Despite a recent spike in hiring of outside lobbyists by companies and trade groups, the region’s top lobby firms are still waiting to see the post-election resurgence in business they’ve been hoping for.
Lobby shops reported their second-quarter lobbying revenue to the Senate last week, and the numbers followed a familiar track: down. Revenue at the 10 most profitable lobby firms dropped a collective 4 percent during the first six months of 2013 compared with the same period last year. Eight of the firms posted flat revenue or saw declines between 2 and 12 percent. The exceptions were Akin Gump Strauss Hauer & Feld, up nearly 7 percent, and BGR Group, up about 11 percent.
The top firms are coming off two back-to-back years of decline: a collective 3 percent drop in 2011, followed by a collective 10 percent dip in 2012.
However, despite most firms earning less revenue compared with the first half of last year, the second quarter of 2013 was markedly better than the first. The top 10 firms earned a collective 5 percent more during the second quarter than the first, with eight of the firms seeing quarter-over-quarter growth between 1 and 18 percent. Some say it’s a sign of a slow recovery tied to key committees in the House and Senate moving forward on immigration and tax reform measures.
“I think there’s still a bit of a drag on the town, but it’s getting better,” said Smitty Davis, a partner in Akin Gump’s public policy group. “Things are slowly getting better.”
Al Mottur, head of the lobbying group at Brownstein Hyatt Farber Schreck, said his firm signed 16 new clients in 2013 — 12 in the first quarter and four in the second.
“Our client roster continues to diversify in key categories including energy, immigration and health care,” he said. “We’re performing strong in this post-election cycle and are strategically positioned to continue this growth throughout the remainder of 2013.”
Firms must report lobbying revenue each quarter to the Senate Office of Public Records under the Lobbying Disclosure Act. But those fees represent just a slice — the only slice that must be publicly disclosed at the level of detail required by the act — of what most firms consider public policy work. Efforts by lobbyists to influence the implementation of laws and regulations by federal agencies are often not considered formal lobbying, and fees from that work do not always get included in firms’ disclosed revenue.
Leaders at law and lobby firms say they are still swamped with regulatory work on the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Patient Protection and Affordable Care Act, the two landmark pieces of legislation that drove record revenue at many lobby firms in 2009 and 2010.
“That revenue has gone elsewhere,” said Kevin O’Neill, deputy chair of Patton Boggs’ public policy group. “It still exits, it’s still being captured by law firms in Washington, but it’s just not showing in [disclosure] numbers.”
Patton Boggs earned $10.8 million in lobbying fees during the second quarter — up from $10.4 million in the first quarter — marking the firm’s first quarter-over-quarter growth in more than a year.
O’Neill said many clients who backed off on lobbying efforts amid the election last year are coming back to the table to have their voice heard in congressional debates over immigration and tax reform.
“The immigration bill brought together a wide coalition of corporations and associations pushing for the first major change in the law since the ’80s,” he said. “With the fight moving into the House, the political reality is the need to do something remains ... We think there will be lots of activity in the third and fourth quarter this year.”