K Street boom days have come and gone.
A bad economy and rigid stalemates on Capitol Hill took its toll on big firms for the second year in a row, with seven out of the 10 biggest lobbying groups reporting flat or negative revenues in 2011, a significant contrast with the double-digit growth many of the same firms experienced in the mid-2000s, according to recently filed federal lobbying reports.
Continue ReadingAnd the stagnant revenues aren?t expected to pick up in the coming year with the economy still slow and an even bigger change afoot in the industry. Fights are no longer just about which side has the most ? or best ? lobbyists. The new world of Washington influence is more diverse:Traditional access lobbying is waged alongside campaigns that use media, grass-roots activism and the Internet ? activity often not reported in federal lobbying filings.
?This is not your grandfather?s lobbying business,? said Nick Allard of Patton Boggs. ?The nature of it is less of a premium on getting information and more of a demand for expert advice.?
Patton Boggs maintained its position as the top-grossing lobbying firm, bringing in $48.4 million in lobbying revenue in 2011. That was up from $45.2 million in 2010. The uptick stems more from the firm?s June merger with Breaux Lott Leadership Group than from overall business growth.
Several lobbyists pointed to last week?s massive online mobilization that tanked two fast-moving anti-online piracy bills as the perfect example of how the influence game is changing. While clients are still willing to pay for access lobbying, there is more of a focus on nonreportable strategy through social media and other grass-roots initiatives.
?A well-resourced content group of people completely got outmaneuvered by the guys in the basement,? Ogilvy Government Relations? Drew Maloney said of the anti-piracy fight. ?It?s not a secret that a lobbying campaign involves a lot of different tools now than maybe it did 10 to 15 years ago.?
The numbers do not come as a surprise to lobbyists, who have been saying all year that K Street is no longer easy street for hired guns.
?Generally speaking, the industry was down, so even in a down year, even is a good thing,? Alex Vogel of Mehlman Vogel Castagnetti said.
Marquee firms like Podesta Group, Van Scoyoc & Associates, Brownstein Hyatt Farber Schreck and Holland & Knight saw their revenues nose dive. Others ? like Cassidy & Associates, Wexler & Walker Public Policy Associates and Mehlman Vogel Castagnetti ? reported relatively flat years.
Competition has also increased as more K-Streeters are hanging out a shingle rather than going to top firms, and clients aren?t as willing to pay huge monthly retainers.
Van Scoyoc & Associates faced one of the steepest declines: Its revenues declined about 14 percent. The firm billed clients $25.3 million for lobbying in 2011, down from $29.4 million in 2010. Holland & Knight?s lobbying revenue dropped 10 percent with the firm bringing in $19 million in 2011, down from $21 million in 2010. Brownstein Hyatt Farber Schreck also dropped about 9 percent. The firm billed $22.1 million in revenue in 2011 compared with the $24.4 million it charged in 2010.
Brownstein Hyatt?s Al Mottur said the drop wasn?t unexpected and that the firm?s explosive, double-digit percentage growth in recent years wasn?t sustainable. Holland & Knight also said the downturn in reportable lobbying revenues was offset by regulatory work as the action moved to the agencies.
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