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The influence business had a strong first half of the year, despite months of debate over lobbying reform legislation and industry ethics. An active congressional session and a flood of private equity money, among other factors, proved lucrative for K Street, according to midyear reports due last week under the Lobbying Disclosure Act. Many — though not all — Republican firms say they’ve held their ground despite the Democratic majority in Congress. Most Democratic firms are reporting increases over last year. One firm that made a high-profile decision to go bipartisan — Ogilvy Government Relations — says its midyear revenue is more than 80 percent higher than last year’s. Midyear reports were still incomplete as of late last week, though many firms agreed to voluntarily provide their total numbers to Legal Times. Lobbyists are also projecting a busy fall for Congress, despite the distractions of a volatile election season that’s accelerated earlier than in previous cycles. Nicholas Allard, the co-chairman of Patton Boggs’ public policy department, didn’t take an August recess vacation this year, but he isn’t complaining. The firm’s revenue is up nearly 9 percent over last year’s $17.8 million midyear number, he says. And Allard maintains that the Democratic majority’s muscular oversight and ongoing investigations have fueled revenue increases in practice areas other than lobbying, a trend he expects to continue. “As the Congress gets some of the low-hanging fruit out of the way, it may be more difficult for them to move rapidly on legislation. And if they’re not going to legislate, they’re going to investigate,” he says. Republican firms are carefully monitoring the effects of a Democrat-dominated Congress. When asked, Loren Monroe, chief operating officer of Republican firm Barbour Griffith & Rogers, wouldn’t rule out considering a Democratic hire at some point. “We’re more open to it for the future,” he says. The firm has no current plans to add Democratic lobbyists, Monroe says, but would do so if it seemed to be the best way to serve clients. Still, the firm has stayed all-Republican so far, and Monroe says the firm’s steady revenue — it ticked up slightly from $11.3 million midyear 2006 to $11.4 million in the 2007 midyear reports — shows that its clients are staying put and that the firm remains an effective advocate. The firm now frequently partners with Democratic firms on clients’ behalf, Monroe notes. “We don’t change our business model based on elections that just happened or are about to happen,” Monroe says. CONGRESS GETS BUSY Still, many firms are making changes. Some are attracting new clients in industries that haven’t had big lobbying presences in the past, such as private equity. Others are coping with fallout — positive and negative — from Congress’ partisan shift. The changing political climate has also sparked a frenzy for Democratic lobbyists, even as the presidential campaign continues to draw some top talent away from K Street. Ogilvy, for instance, added five Democratic lobbyists over the past year and a half, and reported midyear revenues at $12.4 million, up from $6.9 million last year. “We’ll let the numbers speak for themselves and attribute it to a very busy congressional season and the addition of some very talented Democratic lobbyists,” says Drew Maloney, managing director for the firm. More than 60 percent of Ogilvy’s reported increase came from a single client: the Blackstone Group. The private equity giant spent $3.8 million on lobbying during the January-to-June reporting period, compared to $120,000 during the same period last year. Other private equity firms have also turned to K Street in response to a Democratic push to tax their profits at a higher rate, though Blackstone is by far the biggest spender. Reports submitted to the secretary of the Senate show that the Private Equity Council paid roughly $260,000 so far this year to firms including Akin Gump Strauss Hauer & Feld and Brownstein Hyatt Farber Schreck. At least some midyear reports for the PEC were not yet available. Arnold & Porter’s Jim Turner says the firm is reporting roughly $2.7 million, roughly double what it did last year, and expects revenues to continue to rise. “We attract a little more interest because we’re tied to the Democratic side,” says Turner, who is a former Democratic congressman from Texas. The firm has picked up new clients, including United Parcel Service and Segway. Other firms haven’t had the same boost. Jim Pruitt, chief operating officer of the traditionally Republican Livingston Group, says the portion of the firm’s revenue subject to the Lobbying Disclosure Act has dropped by nearly 15 percent compared to last year, when the firm reported slightly more than $6 million. Part of that, Pruitt says, is because the firm has been moving away from appropriations work. Another reason for the drop is that the firm, despite moving to increase its Democratic presence and launching a joint venture with the Podesta Group, which recently landed Egypt as a client, was affected by the Democratic takeover. “We tried to plan for the partisan change,” Pruitt says, but “did get caught in that a little bit.” One example, though it’s on the international side: The Livingston Group’s biggest client, Turkey, “felt that a prominent Democratic firm needed to be the team lead.” That assignment went over to DLA Piper. A SECOND LOOK AT APPROPRIATIONS Livingston used to have more than 50 percent of its business in appropriations work. Today, less than 25 percent of the firm’s work is in appropriations. Pruitt says the firm is instead working to grow international business — it is doing more work for client Azerbaijan these days — and also to attract new clients for practices in energy, science, technology, and telecommunications. “Those are clearly areas where we see growth,” he says. Other firms traditionally known for appropriations work also have done less of it in recent years. “A lot of firms like us have been taking a tough look at appropriations because there’s been such discussion of it in the media and the Hill,” says Gregg Hartley, vice chairman of Cassidy & Associates, a firm once known for appropriations. Hartley says Cassidy reported midyear revenue that was essentially flat, though slightly less than last year’s $12.6 million. Appropriations work is now 51 percent of Cassidy’s business, Hartley notes, and it used to be 70 percent. He says the firm believes international work, energy, tax, and finance are growth areas. Other firms say they expect appropriations to continue to be a big part of their own business but also to become a less crowded marketplace. Rich Gold of Holland & Knight’s public policy practice, which is up more than 15 percent over last year’s $7 million, says Congress’ effort to limit earmarks means that what he calls “K-Mart level” lobby shops won’t have an easy job anymore. “It became very clear about the late ’80s that you weren’t going to do tax lobbying without some sort of expertise,” Gold says. “I think that’s where we are now on appropriations.” Jim Chapman, a partner in Bracewell & Giuliani’s government relations and strategy section, where revenue rose from $3.5 million to $3.7 million, also says the appropriations field is narrowing. A former Democratic member of the House Appropriations Committee himself, Chapman believes split government and greater transparency in earmarking will tilt the game toward firms that know appropriations best — and those that have the best argument for their projects. “If you’re trying to build a bridge to nowhere, then you’ll get a spotlight shining on that,” he says.
Carrie Levine can be contacted at [email protected]. Reporter Jeff Horwitz contributed to this story.

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