Street Talk: Lobbying Is Still a Game Dominated by the Young

Posted February 6, 2009 at 4:25pm

Tom Daschle pulled down a cool $2 million lobbying for Alston & Bird.

[IMGCAP(1)]True, he didn’t technically “lobby” because he didn’t fit the Lobbying Disclosure Act’s exacting criteria. But let’s be real: Lobbying is any effort to influence public policy — it doesn’t matter whether you can avoid registration because you are paid tens of thousands of dollars to tell a client who to lobby and how, but make no more than one lobbying “contact” on the client’s behalf.

Managing partners across the city are now assessing whether Daschle’s lobbying chops have taken an irretrievable hit. They almost certainly have not. But the former Democratic Senator is not an avatar for the industry.

In fact, it’s a very tough market out there, even for Democrats, not like the heady years from 2002 to around 2007, when, notes one longtime lobbyist, things were “high, wide and handsome.”

“Business is hard to come by. Very few people are out there taking chances these days,” a top lobbyist at a big downtown law firm says, referring to the hiring practices of rival K Street firms.

So who can get hired? And how much are they making? Note to Republicans: a lot less than Democrats.

“Some firms in town are looking to scoop up some bargains,” says one principal at a small lobby shop, noting that Republicans with similar issue knowledge as Democrats can be at least $75,000 cheaper, and maybe more.

With rare exceptions, however, such as chief Republican counsels on major Senate committees, GOP staffers are generally out of luck.

For D’s, the food chain, from the bottom up, breaks down like this:

• Legislative assistants for the hot subject areas — health care, energy and taxes — who work for Members not on those committees.

• LAs for on-committee Members.

• Legislative directors in a Member’s personal office.

• Regular committee staff.

• Senior committee aides.

• Chief counsels and staff directors and Members’ chiefs of staff (if you need an access and fundraising lobbyist).

• Above all these, any professional staffer, Democrat or Republican, on Senate Finance and House Ways and Means committees.

“They know where the offsets are hidden,” one former staffer said, and having a few offsets, or pay-fors, that you can keep up your sleeve is exactly the kind of information corporate America will pay dearly for.

If a company wants a tax break worth, say, $50 million a year, it stands a far better chance of finding a sponsor if it can provide a corresponding offset for the same amount.

The former staffer recalled, in admiring tones, how a Finance Committee staffer created a pay-for by adding money to the Internal Revenue Service budget to bolster its fuel tax enforcement efforts. For every dollar in enforcement, the government would bring in, say, $5 in extra tax revenue. And that extra money — minus the enforcement costs — could then be used to offset someone else’s tax break.

“A big hire for a Democrat is $350,000 to $400,000, but they all want to make half a million,” one Republican lobby shop founder said. Instead, the lobbyist counsels: “Your goal in life coming off the Hill should be to double your salary.”

That’s not to say the most senior Hill staffers can’t negotiate higher numbers. But most of those people have already made their move. “Right now, I could use a really good senior person from the House,” lamented the top lobbyist at the big law firm. “But nobody’s leaving.”

Many firms, especially law firms, want potential hires to present a business plan, a couple of pages where the prospective lobbyist details who’s been in and out of his office over the past couple of years — a fair indicator of potential clients for the firm. “It’s got to be credible and checkable,” another longtime lobbyist said. “We’re not neophytes.”

At many firms, a lobbyist will receive X amount of business originated above and beyond salary and overhead.

“It’s real cut and dried,” the lobbyist said. “You want X number of dollars. We have overhead requirements in the firm. If you can bring in revenue in excess of that, the question is what percentage do you want?”

And that’s where it starts to get complicated. Do you get a percentage of business you originate, or that you work on? Or both? And how much? Is there a signing bonus? Are there origination targets? How long do you have to meet them?

“There are some freaky-ass compensation schemes out there,” said the Republican lobby shop founder, who once saw a non-compete clause that included a payback provision of future revenue if a lobbyist left with a client.

“You cannot categorize pay structures. Everybody has a different one,” the law firm lobbyist added.

It is, of course, far less complicated to make those junior hires, the two- to four-year Hill veterans who are not necessarily steeped in substance, notes a top Democratic lobbyist at a small law firm.

In those cases, he said, “you’re just looking for the best available athlete. Can they write, are they really personable, do they have a wide circle of acquaintances? And are they willing to work very hard — or at least very long?

“We’ll pay them a little bit more than they’re making on the Hill, in the low six figures. They come over, they bring their enthusiasm, we teach them to be lobbyist.

“You’re refreshing your information pool this way,” he added. “Remember, it’s still a young person’s game.”