By Ellen Nakashima and Brady Dennis
Washington Post Staff Writers
Monday, March 30, 2009
Last month, just before Valentine's Day, business at Holland & Knight was so slow that the law firm laid off more than 240 lawyers and staff, victims of the economic downturn that has dented Washington's reputation for being recession-proof.
But one area of the multi-service firm was thriving. Rich Gold, head of the firm's public policy and regulation practice, was hiring more than a dozen lobbyists, bringing his federal lobbying team to about 70, every one of them scrambling to stay on top of provisions and changes in the mammoth economic recovery package that was barreling through Congress. They were handling about 240 clients, including 50 new ones, all eager to win a portion of the stimulus that President Obama wanted passed.
"On the legal side of things, we've done our share of downsizing because of the economy, because of reduced demand," said Gold, the firm's chief lobbyist. "But on the policy side . . . we're picking up a couple clients a week at this point."
Put another way, Main Street's gloom has been K Street's boon.
The $787 billion stimulus package -- along with an ambitious new federal budget, bank bailouts and the beginning of a regulatory overhaul -- has succeeded in stimulating the economy along Washington's avenue of influence. In the months since the November election, more than 2,000 cities, companies and associations have hired lobbyists to help them push their agendas on Capitol Hill and at the White House, easily outpacing such numbers after the previous two elections, according to disclosure records.
Nearly every industry and every corner of the country has an issue, especially with so much money at stake.
"The issues in the stimulus package were enormous for our business," said Carol Grant, senior vice president at First Wind, a small wind-energy firm. The company recently hired its first lobbyist -- as well as a public relations firm -- because, as Grant put it, if ever there were a time to plug into the business of the nation's capital, "this is the year."
Local infrastructure projects?
"We decided we needed eyes and ears in Washington," said Ed Tinker, city manager of Glenpool, Okla., population 10,000. The city hired Capitol Hill Consulting Group, which employs former Oklahoma Rep. Bill Brewster (D), for $10,000 a month to help it win grants for education and infrastructure improvements. "There are dollars up there that could come to our community that we weren't aware of," Tinker said. "It's worked out real fine for us. Having that guy on the ground in Washington is going to keep us in the loop."
Interviews with lobbyists and public relations firms in the capital reveal a cautious optimism. Though as an industry firms are not expecting another record year of fees -- last year, lobbying clients paid K Street an unprecedented $3.2 billion, according to the Center for Responsive Politics -- some are planning for modest growth. Others are aiming to keep pace with last year.
"Flat is the new up," said Gold, a former senior counselor to Carol Browner, a Clinton administration Environmental Protection Agency administrator.
Still, there are signs of recession in the lobbying world. Clients are comparison-shopping. Some lobbying firms are shaving their monthly retainer from, say, $35,000 to $25,000 to hold on to long-term clients. Some trade associations have cut their dues in recognition that companies are hurting. Annual meetings have been canceled. Some Republican lobbying firms are being dropped, and firms that focus on only a narrow set of issues are becoming an endangered species, veteran lobbyists said.
Nonetheless, as the industry readies to report its first-quarter figures -- the recent uptick in business will probably not appear until the second quarter -- the global economic turmoil and the motivated new administration have kept the phones ringing on K Street.
"It's like, kiss the wife and kids goodbye," said John Shaw, a lobbyist with the Portland Cement Association, which has a significant stake in $30 billion worth of highway money in the recently passed stimulus legislation, as well as a major transportation-funding bill this fall. "I'll see you in a year, honey."
Some of the busiest firms are well-connected Democratic firms that do the new hot thing: lobbying hitched to strategic communications. At Glover Park Group, founded by former Clinton White House spokesman Joe Lockhart, among others, lobbying fees rose 27 percent last year. And that is only about one-fifth of the firm's income. From a handful of operatives, the shop has grown to 120, occupying a full floor in a spiffy new downtown office.
One of Glover Park's new clients is the Pharmaceutical Research and Manufacturers Association, which over the years has struggled with an industry image of profiteering at the expense of consumer health. It hired Glover Park to do strategic counseling, including polling and research, so it knows before talking to lawmakers what seniors are thinking. "Not only do they help us with messaging, in some cases they help us deliver the message," said Ken Johnson, PhRMA's senior vice president for communications.
PhRMA is bracing for a momentous year, as health-care reform is high on Obama's agenda. But it is doing so with a flat budget, chief executive Billy Tauzin said. "We froze a number of positions," he said, noting that the staff is smaller than it was last year by at least five slots. "We did not lay people off. We simply did not fill positions for the time being in order to make room for all other priorities." Those priorities include lobbying, strategic communications and public relations.
"We're busy as bees out here," he said. "Making honey."
Research editor Alice Crites contributed to this report.