On K Street, 2011 was year to forget

K Street wasn’t paved with gold in 2011.

Several of the biggest influence shops in Washington reported less revenue last year than in 2010, according to lobbying disclosure reports filed this week. 

Taken together, the reports show a hangover from 2010, when the blockbuster fights over healthcare and Wall Street reform had lobbyists in high demand. 

“It was a very tough year for lobbying,” said Nick Allard, a partner for Patton Boggs, K Street’s top-earning firm. 


Instead of legislative deal-making, 2011 was defined by gridlock. The fights over the budget and the debt ceiling consumed Congress and left little time, or political will, for passing legislation. 

“Economic headwinds” forced businesses to be choosy with their lobbying dollars, Allard said, and the fights in Congress over debt “slowed things down to a snail's pace.”

One of the firms that took a hit was the Podesta Group, a lobby firm that has enjoyed an extraordinary rise since President Obama took office. 

After robust growth in 2010, Podesta’s lobbying revenue fell 6 percent last year.

The firm reported earning $27.4 million in lobbying fees in 2011, compared to $29.3 million in 2010.

“We have done well this year during a down economy and when Congress has done very little,” said Missi Tessier, who runs Podesta’s public relations practice. “[Lobbying revenue] numbers are not the whole picture here. It's part of it.” 

Tessier noted that Podesta expanded its PR and international affairs practices in 2011, and subsequently saw a revenue boost that is not reflected in the revenue reported under the Lobbying Disclosure Act (LDA). Tessier said the firm expects regulations, not legislation, will be where the action is in 2012. 

“It's something we have been looking towards again this year where you are likely going see more action on the regulatory front than the legislative front,” Tessier said. 

Other firms also saw declines in their lobbying revenue last year.

Dutko Grayling’s lobbying revenue plunged 35 percent, to $11.3 million. The firm earned $17.3 million in 2010 from lobbying.

Kim Koontz Bayliss, a managing principal at Dutko and co-head of its federal lobbying division, said the firms’ declining lobbying revenue is partly due to the type of clients the firm takes on.

“I think given the state of the economy right now, [the drop is] not surprising. We’re kind of heavily dependent on startup companies and companies and industries where there’s been a lot of consolidation, and what they have to spend on government affairs is reduced,” Bayliss said.

Further, lobbying has gotten “more sophisticated” and the firm’s expanding services for clients are not fully reflected in the numbers, Bayliss said. 

“Just the pure going-to-meet with [lawmakers’] offices, those are the only things that are disclosed. Not that there’s less of that, but the money is going to a lot of different types of advocacy,” Bayliss said.

Van Scoyoc Associates reported earning $25.3 million for lobbying in 2011, down from $29.4 million in 2010. Brownstein Hyatt Farber Schreck also saw a drop, earning $22.1 million last year in lobbying fees, compared with $24.4 million in 2010.

Lobbyists said they expected a strong economic recovery in 2011, but the rebound was weaker than anticipated, leading companies to spend less on consulting and lobbying.

“I think K Street lags behind what happens with the real economy, so the recession took a while to get here,” said Rich Gold, who leads the public policy practice for Holland & Knight.

His firm saw a 10 percent drop in lobbying revenue from 2010, reporting $19 million last year. Gold said Holland & Knight’s public practice policy shifted more to legal work for regulations than lobbying on legislation, much of which is not disclosed under the LDA. 

“There was a big shift this year, and that was from legislative to regulatory,” Gold said. “It's been about the same year. It's just where the revenue is coming from. We're actually pretty happy.”

Patton Boggs bucked the downward trend, taking in $48.4 million in lobbying fees — a 7 percent jump from the $45.2 million the law and lobby firm earned in 2010. 

Last year was the first full year that Patton included revenue from the Breaux Lott Leadership Group, a firm they merged with in the summer of 2010. That purchase certainly helped add to their lobbying take.

“It shows the Breaux Lott acquisition was very positive,” Allard said.

Other firms were also able to make gains last year.

Alston & Bird saw a significant revenue increase in 2011, bringing in $13.7 million in lobbying fees — a 15 percent increase from its 2010 earnings of  $11.9 million. 

Robert Jones, head of the legislative and public policy group, cited the firm’s line-up of all-star hires in 2011, including former Sen. Blanche Lincoln (D-Ark.) and former Rep. Earl Pomeroy (D-N.D.), as a factor in the firm's success.

Those hires and other staff at the firm make it “uniquely positioned to help clients with issues in both chambers of Congress and across party lines,” Jones said in a statement.  

Akin Gump Strauss Hauer & Feld served as another outlier among prominent lobby shops, earning $38 million in lobbying revenue in 2011 — a spike of 6 percent from their take of $35.8 million in 2010. 

Smith Davis, co-manager of the firm’s policy and regulation practice, said one reason his firm had a “pretty good year” was because they snagged “a number of clients with major challenges.” 

“Cyclically, there’s not a lot going on in Washington. We say that a lot, but this time it’s really true,” Davis said. “But there will always be clients with major problems, even at times when Washington as a whole isn’t active.”

Several lobbyists predicted 2012 would be another slow year. Lawmakers are distracted by election-year politics, and legislation is unlikely to move after the first few months of the year. 

Gold of Holland & Knight said things could speed up in the second half of 2012, especially after campaign season comes to a close. 

“You will have the holy trinity of lame-ducks, which is sequestration, the Bush tax cuts and the debt limit. It doesn't get much better than that,” Gold said. 

Others said the coming year will defy predictions.

“The only thing certain about 2012 is its unpredictability about lobbying work. Just because it sounds like I read that in a fortune cookie doesn't mean it's wrong,” Allard said.

Check back with The Hill on Monday for a chart that shows how all the top firms fared last year.