K Street says goodbye, good riddance to 2012, expects upturn this year

K Street says goodbye, good riddance to 2012, expects upturn this year

Washington’s lobbying corps bid good riddance to 2012 on Tuesday, reporting steep declines in their earnings after a year of posturing and gridlock on Capitol Hill.

Few K Street firms were able to escape the downward pull, with even industry leaders Patton Boggs and Akin Gump Strauss Hauer & Feld reporting a drop in their lobbying revenue from 2011.


“These guys weren’t literally here,” remarked Rich Gold, head of the public policy and regulation practice for Holland & Knight, of a Congress that took long recesses to campaign, including a seven-week break before the election.

Compounding the woes for K Street, another steady stream of income — regulatory work — slowed considerably as the administration dialed back its rulemaking during President Obama’s reelection bid. 

“The election was a dam. It had blocked up all of these regulations,” said Kevin O’Neill, deputy chairman of Patton Boggs’s public policy department. 

But lobbyists said Obama’s reelection — and the arrival of a new Congress eager to tackle challenging projects like immigration and tax reform — has their practices buzzing once again.

“My guys are telling me they’re busier than they can remember being in a while,” said H. Stewart Van Scoyoc, the president of Van Scoyoc Associates. “I see four years, that kicked off yesterday, of a pretty active agenda.”

“The dam has now burst with all those rules coming out,” O’Neill added.

Tuesday was the deadline under the Lobbying Disclosure Act (LDA) for lobby firms to disclose their fourth-quarter earning reports for 2012. The forms do not provide a complete picture of K Street’s cash flow, as a substantial portion of lobby work — including state government advocacy, public relations and regulatory work — is not disclosed under the law.

Nonetheless, lobbyists hope a banner 2013 will wipe away the memory of a frustrating period that often left them with little to do.

Patton Boggs, the perennial earnings champ on K Street, reported earning $46 million in lobbying fees for all of 2012 — a 5 percent decline from the firm’s $48.4 million take in 2011. 

O’Neill lamented the tendency of the last Congress to stagger from crisis to crisis but said it could be a long-term winner for the lobbying trade.

“The downside is that Congress has applied short-term patches to a lot of our problems. The upside is that there is a magnet drawing the attention of business to Washington, because what can be decided could be of some significance. 2013 might be when we get a lot of those battles decided,” O’Neill said.

Akin Gump, the top rival to Patton Boggs, reported a total of $31.2 million in revenues for the year, down from $38 million in 2011. Smitty Davis, a senior member of public law and policy practice at Akin, said he expects things to pick up considerably in 2013. 

“Once the supercommittee could not reach an agreement [to cut the deficit], the town basically got pretty slow in an extraordinary way,” Davis said. “Then everyone was waiting for the election to see what was going to happen.”

More congressional action on the budget, spending and taxes this year “will result in firms being retained to protect interests that might otherwise get blown over,” Davis said.

Holland & Knight was another victim of the campaign-induced inertia, earning $18 million in lobbying fees for 2012, compared to $19 million for 2011.

“Our lobbying was down because there wasn’t anyone around for lobbying visits,” Gold said. “That gave us more time to work with our clients on press and other issues.” 

Gold said the firm’s work on policy and regulations has boomed amid the slowdown in lobbying, with revenues up 6 percent for the entire policy group.

Van Scoyoc Associates, another marquee name, reported $22.5 million in LDA revenue for 2012, an 11 percent drop from 2011’s haul of $25.4 million. 

Some firms were able to beat the odds and post growth in 2012.

Podesta Group’s lobbying revenue inched up from $27.4 million in 2011 to $27.5 million last year.

“We are energized for the new year post-election and anticipating more growth across the board in our LDA, international and PR practices,” said Kimberley Fritts, Podesta Group’s CEO, in a statement.  

Brownstein Hyatt Farber Schreck also kept its strong streak going. The firm reported $22.5 million in lobbying fees for 2012 — a 2 percent jump from $22.1 million in 2011.

Mehlman Vogel Castagnetti reported earning $12.9 million in lobbying fees for 2012, a 3 percent hike from its $12.5 million in earnings in 2011.

David Castagnetti, a partner at the firm, said the ambitious agenda of the new Congress is likely to translate into more client work around town.

“More and more people are starting to think about issues coming down the pipeline, like tax reform or implementation of the Affordable Care Act, even immigration reform,” Castagnetti said. “Hopefully, we will continue to grow here.”

Other firms weren’t as lucky.

K&L Gates saw its 2012 lobbying revenue slide by 8 percent from 2011, earning $17.2 million in lobbying fees for last year.

Cassidy & Associates dropped from $20.3 million in lobbying revenue for 2011 to $15.6 million in 2012.

And Williams & Jensen essentially maintained its lobbying revenue, at $18 million, the same as 2011. 

Lobbyists across the board expressed high hopes for the year to come. A reelected and reinvigorated president and a Congress more willing to consider big legislative items should be the ticket to stronger growth, they said.

“We will not be back in the halcyon days of Obama’s first year in office, but it’s definitely going to be better than year three and year four,” Gold said.