K St. Logs Uneven Show
Overall Gain Averages Just 5 Percent for 25 Biggest Lobby Shops
K Street giants mounted a fitful recovery from a lobbying drop-off last year to post modest gains overall in the first half of 2007.
But faced with the double-barreled drama of the Democratic takeover and a lobbying rules revamp, individual performances varied widely. More than half of the 25 largest shops posted double-digit percentage swings from the same period last year.
It was mostly good news for lobbyists. New Democratic chairmen came roaring into power with pent-up legislative agendas that meant corporate clients across the board had to ramp up their lobbying spending. Most large firms, with bipartisan teams and diverse practice groups, had little trouble adjusting and finding new business.
Patton Boggs continued its reign atop the K Street heap by billing $19.4 million, a 9 percent boost over the first half of last year. Akin Gump Strauss Hauer & Feld clawed back into the No. 2 slot, which it had ceded to Van Scoyoc Associates at the end of last year, by upping its billings 14 percent.
To gather figures for the rankings, Roll Call solicited mid-year revenue numbers, as reported under the Lobbying Disclosure Act, from the 50 firms that had reported the highest revenues during the second half of 2006, as reported by CQ MoneyLine. Figures for the firms ranked 26 through 50 are not reported in the final rankings.
Not all firms responded with their total revenue figures by press time, including Cornerstone Government Affairs and the Washington Group. Their figures were taken from CQ MoneyLine.
By far the most dramatic improvement came for Ogilvy Government Relations, which grew its revenue by an eye-popping 80 percent to vault into the No. 4 spot from No. 12 at this time last year. Remarkably, most of the growth came from a single client, the Blackstone Group, a private equity firm that paid its Ogilvy team $3.74 million to help it fend off a package of potentially costly tax hikes.
The lobbying shop, formerly known as the Federalist Group, was exclusively Republican until last year. But it quickly has retooled as bipartisan firm and relaunched this year with the new name.
“The addition of Democrats to our firm has helped us continue to add value for our clients and add new clients,” said Drew Maloney, managing director of the firm.
Meanwhile, one-time K Street champ Cassidy & Associates continued its slip down in the rankings, falling to the No. 5 spot. Its lobbying revenue dipped 2 percent — a result, Chief Operating Officer Gregg Hartley said, of an effort to refocus the firm’s work away from its historic reliance on appropriations lobbying.
“This year’s been a good year,” Hartley said. “We’ve started to restructure our business, managing a downsizing of how much appropriations work we do and focusing on growing other policy areas.”
He said the firm has cut the percentage of its appropriations work from 70 percent of its total portfolio to 51 percent, and is aiming to further trim it to 40 percent. He said the company’s work in public affairs and marketing and for foreign clients is picking up slack from more traditional, reportable lobbying revenues.
Taken together, the 25 biggest firms downtown improved their haul from the first half of 2006 by 5 percent. That’s more than twice the meager 2 percent boost those shops mustered last year amid lobbying scandals and the distraction of the impending elections. But it’s only about half of the 9 percent growth the top shops enjoyed in the first half of 2005 compared with the first half of 2004.
Larger shops attached to law firms said they were better prepared than their smaller rivals to manage the Congressional power swap because they always have a large stable of both Democrats and Republicans on board. And they can better handle the uncertainty surrounding new lobbying rules as well.
“Law firms that also lobby are used to compliance,” said Nick Allard, co-chairman of Patton Boggs’ public policy department. “We’re like the kosher hot dog company. We have to answer to a higher authority.”
Given the tumult, some firms were happy to be treading water. The all-Republican Barbour Griffith & Rogers nudged its earnings up a percent despite the Democratic majorities. “It was very good news,” said firm COO Loren Monroe. “The expectation was that BGR would lose ground, and I think we’ve continued steady growth.”
But Monroe said his firm is reconsidering its business model and could make Democratic hires in the months ahead. “There’s nothing imminent. There’s no meeting going on down the hall,” he said. “But I would say we’re more open to it than we have been in the past.”
Meanwhile, all-Democratic shops — until this year a rare breed that had to survive on relatively meager billings — have seen their kind multiply and their revenue jump. The Raben Group, for example, saw its billings leap more than a third, to $1.1 million for the first half of this year.
Parven Pomper Schuyler recorded $750,000 in receipts from the first six months of its existence. And the newly minted Elmendorf Strategies racked up more than $1.8 million.
None of those firms are close to cracking the top 25 on K Street — yet.
Jillian Bandes contributed to this report.