Lobbying groups within two major law firms are forming separate business units, bringing new attention to an issue that law firm management has struggled with: how to incorporate non-lawyer lobbyists into a law firm.
The firms, Bracewell & Giuliani and Duane Morris, say the restructuring means more self-governance and faster decision-making while still keeping the recognition of an established law firm.
Bracewell’s new unit, the Policy Resolution Group, will offer its 15 professionals (about half of whom are not lawyers) an equity stake in the firm — which previously wasn’t an option for non-lawyer consultants.
“It was putting us in the best position to grow further and faster,” said Scott Segal, founding partner of the Policy Resolution Group.
Duane Morris’ new group, Duane Morris Government Strategies — which will combine lobbyists from the law firm’s government affairs practice and those of Pittsburgh-based GSP Consulting — will be a subsidiary of Duane Morris LLP starting Jan. 1. The new entity will run under a management committee comprised of one Duane Morris lawyer-lobbyist and two GSP executives.
The new entity will have a combined 30 professionals in five states and D.C.
“It allows us to make a small business as opposed to running through an international law firm’s protocol for decision-making,” said Joe Kuklis, chief executive of GSP, who will be a managing director of Duane Morris Government Strategies.
Kulkis and GSP Chief Financial Officer Amy Kaminski, who also will be a managing director as part of the restructuring, will not have equity in the new subsidiary.
“You retain the boutique nature of both of the combining firms that allows us to have more responsible price points and be more agile in serving [clients],” Kuklis said.
Law firms have grappled for a long time with how to recruit and integrate non-lawyer lobbyists, consultants and communications specialists. Lobbying, which is typically done on a fixed fee, doesn’t jibe well with hourly billing, which is still how most big law firms charge; lobbyists have been known to shun working for law firms for that reason.
“It’s distracting when you’re trying to improve the economics of the lobbying practice to have it in the context of a law firm,” said Peter Zeughauser, a legal consultant at Zeughauser Group. “Its easier to ... look at it as a separate financial proposition.”
Restructuring into a subsidiary “allows a better recruiting story for non-lawyers because it provides a career path they can’t get at a law firm,” said Ivan Adler, a headhunter for lawyers and lobbyists at the executive search firm McCormick Group. “It allows them an actual career track that’s tougher to do as a non-lawyer within a law firm. It also typically allows non-lawyers to get paid more.”
Still, Adler said, the law firms with the most successful government relations practices — such as Patton Boggs, Akin Gump and Holland & Knight — don’t have them as subsidiaries, and the subsidiary model doesn’t always prove successful. The key is to stay closely integrated with the law firm and share and refer clients back and forth, he said.