Midterms don’t put damper on K St.

Upcoming elections can hurt K Street’s bottom line, but 2010 is shaping up to be a good year for lobbyists.

Firms were required to release first-quarter revenues on Tuesday, and some reported record earnings over the past three months as Congress considered major healthcare, energy and financial reforms.

{mosads}K&L Gates, for example, earned $4.9 million in the first three months of the year, the highest total the firm has taken in from lobbying in one quarter. 

Mark Ruge, a K&L Gates partner, said he had expected the 2010 midterm elections to slow the pace of business but the activity hasn’t let up.

“Healthcare spilled over. The president’s budget came out. And certain things are gearing up, like financial reform and energy,” Ruge said. 

“Everything is still going full-throttle. The unsustainable pace continues.”

Other firms also reported rising revenues, although some shops saw a decline. Several large firms did not respond to a request by press time.

Podesta Group reported $7.1 million in revenues during the 1st quarter, a 39 percent increase the first quarter 2009; Brownstein Hyatt Farber Schreck reported revenues of $5.8 million for the quarter, a 53 percent increase above what it earned over the first three months of 2009; Holland and Knight reported revenues of $5.5 million, an increase of 8 percent from the same period a year ago; Ogilvy Government Relations reported $4.3 million in revenues, a 2 percent increase; and Cornerstone Government Affairs earned $3.5 million, a 13 percent increase. Venable took in $2.9 million during the first quarter, a 4 percent increase from the $2.8 million it made during the first quarter of 2009.

Some firms reported year-to-year declines. Dutko Worldwide earned $4.4 million in the first quarter of 2010, down from the $4.9 million it took in during the same period a year ago. The Carmen Group earned $2.4 million, down from $2.7 million during the first quarter of 2009.

Election years typically aren’t good for business because members leave Washington to run for reelection. Less time legislating means fewer billable hours for lobbyists. That effect isn’t necessarily felt in the first quarter of the year, and the pace may still let up. 

But lobbyists think 2010 may be unusual.

“People are talking about how this could be the most significant lame duck in history,” said Drew Maloney, the CEO of Ogilvy Government Relations. Republican gains in the election could motivate Democrats to take advantage of their wider voting margins while they still have them. 

Speaking of House Speaker Nancy Pelosi (D-Calif.), Maloney said: “When she is determined, she gets things done.”

The belief that the GOP will do well in the election may boost the fortunes of Republicans on K Street as companies hire in anticipation of a power shift, some lobbyists said.

“Republican-leaning firms are likely to see gains as the year goes on as the election draws closer,” said Steven Hart, chairman and CEO of Williams & Jensen.

Hart, a Republican, expects revenues at his firm to rise. 

Williams and Jensen reported $4.2 million in lobbying fees for this year’s first quarter, about the same as it was last year for the firm. 

He expects the lobbying landscape more broadly will be a mixed bag in 2010. Firms lobbying for earmarks may run into trouble with the House Republican Conference signing off this year, but the healthcare sector will still be big business for K Street.

“That is a given. All these regs coming out — there is a lot of room for technical health writers to work in. That’s lobbying,” Hart said.