers. Additionally, the United States Court Reporters Association (USCRA) offers training programs for stenographers. The USCRA also helps develop industry standards and efficient techniques for transcribing.

Regulation and Policy The Stenographic Services industry is subject to a moderate level of regulation, as court reporters must be certified to record court cases in most states. Individual states have their own examinations for stenographers to receive the title of Certified Court Reporter (CCR). Additionally, many court reporters receive training at a vocational or technical school before taking their state’s examination to enhance their typing speeds and accuracy. The National Court Reporters Association (NCRA) certifies top training programs for industry stenographers. Federal courts

require stenographers to have attended an NCRA certified program before taking the CCR examination.

Additionally, court reporters can take other certificate examinations to distinguish their abilities. The NCRA offers several certificates, such as the Registered Professional Reporter, Registered Merit Reporter and the Registered Diplomat Reporter recognitions. The United States Court Reporters Association also offers a Federal Certified Realtime Reporter certification for stenographers who work in federal courts.

Level & Trend The level of Regulation is Medium and the trend is Steady

Level & Trend The level of Industry Assistance is High and the trend is Steady



Key StatisticsRevenue

($m)

Industry Value Added

($m)Establish-

ments Enterprises Employment Exports ImportsWages ($m)

Domestic Demand

Crime rate (Crimes per

100,000 people)2010 2,645.9 999.6 4,927 4,768 15,317 -- -- 684.8 N/A 3,350.42011 2,584.9 944.6 4,905 4,738 14,196 -- -- 655.1 N/A 3,292.52012 2,389.5 909.2 4,946 4,838 13,604 -- -- 598.6 N/A 3,255.82013 2,327.2 881.3 4,834 4,711 13,122 -- -- 585.8 N/A 3,112.42014 2,368.9 905.0 4,752 4,630 13,245 -- -- 585.2 N/A 2,971.82015 2,413.9 887.9 4,721 4,563 12,950 -- -- 586.2 N/A 2,927.82016 2,535.9 950.8 4,601 4,456 12,644 -- -- 593.2 N/A 2,913.62017 2,612.1 945.2 4,633 4,480 12,811 -- -- 603.1 N/A 2,838.32018 2,669.2 970.6 4,649 4,491 12,925 -- -- 610.0 N/A 2,645.42019 2,710.3 983.2 4,657 4,494 13,015 -- -- 615.2 N/A 2,534.32020 2,723.8 986.7 4,643 4,477 13,030 -- -- 616.4 N/A 2,416.72021 2,740.1 991.4 4,638 4,469 13,071 -- -- 618.7 N/A 2,342.42022 2,764.3 999.1 4,645 4,473 13,140 -- -- 622.4 N/A 2,266.52023 2,783.6 1,005.7 4,651 4,478 13,204 -- -- 625.7 N/A 2,167.22024 2,800.5 1,011.4 4,667 4,492 13,278 -- -- 629.3 N/A 2,061.5

IVA/Revenue (%)

Imports/Demand

(%)

Exports/Revenue

(%)

Revenue per Employee

($’000)Wages/Revenue

(%)Employees

per Est.Average Wage

($)

Share of the Economy

(%)2010 37.78 N/A N/A 172.74 25.88 3.11 44,708.49 0.012011 36.54 N/A N/A 182.09 25.34 2.89 46,146.80 0.012012 38.05 N/A N/A 175.65 25.05 2.75 44,001.76 0.012013 37.87 N/A N/A 177.35 25.17 2.71 44,642.58 0.012014 38.20 N/A N/A 178.85 24.70 2.79 44,182.71 0.012015 36.78 N/A N/A 186.40 24.28 2.74 45,266.41 0.012016 37.49 N/A N/A 200.56 23.39 2.75 46,915.53 0.012017 36.19 N/A N/A 203.90 23.09 2.77 47,076.73 0.012018 36.36 N/A N/A 206.51 22.85 2.78 47,195.36 0.012019 36.28 N/A N/A 208.24 22.70 2.79 47,268.54 0.012020 36.23 N/A N/A 209.04 22.63 2.81 47,306.22 0.012021 36.18 N/A N/A 209.63 22.58 2.82 47,333.79 0.012022 36.14 N/A N/A 210.37 22.52 2.83 47,366.82 0.002023 36.13 N/A N/A 210.81 22.48 2.84 47,387.16 0.002024 36.11 N/A N/A 210.91 22.47 2.85 47,394.19 0.00

Figures are in inflation-adjusted 2019 dollars.

Revenue (%)

Industry Value Added

(%)

Establish-ments

(%)Enterprises

(%)Employment

(%)Exports

(%)Imports

(%)Wages

(%)

Domestic Demand

(%)Crime rate

(%)2011 -2.3 -5.5 -0.4 -0.6 -7.3 N/A N/A -4.3 N/A -1.72012 -7.6 -3.7 0.8 2.1 -4.2 N/A N/A -8.6 N/A -1.12013 -2.6 -3.1 -2.3 -2.6 -3.5 N/A N/A -2.1 N/A -4.42014 1.8 2.7 -1.7 -1.7 0.9 N/A N/A -0.1 N/A -4.52015 1.9 -1.9 -0.7 -1.4 -2.2 N/A N/A 0.2 N/A -1.52016 5.1 7.1 -2.5 -2.3 -2.4 N/A N/A 1.2 N/A -0.52017 3.0 -0.6 0.7 0.5 1.3 N/A N/A 1.7 N/A -2.62018 2.2 2.7 0.3 0.2 0.9 N/A N/A 1.1 N/A -6.82019 1.5 1.3 0.2 0.1 0.7 N/A N/A 0.9 N/A -4.22020 0.5 0.4 -0.3 -0.4 0.1 N/A N/A 0.2 N/A -4.62021 0.6 0.5 -0.1 -0.2 0.3 N/A N/A 0.4 N/A -3.12022 0.9 0.8 0.2 0.1 0.5 N/A N/A 0.6 N/A -3.22023 0.7 0.7 0.1 0.1 0.5 N/A N/A 0.5 N/A -4.42024 0.6 0.6 0.3 0.3 0.6 N/A N/A 0.6 N/A -4.9

Annual Change

Key Ratios

Industry Data




Jargon & Glossary

BARRIERS TO ENTRY High barriers to entry mean that new companies struggle to enter an industry, while low barriers mean it is easy for new companies to enter an industry.

CAPITAL INTENSITY Compares the amount of money spent on capital (plant, machinery and equipment) with that spent on labor. IBISWorld uses the ratio of depreciation to wages as a proxy for capital intensity. High capital intensity is more than $0.333 of capital to $1 of labor; medium is $0.125 to $0.333 of capital to $1 of labor; low is less than $0.125 of capital for every $1 of labor.

CONSTANT PRICES The dollar figures in the Key Statistics table, including forecasts, are adjusted for inflation using the current year (i.e. year published) as the base year. This removes the impact of changes in the purchasing power of the dollar, leaving only the “real” growth or decline in industry metrics. The inflation adjustments in IBISWorld’s reports are made using the US Bureau of Economic Analysis’ implicit GDP price deflator.

DOMESTIC DEMAND Spending on industry goods and services within the United States, regardless of their country of origin. It is derived by adding imports to industry revenue, and then subtracting exports.

EMPLOYMENT The number of permanent, part-time, temporary and seasonal employees, working proprietors, partners, managers and executives within the industry.

ENTERPRISE A division that is separately managed and keeps management accounts. Each enterprise consists of one or more establishments that are under common ownership or control.

ESTABLISHMENT The smallest type of accounting unit within an enterprise, an establishment is a single physical location where business is conducted or where services or industrial operations are performed. Multiple establishments under common control make up an enterprise.

EXPORTS Total value of industry goods and services sold by US companies to customers abroad.

IMPORTS Total value of industry goods and services brought in from foreign countries to be sold in the United States.

INDUSTRY CONCENTRATION An indicator of the dominance of the top four players in an industry. Concentration is considered high if the top players account for more than 70% of industry revenue. Medium is 40% to 70% of industry revenue. Low is less than 40%.

INDUSTRY REVENUE The total sales of industry goods and services (exclusive of excise and sales tax); subsidies on production; all other operating income from outside the firm (such as commission income, repair and service income, and rent, leasing and hiring income); and capital work done by rental or lease. Receipts from interest royalties, dividends and the sale of fixed tangible assets are excluded.

INDUSTRY VALUE ADDED (IVA) The market value of goods and services produced by the industry minus the cost of goods and services used in production. IVA is also described as the industry’s contribution to GDP, or profit plus wages and depreciation.

INTERNATIONAL TRADE The level of international trade is determined by ratios of exports to revenue and imports to domestic demand. For exports/revenue: low is less than 5%, medium is 5% to 20%, and high is more than 20%. Imports/domestic demand: low is less than 5%, medium is 5% to 35%, and high is more than 35%.

LIFE CYCLE All industries go through periods of growth, maturity and decline. IBISWorld determines an industry’s life cycle by considering its growth rate (measured by IVA) compared with GDP; the growth rate of the number of establishments; the amount of change the industry’s products are undergoing; the rate of technological change; and the level of customer acceptance of industry products and services.

NONEMPLOYING ESTABLISHMENT Businesses with no paid employment or payroll, also known as nonemployers. These are mostly set up by self-employed individuals.

PROFIT IBISWorld uses earnings before interest and tax (EBIT) as an indicator of a company’s profitability. It is calculated as revenue minus expenses, excluding interest and tax.

Industry Jargon

IBISWorld Glossary

COMMUNICATION ACCESS REAL-TIME TRANSLATION (CART) Services that enable instant translation of spoken words into text by using a stenotype machine, computer or real-time software on a local or remote basis.

STENOGRAPH MACHINE An electronic device, similar to a keyboard, with only 25 keys and a memory card that records the day’s typing.

VOICE-RECOGNITION TECHNOLOGY Software that transcribes spoken words to on-screen text.



Jargon & Glossary

VOLATILITY The level of volatility is determined by averaging the absolute change in revenue in each of the past five years. Volatility levels: very high is more than ±20%; high volatility is ±10% to ±20%; moderate volatility is ±3% to ±10%; and low volatility is less than ±3%.

WAGES The gross total wages and salaries of all employees in the industry. The cost of benefits is also included in this figure.

IBISWorld Glossary continued


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