Feb. 12, 2016

Some Lobbyists Buck the Odds in 2011

Though revenue has dropped in federal lobbying during recent quarters, some firms have adapted to the market and are finding ways to significantly increase their take during K Street's downturn.

Among the groups outperforming the rest of the industry so far this year are some established firms showing significant gains, midsized shops that tripled their revenue and even some new organizations that first began lobbying during the past six months.

The success of these firms can be attributed to a handful of themes: issue specialties outside of appropriations, heavy client growth and strong connections to current legislative leaders.

Several new firms opened their doors during the first two quarters of 2011, but few have done as well as the Penn Hill Group. The new shop, specializing in education policy, quickly enlisted two dozen clients and reported $900,000 in billings during just the past six months.

Working in a niche industry has been essential to the firm's success, according to Vic Klatt, one of the shop's principals. "What people come to us for is the knowledge of education issues," he said. "We're all former staff people who have worked in this field for some time."

Penn Hill's lobbying clients include Apollo Group, Educate Inc. and the U.S. Chamber of Commerce. While Klatt said Penn Hill Group is "gratified" to be leading K Street with the highest revenue of new firms this year, he believes the company has probably received more money through its consulting business than its lobbying work.

Having a specialized policy area has also helped newcomer Nathanson+Hauck, which had the second-largest revenue of new firms in 2011. The health-care-based lobbying duo of Melanie Nathanson and Megan Hauck said there are benefits to being a smaller shop.

"The secret is not being giant," Nathanson said.

So far, the company has signed up nine clients and reported more than $600,000 in lobbying revenue since January. Some expansion is planned, but not too much.

For some young firms, 2011 has been a banner year. The fastest-moving upstart is the FIRST Group, which began filing reports in the first quarter of 2010. Since then, the four-person firm has signed up 17 clients, including many of the top names around, such as ExxonMobil, the Pharmaceutical Research and Manufacturers of America and Google. These companies helped the new firm almost quadruple its quarterly revenue since 2010.

One reason the FIRST Group is attracting such blue-chip clients might be because of who they know. All four lobbyists are former chiefs of staff for Senators two worked for Democrats and two came from GOP offices. The four men ran offices for Sens. Lamar Alexander (R-Tenn.), Jeff Bingaman (D-N.M.), Mitch McConnell (R-Ky.) and Mark Pryor (D-Ark.) and former Sens. Joseph Biden (D-Del.), Bill Bradley (D-N.J.) and Byron Dorgan (D-N.D.).

So far, the firm has billed almost $1.4 million during the first six months of 2011.

Another new firm showing strong growth is Jennifer Bell + Partners, which has doubled its first-year revenue and is on pace to bill $1 million in revenue in 2011. The new shop, which started in 2010, specializes in health care and has pulled together a list of eight clients, including Sanford Health, Independence Medical and Covenant HealthCare.

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