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Several prominent K Street firms saw their revenues level off or drop in the third quarter.
Lobbyists blamed the dreary numbers on the combination of the presidential election, the annual August recess and the all-consuming financial crisis on Wall Street that left little time for lawmakers to tackle other issues.
But even if the overall economic outlook continues to darken, many lobbyists said they believe brighter days lie ahead with a new Congress, a new administration and $700 billion on the table to be spent by the Treasury Department. In fact, several lobbying firms have already begun to register a slew of new clients to lobby on the economic rescue plan passed by Congress earlier this month.
“There are things that will happen over the next two or three years that will offer increased opportunities for organizations and increased risks, due to legislation or regulation, and that hopefully will offset any corporate belt-tightening,” said Gregg Hartley, vice chairman and chief operating officer at Cassidy & Associates. Cassidy’s revenues dropped from $6.1 million in the second quarter to $5.9 million in the third quarter.
Patton Boggs retained its place as top earner on K Street in the third quarter, according to disclosure forms due Monday under the Lobbying Disclosure Act. This is the first time firms have had to file third-quarter revenue reports. Previously, lobbying shops only had to report revenues twice a year, but the ethics law Congress passed a year ago now requires quarterly reporting.
But Patton Boggs wasn’t immune to the revenue dip. It generated $10.1 million in lobbying revenue last quarter, and $9.3 million over the past three months.
“Everyone is holding their breath for the election,” said Jim Christian, a partner at Patton Boggs. “We have seen this before in election years, especially in presidential election years.”
Akin Gump Strauss Hauer and Feld, meanwhile, retained its place in second, although its quarter-to-quarter revenues increased a bit. Joel Jankowsky, who leads Akin’s government relations practice, said he was happy that revenues at his firm remained relatively stable.
There are reasons to believe that business will pick up again after Nov. 4. Democrats are likely to come out of the election with strengthened majorities in the House and Senate that make it easier for them to implement their agenda. Also, a new administration will push a spate of new policies — on healthcare, energy or tax policy — that should keep lobbyists busy.
In fact, several lobbyists said they were already seeing business rebound, because of the $700 billion Wall Street rescue plan that is now being implemented by Treasury officials, as well as Democratic pronouncements that a second economic stimulus package may be passed during the lame-duck session.
“For the fourth quarter, we are seeing an uptick in large part because of the financial markets’ turmoil,” said Peter Peyser, the head of government relations for Blank Rome. Peyser said the fourth quarter was expected to be “unusually strong” for an election year.
Chuck Wilkins, a spokesman for Venable, also expected fourth-quarter revenues to rebound at his firm. Venable reported $2.4 million in revenue in the second quarter and $2 million in revenue in the third quarter. “None of our bailout work is going to show up in the third quarter, and we’ve done a ton of bailout work,” Wilkins said.
Rich Gold, who leads Holland and Knight’s public policy and regulatory practice, said the firm has signed around a dozen new clients because of the bailout package and is also lobbying on the stimulus.
Some of the new clients have hired Holland and Knight to perform legal or regulatory work that won’t affect the firm’s quarterly lobbying revenue figures. But Gold said he expected some additional advocacy business this year and next because of the bailout and the future efforts in Congress to reform the financial services regulatory structure.
There is also the possibility, however, that the larger economic picture will affect business in Washington, which is resistant to a downturn, though not immune. Some companies are likely to reduce their spending on advocacy as they cut costs in other areas. Already, the constriction in the financial services sector and the exit of Fannie Mae and Freddie Mac from the advocacy business has left K Street without some of its best-paying clients. Still, lobbyists said they were looking forward to putting the third quarter behind them.
Roxana Tiron and Jeffrey Young contributed to this article. |
