Lobby shops hit a wall during first half of 2012

K Street stumbled during the first half of 2012, with the District’s 10 most profitable lobbying shops reporting a collective 5 percent drop in lobbying revenue — $120.9 million, down from $126.7 million during the first half of 2011.

Seven of the 10 largest firms saw declines in lobbying fees, with three of them dropping by double-digit percentage points during the first six months of 2012 compared with the same period last year. Lobbying activity traditionally slows during presidential election years, but many firms had already been posting flat or declining revenue in 2011 and saw little pickup when Congress’s deficit-reduction panel, known as the “supercommittee,” failed to break a deadlock over budget policy. Many predict little action until after the November presidential election, and some firms are increasingly expanding non-lobbying services to help offset losses in lobbying fees.

“If Congress is less active, which they’ve been since the supercommittee failed, we’re less active,” said Smitty Davis, co-chairman of public policy at Akin Gump. “We’re hopeful in the future that after the election, things will begin to pick up.”

Some firms lost key leaders this year. In June, Ogilvy Government Relations saw the exit of Chairman Wayne Berman to Ogilvy’s biggest client, private equity firm Blackstone Group, and Drew Maloney to the Mitt Romney campaign. The departures, in addition to those of John O’Neill and Elena Tompkins to other firms, reduced the number of lobbyists at Ogilvy from 15 to 11.

Nick Allard, former chairman of Patton Boggs’ lobbying practice, left to become dean of Brooklyn Law School.

Kevin O’Neill, deputy chairman of Patton Boggs’ lobbying group, said the firm is “having a gangbusters year overall in the public policy arena,” but not all public policy work is related to direct lobbying. Lawyers and lobbyists continued to monitor the progress of the Dodd-Frank financial reforms and offer clients analysis on the Affordable Care Act, which the Supreme Court upheld last month, but neither of those count toward lobbying revenue, he said.

O’Neill added that the first two quarters of 2012 were more productive than many expected, with Congress finalizing the transportation bill that President Obama signed earlier this month, and lobbyists gearing up for fights over tax reform and budgets cuts required under the sequestration process.

The three firms that posted revenue growth — Brownstein Hyatt, Ogilvy and Williams & Jensen — grew modestly, between 3 and 7 percent. Cassidy & Associates saw the greatest percentage drop at 32 percent, followed by Akin Gump (down 12 percent) and Van Scoyoc Associates (down 11 percent).