K Street boosts earnings heading into Trump’s third year

K Street boosts earnings heading into Trump’s third year
© Greg Nash

K Street ended the second year of President TrumpDonald John TrumpJustice Department preparing for Mueller report as soon as next week: reports Smollett lawyers declare 'Empire' star innocent Pelosi asks members to support resolution against emergency declaration MORE's tenure on a strong note, with lobbying shops bringing in higher earnings in 2018.

Firms saw an uptick in 2017 thanks to the so-called Trump effect, as a new president pushed ahead with an ambitious trade, tax and deregulatory agenda. 2018 proved even better for the biggest players.

The Trump-connected firm Ballard Partners nearly doubled their numbers in their second year with a Washington, D.C. office, taking in $18.5 million for 2018, up from $9.9 million in 2017. In the fourth quarter of 2018 alone, the firm took in $4.85 million.

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Another major K Street player, Brownstein Hyatt Farber Schreck, is continuing to close the gap between them and Akin Gump, the long-standing highest-grossing lobbying shop. It brought in over $31.6 million for 2018, 8 percent more than 2017.

Marc Lampkin, Brownstein's government relations department chair, pointed to a number of factors aiding K Street's big quarter.

“In my mind, the combination of Trump, regulatory activity, tax implementation, and people ready for the new Democratic regime in the fourth quarter, shows the business and opportunity on engagement,” Lampkin told the Hill.

The firm reported $9 million for its fourth-quarter revenues. 

Akin Gump again topped the list with over $37.6 in revenue in 2018. In the fourth quarter alone, it brought in over $9.6 million.

The strong quarter was especially surprising coming in an election year. In election years, and particularly in their fourth quarters, lawmakers spend much of their time on the campaign trail. Lobbying shops generally see revenues decrease slightly as legislative work takes a backseat to campaigning.

Akin Gump's revenues were down from 2017, when it brought in $38.9 million, but higher than the $36.3 million in revenue brought in during the presidential election year of 2016.

“Despite it being an election year — when activity tends to slow down a bit — 2018 ended up being a very strong year for us, and we were able to close on a high note. And in spite of the shutdown, 2019 has been off to a strong start as well,” Brian Pomper, co-head of Akin Gump’s public law and policy practice, told The Hill. 

K Street firms are also looking forward to a burst of activity this year with Democrats in control of the House and plans to tackle a host of contentious economic and health care issues.

"With a Democratic-controlled House now seated, I think there are real opportunities for bipartisan legislation on issues such as privacy, infrastructure and trade, and I’m optimistic as I look ahead to the rest of the year,” Pomper said.

BGR Group, which is made up of mostly Republican lobbyists, ended the year at $27.1 million, up from $23.6 million in 2017. Its fourth quarter brought it $6.7 million.

“Uncertainty in Washington leads companies to hire trusted advisers,” Loren Monroe, a principal at BGR Group, told The Hill. “With a large number of important domestic and foreign policy issues being considered by the executive branch and Congress, BGR’s lobbyists were in demand in 2018.”

Holland & Knight had over $24.5 million revenue in 2018, up from about $22.3 million in 2017. The firm made over $5.8 million in the fourth quarter, down from just over $6.2 million in the fourth quarter of 2017. 

Just behind them is Squire Patton Boggs, which made over $24.2 million in 2018. In the fourth quarter alone, the firm made over $5.5 million. That year-end revenue is just down from the firm's $24.3 million in 2017 but higher than the $18.7 million it brought in during the 2016 election year.

K&L Gates also saw the election effect in the last quarter when it took in $4.2 million compared to over $4.4 million in the fourth quarter in 2017. But the firm ended up with over $18.2 million for the year, a 4 percent increase

“For us, a lot of the work was driven by our transportation work, our appropriations work, our trade work, our postal – kind of a niche area – work,” Darrell Conner, co-leader of K&L Gates’s public practice, told The Hill. “Lots of things moved. There were of course things that didn’t move that were also good for clients, that Congress didn’t act on that had clients playing defense.”

Covington & Burling also experienced an election year decline in revenue. The firm brought in over $3.4 million in the fourth quarter of 2018 and over $16.6 million for the year. In 2017, it made over $17.9 million.

"With Congress adjourned for much of 2018's last quarter, we saw an expected decline in lobbying activity.  However, our domestic and international policy and advocacy work that fall outside the LDA continued on a positive track, particularly as American companies attempt to navigate uncertainty around the Administration's sanctions and trade policies,” co-chair of the public policy practice Muftiah McCartin told The Hill. 

She’s anticipating “an uptick in 2019 in lobbying activity around policies” and noted the return of former Sen. Jon Kyl (R-Ariz.) to the firm.

Mehlman Castagnetti Rosen & Thomas saw a modest increase this year. The firm had a revenue of over $15.5 million in 2018, up from over $15.1 million in 2017. It ended the fourth quarters of both years with $3.9 million.

Partner David Thomas expects 2019 to be even better for them.

“After 8 years in the minority and energized by 64 freshmen, the new Democratic majority is eager to address longstanding policy challenges and conduct meaningful oversight ensuring a very busy 2019,” he told The Hill.

Heather Podesta’s firm, Invariant, made its way into the mid-sized firms category in 2018 when it had over $13.1 million in revenue, up from over $10.9 million in 2017. In the fourth quarter of 2018, it brought in over $3.5 million.

Many smaller firms also saw gains in 2018.

CGCN closed the year with just over $9 million in revenue, up from $8.3 million in 2017.

Monument Advocacy, which just changed its name from Monument Policy Group, had over $8.2 million in the books for 2018, up 10 percent from 2017.