By Kevin Bogardus and Rachel Leven - 07/20/11 11:45 PM EDT
Washington’s all-consuming focus on the debt ceiling has eaten away at K Street’s revenues.
Several of Washington’s prominent lobbying firms reported declines in their lobbying earnings for the first half of this year compared to the same point in 2010, according to forms filed Wednesday under the Lobbying Disclosure Act (LDA).
“We have gridlock,” said former Rep. Jim Walsh (R-N.Y.), a government affairs counselor at K&L Gates. “We have everyone focused on the big deal, and that has frozen everything in its place.”
Several pieces of legislation that generate work for lobbyists have stalled since divided government took hold in January. The surface reauthorization transportation bill, the Federal Aviation Administration reauthorization bill, the patent-reform bill and the long-wanted trade deals with Colombia, Panama and South Korea are just a sampling of what’s been stuck in Congress.
This year’s inactivity stands in stark contrast to the last Congress, when a flurry of legislation from Democrats had companies flocking to K Street for help.
K&L Gates reported making $9.6 million from lobbying so far this year, a small drop from its 2010 midyear lobbying earnings of $9.8 million.
Other lobbyists agreed with Walsh that the debt-ceiling negotiations have sucked up all the oxygen in Washington.
Tom Quinn, a partner at Venable, said the “gorilla in the room” is the debt-ceiling debate. While the firm has picked up business by monitoring the negotiations for clients, lobbyists have been shut out of the talks on Capitol Hill.
“To a certain degree, the issues have almost gotten out of the lobbyists’ hands and into the political leadership,” Quinn said. “The Senate, the House and the Gang of Six have sought the advice of the business community, which I would say is represented by the lobbyists. But as much input as we have, it is certainly left up to the leadership and the White House.”
Venable has earned $5 million in lobbying fees so far this year, a drop from the $5.7 million it had taken in at this point in 2010.
Patton Boggs, typically the influence industry’s top player, reported making $24.7 million from lobbying so far this year, a significant jump from its $20.5 million figure at this point in 2010. But 2011 lobbying earnings have included revenue from the Breaux-Lott Leadership Group, which merged with Patton last year.
“The reason that revenues are growing is because there is more regulatory work … implementing major legislative programs. There’s more work analyzing and predicting the outcomes of these programs,” said Nick Allard, a partner at Patton Boggs. “That is causing more work in the technical, non-lobbying area, but that is still public policy.”
Other top firms didn’t fare as well as Patton Boggs. Akin Gump Strauss Hauer & Feld saw a decline in lobbying revenue, reporting $17.7 million earned so far, compared to an $18.3 million take at this point in 2010. The Podesta Group also saw a decrease, taking in $13.7 million for lobbying fees so far in 2011, down from $14.3 million by mid-2010.
Some on K Street said the struggling economy remains a drag on lobbying revenues.
David Grenham, director of client services and marketing for the Ferguson Group, said the poor economy has significantly affected the majority of his firm’s clients — local governments and local public agencies.
“The explanation [for the drop in lobbying revenue] is that the economy has hit our client base really hard,” Grenham said. “Cities, counties and other local governments are hurting. So the decrease is definitely a reflection on that.”
The Ferguson Group’s lobbying revenue decreased from $6.6 million in mid-2010 to $5.2 million in this year’s midyear disclosures.
“Flat is the new up,” said Rich Gold, the head of the public policy group at Holland & Knight.
Gold’s firm reported lobbying earnings of $9.5 million for this first half of this year, down from the $10.8 million it earned from lobbying at this point in 2010.
“It’s the least active Congress since World War II,” Gold said. “It’s showing in the numbers. It’s also coming off a Congress where everyone was working double-time.”
Nevertheless, Gold said the increasing output of regulations from federal agencies is keeping his firm’s partners very busy.
The Obama administration is working on a slew of new federal rules stemming from the massive healthcare and financial-services reform laws. That regulatory work is bringing new clients for lobbyists, but that is not reflected in the LDA filings because legal work is not reported.
“The revenue for my group is up 5 percent,” Gold said. “So if [lobbying revenue] is down, regulatory work is putting gravy on the table.”
Other firms also saw declines in lobbying revenue. Dutko Worldwide reported $6.2 million earned from lobbying for 2011 so far — a drop from the $8.8 million the firm reported for the first half of 2010.
Joshua Rosenstein, Dutko’s vice president and general counsel, said there is more to lobbying these days than what is shown on disclosure forms, with the industry shifting away from “pure traditional lobbying.”
“I think that’s part of [why our numbers are down]. I think we’ve seen a lot of the work shift from traditional lobbying to nontraditional consulting areas,” Rosenstein said. “I can’t speak to what other companies are doing, but I do know that some of our clients are some of the most prestigious in the world and they are demanding that we broaden the services we are able to offer them.”
Dutko is rebranding itself to that effect. Soon the firm will become Dutko-Grayling, to include the international public-relations firm it merged with more than a year ago. That will reflect the more “global focus on interdisciplinary scope of service that we’re offering to our clients,” Rosenstein said.
Check back with The Hill to see how other top lobbying firms fared in their lobbying revenue.