K Street Posts 9% Growth in 2007
But Revenue Rise Uneven in Yearly Survey of Top 25
K Street’s top firms cashed in on the legislative energy unleashed by new Democratic majorities to post solid overall growth of about 9 percent in 2007.
But the power switch and a Democratic-led revamp of lobbying rules — as well as a harsher earmark environment — spawned uncertainty that produced widely varying individual performances among the 25 largest shops.
The results for the top five firms tell the story: While the top two shops increased revenue by at least 20 percent, growth for the next three was flat.
Patton Boggs retained its crown as K Street king by pulling in $42.4 million, putting a whopping $10 million between it and its nearest rival, Akin Gump Strauss Hauer & Feld. Van Scoyoc Associates and Cassidy
& Associates — both of which relied on large appropriations practices in a difficult year for earmarks — and Barbour Griffith & Rogers, until recently an all-Republican firm, respectively rounded out the top of the list.
“This is a return to normalcy,” Akin Gump partner Steven Ross said, “and a return to people recognizing the value of having a broad-based ability to articulate and advocate the interests of clients to people on both sides of the aisle.”
To gather figures for the rankings, Roll Call solicited year-end revenue numbers, as reported under the Lobbying Disclosure Act, from the 50 firms that CQ MoneyLine found earned the most during the first half of the year. Figures for the firms ranked 26 through 50 are not reported in the final rankings.
Some firms in the bottom half of the top 50 either did not respond or declined to provide their results.
Private equity firms helped spell big revenue hikes for at least two firms: Ogilvy Government Relations, which pulled in $22.3 million — a 51 percent jump from 2006 that vaulted it from No. 12 to No. 6 — and Covington & Burling, where revenues jumped 52 percent to $12.9 million in the first year it has made the top 25.
“It reflects our incremental growth, adding people and projects, and we expect to see the same thing for this year,” Covington & Burling’s Rod DeArment said. The firm earned $1.1 million from Kohlberg Kravis Roberts & Co. for work on its takeover of TXU Energy and the brouhaha over carried interest.
Ogilvy picked up a more than $4 million haul from The Blackstone Group, the private equity firm that needed help beating back two potential tax hikes. But firm managing director Stewart Hall said the shop also added significantly to its retainer-based clients, “the mother’s milk of any firm.” Formerly known as The Federalist Group, the shop was all-GOP until 2006. It relaunched last year with the new name.
“We had a great year last year and we’ve got great enthusiasm going into next year,” Hall said. “We’re going to keep doing what we’ve always done, focusing on good client services and building client loyalty and trust.”
Further down the list, the law firms Holland & Knight and Brownstein Hyatt Farber Schreck both enjoyed considerable boosts in their bottom lines. Newly invigorated debates on energy and climate change helped Holland & Knight post a 19 percent gain, according to Rich Gold, who runs the firm’s lobbying practice. Al Mottur, at Brownstein Hyatt, said the firm mustered 22 percent growth this year — on top of 60 percent growth last year, according to Roll Call figures — by expanding across a range of practice areas, including energy and water, health care, financial services, and homeland security.
This filing period marked the first under a newly streamlined system designed to comply with the lobbying reforms, and K Streeters praised its efficiency. Previously, lobbyists had to buy a “digital signature” from an outside vendor to meet a House requirement that they file disclosures electronically. They then had to submit hard copies to the Senate.
The new system scraps the digital signature, and allows lobbyists to electronically file to both the Clerk of the House and the Secretary of the Senate at once with the click of a button.
“It’s a happy development for all of us who have to deal with these things,” DLA Piper lobbying expert William Minor said.
Amid mostly good news last year, some firms had a bumpier ride. Williams & Jensen, for example, saw its reported revenue slide nearly 5 percent. “I don’t think our corporate clients feel threatened with Bush in office,” firm partner Steve Hart said. “It will be a different story if Sen. [Hillary Rodham] Clinton [D-N.Y.] or Sen. [Barack] Obama [D-Ill.] are in the White House. Senate Republican lobbying will triple, or quadruple.”
The year proved an especially mixed bag for firms that focus on appropriations. With Democrats pledging to chop the special projects in half, some of the largest shops saw growth stumble.
In addition to Van Scoyoc and Cassidy, both of which saw less than 1 percent climbs, The PMA Group witnessed a 1 percent dip.
Cassidy invented earmark lobbying and relied on the model to grow into what was once the largest firm on K Street. Last year, amid tougher times for the practice, the firm cut its appropriations work to just under half of its total LDA revenue. But Gregg Hartley, the firm’s chief operating officer, said it will continue to be an important part of the business.
“2006 was the worst time. With so much controversy, a lot of people were backing off the playing field,” he said. “Now we see where the rules are going. This has been a good year, and we would anticipate that appropriations will always be a good, strong, healthy part of our business.”