K Street receipts drop slightly as the final curtain falls on an active Congress

Several of Washington’s top lobbying firms saw slight declines in their revenue over the last three months, according to disclosure reports filed on Wednesday.

Lobbyists contacted by The Hill said a quiet end to this Congress, one of the most active in recent history, translated into a slight downturn at the end of a busy season for K Street.

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Two sweeping pieces of legislation — healthcare reform and the financial services overhaul — became law earlier this year, while an equally wide-ranging climate and energy package stalled in the Senate. With lawmakers away from Washington during the August recess and now for the midterm elections, the decline in lobbying business reflects a general slowdown in activity on Capitol Hill.

“One can say this Congress that came in as a lion is going to go out as a relative lamb,” said Mark Ruge, head of the public policy group at K&L Gates. 

Wednesday was the deadline for lobby firms to file their third-quarter reports under the Lobbying Disclosure Act (LDA). The reports cover the period from July 1 to Sept. 30. 

Ruge’s firm saw a slight decline in revenue in the third quarter, reporting $4.7 million in fees from clients, compared to $4.9 million in the second quarter. Its third-quarter number, however, represents a slight improvement over its performance during the same period in 2009, when the firm reported earnings of $4.6 million.

Other firms saw drops in their lobbying revenue as well. Patton Boggs, K Street’s perennial powerhouse, reported $9.4 million in lobbying fees for 2010’s third quarter, a drop of almost $1 million from the second quarter. The figure is also about $1.5 million less than its revenue during last year’s third quarter.


But lobbyists at Patton Boggs say the drop doesn’t reflect a decline at the firm. They point out that Patton Boggs purchased the Breaux Lott Leadership Group on June 30; combined with that subsidiary, the two firms earned over $12 million last quarter, by far the most of any lobby firm in town.

“In an administration and a Congress that were extraordinarily ambitious at their beginnings, they really narrowed the focus of things they wanted to concentrate on in the third quarter. Of course, that will affect the lobbying marketplace,” said Kevin O’Neill, deputy chairman of Patton’s policy department. 

But while lawmakers may not be passing bills at the moment, they left plenty of work for the Obama administration — and, consequently, lobbyists — by authorizing new rules and regulations to be drafted, especially from the healthcare and financial reform packages. 

“The flip side of that is the battles that have been legislative in nature have moved to the regulatory arena. That may not be always accurately reflected in the LDA process,” O’Neill said. 

Other lobbyists also said their firms are becoming more and more consumed by the rulemaking processes that were set in motion by the healthcare and financial services laws.

“There definitely was a noticeable shift to executive branch advocacy,” said Rich Gold, head of the public policy group at Holland & Knight. “We have a lot of work, then, that doesn't show up under the LDA, but client work continues.”

Holland & Knight reported steady lobbying revenue for the second and third quarters of this year, with each generating about $5.3 million in revenue. That is, however, a slight drop from the 2009 third quarter for the firm, which brought in $5.5 million. 

Other firms continued to show strong growth in their lobbying revenue.

The Podesta Group, for example, earned about $7.4 million in lobbying fees last quarter — an increase from its $7.2 million in the second quarter and a big jump from its $6.9 million in 2009’s third quarter. 

In addition, McBee Strategic Consulting reported earning $3.4 million in lobbying fees, the same as this year’s second quarter, but a significant jump from the $2.8 million in fees earned during 2009’s third quarter. 

“We end up spending a lot of time with our clients even during the down times because we are working with them on the strategic side, not just on execution,” said Steve McBee, president and CEO of the firm. 

BGR Group, formerly known as Barbour Griffith & Rogers, saw growth in its lobbying revenue from the second to the third quarter this year, from $3.5 million to $3.8 million. Considered a Republican-leaning firm, it can expect to do well during the next Congress if the GOP makes gains in the midterm elections.

Loren Monroe, principal at BGR, said the upheaval of an election is always a plus for K Street, regardless of which party holds power. 

“Anytime there's a large amount of change, it's good for a lobbying business. In that general environment, people reach out to experienced lobbying firms. We’re well-positioned for that change,” Monroe said.

Other lobbyists said they are not worried that the renewed focus on the national debt will harm K Street. In turn, with government programs on the chopping block, clients will need lobbying help to defend their interests in Washington. 

“The predominant theme of the next year will be deficit reduction,” Ruge of K&L Gates said. “All signs point to tremendous budget pressures. That means a lot of people could be seeing their particular ox being gored, and that will be where the action is.”

Check back with The Hill on Thursday to see how much revenue Washington’s other top lobby firms earned during the last quarter. 

Roxana Tiron and Dustin Weaver contributed to this report.