The lobbying giant expects the historic earnings boom to continue, even if a divided Congress threatens to slow legislation.
Washington, D.C.’s top lobbying firm reported huge gains for the final three months of 2022 on Friday, capping off a record year for K Street.
The strong performance in the fourth quarter bucked the norm during election season, boosting hopes that businesses will continue to spend heavily on D.C. lobbyists in the new year.
Lobbyists said clients were particularly interested in the must-pass spending bill, the fragile debt-ceiling battle and investigations that would implicate Republicans in big companies.
“People are assuming that nothing will happen in the next two years, which is probably wrong,” said former Speaker John Boehner (R-Ohio), a senior adviser to Squire Patton Boggs, referring to investigations and proposals by House Republicans. Influencing the energy and technology industries.
Gridlock is bad for business. Lobbying spending has hit record highs in recent years under a bipartisan bill to fight COVID-19 and Democratic control of DC, which has introduced trillions of dollars in new government spending.
Demand for lobbyists typically plummets when legislation stalls, but K Street is eyeing a slew of bipartisan legislation.
“Contrary to partisan doom and gloom, we expect significant activity around the debt limit, cryptocurrencies, farm bill, FAA and defense reauthorization, TCJA expiration [Tax Cuts and Jobs Act] Tax rules, and issues related to China,” said Brian Pomper, a partner at law firm Akin Gump and a former Democratic Senate aide.
Lobbying firms expect the spending spree to continue into the early part of the year, when clients will introduce themselves to new lawmakers and committee chairmen and help them navigate an uncertain Congress.
“Right now, the point is: Who do we need to know? Who do we need to meet? How do we need to position ourselves going forward on some of these issues?” said Nadeam Elshami, co-chairman of government relations at the Brownstein Hyatt Farber Schreck and former Speaker of the House Former chief of staff to Nancy Pelosi (D-Calif.).
In many cases, lobbying efforts have extended beyond Congress.
Major bills from the last Congress, such as the Lower Inflation Act and the Chips and Science Act, are gifts that keep on K Street. The corporate clients who lobbied for the bills when they were drafted are now lobbying the agencies that set the new rules and hand out lucrative contracts.
“Regulatory enforcement is a very important area of focus right now,” said Karishma Page, co-head of K&L Gates’ policy practice. “The Lower Inflation Act introduced so many important policies, we spent a lot of time analyzing implementation guidance for clients and providing feedback.”
Big corporations are concerned about the debt-ceiling battle, which could lead to an economically crashing default, but also see a potential debt-limit package as an opportunity to secure priorities such as tax reform.
Earlier this month, the largest U.S. business lobby, the U.S. Chamber of Commerce, warned that businesses were “fed up” with Congressional inaction and would not accept gridlock over priorities such as the debt limit, immigration and allowing reforms.
Bruce Mehlman, a partner at Mehlman Consulting, said: “The return of a divided Congress will place a heavy emphasis on bipartisan influence and solutions, requiring more patience and persistence from firms aiming to shape policy outcomes. “
Several companies hit new profit records
Brownstein Hyatt Farber Schreck reported annual revenue of $61.6 million, up 9% from 2021 totals and breaking records at the time. The company took first place. Ranked #1 among lobbying firms for the second year in a row.
Akin Gump brought in $14 million in the last three months of 2022, the best quarter on record. The company reported annual revenue of $53.1 million, down less than 1% from its record 2021 revenue.
Top lobbying firms have sought to bolster their dominance by hiring senior staff with close ties to DC power establishments.
Akin Gump recently hired Reggie Babin, the former chief counsel to Senate Majority Leader Charles Schumer (D-N.Y.). In October, Brownstein hired former Speaker Kevin McCarthy (R-Calif.) Deputy Chief of Staff for Policy Will Dunham.
Holland & Knight brought in approximately $43.4 million in revenue, a 24% increase over 2021. Recently retired Congressman. Ed Perlmutter (D-Colo.) joined the company’s lobbying team earlier this month.
Meanwhile, BGR Group’s fourth-quarter and 2022 revenues of $10.1 million and $39.2 million, respectively, are tops for the company.
“We’re helping protect our clients’ priorities in the defense, health and appropriations bills that the Democratic majority in Congress is finalizing while engaging with the incoming House majority as Republican leaders craft their 2023 agenda ,” said Superintendent Loren Monroe. In BGR Group.
Invariant generated $9.9 million in revenue for the fourth quarter and $38.2 million for the full year, an increase of nearly 23% over 2021. Cornerstone government affairs revenue was US$37.4 million, an increase of 8% year-on-year.
Mehlman Consulting reported annual revenue of $25.7 million, an 8 percent increase over the previous year. Squire Patton Boggs boosted its revenue to $25.3 million from $24.4 million. Tiber Creek Group brought in $25.2 million, up from $24.6 million the year before.
Cassidy & Associates’ revenue rose to $22 million from $20.6 million. Van Scoyoc Associates increased its annual revenue from $19.5 million to $21.2 million.
K&L Gates reported lobbying revenue of $21.4 million, slightly higher than in 2021. The company hired a former congressman. Last month, Rep. Mike Doyle (D-Pa.), a longtime member of the influential House Energy and Commerce Committee, joined the government affairs team.
K Street has been recruiting former lawmakers and leadership staffers, as if there was no slowdown on the horizon.
Former Rep. Rodney Davis (R-Illinois) joined Corson O’Connor last week, while the former Rep. GK Butterfield (DN.C.) joined McGuireWoods Consulting earlier this month.