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For law firms, lobbying can mean big bucks. Three of the biggest lobbying practices in Washington — at law firms Patton Boggs, Akin Gump Strauss Hauer & Feld, and Hogan & Hartson — brought in a total of more than $140 million in revenue last year. Now a wave of out-of-town law firms — from Pittsburgh to Los Angeles — is emulating their success. In the last three years, a series of budding legislative practices have opened their doors and are now competing for a share of the lobbying dollars. They have a difficult road ahead of them. W. Michael House, who chairs the legislative practice at Hogan & Hartson, says that integrating the lobbying practice with the rest of the law firm is key to building a successful shop. But explaining the value of a lobbying practice to corporate attorneys can be a challenge, even inside the Beltway. This difficulty is multiplied when a firm is headquartered far outside the District. “I think the headquarters being somewhere besides Washington is a major hurdle,” says House. “It’s hard enough for the litigators and the corporate types even in a Washington practice to understand what you do.” And law firms both inside and outside the Beltway must compete with lobbying boutiques for talent. Recruits often worry that tedious time sheets, high overhead, excessive conflicts, and unwieldy bureaucracies put law firms at a disadvantage to leaner, aggressive lobbying consultancies. Nonlawyers also worry that they will be treated as second-class members of law firms. But the law firms that are giving it a try argue, not surprisingly, that many of those worries are groundless or exaggerated. Law firms can employ flexible billing structures — their lobbyists will never be slaves to recording each six-minute increment of their workday. And all law firms interested in finding top talent will respect nonlawyers and compensate them accordingly. Still, House, who is an attorney, says, “It takes a special kind of nonlawyer person to work at a law firm.” House characterizes the type as someone who loves policy as much as politics. Some law firms avoid some of these obstacles altogether by spinning off subsidiaries to house their lobbying practices. But others say that the wealth of resources and expertise that a large law firm can bring to a lobbying practice more than compensates for the inconveniences. Some law firm lobbyists argue that state bar association rules can work to their advantage. For example, Andrew Zausner, who heads the legislative practice at Dickstein Shapiro Morin & Oshinsky, tells potential clients that rules prohibiting conflicts will keep them faithful to their issues. “Clients we have know that when we take their case, we’re not going to be of mixed minds as to our representation,” he says. Two out-of-town firms are proving that building a successful lobbying shop from the ground up is not impossible. Venable, founded in Baltimore, almost doubled its revenue between 2001 and 2002. Elliott Portnoy has made Chicago-based Sonnenschein Nath & Rosenthal a major contender after founding the lobbying practice there less than two years ago. Making a big play in Washington lobbying, Piper Rudnick — created by the merger of a Baltimore and a Chicago firm — gobbled up Verner, Liipfert, Bernhard, McPherson and Hand in 2002. While not comprehensive, the sampling below offers several examples of how law firms approach the daunting task of building a legislative shop from the ground up. BARNES & THORNBURG Although it took Jeffrey Taylor some time to get used to a note at the bottom of his business cards that reads, “Mr. Taylor is a registered lobbyist, not an attorney,” he says that working within the law firm of Barnes & Thornburg has been well worth it. He describes starting a lobbying practice at the Indiana-based law firm’s Washington office as “two cultures coming together” — legal and political. Before Taylor, 41, founded the lobbying practice in 2001, the firm’s Washington attorneys only represented clients on Capitol Hill occasionally, although they had a sizable state lobbying practice in Indiana. Barnes & Thornburg decided to create a shop dedicated to federal government relations after the 2000 election, Taylor says, realizing the firm was losing “enormous sums of money” when clients took their lobbying business elsewhere. Taylor knew the 370-plus attorney firm from his tenure as chief of staff to then-Rep. David McIntosh (R-Ind.). “Barnes & Thornburg was a traditional law firm with many practice groups but very few nonlawyers” who served clients, he says. Bringing in a nonlawyer to run the federal relations practice, he says, “was a bold move by this firm, as it is for a lot of traditional firms.” Taylor’s first goal was to educate the firm’s attorneys about the value of a lobbying practice. He sends periodic e-mail updates on pending legislation. This, in turn, has led his lawyer colleagues to refer clients to the lobbying practice. Taylor estimates that about half of the approximately 20 clients the practice is registered to represent are referrals from the law firm. Lobbying clients now include the Native American tribe Bad River Band of Lake Superior Chippewa and NIBCO Inc., an Elkhart, Ind.-based manufacturing company. Taylor says the law firm has had to overcome some cultural differences to accommodate the lobbying practice. For example, the lobbyists are teaching Barnes & Thornburg’s media-shy attorneys about the value of public relations. And the lobbying team must abide by some restrictive Indiana state bar association regulations, such as the one preventing them from cold calling potential clients. Taylor says that he has gone to some great — and sometimes humorous — lengths to approach potential clients without breaking this rule. Taylor and his Democratic co-chairman — attorney Walt Sanders, who was counsel and legislative director for Rep. John Dingell (D-Mich.) — are the firm’s only full-time lobbyists, though attorneys in Washington and Indiana also do some legislative work. Based on the practice’s revenue in December, Taylor will consider hiring more lobbyists. He hopes to have a $3 million to $5 million practice in the next three to four years. Barnes & Thornburg has discussed creating a separate subsidiary for federal relations. Taylor notes that an Indiana-based competitor, Baker & Daniels, has been successful with its subsidiary, B&D Sagamore. But Taylor adds, “I think we’re a few years away from doing that.” For the time being, he says, he’s happy to keep the federal relations practice right where it is. BLANK ROME GOVERNMENT RELATIONS Blank Rome is not new to lobbying, explains David Girard-diCarlo, but when the firm found the perfect “marriage partner” in the Washington-based law firm Dyer Ellis & Joseph at the start of 2003, they decided to spin off Blank Rome Government Relations in May. T. Michael Dyer now runs the Washington office of Blank Rome Government Relations, which is overseen by Girard-diCarlo, chairman of Blank Rome’s 425-attorney law firm, who splits his time between the firm’s Pennsylvania, New York, and Washington offices, although most of his time is now spent in D.C. Girard-diCarlo says the law firm created a subsidiary to avoid state bar regulations, such as those that prohibit fee-splitting between attorneys and nonattorneys and prevent nonlawyers from becoming full equity partners in a law firm. “I think those rules are nuts,” he says, but adds, “The rules are what they are, and we don’t want to be on the cutting edge.” The 14-person lobbying office includes Mark Holman, a top aide in the now-defunct Office of Homeland Security and a former chief of staff to then-Gov. Tom Ridge; Ashley Davis, another former Ridge aide; and David Norcross, who was recently named chairman of the Committee on Arrangements for the 2004 Republican National Convention. C.J. Zane, former chief of staff to Rep. Don Young (R-Alaska), came to the firm with Dyer Ellis. Barbara Comstock, former chief spokesperson for Attorney General John Ashcroft, and Topper Ray, who was senior vice president at Tierney Communications and a lead press advance representative for President George H.W. Bush, are on the firm’s strategic communications team. The firm plans to bring on more lobbyists in the next year. Although Republicans now dominate Blank Rome Government Relations, Girard-diCarlo and Dyer say they plan to hire from across the aisle to create a bipartisan practice. Blank Rome Government Relations is now registered to represent the Boeing Co., Navigant Consulting Inc., BearingPoint Inc., and the Rajant Corp. Girard-diCarlo estimates that the practice will bring in $5 million to $6 million a year. “We are just beginning to tap into the [law firm's] client base,” he says. Despite that ambition, Girard-diCarlo is wary of moving too fast. “Our challenge right now is to be disciplined,” he says. “The hires we make and the decisions we make will define us.” BUCHANAN INGERSOLL When Steven Hilton left Akin Gump Strauss Hauer & Feld for a lobbying boutique — the now-defunct Legislative Strategies Group — in 1999, he soon missed having the resources of a law firm at his disposal. So in March 2001 he left the boutique and returned to a law firm to build a federal relations practice. Hilton, 45, a native of Philadelphia, says that joining Pittsburgh-based Buchanan Ingersoll “was like coming back to my roots.” The practice specializes in defense, homeland security, biomedical health, and appropriations. Hilton and his lobbying team have quite a bit of expertise in those areas. James Wiltraut, a former aide to then-Rep. Paul McHale (D-Pa.), brings experience in defense issues to the practice. Former Rep. James Lightfoot (R-Iowa) chaired the House appropriations subcommittee that allocated funds for the Treasury Department and Postal Service. Hilton and Wiltraut also have a personal connection to defense issues — Hilton serves in the U.S. Army Reserve and Wiltraut in the U.S. Naval Reserve. Hilton, the only attorney of the three, has worked on both sides of the aisle. After starting as a top aide to Sen. Arlen Specter (R-Pa.), he was a deputy assistant to President Bill Clinton. The firm has also retained Jeff McCausland as a consultant. McCausland, a retired Army colonel and dean of the Army War College, served for two years on President Clinton’s National Security Council staff. Hilton says Buchanan Ingersoll understands the value of a legislative practice. The firm has state lobbying shops that preceded the federal lobbying practice, including an office in Harrisburg, Pa. Hilton acknowledges that the law firm has higher overhead and less flexibility than a boutique, but “I think it’s a good trade-off for the resources” that it can provide to a client, he says. The firm has about 13 clients and is now registering to represent Al Najat, a new consortium of health care companies seeking contracts in Iraq. Most of the clients originated from the legal side. The next step in the practice’s growth, Hilton says, is to publicize the practice and bring in outside clients: “Now we’re ready to step out and let the world know what our capabilities are.” HUNTON & WILLIAMS “Each firm in this town tries to build up a practice that has its own kind of imprint,” says James Miller, an attorney at Hunton & Williams. When Miller joined from Greenberg Traurig in July 2001 to start a legislative practice at the Richmond, Va.-based law firm, he looked to the firm’s Southern roots to determine his new shop’s style. Miller, 51, knew that Hunton & Williams had a strong utilities and telecommunications practice and thought he could leverage those areas of expertise into a strong legislative program. “What the hell,” he remembers thinking. “I’m always up for a challenge.” The lobbying practice now focuses on trade, energy, environment, tax, appropriations and health care. Miller says that he is pleased with the group’s success thus far. “This year has been a very big year for us,” he says. “We’ve got a battle-tested group of young associates,” Miller adds. His team consists of eight lobbyists, including Joseph Stanko, formerly an aide to Rep. Billy Tauzin (R-La.) on the Energy and Commerce Committee. All but two are attorneys. The practice also has an alliance with J.C. Watts’ new lobbying shop, the J.C. Watts Cos., on issues involving West Africa and urban revitalization. Of the firm’s approximately 25 clients, about half have been developed by the practice. The lobbying shop is now organized as a practice group within the firm, but the firm has not ruled out forming a separate subsidiary. As the practice grows, Miller hopes to maintain the “Southern, gentlemanly” culture of the firm. But he adds, “You can be a gentleman and a lady and still be pretty aggressive in representing your clients’ interests.” KILPATRICK STOCKTON Atlanta-based Kilpatrick Stockton has had a Washington office since the mid-1970s that did occasional lobbying work. But it wasn’t until this year, when Christopher Ott, a 34-year-old associate, proposed developing a formal legislative practice, that Kilpatrick made lobbying a priority. In early 2002, Ott took on a lobbying assignment for an existing firm client. One assignment led to another. “I love politics,” says Ott, who is active in the Republican Party and served as outside counsel to two senators. In July 2002, he approached the firm about lobbying full-time and creating an infrastructure for his work. Steven Sacher, who oversees the budding legislative practice, says Kilpatrick Stockton encourages this entrepreneurial impulse in its attorneys, as long as it advances the goals of the firm. He adds that the firm also recognized that lobbying practices are becoming a standard feature of Washington law firms. When doing business in Washington, he says, “to fully serve your clients, you have to provide legislative counsel and representation.” Today, Kilpatrick Stockton’s lobbying work is primarily handled by Ott, although other attorneys occasionally do legislative work. The practice is currently registered to represent eight clients, including EntreMed and CytImmune Sciences, two biotech firms, and the town of Highlands, S.C. Two more are on the way. Kilpatrick is looking to hire additional lobbyists — both lawyers and nonlawyers. The goal is to build a bipartisan practice with expertise in both chambers of Congress, the White House, and the federal agencies. The firm has not ruled out creating a separate subsidiary for government relations, but Sacher says that for now it plans to keep the legislative practice within the firm. The small lobbying shop is in the process of explaining its capabilities to Kilpatrick Stockton attorneys. Ott went to the firm’s home office in October to brief the attorneys there on the new practice. “We are very much lawyers,” Ott says. Unlike more media-friendly lobbyists, the firm is unwilling to divulge information about many of the practice’s lobbying clients, citing attorney-client privilege. But despite that conservative style, Sacher says that the firm is willing to take aggressive steps to build the lobbying shop, including possibly acquiring an established practice. “I would expect that a year from now we’ll have four to five times as many clients,” he says. PAUL, HASTINGS, JANOFSKY & WALKER Although Paul, Hastings, Janofsky & Walker has had a lobbying shop since 1989, only recently did it kick into high gear. In February 2002, Lawrence Sidman and four of his colleagues came to the firm from now-defunct Verner, Liipfert, Bernhard, McPherson and Hand. Sidman, 55, who was chief counsel and staff director to the Energy, Conservation and Power Subcommittee and the Telecommunications and Finance Subcommittee of the House Energy and Commerce Committee, joined Ralph Everett, who was chief counsel and staff director of the full Senate Commerce, Science, and Transportation Committee. The two have known each other both on and off Capitol Hill for about 15 years. “For us,” Sidman says, “this was a little bit of a reunion.” Rounding out the group is Judith Hope, associate director of the White House Domestic Council under then-President Gerald Ford. Sidman says that he preferred to join a small, established lobbying shop to starting a legislative practice from scratch. He says, “It afforded optimal opportunities for growth and shaping with someone that I had been very good friends with for 15 years.” The three partners are now joined by about 15 attorneys and lobbyists, who share the legislative work full- or part-time. Sidman expects to add additional staff to this team in the near future. The government relations practice has about 20 clients. Sidman’s include NBC, Verizon Communications, Philips Electronics, Thomson Multimedia, and Clear Channel Communications Inc. Los Angeles-based Paul, Hastings has a strong telecommunications practice, and Sidman’s experience and clients complement that focus. The practice, however, is not limited to telecommunications issues. He cites his work for Financial Executives International in connection with the Sarbanes-Oxley Act as an example. “One of our aspirations is absolutely to continue broadening out the practice,” says Sidman. Another goal, he adds, is to do legislative work for more clients represented by the firm’s other practices. The firm’s leadership has been very supportive of the burgeoning lobbying shop, Sidman says, adding that it is not always easy to make Paul, Hastings attorneys understand the value of the practice. “In dollars-and-cents terms,” he says, “the revenues are often substantially less than what flow from multi-billion-dollar corporate transactions.” Sidman says that both the legislative practice’s revenue and the number of clients have roughly tripled from 2001 to 2002. These figures, he says, do not include revenue to other practices that has been generated by their lobbying and regulatory work. Sidman estimates these numbers will continue to mushroom. “We have enormous expectations,” he says. Sidman says the practice’s strength is drawing from the firm’s expertise to develop legislative strategy and make substantive presentations on Capitol Hill. “We’re not just door-openers,” he says. TROUTMAN SANDERS PUBLIC AFFAIRS GROUP Atlanta law firm Troutman Sanders took Blank Rome’s approach to building its lobbying practice. In January the firm created a subsidiary, Troutman Sanders Public Affairs Group, headed by Georgia-based Pete Robinson, to house the government relations office. Previously, the law firm had done regulatory work and occasional lobbying for existing clients. Only since January has the law firm had a team in Washington dedicated to lobbying. Troutman Sanders Public Affairs Group first opened in Atlanta and also has an office in Richmond. Robert Leebern Jr., a longtime aide to Sen. Saxby Chambliss (R-Ga.) — in both the House and the Senate — was hired to run the Washington office. Leebern says he joined the firm because he liked the people and the culture of the Atlanta-based office. He also appreciated having the resources of what he calls a “top-notch legal team” with the size and flexibility of a boutique. “I didn’t want to be gobbled up and work with nine different bosses,” he says. The public affairs group keeps separate books and has a different billing system than the law firm, so the lobbyists don’t have to contend with the law firm’s overhead costs. “We’re a profit center,” Leebern says. The separation from the law firm’s bureaucracy also gives Leebern’s team the flexibility to make decisions and handle administrative costs — such as travel and entertainment — more quickly. Leebern praises the Troutman law and lobby firms as being “seamless but separate.” The public affairs group has 15 clients, including the Coca-Cola Co., Leebern says, about 80 percent of which did not come from the law firm. In the next calendar year, Leebern expects the office to bring in $1 million. Along with Leebern, Laura Quattlebaum, a former top aide to Rep. Jack Kingston (R-Ga.), and Tommy Sears, who came from Van Scoyoc Associates, handle the workload. In addition, both Robinson and Robert Willis, another Georgia-based lobbyist, travel to Washington frequently. The firm plans to hire more lobbyists next year for the Washington office. Leebern says he will consider both lawyers and nonlawyers. “A lot of the best talent you’ve got in this business are not lawyers,” he notes. WOMBLE CARLYLE SANDRIDGE & RICE The goal of the legislative practice at Womble Carlyle Sandridge & Rice is to “start small and good and build up,” says Walker Nolan, who heads the Washington federal practice of the Winston-Salem, N.C.-based firm. This year, Womble Carlyle has already hired the former chiefs of staff to Sen. John Edwards (D-N.C.) and then-Sen. Jesse Helms (R-N.C.). In April 2002, Nolan, 58, came to Womble Carlyle from Edison Electric Institute to start a lobbying practice at the firm. He joined Kevin Jones, a North Carolina-native, who came over from Baker, Donelson, Bearman, Caldwell & Berkowitz in 2000. Nolan then recruited Jeffrey Lane from Edwards’ office, and James Broughton, who had worked for Helms for more than a decade. Broughton is the only nonlawyer of the group. The practice focuses on pharmaceutical, health, science, appropriations, banking, tax, and environmental issues and has brought in 14 clients, more than half of which are new to the firm. “I think we’ve been pretty successful in one year,” Nolan says. Nolan adds that the firm is willing to consider a different structure for the practice in the future, including creating a separate subsidiary, but for the time being, he is happy to work within Womble Carlyle. “We’re trying to make it fit in with a traditional practice,” he says. The legislative practice plans to build on the law firm’s strong North Carolina ties — working on issues that affect the state’s furniture and textile industries and taking on pharmaceutical clients with interests at Research Triangle Park. But while the practice is made up of North Carolina natives thus far, Nolan says that he will look outside the Tar Heel State for future hires. “We don’t plan to be all local guys,” he says. This article first appeared in the Nov. 12 issue of Influence, the Legal Times sister publication that covers the business of lobbying. For more, go to influence.biz.

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