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February 4, 2010

U.S. Securities and Exchange Commission

Division of Corporation Finance

100 F Street N.E.

Mail Stop 4631

Washington, D.C. 20549

Attn: John Hartz, Senior Assistant Chief Accountant

    RE:

    Lawson Products, Inc.

Form 10-K for Fiscal Year Ended December 31, 2008

Form 10-K/A Filed April 29, 2009

Form 10-Q for the Period Ended September 30, 2009

Form 8-K Filed August 25, 2009

File No. 0-10546

Dear Mr. Hartz,

     As Senior Vice President and Chief Financial Officer of Lawson Products, Inc. (“Lawson” or the
“Company”), I am responding to the letter from the staff of the Division of Corporation Finance of
the United States Securities and Exchange Commission (“Staff”) dated December 31, 2009, containing
comments on the above-referenced filing. For your convenience, we have included in this letter
each of the Staff’s comments before providing our response to that comment. As noted in our
responses below, all proposed revisions refer to Lawson’s intended method for complying with the
Staff’s comments in Lawson’s future filings with the Commission, if appropriate, given the then
current facts and circumstances.

FORM 10-K FOR FISCAL YEAR ENDED DECEMBER 31, 2008

Item 7. Management’s Discussion and Analysis, page 13

Liquidity and Capital Resources, page 16

    1.

    In future filings please disclose the Amended Credit Facility’s specific covenant ratios.

Response:

     In future filings, the Company will disclose the specific covenant ratio requirements listed
below and performance against those specific requirements. For the Staff’s reference, the Company
filed a Form 8-K on August 25, 2009 containing a new Credit Agreement which replaced the previous
Amended Credit Facility. Additionally, the Company entered into a Second Amendment to Credit
Agreement which was filed on a Form 8-K on February 3, 2010. The significant covenants contained
in the Second Amendment to Credit Agreement dated January 29, 2010 include:

    •

    Minimum cash plus accounts receivable plus inventory to total debt ratio of 2.0:1.0 at
the end of each quarter;

    •

    Minimum tangible net worth of $55.0 million;

    •

    Minimum debt service coverage ratio of 1.20 commencing with fiscal year ending December
31, 2010;

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    •

    Minimum trailing twelve months consolidated EBITDA of $8.0 million at the end of
December 31, $9.5 million for the twelve month period ended March 31, 2010 and $10.0
million for the twelve month periods ended June 30, 2010, September 30, 2010 and December
31, 2010, respectively; and

    •

    Other covenants including limitations on dividends, share purchases and acquisitions or
sale of property.

Critical Accounting Policies, page 18

    2.

    Based on the significance of your goodwill balance, the goodwill impairment charge you recorded
in 2008, and your market capitalization relative to the carrying value of equity, please revise
future filings to include a critical accounting policy detailing your process for evaluating
goodwill impairment. Refer to Section 501.14 of the Financial Reporting Codification, SFAS 142, and
Release No. 33-8350, Interpretation-Commission’s Guidance Regarding Management’s Discussion and
Analysis of Financial Condition and Results of Operations on our website at
http://www.sec.gov/rules/interp/33-8350.htm#P180 57133 for guidance. Please supplementally
provide us your proposed disclosures.

Response:

     In future filings we will include a critical accounting policy detailing our process for
evaluating goodwill impairment. The following is our proposed disclosure:

     Goodwill Impairment – Goodwill, all of which is included in our Lawson Products business unit,
is tested annually during the fourth quarter, or when events occur or circumstances change that
would more likely than not reduce the fair value of the reporting unit below its carrying
value. Impairment of goodwill is evaluated using a two step process. First the fair value of the
reporting unit is compared with its carrying amount, including goodwill. If the fair value of the
reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not
impaired, thus, the second step of the impairment test is unnecessary. If the carrying amount of
the reporting unit exceeds its fair value, the second step of the goodwill impairment test is
performed to measure the amount of impairment loss, if any.

     We estimate the fair value of the Lawson Products business unit using a market approach, which
relies on the market value of companies that are engaged in a similar line of business. We also
prepare a discounted cash flow (“DCF”) analysis based on the operating plan to determine a range of
fair values. The DCF model relies on a number of assumptions that have a significant affect on the
resulting fair value calculation and may change in future periods. Estimated future cash flows are
affected both by future economic conditions outside the control of management and operating results
directly related to management’s execution of our business strategy. Our DCF model is also affected
by our estimate of a discount rate that is consistent with the weighted average cost of capital
that we anticipate a potential market participant would use.

     As of the fourth quarter of 2009, the calculated fair value of the Lawson business unit
exceeded its carrying value by approximately [___] million using our most conservative estimate and,
therefore, was not considered impaired. Changes in the assumptions used in our DCF calculation
could have a material affect on the fair value estimate and could change our assessment of
impairment. A hypothetical 10% decrease in the estimated future annual cash flows generated by the
Lawson business unit would decrease

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its estimated fair value by [___] million. A hypothetical 100 basis point increase in the
discount rate would decrease its estimated fair value by [___] million.

    3.

    Please clarify how you determine your reporting units under SFAS 142. To the extent that any of
your reporting units have estimated fair values that are not substantially in excess of their
carrying value and goodwill for these reporting units, in the aggregate or individually, could
materially impact your operating results, please identify those reporting units and provide the
following disclosures:

    •

    The percentage by which fair value exceeds carrying value as of the most recent
step-one test.

    •

    The amount of goodwill allocated to the reporting unit.

    •

    A description of the assumptions that drive the estimated fair value.

    •

    A discussion of any uncertainties associated with the key assumptions. For example,
to the extent that you have included assumptions in your discounted cash flow model that
deviate from your historical results, please include a discussion of these assumptions.

    •

    A discussion of any potential events, trends and/or circumstances that could have a
negative effect on estimated fair value.

    •

    Any other material and useful information you gather and analyze regarding the risks
of recoverability of goodwill.

    If you have determined that estimated fair values substantially exceed carrying values for all
of your reporting units, please disclose that determination. Refer to Item 303 of Regulation S-K
and Sections 216 and 501.14 of the Financial Reporting Codification for guidance.

Response:

     Following the guidance provided by Accounting Standards Codification (“ASC”) 350 (Previously
FAS 142) and ASC 280 (previously SFAS 131), goodwill impairment was analyzed in relation to the
appropriate reporting unit as reviewed by the Company’s chief decision maker. The Company’s chief
decision maker allocates resources and reviews the operating performance of four business units;
Lawson Products, Rutland Tools (which comprise the MRO segment), Assembly Component Systems (“ACS”)
and Automatic Screw Machine Parts (which comprise the OEM segment).

     All of the goodwill on the balance sheet relates to a 2001 acquisition that only benefited the
Lawson Products business unit. The estimated fair value of the Lawson Products business unit
substantially exceeded its carrying value and goodwill as of the most recent testing date in the
fourth quarter of 2009. In future filings we will include the critical accounting policy, proposed
in our response to the Staff’s comment #2 above, that provides details of our evaluation process
for goodwill impairment as well as the results of that evaluation.

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Note E – Goodwill, page 31

    4.

    Please expand your disclosures in future filings to describe the specific facts, circumstances,
and changed assumptions that resulted in the goodwill impairment that you recorded during the
fourth quarter of 2008 in accordance with paragraph 47 of SFAS 142.

Response:

     In future filings, the Company will expand its disclosures to include the specific facts,
circumstances and changed assumptions that resulted in the goodwill impairment recorded in the
fourth quarter of 2008 in accordance with paragraph 47 of SFAS 142. The Company expects the
disclosure to be as follows:

     The Company reviews goodwill annually during the fourth quarter, or when events occur or
circumstances change that would more likely than not reduce the fair value of the reporting unit
below its carrying value. Goodwill impairment is deemed to exist if the carrying amount of a
reporting unit exceeds its estimated fair value and the goodwill impairment charge, if any, is
measured as the difference between the carrying amount of the goodwill as compared to its estimated
fair value. In 2008, our ACS business unit carried a $2.3 million goodwill balance related to a
1999 acquisition. In previous years, the operating results of ACS supported the goodwill balance
based on market prices of comparable businesses and discounted cash flow forecasts. During 2008,
ACS began to experience increases in commodity costs that led to lower gross margins and operating
results. Then, with the onset of the global worldwide recession in the fourth quarter of 2008, the
Company revised its forecast of future operating results significantly to reflect the new
unfavorable economic environment and determined, based on market prices of comparable businesses
and revised discounted cash flow forecasts, that the goodwill associated with ACS was fully
impaired. The Company recorded a charge of $2.3 million for the year ended December 31, 2008.

Controls and Procedures, page 43

    5.

    We note that your description of your disclosure controls and procedures does not appear to
conform to the definition provided in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. In future
filings, please revise your statement to ensure you describe your disclosure controls and
procedures in accordance with the two-part definition provided in Rules 13a-15(e) and 15d- 15(e) of
the Exchange Act or simply state whether they are effective. Please confirm to us supplementally
that your disclosure control and procedures were effective in accordance with the two-part
definition.

Response:

     We confirm that our disclosure controls and procedures were effective in accordance with the
two-part definition provided in Rules 13a-15(e) and 15d-15(e) of the Exchange Act as of the year
ended December 31, 2008. In addition, in future filings we will revise our disclosure and clarify
our compliance by adopting the following disclosure:

     Under the supervision and with the participation of our senior management, including our chief
executive officer and chief financial officer, we conducted an evaluation of the effectiveness of
the design and operation of our disclosure controls and procedures,
as defined in
Rules 13a-15(e)
and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the
end of the period covered by this annual report (the “Evaluation Date”). Based on this evaluation,
our chief executive

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officer and chief financial officer concluded as of the Evaluation Date that our disclosure
controls and procedures were effective such that (i) the information relating to Lawson, including
our consolidated subsidiaries, required to be disclosed in our Securities and Exchange Commission
(“SEC”) reports is recorded, processed, summarized and reported within the time periods specified
in SEC rules and forms, and (ii) include, without limitation, controls and procedures designed to
ensure that information required to be disclosed is accumulated and communicated to our management,
including our chief executive officer and chief financial officer, as appropriate to allow timely
decisions regarding required disclosure.

FORM 10K/A FILED APRIL 29, 2009

Compensation Discussion & Analysis, page 5

Elements of Total Compensation, page 7

Annual Incentive Plan (“AIP”), page 8

    6.

    We note your disclosure in the table presenting the target bonuses and actual bonuses received
in 2008. Please tell us supplementally, with a view toward future disclosure, whether you assigned
particular weightings to each individual performance goals you identify for each named executive in
the fourth paragraph of this section to calculate the “Bonus Awarded” column of the table. If you
did not establish weightings for each individual performance measure, please tell us how you
ultimately determined the amount in the Bonus Awarded column for each named executive officer.
See Item 402(b)(1)(v) of Regulation S-K.

Response:

     As a reference to the Staff, and as disclosed on page 9 of Form 10 K/A, for fiscal year 2008
actual bonuses under the Annual Incentive Plan (“AIP”) were awarded to the Named Executive Officers
(“NEO”) and were determined based on each executive’s respective performance against their
individual goals. Individual weightings were assigned to each NEO’s performance goals and the
payout determined based on achievement versus goals. The bonus payouts for each NEO other than the
CEO were based upon the CEO’s evaluation of each NEO and recommendation to the Compensation
Committee, and for the CEO, based upon an evaluation by the Board of Directors. No bonus payments
were awarded to the NEO’s for the corporate performance component as the Company did not meet its
corporate performance goals established for 2008.

     To address the Staff’s comments, we will provide in future filings the following supplemental
disclosure in “Item 11. Executive Compensation” (new proposed supplemental disclosure is
underlined).

Compensation Philosophy and Objectives

Page 5 The Company’s executive compensation programs are designed to reward executives for the
development and execution of successful business strategies. In determining the type and amount of
compensation for each executive, we use both annual cash compensation, which includes a base
salary and an annual incentive plan, and a long-term incentive opportunity. We believe the mix of
these three forms of compensation in the aggregate balance the reward for each executive’s
contributions to our Company. Our compensation programs are designed to encourage and reward the
creation of long-term shareholder value.

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Page 6 3. Accountability for Individual Performance. We believe teams and individuals should be
rewarded when their contributions are exemplary and significantly support Company performance and
value creation. Accordingly, individual performance measures and goals, along with specific
weightings for each goal, are established for each participant in our annual incentive plan.

Elements of Total Compensation-Annual Incentive Plan (“AIP”)

     To address the Staff’s comment regarding the AIP on page 8 of Form 10 K/A, we are providing
the following supplementary information.

     The remaining components of the AIP consisted of key individual performance measures and
weightings which were established f