Busy Trump, Congress keep K Street booming

Busy Trump, Congress keep K Street booming
© Greg Nash

K Street’s earnings spree is rolling on well into President TrumpDonald John TrumpTrump: I hope voters pay attention to Dem tactics amid Kavanaugh fight South Korea leader: North Korea agrees to take steps toward denuclearization Graham calls handling of Kavanaugh allegations 'a drive-by shooting' MORE’s second year in office, with lobbyists busy keeping clients up to speed on the administration's dizzying array of policy changes and congressional action.

Many of the top lobbying shops in town have seen increased revenues in the first six months of the year over the same period in 2017, Trump’s first year in office. Some firms saw earnings increase more than 20 percent.

“In this environment, it is a constant in terms of the level of effort. Congress has not let up off the gas pedal, in terms of legislation,” said Darrell Conner, the co-head of the public policy practice at K&L Gates. “When you couple that with an aggressive administration agenda ... the accelerator is being pushed in a way that it hasn't in awhile."

“With that pace, it necessitates an increased level of engagement with clients because there is a constantly evolving environment in which you have to adapt,” he added. “Clients want to understand how to engage effectively in that process.”

K&L Gates took in more than $9 million in the first half of the year, a 3 percent increase from 2017. They not only deal with trade issues — an active policy area keeping many firms busy — but transportation, maritime and postal issues.

Congress has also been active in moving spending bills for defense and agriculture, among other areas.

Elizabeth Gore, the government relations department chair at Brownstein Hyatt Farber Schreck, says that high-stakes issues involving health care, a water resources bill, tariffs and tweaks to Republicans' landmark tax-reform bill, and in particular Congress moving spending bills, have generated considerable work.

Brownstein continued to boost its lobbying revenues, jumping another 20 percent over 2017’s midyear numbers. It remains steady as K Street’s second-highest grossing firm, pulling in more than $14 million in the first six months of the year.

“There is some skepticism that there was going to be floor action on them, but there has been or we suspect there will be. That creates a busier environment for the advocacy industry and K Street writ large,” she said.

BGR Group, a public affairs firm with mostly Republican lobbyists, also continued its ascent up the ranks, earning almost 30 percent more in lobbying fees than it did last year. 

With nearly $13.7 million in revenue in the first half of 2018, it has catapulted into the No. 3 spot in top lobbying firms by revenue.

Squire Patton Boggs, which previously held that slot, still increased its numbers from last year, taking in $12.6 million.

Cornerstone Government Affairs, an appropriations-focused advocacy firm, earned about $11.3 million thus far in 2018, beating last year’s revenues by 23 percent.

Law and lobbying shop Holland & Knight also saw a 20 percent increase in advocacy cash during the same period, ending June with $12.6 million in lobbying fees.

“The reason there was such chaos the first half of the year, the business community kept their wallets in their pockets. They didn't think that much was going to happen. With the failure of health-care reform, the disorganization of the effort, people didn't buy into the idea that a lot was going to get done,” said Rich Gold, the head of the public policy group at Holland & Knight.

Despite a boom year for K Street in Trump’s first 18 months, it still hasn’t matched up with the same period of the Obama presidency, Gold notes. His firm ratcheted up its lobbying numbers 40 percent from 2008 to 2009 when Obama came into office.

“You had Dodd-Frank, you had health-care reform, you had climate and you had the Recovery Act,” Gold said. “It was a legislative orgy … There has not been a legislative orgy under Trump." 

Still, firms say there has been a heightened sense of uncertainty coming out of the government in ways they haven't seen before.

“Both our domestic and foreign clients have called on us to understand what's happening, and to help them prepare for the unexpected,” said Muftiah McCartin, the co-chair of Covington & Burling’s public policy group. “At the same time, smart companies are looking more closely to Congress and how its composition may change in November, and the potential impacts any changes could have on their operations.”

Covington & Burling had a modest increase in its books, earning $9.23 million so far this year.

Although there will be a slowdown legislatively before the November midterm elections and a potential drop in revenues in the third and fourth quarters, administration officials, often steered by Trump’s tweets, will keep lobbyists busy.

Clients “are very aggressive recognizing that they need to do stuff now," said Conner.

"The pace of information is moving faster now than it ever did. It happens to come in [280] characters nowadays, but it certainly comes much faster,” he added. “There's no doubt that how this administration communicates its policies drives the extended days and hours.”

Smaller firms also had strong showings in 2018, with public affairs firm Forbes Tate making $6.3 million, or about 16 percent more in lobbying fees than it did in the first six months last year.

Monument Policy Group generated $3.91 million in lobbying revenue during the first half of this year. On paper, that’s a 5 percent decrease over the same period in 2017, but a short-term client that paid the firm more than $590,000 in the second quarter boosted those revenues. 

Trump-connected firm Ballard Partners, whose founder — longtime Florida lobbyist Brian Ballard — helped fundraise for Trump during the 2016 election, saw a more than 130 percent increase over the same period last year. 

He took in $8.6 million in the first half of 2018, only Ballard’s second year with a Washington office.