For K Street, 2012 was another bad year

For the second year in a row, most of K Street’s heavy hitters took a hit. The region’s 10 most profitable lobby shops earned a collective 10 percent less in lobbying revenue in 2012 than in 2011, dropping from $256.9 million to $232.6 million.

The same firms reported a collective 3 percent drop in 2011 — and the back-to-back down years mark a sharp contrast to 2009 and 2010, when major legislation reforming the nation’s health care system and financial industry raked in record earnings at many firms.

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For 2012, seven of the top 10 firms reported declines in revenue ranging from 5 percent to 30 percent. The three exceptions — Brownstein Hyatt, Podesta Group and Williams & Jensen — stayed flat or grew modestly.

Lobbying powerhouse Patton Boggs once again led the pack with $46 million in lobbying fees, though that represents a 5 percent decline from 2011. The firms that posted the most dramatic losses were Cassidy & Associates (down 23 percent from $20 million to $16 million) and Ogilvy Government Relations (down 30 percent from $20 million to $14 million). Ogilvy underwent a major executive shake-up in 2012 when then-chairman Wayne Berman left for the firm’s biggest client, Blackstone Group; chief executive Drew Maloney left for the Romney campaign; and two other senior lobbyists jumped to other firms.

Lobbyists attributed the downturn overall to a deadlocked Congress sidetracked by the debt ceiling and “fiscal cliff” debates, and the presidential election that put many regulatory proposals on hold. But that may change now that a new Congress is in session and the election is over.

“Congress literally just wasn’t here in the fourth quarter, and when they were, they were doing fiscal cliff-avoidance stuff, which isn’t the type of activity that generates a lot of lobbying,” said Rich Gold, who heads the public policy group at Holland & Knight, which saw lobbying fees slip 5 percent from $19 million to $18 million. “It wasn’t the days of 2009 where we were debating the health care bill and passing the Recovery Act, but it was a reasonable year. 2013 will be better.”

Last year had “the least activity I’ve seen in Washington in a long time,” said Smitty Davis, co-chair of Akin Gump’s public policy group. “We expect more activity in 2013 now that the election is behind us. How much, and whether it goes back to 2011 levels or 2010 levels, I don’t know, but we do expect more activity.”

Lobbying revenue at Akin Gump slid nearly 18 percent from $38 million to $31 million. Davis attributed the dip in part to two major lobbying projects that ended in late 2011 that made that year especially profitable by comparison.

H. Stewart “Stu” Van Scoyoc, president of lobby firm Van Scoyoc Associates, said there are signs — such as the House voting to suspend the debt limit in order to reach a budget agreement — that Congress is returning to a more “normal”state.

“The last two years, because Congress was doing so little and we were facing a presidential election, a lot of people were waiting for the beginning of the new Congress and completion of the last presidential election” to hire lobbyists, Van Scoyoc said. “We’re seeing signs of recovery ... [the House vote] is a first step toward a more ‘back to normal’ process. They’re using the debt ceiling to force a budget process. That’s a more traditional process, the kind of legislative activity that clients and lobby firms in town are going to be more engaged in.”

 
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