Lobbying firm revenue down overall in first quarter

Lobbying revenue at the District’s 10 most profitable lobbying shops dropped a collective 5 percent during the first three months of 2012, following a year when most of those firms stayed flat or saw revenue dip slightly.

Four of K Street’s 10 largest shops posted modest growth compared with the same period of 2011, while the other six were down — with three major firms slipping double-digit percentage points.

Lobbying activity typically slows during an election year.

Leaders at firms that posted growth attributed the modest uptick to many lobbyists lining up clients in preparation for a flurry of activity expected to hit once the presidential election is decided in November.

Some pointed to appropriations, budget and taxes as some of the major issues clients are positioning themselves for in the months leading up to the election, as Congress faces a December deadline to propose a possible alternative to sequestration (or $1 trillion in federal spending cuts that could go into effect January 2013), and to decide whether to extend Bush-era tax cuts that expire at the end of the year.

“The big game will be played November and December, and you need to get your play into the playbook now,” said Jim Walsh of K&L Gates, which saw lobbying revenue rise about 3 percent. “It’s just a matter of being engaged early on because things will happen quickly in the end.”

Kevin O’Neill, deputy chairman of public policy at Patton Boggs, which posted a 2 percent drop, said the first-quarter slide represents a continued shift in focus for firms. Many have seen work move from the legislative branch to the executive branch, where firms are doing more non-lobbying work keeping tabs on regulatory efforts to implement Dodd Frank’s financial industry reforms and health care’s Affordable Care Act.

Some of the firms that posted the most dramatic drops in lobbying revenue this quarter, Cassidy & Associates and Van Scoyoc Associates, have been increasingly seeking partnerships with consulting businesses to help offset the lobbying declines.

“The more people recognize Congress is not going to have the level of accomplishments they had in the past session, the more they turn their eye to doing things with the executive branch,” O’Neill said.

Catherine Ho covers lobbying at The Washington Post. She previously worked at the LA Daily Journal, the Los Angeles Times, the Detroit Free Press, the Wichita Eagle and the San Mateo County Times.

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