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Inside a K Street success story

Greg Nash

Capitol Counsel has arrived.

Revenue has almost tripled since the lobby firm opened its doors in 2007, and it is snapping up top talent and big-name clients at a time when most shops are stuck in neutral.

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“You have to be pretty well-rounded to play offense in this environment,” said Josh Kardon, Capitol Counsel’s newest hire. “You need to understand the politics of both caucuses, the campaigns, the press, the personalities and the law.”

The rapid growth has vaulted Capitol Counsel into the rarefied air of K Street’s elite. The firm ranked No. 9 for lobbying earnings last year after posting $14.7 million in revenue, a 21 percent increase over 2012.

Driving home its new power status, Capitol Counsel recently signed a 10-year lease for office space that spans the entire second floor of a building near the White House. 

The lease was a big moment for the self-described “odd couple” of John D. Raffaelli and former Rep. Jim McCrery (R-La.).

Raffaelli, the firm’s founder and mastermind, gives McCrery a large share of the credit for Capitol Counsel’s success. The firm’s revenue increased by more than $1.7 million in 2009, the year the former congressman retired from the House and came onboard.

“He’s dressed well, he’s very calm, very low-key, very intelligent. I’m sort of your typical fat, bald Italian,” Raffaelli said of McCrery with a laugh.

“His personality and style permeate the firm here. Even though I founded it and was the first person here, his style has become what the firm is all about,” Raffaelli said. “We have a lot of fun together, but we’re very different.”

The former lawmaker, a Louisiana native with blond hair and a soft voice, says he works more on organizing clients’ needs and bridging the gap between the business and interpersonal aspects of the firm. 

McCrery, in turn, describes Raffaelli as wearing the proverbial “green eyeshade” and tinkering with all the business elements at the firm, such as managing expenses and plotting expansion. 

Lobbyists at Capitol Counsel have been carefully selected to ensure they will fit in with the firm’s “all hands on deck” mentality. 

“John D. can be ‘aw-shucks’ about it, and he probably wants to get away with it, but he, Jim and the partners have been amazingly strategic about how to grow the firm the right way,” said Kardon, who has known Raffaelli since the ’80s. 

Though the firm has essentially doubled its staff in the past seven years, it hasn’t happened “just because,” said one of the original partners, Shannon Finley. 

“That is the most important about the last few years: We’ve grown in ways that really enhance what we’re able to do for our clients,” she said.

Capitol Counsel began with only one Republican on its roster, healthcare expert Denise Henry Morrisey. Hiring McCrery in 2009 threw the bipartisan expansion into overdrive, and the firm now boasts a near-equal party split among its lobbyists.

The firm’s second major growth spurt began in June 2012, when Senate Republican leadership guru John O’Neill came over from Ogilvy. Later that year, former financial regulator De’Ana Dow made the same move.

Next came Jeffrey Walter and Brad Mollet, veterans from the lobbying industry and Capitol Hill, and Kyle Nevins, formerly the No. 2 staffer in House Majority Leader Eric Cantor’s (R-Va.) office. Then, Kardon began work in January.

“The culture … was a significant drawing point for me,” said Kardon, who formed his own lobby shop in 2011 after spending 17 years as a chief of staff to Sen. Ron Wyden (D-Ore.). 

“[It’s] a no-nonsense team approach to clients. It’s the antithesis of an ‘eat-what-you-kill’ firm,” he said.

Lobbyists at Capitol Counsel say they’re constantly in contact over email as they pitch in with each other’s work.

“We all complement each other with the relationships we have on the Hill. Nobody knows everybody,” said David Jones, a Democratic campaign operative and original Capitol Counsel partner. “Everybody helps with every client, if needed. For example, Kyle and I can trade about 30 emails every day.”

The firm sells itself as a full-service operation able to operate in both chambers of Congress, with both parties, and in the administration. It also works parts of the fundraising circuit and connects state-level interests with those of federal policymakers.

Drew Goesl, who worked as an aide to former House Blue Dog Democrat Mike Ross (Ark.) and to Sen. Blanche Lincoln (D-Ark.), left the Hill for Capitol Counsel in late 2009, at a time when centrist Democrats were a valuable commodity at K Street.

“The pendulum swings back and forth,” he said, noting the Democrats’ loss of the House in 2010. “The best place to be at a time like that is a firm that values all your talents and relationships.”

Capitol Counsel’s rise seems all the more remarkable coming at a time when lobbyists are struggling to convince clients that they should engage with Congress.

“Because of the team [Raffaelli] has put together and the talents they bring, our clients have stayed with us, despite what … has been perceived as a stalemate,” Goesl said.

“Not every client need is an aggressive offense — ‘Get this bill passed’ — there are so many other things we do,” he said.

It could be said that the third time’s a charm for Raffaelli, had his other two ventures not been so successful.

He ran McAuliffe, Kelly & Raffaelli, a law and lobby shop with now-Virginia Gov. Terry McAuliffe (D), from the mid-1980s into the ’90s. It signed big-name clients from Phillip Morris to the International Franchise Association to the Republic of Turkey and McDonnell Douglas, which eventually became Boeing.

In 1997, Raffaelli founded the Washington Group, which recorded its highest revenue of $11.4 million eight years later, the year before he decided to start fresh with a new firm.

That new start would be called Capitol Counsel, so named, as Raffaelli likes to say, because that’s where the firm’s lobbyists earn their money: under the Capitol dome. 

“If you get a good group of people around you, people will say, ‘God, they must be good.’ And that’s what I’ve always done,” he said.

 

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