With a mediocre year behind it, K Street is gearing up for a presidential election year that many expect to bring few legislative fights but lots of hiring.
Ten of the District’s largest lobbying outfits saw lobbying revenue drop in 2011 by a collective 3 percent — a decline that firm leaders attributed to a major slowdown in traditional legislative activity as health care and financial reform bills passed in 2010 made their way to the implementation stage. And the year ahead likely will stay flat until after the November elections, they predicted.
“The next two quarters will be about the same, and we’ll start to see an uptick in the third quarter, which is typical for a presidential election year, as companies and folks start looking at the new president and thinking, ‘What do I need to do to prepare? What do I need to change in my consulting mix?’” said Rich Gold, head of Holland & Knight’s public policy group. “We’ll start getting pulled in during the third quarter to say, ‘If this, then that, but if it goes the other way, we’ll do this.’ You start doing contingency planning, basically.”
Some say the expectation of a quiet period ahead means now is the prime time to hire staffers coming off the Hill, who have a one-year waiting period before they can lobby former colleagues.
“It’s a good time for firms to hire ... so that the calendar eats up the wait period before they can lobby,” said Ivan Adler, a headhunter for lawyers and lobbyists at the McCormick Group. “The smart firms are doing that, and that’s exactly why they do it.”
James T. Walsh, a former congressman and lobbyist at K&L Gates, said a major hiring spurt will probably not happen until after November, during the customary post-election shake-up a new administration brings to K Street and the Hill.
“I think that happens more at the end of an election cycle as opposed to the middle,” Walsh said. “At the end of the election, a lot of people will be hired.”
Meanwhile, there are signs indicating 2012 could be busier for lobbyists than the typical election year: payroll tax extenders, the extension of unemployment insurance and the appropriations process are all issues Congress must resolve in 2012. And firms will have to lay the groundwork for a major debate on tax reform expected to get into full swing in 2013.
“Usually you’d expect the fourth year in an election cycle, especially at a time there’s been historic partisan bickering, to be very slow,” said Nick Allard, chair of Patton Boggs’ lobbying practice. “And it could be — there’s some reason to believe some members of Congress will throw their hands up and say, ‘See ya in 2013.’ However, there are some strong countervailing forces.”
For incumbents facing contested races, some may rally to pass bills that’ll give them talking points for reelection campaigns.
“Since there’s time left for them to build their record for reelection, they have ... incentives to find areas that they can agree on and reach across the aisle and pass legislation,” Allard said. “It gives them a record to run on, instead of running against something.
“All bets are off, the only thing certain about 2012 is its unpredictability,” Allard said.