By Kevin Bogardus - 12/21/13 04:20 PM EST
Retiring lawmakers are likely to find a tough job market next year on K Street.
While corporate headhunters see a future on K Street for many of the retiring lawmakers, they warn that sluggish lobbying revenues and gridlock on Capitol Hill are depressing demand.
“With revenues down, it's not going to be as fruitful. It will slowly pick up, but we are still in a slump when it comes to government relations and lobbying,” said Chris Jones, managing partner of CapitolWorks.
Jones said lawmakers out of work in 2015 would “need to be creative when it comes to finding their next job.”
That might mean taking not one but several jobs: working in venture capital, heading to academia or sitting on corporate boards while doing a little lobbying on the side.
“Just having a congressman doesn't get you much in the world. But if you got a name with the right connections, they can work for magic for you,” said Larry Latourette, a principal at Lateral Link.
More than a dozen members of the House and the Senate are retiring after the coming elections, with three alone announcing their retirement plans on Tuesday — Reps. Tom Latham (R-Iowa), Jim Matheson (D-Utah) and Frank Wolf (R-Va.).
Retiring lawmakers who accrued seniority and a bipartisan record are the top prizes for K Street.
“The keys for this for any of these people are if they have any seniority, if they can transition to the private sector and if they are bipartisan,” said Nels Olson, vice chairman at Korn/Ferry International. “If you don't, it's going to be a tougher road. It's a supply-demand issue.”
Olson said the financial services, healthcare and taxes are the areas of expertise “most in demand.” Lawmakers who are well-versed in those fields could make a soft landing on K Street.
Headhunters said Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee, would have been a top target for many law and lobby firms. But Obama nominated Baucus for U.S. ambassador to China, taking him out of the job pool.
“Baucus, given his track record and bipartisan reputation, would have demanded top dollar,” Olson said.
“Max Baucus would have been the big dog if he had gone to the lobbying and government relations sector out of this class of lawmakers. Now that he has taken the road to China, others who are retiring will have to step up their game,” Jones said.
Other former members are considered good candidates for K Street. Matheson is one of the remaining Blue Dog Democrats, a popular breed among lobby shops for their business support in the House.
“Jim Matheson is a Blue Dog Democrat and has been helpful to the business community, so that's appealing to K Street,” said a Republican lobbyist.
Further, Latham is considered close to Speaker John Boehner (R-Ohio), which could help if he chooses a lobbying career.
“I think Boehner will stick around, and you cannot get a better guy [than Latham]. He's certainly at the top of everyone's list,” said the lobbyist.
Other prospects include retiring Sens. Saxby Chambliss (R-Ga.) and Mike Johanns (R-Neb.). Chambliss will have almost two decades of service in the House and the Senate when he retires, while Johanns is also a former Agriculture secretary from the George W. Bush administration.
“I see Chambliss or Johanns fitting in extremely well with a law firm that lobbies in Washington. They would fit in like a glove,” said Ivan Adler, a principal at The McCormick Group.
A career in influence can be lucrative for a former lawmaker.
Ex-House members can draw anywhere between $250,000 and $500,000 in annual salary, with the pay scale rising further depending on seniority, according to headhunters’ estimates. Former senators fare better, taking home between $500,000 to $1 million in a year.
That is a big step up from congressional pay, which is $174,000 per year for a House member or senator.
Major trade associations often pay even more. Former Sen. Chris Dodd (D-Conn.), chairman and CEO of the Motion Picture Association of America, earned more than $2.4 million in compensation for 2011, according to the Hollywood lobby’s tax form for that year.
Luckily for the retiring class, business group jobs are opening up downtown.
Kevin Burke is stepping down as president and CEO of the American Apparel & Footwear Association next month, while Michael Stanton, president and CEO of the Association of Global Automakers, is leaving in early 2014 as well. CTIA-The Wireless Association will need a new head by the end of 2014 after former Rep. Steve Largent (R-Okla.) retires.
Headhunters said they expect more lawmakers to retire ahead of the November elections. Many members have been discouraged by the inaction in Congress and are eager to get out.
“I wouldn't be surprised, if there are more retirements coming. There is a sense of frustration among members in not getting stuff done,” Adler said.