Cash surges to lobby firms in Trump era

Cash surges to lobby firms in Trump era
© Greg Nash

K Street started 2017 off with a bang, with many lobby firms racking up six-figure increases to their bottom lines in the first six months of the year. 

The beginning of President Trump’s administration has contributed to the cash boom in Washington’s influence sphere, though it’s not the only factor driving growth. 

Of the 20 highest-grossing lobbying shops in Washington, 14 saw increases in lobbying fees. Five of those pulled in an increase of $1 million or more between January and June. 

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Law and lobby firm Covington & Burling made the biggest jump of the large firms, earning almost $9 million from lobbying clients in the first half of 2017 — a 39 percent increase from the same time last year. 

“Although there have not been any high-profile legislative accomplishments during the first six months of the Trump administration, the legislative wheels of government are clearly grinding away,” said Muftiah McCartin, vice chairwoman of Covington’s public policy and government affairs practice. 

Other big winners in the second-quarter revenue game included Cornerstone Government Affairs, which took in $9.26 million for its advocacy work throughout the beginning of the year — about $1 million more than the first six months of 2016.

BGR Group boosted revenues 23 percent over the same time last year, earning $10.7 million, while Ogilvy Government Affairs made a 10 percent jump over 2016 to $5.8 million.

Moses Mercado, a principal at Ogilvy, said its largest growth area has been in “specialized representation” for clients with targeted goals, such as those working or looking to work with the government on specific projects.

Meanwhile, the comeback at Squire Patton Boggs is accelerating.

The firm has been working to build back its influence practice following a rocky merger three years ago, and saw its biggest gains yet in the first half of the year, with its midyear revenue jumping from $9.19 million to more than $12 million.  

“Our public policy work has grown steadily for four consecutive quarters,” said Dave Schnittger, a spokesman for the Squire Patton Boggs public policy practice, who noted that other legal and advocacy work isn’t captured in the lobbying figures. 

“Some of the growth is attributable to an increased demand for public policy work with a new administration, and some of it is a result of our firm’s global policy brand gaining traction, bringing in new clients and new talent,” Schnittger added in a statement to The Hill. “The vision that drove the 2014 combination of our legacy firms, Squire Sanders and Patton Boggs, is becoming a reality.”

Only direct lobbying activity is captured in lobbying revenues under the Lobbying Disclosure Act. Other common influence work, such as public affairs or foreign lobbying, is not counted in these revenue figures. Legal work is also not counted. 

Washington firms increasingly say that combining the public relations and lobbying work they do is driving more business. 

“Shoe-leather lobbying is certainly a way to make money, but it's not [all of] what clients are seeking. They want strategists who can then lobby as well as engage in communications and public affairs,” said John Murray, a partner at Monument Policy Group. 

Monument grew its lobbying revenue from the first half of the year by almost 40 percent from the same period last year, taking in more than $4 million.  

Murray is opening a new office for the firm in Seattle along with another partner at the firm, Tim Punke. Some of its clients include Seattle-based Amazon and Microsoft.

Last year, the boutique GOP firm CGCN Group added a public affairs component, and partners say they’re already reaping the rewards. It saw a boost in its lobbying earnings, going from $3.4 million to more than $4 million in the first half of 2016 and 2017, respectively. 

“We try to offer up an outside-in approach to moving legislation,” said Ken Spain, a partner at the firm. “The first thing a member of Congress is going to ask when you present an issue to them is, ‘How is this play in my district?’ ”

“We try to marshal support in district and states for the positions we're trying to advocate for on behalf of our clients,” Spain added, mentioning the work includes coalition building and communications and digital services, “to amplify the policy objectives we're advocating on.” 

Top issues on the docket at the dawn of the Trump administration have been healthcare, taxes and trade — things that don’t show any signs of slowing down, especially as Capitol Hill struggles to come to an agreement on repealing and replacing ObamaCare.

Firms are already looking forward to a robust rest of the year, with government funding and tax reform — the biggest lobbying issue of all — looming on the agenda. 

The third quarter “is going to be incredibly busy, and the same issues that haven't been put to bed in the last quarter are going to bleed into the next quarter and into the fall work period,” said Elizabeth Gore, chairwoman of the government relations department at Brownstein Hyatt Farber Schreck. 

The law and lobby shop at Brownstein, which is also expanding its ranks, had a second-quarter revenue increase, but midyear revenues primarily remained the same, at $13.6 million

Republicans are aiming to release a tax reform plan after Labor Day, the administration is set to begin renegotiating the NAFTA free-trade agreement, and Capitol Hill is going to have to grapple with spending bills and a fight over raising the debt limit.  

“The debt ceiling has the potential to bring a lot of issues into its orbit,” Gore said, mentioning a potential for entitlement policy and spending issues to be thrown in. 

Mehlman Castagnetti Rosen & Thomas grew lobbying fees by 17 percent over the first six months of 2016, taking in more than $7 million.

There are a limited number of days left on the legislative calendar, firm co-founder Bruce Mehlman points out, to complete policy items that have an expiration date at the end of the fiscal year — including tackling flood insurance, food stamps, children’s health insurance, Food and Drug Administration user fees and Federal Aviation Administration reauthorization, among others.

K Street’s No. 1 firm, Akin Gump Strauss Hauer & Feld, held steady in the first half of the year at about $19 million in revenues, though fees took a slight dip.

Despite the many hurdles facing Congress, Hunter Bates, a new co-chairman of Akin’s public law and policy practice, is optimistic about key legislative items this year. 

“The challenges on healthcare have increased the drive and determination to be successful on tax reform,” he said. “It only adds to urgency of achieving tax reform … [and] when you have that kind of potential on tax reform, it breeds an enormous amount of business activity.” 

“We are well positioned in that space,” he said.

— Updated at 4:27 p.m.