K St. revenues a mixed bag in slow economy

Patton Boggs continued its reign as the top earner on K Street, raking in $18.5 million from its lobbying activity so far this year, according to an analysis of midyear lobbying revenue totals by The Hill.

Akin Gump and Van Scoyoc Associates took second and third place in the race for lobbying receipts, bringing in $16 million and $13.4 million, respectively.

ADVERTISEMENT
Revenues at the two top firms, though, were off the totals they reported for the first six months of 2008, as a sluggish economy continued to be a drag on K Street. In total, 13 of the 25 largest lobbying firms reported revenue declines during the first six months of 2009, according to The Hill’s survey.

Some lobbying shops, though, bucked the trend, buoyed by an activist administration and Democratic Congress.

The Podesta Group was the fourth biggest earner on K Street, reporting revenues of $11.6 million for the first six months of the year, a 57 percent jump over its receipts from the first half of 2008.

Holland & Knight reported revenues of $10.6 million, the fifth best start of the year. Its revenues were 41 percent higher than what it had reported at midyear 2008.

Lobbyists said sweeping proposals to reform the energy, healthcare and financial-services sectors helped portions of K Street rebound from a slow first quarter and offset scattered belt-tightening by clients.

“Because of the economic downturn, a number of businesses were laying off their personnel because they could not justify continuing with a consultant. But then it began to pick up after the election,” said Sandi Stuart, a senior partner at Clark & Weinstock.

Clark & Weinstock reported $3.7 million in earnings for the first two quarters of 2009. During the first six months of 2008, the firm reported $3.3 million in revenues. Clark & Weinstock has since merged with The Washington Group, which reported receipts of $1 million during the first half of 2008.

Mark Ruge, co-leader of K&L Gates’s public policy and law practice group, attributed a slight uptick in his firm’s business to sweeping legislative proposals in Congress. The firm reported revenues of $9.5 million so far in 2009, a 19 percent increase from what they were at this point a year ago.

“In the last three months, we have seen the stimulus roll-out, appropriations, healthcare reform, energy reform, significant tax proposals and much, much more,” Ruge said. “The activity level is off the charts.”

Still, some firms continued to struggle. Blank Rome Government Relations reported revenues of about $2 million for the first and second quarter of 2009, which is less than what the firm took in during the first half of 2008.

Peter Peyser, a principal at Blank Rome, says the lobbying industry is “acyclical.” He said he expected business to pick up during the second half of the year.

“We are still anticipating growth for 2009. We have signed on a number of new clients in the first half of the year and we are anticipating that we will see revenue growth in the second half,” Peyser said.

Hogan & Hartson have also experienced a significant decline in business during the first half of this year. Revenues for the firm have decreased 4.6 percent from midyear 2008 to midyear 2009, with $10.4 million for 2008 compared to $8.8 million for 2009.

Mike House, head of Hogan & Hartson’s government affairs team, said that the firm’s revenues in areas not counted under the Lobbying Disclosure Act (LDA) were up this year. But House acknowledged the poor economy was affecting the lobbying industry.

“I would be surprised if I don’t see a decrease in overall lobbying numbers. People are more reluctant than usual to pay fees,” House said.

Steven Ross, a partner at Akin Gump, also said declines in lobbying revenues were made up for by higher receipts from other areas in his firm’s government relations practice. The firm advises clients involved in government investigations, for example, and represents foreign interests that register with the Justice Department and are not counted as LDA revenues.

The fluctuation in lobbying revenues reflects the ebb and flow of the congressional cycle, Ross said. He said it was more appropriate to compare the first six months of 2009 with the first six months of 2007, which was also the first year of a congressional session. Akin Gump reported $15.1 million in lobbying receipts at the midyear point of 2007.

 

This story was updated on Wednesday, July 22, 2009, at 12:33 p.m.

More in Lobbying Contracts

Bottom Line

Read more »