K Street rebounds as many firms sign clients at fast pace

K Street’s economy appears to be on the rebound as a number of firms are reporting a sharp increase in new clients, a trend lobbyists attributed to the new president’s far-reaching agenda.

The combination of a deepening recession and the distraction of the 2008 campaign, which kept Congress out of session for much of the latter half of last year, were blamed for pushing lobbying revenues down in 2008.

{mosads}Since Nov. 4, however, several top firms have signed new clients at a pace exceeding the growth periods that followed previous election cycles. Lobbyists credited the recently passed stimulus package and anticipated policy fights touching on the energy, healthcare and financial-services sectors for the uptick.

“There is no question that it has been our most productive period since the election since we have been in practice,” said Rich Gold, head of the public policy group for Holland & Knight.

Holland & Knight is doing particularly well, having registered 50 clients from Election Day to Feb. 20. To compare, the firm registered nine new clients after the 2000 election and 13 new clients after 2004’s race.

An analysis of lobbying disclosure forms by The Hill shows that all along K Street, the lobbying business seems to be booming, even as the Obama administration has tried to minimize the influence of lobbyists through new revolving-door and other ethics rules.

More than 1,500 clients registered with firms between the election and last Friday. That beats similar post-election periods by some distance.

The Democratic takeover of Congress after the 2006 midterms provided new business to K Street. But more than 200 clients have registered with firms in 2008 than had two years ago by this time. Both figures far outpace the number of new registrations that followed George W. Bush’s win in 2000. That year, around 800 companies and other groups had registered with firms to lobby between the election and late February, about half the number that have registered in the last three and a half months.

Gold and other lobbyists said the growth has been driven by what is anticipated to be an activist administration that is supported by expanded Democratic majorities in both houses of Congress.

“If Obama had [President] Clinton’s smaller majority, we wouldn’t have had a stimulus bill,” Gold said.

With Democrats firmly in control, lobbying firms have sought out ex-party staff aides and former members to help make inroads on Capitol Hill and in the White House. Holland & Knight, for example, notes its roster of lobbyists includes several high-profile Democrats, such as former Reps. Gerry Sikorski (D-Minn.) and Jim Davis (D-Fla.), along with former Clinton White House aide Lynn Cutler.

But beyond partisan affiliation, the various bailouts of the financial sector and the White House’s massive stimulus package prompted companies to seek more help from K Street.

“What you saw was a predictable drop-off for the industry due to the end of an election cycle and an economic downturn” in 2008, said Nick Allard, co-chairman of the public policy department at Patton Boggs.

“What softened that somewhat was the enormous government intervention into the markets before the election, which generated a lot of professional activity in Washington, and stakeholders wanting to get a head start after the election.”

Patton Boggs, typically the biggest earner in lobbying revenues, has registered 25 clients since the election, which also beats its growth rates after the 2000 and 2004 elections.

Allard said the new figures may actually understate the firm’s surge in activity because the amount of legal work the firm does has increased at a faster pace than its lobbying business has.

“The [Troubled Assets Relief Program] work is legal work. It’s not lobbying,” Allard said. “It is not for the cigar-chomping, martini-swilling, duck-hunting caricature of a Washington lobbyist. We never do all those things at once anyway.”

In a few instances, the growth rates at firms are at least partially attributable to mergers with other lobbying practices.

For example, Holland & Knight has partnered with MARC Associates since Jan. 1. Gold estimates that 15 or so of the firm’s new clients have come from its new partner. Mergers at Bryan Cave and Clark & Weinstock have increased the number of clients each firm has registered this year.

But generally, lobbyists said the growth had less to do with acquisitions and more to do with the new residents of the White House. Stu Van Scoyoc, president and founder of Van Scoyoc Associates, said he had been preparing for a change in administration for a year.

“It would be the first time since Eisenhower that neither a sitting president nor vice president was a candidate,” Van Scoyoc said. “You knew you were going to have a very dramatic shift.”

Obama’s victory means that the White House and Congress will work in concert rather than at odds, a shift from the last two years, when Democrats on Capitol Hill sought to block much of the Bush administration’s agenda.

“Because you had the Bush administration for the last two years, the new Democratic Congress was not able to get ahead and do what it wanted to do. Democrats like to legislate,” Van Scoyoc said.

“It looked like to me that the stopper would be let out of the volcano and the natural inclination of an activist Congress would be able to fully express itself.”

Van Scoyoc’s firm has registered 42 clients since the election. Van Scoyoc said about a third of the new accounts are healthcare companies anticipating that Democrats will push for healthcare reform.

Others are also seeing an influx of issue-based work. For example, about half of Brownstein Hyatt Farber Shreck’s 10 new clients are lobbying on energy issues.

“Part of it is related to the stimulus package. Another part is that the administration still has not been staffed out fully,” said Kyle Simpson, the firm’s policy director. “On the heels of that, you have a new energy bill and a new climate change bill coming up. We have never seen a cascade of that [legislation] that cuts across all sectors.”

Consequentially, revenue for the firm’s energy, environment and natural-resources practice has grown threefold in the past two months, Simpson said.

Lobbyists say having a new, active administration running Washington bodes well for their business. But K Street is not necessarily recession-proof — as evidenced by the fact that more than half of the top 20 firms reported a drop in revenues in 2008 from the previous year. Some companies may be forced to trim back their lobbying budgets.

“[This] looks like an extremely busy year, but it’s too early to tell. We are in uncharted waters because of the economy,” Allard said.