Some Shops Soar; Others Flutter
K Street Posts an Uneven Quarter
It was feast or famine on K Street during the first quarter of 2009, with seven of the top 10 lobbying firms reporting drops in lobbying revenues compared with the first three months of 2008.
The downturn wasn’t universal, however.
Podesta Group, Holland & Knight and K&L Gates all reported double-digit growth over the same period.
But while the majority of top firms are reporting revenue losses on the comparison, almost every K Street shop is reporting higher revenues when compared with the fourth quarter of 2008, when a sinking economy and presidential election sent revenues plunging at many firms.
Podesta Group continued its large upward swing, climbing 52.9 percent in 2009, compared with last year’s first-quarter filings.
Podesta reported $5.2 million in billings so far this year.
Firm founder Tony Podesta attributed the large gains to client renewals, expanding contracts and new clients.
“I don’t think the economy has impacted us in some dramatic way,— Podesta said. “We didn’t represent AIG or Lehman Brothers.—
Besides losing a client and taking a short-term haircut from another, Podesta said the firm has been relatively unaffected by the downturn. And he expects it to continue to thrive into the second and third quarters of 2009 with energy, health care, financial services and appropriations all picking up pace.
“I think this is going to be a busy year all the way along,— Podesta said.
Holland & Knight also experienced explosive growth in the first quarter, increasing its revenue 37.8 percent compared with the first quarter of 2008.
The firm reported $5.1 million in lobbying revenue for the first quarter.
Holland & Knight’s public policy group head, Rich Gold, attributed the growth to the firm’s large commercial real estate practice, the Obama administration taking on several high-profile regulatory issues and the firm’s merger with MARC Associates becoming official on Jan. 1.
“This is the tip of the iceberg,— Gold said of the massive lobbying efforts that are going to accompany a new administration with a very ambitious agenda.
“I think you are seeing the economy in some of these numbers,— said Gold, referring to the struggle of some firms to rebound from 2008. “It feels a little bit to me like last year was the down year, and you will see even those [who] are not firing on all cylinders … will have an up 2009 over 2008.—
K&L Gates also saw dramatic growth, increasing 20.5 percent to $4.7 million in the first quarter of 2009.
“This Congress and the Obama administration hit the ground running and so did we,— said Mark Ruge, co-chairman of K&L Gates’ public policy practice. “The first quarter of this year seemed like a full session of Congress that compacted into three months.—
K&L Gates’ lobbying revenues were up 38 percent compared with the fourth quarter of 2008.
Not everybody on K Street is showing dramatic amounts of growth.
Patton Boggs and Akin Gump, the top two lobbying firms in overall revenues, both reported quarter-on-quarter decreases.
Patton Boggs had the largest decrease in revenue of the top 10 lobbying firms, dropping 19.2 percent, from $10.4 million in the first quarter of 2008 to $8.4 million so far this year.
Akin Gump dropped 9.1 percent from 2008 to $8 million for the first quarter of 2009.
The revenue drop isn’t worrying Patton Boggs’ government affairs practice co-chairman Nick Allard.
“We’ve got a lot of new registrations, I think 32,— Allard said. “I’m fully confident that understates the [amount] of new business because there’s just a lot of policy work … that isn’t lobbying.—
Akin Gump’s Smith Davis echoed Allard. “I think that with the inauguration and so much of policy development being administration-oriented as opposed to Congressionally oriented, this shows a fair amount of activity on our part,— Davis said, noting the firm’s $500,000 increase in revenues compared with the fourth quarter of 2008.
Van Scoyoc Associates Inc. and Cassidy & Associates also reported drops in revenue.
Van Scoyoc’s lobbying numbers fell 10.6 percent to $5.9 million. Firm founder Stu Van Scoyoc said the numbers reflected the downturn in a presidential election year but do not take into account the new business the firm has already attracted.
Cassidy & Associates’ numbers fell 18.3 percent in the first quarter of 2009 to $4.9 million from $6 million in lobbying revenues for the first quarter of 2008.
Ogilvy Government Relations’ Moses Mercado blamed the firm’s 6.5 percent first-quarter drop on the normal ebb and flow of business. The firm posted $4.3 million in lobbying revenue during the first quarter of 2009.
Ogilvy’s numbers were down from the fourth quarter of 2008, when they hit $7.3 million, but that was because the firm’s private equity clients like Blackstone pay the firm in a lump sum, according to Senate lobbying disclosure reports.
Additionally, Mercado said the firm has made a strategic decision to focus on non-registerable consulting, following the Obama administration’s negative view on the lobbying profession.
“We’re well-positioned for the new sort of playing field where people want more strategic communication,— Mercado said. “In this new world of transparency, a lot of companies want help with messaging and grass-roots work.—