K Street’s hopes for a recovery in 2013 proved to be a pipe dream, as leading firms staggered through another year of declining revenue.
While some upstarts defied the trend, most lobby shops couldn’t escape the downward pull of a historically unproductive Congress that stalled on big-ticket items like immigration and tax reform. The government shutdown didn’t help, either.
Industry king Patton Boggs took it hard on the chin, earning $40.2 million in lobbying fees for 2013 — a 13 percent drop from the $46.2 million the firm earned the prior year.
“The lobbying industry responds to what happens in Congress, and the ambitions were certainly grander than the execution. That impacted us,” said Kevin O’Neill, Patton Boggs’s deputy chairman of the public policy department.
Brownstein Hyatt suffered a drop as well, going from $22.5 million in lobbying fees during 2012 to $22.2 million last year.
Other victims of the slump included Williams & Jensen, which made $17.6 million in lobbying fees after banking around $18 million in 2012, and Van Scoyoc Associates, which went from $22.5 million for lobbying revenue in 2012 to $21.4 million last year.
Steve Hart, Williams & Jensen’s chairman and CEO, cast blame on the gummed-up legislative process on Capitol Hill, which, at times, left lobbyists with little to do.
“If Harry ReidHarry ReidSanders and Schumer are right: Ellison for DNC chair The Hill's 12:30 Report Hopes rise for law to expand access to experimental drugs MORE doesn’t allow votes in the Senate, not much can happen in the lobbying world,” Hart said.
Other top firms are expected to post down years when they release their lobbying numbers this week.
But not everyone on K Street is wondering went wrong. Several shops, including those on the lower rungs of the industry hierarchy, posted gains.
“Generally, smaller firms are doing better than larger firms,” said Steve Elmendorf, the president of Elmendorf | Ryan. His firm took in $10 million for lobbying fees last year, an increase over its 2012 take of $8.6 million.
“The economic model of a large law firm or a large public relations firm is, they throw a lot bodies at the problem. The principal pitches the client, and less experienced people are brought in to work on it. As a business model for lobbying, it doesn’t work very well,” he said.
Another winner was Holland & Knight, which pulled in $18.1 million for lobbying fees last year, a bump over the $18 million the firm took in for 2012.
“I do think we have hit the bottom when it comes to the [Lobbying Disclosure Act],” said Rich Gold, a partner at Holland & Knight.
Perhaps the strongest showing came from Capitol Counsel, a firm that turned heads recently by hiring former senior aides to House Majority Leader Eric CantorEric CantorGOP shifting on immigration Breitbart’s influence grows inside White House Ryan reelected Speaker in near-unanimous GOP vote MORE (R-Va.) and Sen. Ron WydenRon WydenMnuchin aiming for tax reform by August Dems rip Trump administration for revoking Obama's transgender directive IPAB’s Medicare cuts will threaten seniors’ access to care MORE (D-Ore.), the chairman-in-waiting on the Senate Finance Committee.
Capitol Counsel posted $14.7 million in lobbying fees, a tidy increase over the $12.1 million it recorded in 2012.
“We want clients to look at us as a firm that can cover, in a substantive way, various committees and members of leadership and make their dollar go farther,” said John Raffaelli, the firm’s founding partner. “Save them money and make us money.”
Covington & Burling, which now employs former Rep. Howard Berman (D-Calif.) and ex-Sen. Jon Kyl (R-Ariz.), showed growth as well. The firm earned $12.1 million in lobbying revenue for last year, an increase over the $10.9 million it recorded in 2012.
For one K Street mega-firm, 2013 was a year to celebrate.
Akin Gump Strauss Hauer & Feld, second only to Patton Boggs in lobby revenue, grew by 8 percent from 2012, clocking in at $33.8 million.
“If you have a good team of energetic people who figure out how to get things done in an off year, you’re going to be successful,” said Don Pongrace, the head of Akin Gump’s policy group.
Akin represents blue-chip clients, such as AT&T, Chevron and Boeing, but prides itself on “quarterbacking” a number of prominent industry coalitions that hope to influence policymakers — including The Coalition for 21st Century Patent Reform, the Alliance for a Stronger FDA and the Alliance for Fair Trade with India.
Despite making overly optimistic predictions for 2013, some lobbyists insist their prospects are brightening.
They predict a flurry of activity before campaign season takes hold. Immigration reform isn’t dead, they note, and President Obama is seeking fast-track trade authority to move forward on massive trade deals.
“This is a chunky year, and we will have a lot of stuff to get done. Some may get done before the silly season starts in June but we will have a busy lame-duck session,” Gold said.
Stu Van Scoyoc, the president and CEO of Van Scoyoc Associates, said a return to regular order on appropriations and pending legislation like the farm and highway bills could drive foot traffic to K Street.
“If I look forward, where we are this year, compared to where we were last year, may actually see an increase this year,” Van Scoyoc said. “We’re feeling very good.”
Others were less optimistic and said they are eyeing the rest of Obama’s term with dread.
“The combination of Obama and Republican gains in the Senate means not much is going to happen until 2017,” said Hart of Williams & Jensen.