Law Firms and Congressional Gridlock

What does the future hold for Biglaw lobbying practices?

Ed. note: This is the latest installment in a new series of posts on lateral partner moves from Lateral Link’s team of expert contributors. Today’s post is written by Larry Latourette, Executive Director of the Partner Practice at Lateral Link.

Over the last several decades, corporations have increasingly realized that having a voice in Washington is imperative. Lobbying the federal government can yield lucrative returns; studies have estimated the ROI at more than 2,000 percent. Attending to Washington can also prevent or reduce the harmful impact of government lawsuits or investigations that can occur when D.C. is ignored (take, for example, the DOJ’s antitrust case against Microsoft before it had a meaningful voice in Washington). In response, companies have set up Washington offices and joined or augmented industry trade associations to represent their interests.

Following their clients, D.C. law firms in turn have significantly beefed up their lobbying efforts and personnel to meet these increased demands. Some firms, like Patton Boggs, Akin Gump, K&L Gates, and Holland & Knight, now have scores of lobbyists on the payroll that have made major and, until recently, growing contributions to the bottom line. It’s probably no accident that D.C. is one of the only jurisdictions allowing non-lawyers to be partners in law firms.

Recent congressional gridlock, however, has posed difficulties for law firms and policy shops that depend on the flow of legislation for their revenue….

As Congress labors through another session accomplishing little, these lobbying shops may be the only constituency more frustrated with Congress than the electorate. With some notable exceptions like Obamacare, most recent corporate lobbying efforts have been defensive in nature. Companies have focused more on preserving what they have by blocking damaging legislation or regulations than seeking changes that could help them. Initiatives that even hint at increased federal spending, regulation, or oversight are largely dead on arrival. As a result, spending on lobbying has dropped over the last three years, as has the lobbying revenue at many of the firms that have invested in these practices.

As the head of partner recruiting at Lateral Link and head of its D.C. office, I keep a keen eye on the congressional landscape for our clients and candidates. While the 2014 election is unlikely to end the logjam between the executive and legislative branches, and the GOP will almost certainly retain the House, the race for control of the Senate looks to be a dead heat. As Nate (“Moneyball”) Silver suggests in his blog, Five Thirty Eight, the GOP has about a fifty-fifty chance of picking up the Senate. Currently, Democratic Senators Kay Hagan (North Carolina), Mary Landrieu (Louisiana) and Mark Pryor (Arkansas) are projected to have only an even shot of retaining their seats. Meanwhile, the GOP is projected to prevail for the seats of retiring Democratic Senators Max Baucus (Montana), Jay Rockefeller (West Virginia), and Tim Johnson (South Dakota), putting the GOP near or over the threshold for the majority — depending on how the other races play out.

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This situation presents potential lobbying employers both a conundrum and an opportunity. The uncertain fate of the Senate makes it difficult to know whether corporations will boost lobbying expenditures in the short term (which, everything else being equal, they probably would if the GOP wins since the tension between the two chambers will be reduced…probably) and whether it is better to invest in senior Senate Democrats or Republicans. On the other hand, it’s now a buyer’s market given this uncertainty and a good time for lobbying practices to invest in the future by hiring new people, since spending on lobbying is almost certainly to grow in the long term. Moreover, GOP House staffers who will enjoy grandfathered health benefits only if they leave in the next few months may be more eager to move to the private sector than is typically the case. Finally, the 2014 elections will offer a bumper crop of retiring (whether voluntarily or not) Congressmen and Senators and high-ranking staffers to bolster a firm’s lobbying capability, some of whom will be highly sought after by the law firms and lobbying shops on K Street that have government relations practices.

Overall, as I have advised many of my clients and candidates, while the next several years may be relatively flat as far as lobbying revenues, the long-term prospects of the practice area remain bright. Stay tuned.

Disclosure: This series is sponsored by Lateral Link, which is an ATL advertiser.


Lateral Link LLP is one of the largest legal recruiting agencies in the world, with 13 offices in the United States and Asia. Lateral Link has been recognized by the Wall Street Journal, The American Lawyer, the ABA Journal, The Daily Journal, and the National Law Journal for its innovative approach to legal placement. Lateral Link recruiters are comprised of former practicing attorneys who have consistently succeeded in placing partners, associates, general and corporate counsel into some of the most reputable law firms and organizations in the world.

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