SecProbe.io

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549 -4631

DIVISION OF
CORPORATION FINANCE
         August 22, 2012

Via E-Mail
Mr. Ronald Knutson
Senior Vice President and Chief Financial Officer
Lawson Products , Inc.
1666 East Touhy Avenue
Des Plaines, IL  60018

 Re: Lawson Products , Inc.
  Form 10 -K for Fiscal Year Ended December 31, 2011
Filed March 1, 2012
  Form DEF 14A
  Filed April 5, 2012
Form 10 -Q for  Fiscal Quarter Ended June 30, 2012
Filed August 9, 2012
  File No.   0-10546

Dear Mr.  Knutson :

We have reviewed your filing s and have the following comments.  In some of our
comments, we may ask you to provide us with information so we may better understand your
disclosure.

Please respond to this letter within ten business days by amending your filing, by
providing the r equested information, or by advising us when you will provide the requested
response.   If you do not believe our comments apply to your facts and circumstances or do not
believe an amendment is appropriate, please  tell us why in your response.

After rev iewing any amendment to your filing and the information you provide in
response to these  comments, we may have  additional comments.

Definitive Proxy Statement

Compensation Discussion and Analysis

Determination of Competitive Practices, page 17

1. We note that you disclose in the first paragraph on page 18 that you use data from peer
groups to bench mark total direct compensation.  In future filings, for each named
executive officer, please disclose where you target total direct compensation against the
peer companies and where actual payments fell within the targeted parameters.  To the

Mr. Ronald Knutson
Lawson Product s, Inc.
August 22, 2012
Page 2

 extent actual compensation was outside a targeted percentile range, please explain why .
Please show us what your disclosure would look like.

Form 10 -Q for Fiscal Quarter  Ended June 30, 2012

Consolidated Financial Statements

Note 8 – Contingent Liability, page 10

2. We note your disclosures regarding the employment tax examination and the contingent
liability you recorded related to Drummond.  Please revise future filings, including your
next Form 10 -Q, to address the following:
 Explain how you determined the amount you accrued during 2011 , including, to
the extent applicable, if and how you assessed any additional potential liability for
time periods and/or subsidi aries, in addition to those currently being examined;
 Explain why you believe the amount you accrued represents your best estimate of
the costs to resolve this matter, particularly in light of the amount of the notice of
adjustment you received in January 2012; and
 Explain the process and anticipated time frame for resolving this matter with the
IRS.
Please provide us your proposed disclosures with your response letter.

Management’s Discussion and Analysis of Financial Condition and Results of Operations, page
11

3. We note the declining trends in sales and gross profit margins  during the interim periods .
Please revise future filings, including your next Form 10 -Q, to more fully address the
following:
 Disclose and discuss changes in your marker share relativ e to your competitors
during the periods presented;
 Quantify total sales to government bases that support troop deployment s and
address if additional declines in such sales are anticipated;
 Quantify the impact of and explain the reasons for each factor you  identify as
impacting sales and gross profits during each period presented, including, lower
freight revenues, increases in small customer attrition, declines in sales
representatives, and lower outbound freight recoveries;
 In light of the inventory reser ves you recorded, address the anticipated impact on
future sales of your decision to discontinue certain products;

Mr. Ronald Knutson
Lawson Product s, Inc.
August 22, 2012
Page 3

  In light of your intention to continue to increase the percentage of sales from
strategic customers, address the anticipated impact on future  gross profit margins
of this strategy;
 Explain the facts and circumstances that resulted in the entire goodwill balance
being impaired during the quarter ended June 30, 2012; and
 Explain the negative factors that resulted in you recording a tax valuation
allowance during the quarter ended June 30, 2012.

Closing Comments

We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filing to be certain that the filing includes the information the Securities Exchange Act of
1934 and all applica ble Exchange Act rules require.   Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of t he disclosures they have made.

In responding to our comments, please provide  a written statement from the company
acknowledging that:

 the company is responsible for the adequacy and accuracy of the disclosure in the
filing;

 staff comments or changes to disclosure in response to staff comments do not
foreclose the Commission from taking any action with respect to the filing; and

 the company may not assert staff comments as a defense in any proceeding initiated
by the Commission or any person under the  federal securities laws of the United
States.

You may contact Kevin Stertzel  at (202) 551 -3723 , or Anne McConnell at (202) 551 -
3709 if you have questions regarding comments on the financial statements and related matters.
Please contact Sherry Haywood  at (202) 551 -3345 , with questions regarding legal comments , or
me at (202) 551 -3768  with any other questions.

        Sincerely,

/s/ W. John Cash

W. John Cash
Branch Chief