Washington's top firms are finding new ways to rake in cash, although their public disclosures show a slowing down of traditional work
Some of Washington's biggest lobbying shops are pulling down good money this year, but you wouldn't know it from their public disclosures.
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The early reports of second-quarter revenue numbers, due at midnight on Wednesday, had lobbyists bemoaning how a slumping economy and a deficit-obsessed Congress were hurting business. But that downturn in lobbying revenue is more than offset by the regulatory work, political intelligence, investigation prep, and agency lobbying that is part of the unreported influence economy, insiders say.
"Lobbying is the tip of the iceberg," said Mark Ruge, cochairman of K&L Gates' policy group.
Indeed, the passage of health care and Wall Street reform, from which K Street made a killing lobbying for two years, have now morphed into a regulatory gravy train as corporations scramble to influence the hundreds of rules that will soon govern their industries.
And because regulatory work requires specialists who understand the rule-making process and can help clients comply with, or challenge, the new rules, it is much more lucrative than traditional lobbying--paying two to three times more.
Take Akin Gump, for example. The firm brought in about $17.7 million lobbying during the first half of this year, down from last year's $18.3 million. But overall, the firm has increased its revenue about 2 to 3 percent, said Smitty Davis, who co-manages the group.
"The regulatory practice, that trend is pretty obvious because there are more problems there," Davis said. "Clients retain those parts of your firm where the action is and right now a lot of the action is on a regulatory basis."
Ruge said K&L brought in about $9.6 million during the first half of this year, down from $9.8 million during the same time period last year. But K&L does about $2 in regulatory work for every $1 in lobbying activity and that is "well up this year, particularly in the financial services and environmental sectors," he said.
And it's not just regulatory work that is booming. With the earmarks ban, lobbyists are busy working agencies and departments that are now in charge of doling out money in the form of contracts and grants. Firms are also cashing in as clients prepare to testify in front of congressional panels and respond to agency investigations. And political intelligence continues to pay, insiders say.
All that money is hard to track because, unlike traditional lobbying, the law doesn't require as much disclosure.
But a veteran lobbyist with a major firm estimated that while the ratio of lobbying to other influence work over the last few years has been about 70 percent to 30 percent, those numbers have essentially flipped this year. And the explosion of regulatory, investigation, and agency work has grown the size of the lobbying pie by 10 to 20 percent, despite the slumping economy.
Patton Boggs saw their second quarter revenues jump from $10.3 million last year to $12.4 million this year, according to partner Jim Christian. But, the revenue bump was helped by the acquisition of the boutique lobbying shop Breaux-Lott, led by former Sens. John Breaux (D-La.) and Trent Lott (R-Miss.), which Patton picked up last summer.
"If you're in a big, diverse firm, especially a larger law firm that has a combination of skill sets and has diverse expertise than they've all experienced that the legislative work has flattened out," said Patton Boggs partner Nick Allard, adding that other advocacy work is "up slightly. It's not gangbusters, but it's balanced out and growing."
Brownstein Hyatt Farber Schreck, whose "bread and butter" is more traditional lobbying, brought in about $10.7 million during the first half of this year, down about $1 million during the same period last year, said managing partner Al Mottur. But, he said, "We're among the leaders and keeping pace and very pleased."
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