[PEPPER, HAMILTON & SCHEETZ LLP]


                                 June 30, 1997

Hagler Bailly, Inc.
1530 Wilson Boulevard
Suite 900
Arlington, VA 22209


Gentlemen:

     We have acted as special counsel to Hagler Bailly, Inc., a Delaware
corporation (the "Company"), in connection with the preparation and filing with
the Securities and Exchange Commission (the "Commission") of a registration
statement (the "Registration Statement") of the Company on Form S-1 (No.
333-22207) under the Securities Act of 1933, as amended (the "Act"). The
Registration Statement relates to the proposed issuance and sale of up to
3,150,000 shares (the "Firm Securities") of the Company's common stock, $0.01
par value per share ("Common Stock"), as well as the issuance and sale of up to
an additional 472,500 shares (the "Option Securities"), of the Company's Common
Stock to cover over-allotments. Of such amount, 2,500,000 shares are being
offered by the Company (the "Company Shares") and 1,122,500 (including all of
the Option Securities) are being offered by certain stockholders of the Company
(collectively, the "Selling Stockholder Shares").

     In this connection, we have examined the originals or copies, certified or
otherwise identified to our satisfaction, of the Certificate of Incorporation
and the By-Laws of the Company as amended to date, resolutions of the Company's
Board of Directors and such other documents and corporate records relating to
the Company and the proposed issuance and sale of the Firm Securities and the
Option Securities as we have deemed appropriate. The opinion expressed herein is
based exclusively on the applicable provisions of the Delaware General
Corporation Law ("DGCL") as in effect on the date hereof.

     On the basis of the foregoing, we are of the opinion that:





PEPPER, HAMILTON & SCHEETZ LLP


Hagler Bailly, Inc.
Page 2
June 30, 1997


     1. The Company Shares, when issued, delivered and paid for in accordance
with the Underwriting Agreement in the form filed as Exhibit 1.1 to the
Registration Statement, will be legally issued, fully paid and non-assessable
under the DGCL; and

     2. The Selling Stockholder Shares have been validly issued, and are fully
paid and non-assessable under the DGCL.

     We hereby consent to the reference to our firm under the caption "Legal
Matters" in the Prospectus included in the Registration Statement and to the
filing of this opinion as an exhibit to the Registration Statement. 


                                            Very truly yours,


                                            /s/ PEPPER, HAMILTON & SCHEETZ LLP