A year after Washington’s pre-eminent lobby shop, Patton Boggs, was acquired by Squire Sanders, the firm is trying to reestablish its dominance on K Street under new leadership and a new corporate structure.
Making sure it does is now the job of Senate veterans-turned-K Street rainmakers Trent Lott and John Breaux, the new faces of the firm’s lobbying practice.
The acquisition, which took effect in June 2014, initiated a shift from Patton Boggs as an independent D.C. business to a relatively small division of a large global conglomerate — a transition that has not always gone smoothly.
Lobbying revenue fell 20 percent in 2014 compared to the previous year, and Patton Boggs for the first time in over a decade ceded its spot as the nation’s top lobby shop by revenue, falling behind rival Akin Gump. Meanwhile, Squire had to stop representing the sugar industry in a multimillion-dollar court case against corn syrup manufacturers, a matter into which it invested years and tens of thousands of hours of work, because of a failure to detect early enough that Patton was representing corn syrup manufacturers in another matter. Dozens of profitable partners, particularly from the Patton Boggs side, left for other firms, taking their enviable client lists with them.
And the firm’s renowned leader Thomas Boggs Jr., who helped define the modern lobbying industry, died unexpectedly in September.
But Breaux and Lott say they are making progress rebuilding the practice. Since December, they have hired several new lobbyists, including two former House members and a former top aide to House Speaker John A. Boehner (R-Ohio), and signed 17 new clients.
“A legend like Tom Boggs, when you lose him, that has an impact,” said Lott, a former Senate majority leader. “But we’ve worked through that, we’re looking to the future and we’re bringing on work and new people and making some good progress.”
The former senators are no strangers to the lobbying business, but they are taking on new leadership responsibilities at a firm that has long been known more as Boggs’s domain than their own.
In a town where lawmakers-turned-law firm partners have lackluster reputations as business generators, Breaux, a Democrat, and Lott, a Republican, stand out in terms of earning power. The duo in 2008 founded their eponymous lobby shop, Breaux Lott Leadership Group, and in just two years grew it to a $12-million-a-year business. In 2010, they merged it into Patton Boggs because the 10-person boutique was getting more clients than its small staff could handle, they said.
Even after joining Patton Boggs in 2010, however, Breaux and Lott continued running their shop somewhat separately from the rest of the firm. But last year, after the merger, they were tapped to take on a more public-facing role as co-chairs of the lobbying group.
Since December, they have recruited new hires in the public policy practice, including longtime top Boehner aide David Schnittger; David Hoppe, Lott’s former chief of staff who once led lobby shop Quinn Gillespie; Kristine Blackwood, a deputy director from the Health and Human Services Department; and two former House members, Jack Kingston (R-Ga.) and Jim Matheson (D-Utah).
During the same period, the firm signed 17 new clients. Most of them have so far paid the firm relatively small fees, with the exception of TK Holdings, the U.S. subsidiary of the embattled Japanese airbag manufacturer Takata. Takata hired the firm in December and has paid it $410,000 to help in the congressional investigation into the company’s airbag safety failures.
But the new business has yet to fully replace what was lost when many of Patton Boggs’s most profitable partners left in the months leading up to and following the merger. The firm’s leaders have maintained that many departures were expected. Even so, they took a toll on the firm’s bread and butter practice, public policy.
Six of Patton Boggs’s 10 top-paying lobbying clients as of 2013, the last full year it operated independently, have either signed with another firm or are expected to do so soon because their lobbyist has left or will soon. Those six companies and trade groups represented about $4.6 million in annual revenue in 2013 — roughly 12 percent of Patton Boggs’s $39.9 million in overall lobbying revenue that year, according to lobbying records.
“Anytime you have businesses that are as large as we are, you’ll have bumps in the road in the transition,” Breaux said.
On K Street, client loyalty is to the individual lobbyist or lawyer, so a mass departure of partners from one firm is almost always followed by a major loss of revenue as they take their clients with them. Fluctuations in revenue and the comings and goings of partners and their clients are not unusual in the law and lobby business. But the pace of partners streaming out of Patton Boggs during the past 18 months was notably faster and more prolonged.
The losses went beyond the lobbying practice. A huge chunk of Patton’s star roster is no longer with the firm: litigator Bob Luskin, who joined Paul Hastings earlier this year; Ben Chew, former head of the firm’s commercial litigation department who left for Manatt Phelps; and a well-known trio of Republican election lawyers Ben Ginsberg, Don McGahn and Bill McGinley, who went to Jones Day.
Boggs’s youngest son Doug Boggs, a corporate attorney, left this past spring, leaving Patton Boggs for the first time in its 53-year history without a Boggs in the building. Two more recent departures include Norma Krayem, former co-chair of the cybersecurity practice who just joined Holland & Knight, and Micah Green, a tax and financial services lobbyist who is joining Steptoe.
The exact financial losses are hard to measure because law firms do not disclose those details publicly beyond lobbying revenue, which must be reported to the Senate under lobbying laws.
The impact of the departures is perhaps more cultural than financial.
Squire Patton Boggs, which last year reported $870 million in global revenue, can absorb losses more easily as a large corporate entity than Patton Boggs could on its own. Squire was about four times the size of Patton Boggs at the time of the combination, with roughly 1,200 attorneys and 3oo attorneys, respectively. So while lobbying revenue declined 20 percent to $31.6 million in 2014, that figure makes up less than 4 percent of Squire’s overall revenue.
But for many former longtime Patton partners, the merger resulted in a dilution of the old Patton Boggs culture, which was accelerated by Boggs’s death. Many partners stayed through the merger out of loyalty and friendship to Boggs but left after his passing. Other than the Boggs name in Squire Patton Boggs, some say, little remains of the firm they once knew.
Breaux and Lott recently renewed their commitment to stay at Squire Patton Boggs. Breaux, 71, and Lott, 73, both say they have no intention of slowing down.
“I’m going to work as long as I have children and grandchildren,” Breaux said.
“What would we do?” Lott said. “Sit on the front porch and rock? Our personalities are not and have never been that.”
They say Squire’s global footprint — 1,500 lawyers spread across 21 countries — gives them a built-in platform to sell their lobbying services, which they are pitching to partners in other offices that don’t always understand what they do in Washington.
“We can have our colleagues in Asia and Europe talk to their clients that are doing business in the U.S. about the necessity of them to have a presence in Washington,” Breaux said. “We couldn’t do that before because we didn’t have offices in London or Moscow, Brussels, Singapore, Shanghai, Beijing.”
“We do webinars to explain to people in London or Brussels exactly what we do and how it relates to what they do,” Lott said. “They get some puzzled expressions on their face because they do the same thing in London but they don’t call it lobbying. It’s very different.”