Election crimps K Street

Patton Boggs remained, by far, the top dog among Washington’s lobbying firms despite a slight dip in revenues in 2006.

Patton Boggs remained, by far, the top dog among Washington’s lobbying firms despite a slight dip in revenues in 2006.

Van Scoyoc Associates, however, might be the biggest story of the year in the lobbying industry as it leapfrogged last year’s second-ranked and third-ranked firms to take its place behind Patton Boggs. Van Scoyoc’s revenues grew 6.3 percent to $28.7 million dollars for the full year.

The business of lobbying has been growing swiftly and steadily in recent years. The slowdown among the industry’s biggest players was due partly to controversy surrounding lobbying and to the effects of an election year, which took lawmakers out of town and acted as a a brake on legislating.

Patton Boggs pulled in $35.3 million in lobbying money last year to stay the largest lobbying firm in town. The company’s 2.8 percent year-to-year decline compared to a 17.1 percent increase from 2004 to 2005.

Akin Gump Strauss Hauer & Feld and Cassidy & Associates both slipped relative to Van Scoyoc, though they remained among only four firms with annual lobbying revenues above $20 million. Cassidy saw its lobbying revenues decline by 11.5 percent to $24.6 million while Akin Gump’s lobbying revenues declined 8.8 percent to $25.9 million. In the last year-to-year comparison, Akin Gump’s revenues grew 3 percent and Cassidy’s were flat.

Yesterday was the deadline for all lobbying firms to file their six-month revenue disclosure forms with Congress. The Hill contacted approximately 30 lobbying shops that ranked among the highest in revenue in 2005.

The relatively poor performances of big firms such as Akin Gump and Cassidy reflects a difficult second half of 2006 that followed record-breaking lobbying revenues in the first half of the year.

“Last year was, I think, a difficult year for everybody,” Stu Van Scoyoc said. Because of the heated political environment before and after the midterm congressional elections, Congress did less legislating than in a typical year, particularly in the area of appropriations, he said. Even though Van Scoyoc Associates became the second-highest revenue generator last year, its growth was slower than between 2004 and 2005, when its revenues rose 8.9 percent.

Van Scoyoc said his firm held steady because of its approach to retaining clients. “Our general focus is on long-term clients so we tend not to anticipate that we’ll have wild swings back and forth,” he said.

Patton Boggs spokesman Brian Hale said the election hurt the company’s bottom line. “Normally, there would have been more activity,” he said.

Steven Ross, who heads Akin Gump’s public policy division, said lobbying totals were hurt by the shortened session as members left to campaign for the midterm elections. Ross also said the firm’s overall public policy practice, which includes its work on regulation and on helping clients prepare for congressional investigations and oversight, grew to nearly $77 million, a 10 percent increase over 2005.

“Last year, clients and potential clients pushed the hold button on their lobbying efforts as K Street reacted to scandal and congressional reform as well as a change in leadership on Capitol Hill,” Cassidy & Associates Vice Chairman and Chief Operating Officer Gregg Hartley said. Hartley predicted that business would rebound in 2007.

Several firms with revenues higher than $10 million also suffered drops in their lobbying revenue compared to 2005, such as the Podesta Group (formerly PodestaMattoon), the PMA Group, Washington Council Ernst & Young and DLA Piper.

The Podesta Group’s revenues fell 13.4 percent to $12.3 million. In 2005, PodestaMattoon’s revenues rose 28 percent. The PMA Group saw a revenue decline of 7 percent to $16.4 million; in 2005, its revenues grew 20.4 percent.

Not that $10 million-plus firm had bad 2006s.

Quinn Gillespie generated $17.5 million in lobbying revenues last year, a 9 percent increase; K&L Gates enjoyed a 17 percent revenue boost to $13.1 million. (The former Preston Gates merged with the law firm Kirkpatrick & Lockhart at the start of 2007.). The Livingston Group enjoyed a 33 percent surge in lobbying revenues to $12.9 million one year after its revenues grew 21.3 percent.

Hogan & Hartson garnered $18 million from lobbying last year, a 12.5 percent increase. These results, however, mask a sluggish second half. “I’m just glad we’re up at all,” said Mike House, who directs the firm’s legislative affairs practice, “An election year can be catastrophic.”

Holland & Knight partner Rich Gold said that law firms with lobbying practices were better positioned for growth after his firm posted a 7.6 percent increase in lobbying revenues to $14.2 million. “Over the last five years, you are starting to see a big shift in town” in the direction of firms like his, Gold said.

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Lobbying Firm                      2006                     % age                   2005
                                                                            change            

Patton Boggs                         35.3                           -2.8                      36.3 
Van Scoyoc Associates         28.7                          +6.3                       27 
Akin Gump                            25.9                          -8.8                      28.4 
Cassidy & Associates            24.6                          -11.5                    27.8 
Dutko Worldwide                  20.6                          +1.5                     20.3 
Hogan & Hartson                   18                            +12.5                     16 
Quinn Gillespie                       17.5                            +9                      16.1 
DLA Piper                             16.4                          -1.8                      16.7 
PMA Group                          16.4                            -7                       15.3 
Federalist Group                    14.8                            —-                      14.8 
Holland & Knight                   14.2                         +7.6                       13.2 
K&L Gates*                          13.1                           +17                      11.2 
Livingston Group                    12.9                          +33                        9.7 
Podesta Group**                   12.3                         -13.4                     14.2 
Carmen Group                        11.5                        +11.7                     10.3 
Brownstein Hyatt Farber Schreck 11.2                    +64.7                    6.8 
Clark Consulting                     11.1                           -2.6                     11.4 
Washington Council Ernst & Young10.6                   -6.2                     11.3 
Ferguson Group                      10.2                         +10.9                     9.2 
Venable                                   8.7                            +16                      7.5 
Covington & Burling                 8.2                          +17.1                      7 

2006 figures from the firms. 2005 figures from the Center for Responsive Politics.
* Preston Gates Ellis & Rouvelas Meeds merged with Kirkpatrick & Lockheart to form K&L Gates.
** The Podesta Group is the successor company to PodestaMattoon.