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K Street bouncing back in 2015

Nearly all of Washington’s top lobby shops saw gains in revenue in the first half of 2015 as an uptick in activity within both Congress and the Obama administration translated to a boon for K Street.

Following a period of relative stagnation in the two-year span preceding the 2014 elections, the Beltway’s biggest lobbying firms have broken through the malaise, securing a long-term Medicare “doc fix,” engaging policymakers on impending trade deals and working on several funding bills.

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Seventeen of Washington’s top 20 firms by revenue submitted midyear figures to The Hill. Of those, only four saw their lobbying fees decrease during the first six months of 2015 when compared to the year before.

“Corporations are a lot more optimistic about whether to invest in Washington,” said Marc Lampkin, a former aide to Speaker John BoehnerJohn BoehnerDem drops out of race for Boehner's old seat Conservative allies on opposite sides in GOP primary fight Clinton maps out first 100 days MORE (R-Ohio) and the managing partner of Brownstein Hyatt Farber Schreck’s Washington office.

He credits the GOP control of Congress that resulted from the 2014 elections with making it easier for members to offer amendments to legislation, which has also brought along more attempts at attaching riders to appropriations bills.

Brownstein took in $6.25 million from April to June, a 7 percent jump over the same period last year. The firm has brought in more than $12 million in revenue so far this year.

Washington’s influence industry, aware that politics will soon overtake policy in the halls of Congress, is looking to capitalize before the window of opportunity shuts.

“Congress is going to press its agenda before the presidential campaign takes all of the oxygen out of the room” next year, said Darrell Conner, co-chairman of K&L Gates’ public policy and law practice group. 

K&L Gates also had modest gains over last year, earning $9.26 million in lobbying fees during the first half of 2015. The firm has recently brought on new lobbyists to focus on financial services, healthcare and transportation issues, which will likely be policy
areas of intense focus into next year.

As the Dodd-Frank financial reform law enters its fifth year, companies are still trying to figure out how to deal with its impacts, including enforcement actions from the
Consumer Financial Protection Bureau.

Lawmakers are also gearing up for big fights surrounding legislation to fund federal highway projects and the Federal Aviation Administration, which will reignite arguments about tax reform and how to pay for the expensive packages. 

“Industry is like, ‘OK, we have to make sure we’re involved in this conversation.’ If you’re a target of a pay-for, you want to make sure your side of the story gets told,” said Moses Mercado, a principal at Ogilvy Government Relations.

Many of these issues are likely to linger unresolved through the last months of the year, “but you have to get in there before that,” he added. “So it’ll be a busy August.”

Ogilvy’s second-quarter revenue increased 19 percent from the same period last year, to more than $2.5 million.

Other firms had mixed performances this quarter, such as Hogan Lovells. Its second-quarter revenue dropped, but it saw a slight uptick in fees during the first six months of the year compared to the same times last year. 

“I think the environment this year started a little slow, but
it has been very good,” said Mike House, the director of Hogan Lovells’s legislative group. “After an election year, there’s a lot of movement,” with members and staff coming off Capitol Hill. 

By the second quarter, though, “people are more hunkered down, and they tend to business,” he added.

So far, the firm has taken in $6.37 million in lobbying fees in 2015.

Congress must also tackle a toxic chemical reform bill that’s been in the works for almost two decades, an overhaul of the Food and Drug Administration’s drug approval process and legislation addressing genetically modified foods.

“These are things that have been big for us, but hadn’t had bipartisan support before,” Mercado said. “They’re finding that now.”

K Street’s top firm — Akin Gump Strauss Hauer & Feld — continued to bolster its advocacy revenue, earning $10.23 million in the second quarter. The total is a 19 percent increase compared to the same period last year.

“I think our success during the first half of 2015 reflects the high level of trust we have earned from our clients to handle their most challenging issues coupled with a high
degree of activity in Congress,” said Don Pongrace, head of the firm’s public law and policy practice.

Other firms that experienced an increase include Elmendorf Ryan and Covington & Burling, which had a 7 percent and 23 percent boost in midyear earnings, respectively. Elmendorf Ryan earned nearly $5.1 million during that period, and Covington took in $7.6 million.

Podesta Group, which had traditionally been third among K Street’s top earners, saw revenue fall about 12 percent, taking in $11.35 million in lobbying fees during the first six months of this year. In the second quarter of 2015, the firm earned $5.75 million, putting it at No. 5 on the list.

Those changes reflect a different business model being pursued by the firm, says David Marin, a principal at the Podesta Group.

“Where we’re seeing growth is in blended, integrated advocacy campaigns that don’t necessarily show up on LDA [Lobbying Disclosure Act figures],” such as PR, grassroots advocacy and data analytics. 

“Traditional shoe-leather lobbying is not extinct — it’s still our bread and butter — but we’re becoming a data-driven technology company,” he said. “It’s really about
understanding, with precision, where the relevant conversations are taking place, who is influencing those conversations and who is influencing the influencers. That goes far beyond quote-unquote ‘lobbying.’”

Squire Patton Boggs, which long reigned as the No. 1 earner on K Street, is starting to recover from post-merger revenue losses. The firm took in $6.76 million during
the second quarter, a 19 percent drop from the same time last year, but experienced a slight uptick over 2015’s first three months.

Firms that don’t make it into the top 20 earners also did well in the first six months of the year, according to figures provided to The Hill.

Thorn Run Partners earned $3.63 million in the first half of the year; the firm took in $2.43 million during the same period in 2014. And Monument Policy Group had $2.72 million in lobbying earnings, a 21 percent increase compared to last year.