Ogilvy CEO Maloney discusses 2010

National Journal

Brisk Business For K Street In 2010

by Bara Vaida

July 24, 2010

Business on K Street was brisk in the first half of 2010 as Congress's consideration of the health care reform bill, financial services regulation, and energy legislation drove companies to invest in hired guns to try to influence the debate.

The king of the lobbying world remains Patton Boggs, which has been the leader since 2002. The law and lobbying firm aims to keep its top-dog status with the July 1 purchase of Breaux-Lott Leadership Group. Patton Boggs reported first-half fee income of $20.6 million, up 11 percent from 2009, figures that don't yet reflect the purchase of the successful boutique lobbying firm founded by former Sens. John Breaux, D-La., and Trent Lott, R-Miss. Breaux-Lott's lobbying fees were $6.5 million in the first six months of 2010.

"We just put Patton Boggs on steroids by bringing [Breaux and Lott] in," said Nick Allard, a partner and the chair of the firm's lobbying, political, and election-law practice. "They just give us the ability to provide top-drawer service with two of the most respected and effective lobbyists in the U.S."

On Patton Boggs's heels is Akin Gump Strauss Hauer & Feld, which reported fee income of $18.2 million, reflecting the law and lobbying firm's strong financial services and energy-policy practices. The fee number also includes the March purchase of Parven Pomper Strategies, a boutique Democratic lobbying firm, and the From Group, whose founder is Al From, the former head of the Democratic Leadership Council.

"Business is strong and more surefooted than last year," said Smith (Smitty) Davis, head of the policy and regulation practice at Akin Gump. "Companies have found the resources to do what they need to do in Washington, and you can feel a greater confidence in town as the economy has improved."

As is the norm for Washington, firms with ties to the party in charge have performed the best. Brownstein Hyatt Farber Schreck, for example, posted lobbying income of $11.8 million, up 28 percent from the first half of 2009. Steve Farber was the chief fundraiser for the host committee for the Democratic National Convention in Denver in 2008. The Podesta Group, the lobbying firm owned by well-known Democrat and prolific party fundraiser Tony Podesta, posted income growth of 22 percent, to $14.2 million.

But fortunes for those tied to Democrats could change in the coming year. Analysts predict that the House and Senate will have many more Republicans and fewer Democrats after the November elections, and some think that power in the House and possibly the Senate will shift to GOP control. Firms with long-standing ties to Republicans are optimistic that 2011 will be a good year for business, and many on K Street have started thinking about bolstering the number of Republicans on their lobbying teams.

"It's standard operating procedure in Washington that whenever there is a shift in power, there is a scramble by companies to make sure they have adequate representation with the new power brokers," said Sheila Krumholz, executive director of the Center for Responsive Politics.

A Republican-controlled Congress would mean less regulation for businesses; if a client is looking to fend off regulation, Rich Gold, the leader of Holland & Knight's public policy and regulation practice, said, he would advise the client to focus on strategy for next year. "What comes into play is not so much whether power flips, but rather, will the new [political] environment be more favorable or less favorable for your client?" Gold said.

For the rest of 2010, many lobbying firms said they are recalibrating their work to focus on the regulatory phase of reform, now that the health care and financial services bills are law. Ogilvy Government Relations this week launched a financial services implementation practice to help clients navigate the agencies that will be writing the new rules for banks and financial companies. "A lot of decisions have been punted to the agencies, so you'll see a lot of entities trying to have an impact" on that process, said Drew Maloney, Ogilvy's COO.