By Jim Snyder and Silla Brush - 04/20/10 12:24 AM EDT
Jennifer Richter has a powerful résumé, but her promotion to co-director of a leading lobbying office was unusual in one respect.
Richter, who helps run Patton Boggs’s Public Policy practice, isn’t a lobbyist.
Regulatory work is often more cumbersome and legalistic, with rulemaking procedures regularly taking months largely outside of public view because disclosure laws are not nearly as strict for agencies as they are for Congress. As the Obama administration and its regulatory arms push forward on major changes to healthcare, energy, financial-services and telecommunications rules, K Street is looking to grab a piece of the action.
“We’re seeing a surge in both the short-term and long-term opportunities in the regulatory arena,” said Kevin O’Neill, the deputy chairman of the public policy practice and a registered lobbyist.
The firm has gone on a hiring spree in the past year. It hired Kevin Martin, a former chairman of the Federal Communications Commission, to do telecom work, and on Monday announced Suedeen Kelly, a former member of the Federal Energy Regulatory Commission, would help lead its energy practice.
Richter has more than two decades of experience in telecommunications and technology law and also serves as co-chairwoman of Patton Boggs’s communications practice.
Legal-lobby firms say they have an edge in regulatory work because they are better able to walk clients through the technical issues they face before federal agencies. The business is less dependent on the type of personal relationships former members or key staff aides often rely on to lobby.
But it isn’t just the big law firms that are gaining by paying more attention to federal agencies. Lobby-only shops are getting in the game by developing federal marketing practices to help clients compete for federal loans and grants.
Last month, Van Scoyoc Associates announced the start of a new consulting practice that concentrates on federal agencies. Cassidy & Associates has supplemented declining revenues from appropriations lobbying with a growing federal marketing practice that has concentrated on selling the Pentagon on its clients’ products.
The extra push at the agencies doesn’t mean that firms are cutting back on lobbying Congress, however. In fact, the reason they are targeting federal agencies, which have never been fully ignored by K Street, is in large measure due to Congress’s ambition.
The $787 billion stimulus package was devoid of earmarks, the targeted appropriations lawmakers slip in to benefit special interests. That put an enormous amount of power in the hands of career governmental officials.
Ethics rules imposed by the White House limited access to those officials and further raised the profile of lawyers who don’t register to lobby Congress.
Since the stimulus, Congress passed another major law that will yield K Street years of work: healthcare reform.
Lobbying spending on healthcare likely reached records levels with reform measure, which is expected to expand coverage to 32 million uninsured.
“The impact of that will be felt [for] years, if not decades, in [the] making of regulatory rules that come out of any number of [the] alphabet soup of regulatory agencies,” O’Neill said.
Rich Gold, the director of the Holland and Knight’s public policy and regulatory practice, foresees more than a hundred rules stemming from the healthcare law, many of which will hold significant consequences for medical device makers, drug companies or other businesses in the healthcare sector.
Meanwhile, the administration is proposing new greenhouse gas standards that could rearrange how the nation produces and uses electric power; has adopted new fuel-efficiency standards; and is pushing a national broadband plan to expand Internet infrastructure.
Congress is heading toward final votes on a financial reform package that will trigger more regulatory work.
“The problems we are trying to solve are not local issues,” Gold said. “We’re dealing with much broader issues.”
Washington’s expanding role in the economy means more focus on Congress and the administration, Gold said.
He also sees something more subtle at play. Congress passed Sarbanes-Oxley to impose new ethics requirements on industry, which has consequently enhanced the role of general counsels at major companies.
Corporate lawyers were more aware of the impact of regulatory work and tend to favor firms that do both lobbying and legal work.
Five years ago, Gold said, Holland and Knight had 50 to 60 people in its regulatory practice. It now counts 95 employees.
The firm’s lobbyists have generated faster growth than its regulatory practices, but revenues from both are increasing at a double-digit clip year to year, Gold said.
Some government watchdogs want Congress to force outside interests to disclose more about their interactions with regulated agencies.
Craig Holman of Public Citizen said lobbying laws only require interests to report contacts with the heads of agencies or board members of federal commissions.
“Quite frankly, half of the lobbying work is really with regulated agencies,” Holman said. “Legislating goes way beyond the approval of laws. If not implemented well, you can fully change the public policy impact of the regulation.”