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When Richard Gold, head of Holland & Knight’s public policy and regulation practice group, recently met with the firm’s management to go over the year’s finances, he knew everyone would be pleased: The practice’s revenues were up between 12 percent and 15 percent from the year before, and its Washington public policy staff had grown by eight or nine lobbyists. But they weren’t as delighted and surprised as Gold would have liked them to be. “You guys always grow,” the other partners told him. It’s easy being blas� about growth in a year like 2007. The first year of the 110th Congress has lifted many of K Street’s boats, with firms like Holland and Patton Boggs hinting at strong showings. (According to Lobbying Disclosure Act numbers, for instance, Holland & Knight reported roughly $8.1 million in revenue at midyear, while the Patton Boggs tally came in at $19.4 million.) But that may be the high point for now. Several lobby firm leaders say they’re concerned that growth and hiring will slow in 2008, thanks to both a struggling economy and the usual election-year slowdown. Though the hiring picture is still bright for very senior Capitol Hill staffers and in a few specific practices, like health care and tax, the rest of K Street is hunkering down for a long winter. “You’d be an idiot to not plan for the idea that there could be a downturn here, that things could cool off for a while,” Gold says. EXODUS That’s not stopping the exodus from the Hill, however. Between 2007 and 2008, 24 chiefs of staff to the 90 returning senators stepped down, with a few saving their resignations for the final day of the legislative session. Of those, at least 12 have gone directly to K Street or other government relations jobs. That’s an above-average rate of departure compared to the most recent available data from the Congressional Management Foundation, which monitors Hill employment trends. (Departures are usually significantly slower in the House, where a chief’s average tour of duty is 5.2 years. Even still, 2007 saw the departure of Christopher McCannell, New York Rep. Joseph Crowley’s former chief who went to Quinn Gillespie & Associates, and Peg McGlinch, who joined Clark & Weinstock after chiefing for Minnesota Rep. Tim Walz.) Lobbying reform has been one impetus on the Senate side. Under the rules, the period in which top Senate staffers are banned from lobbying their colleagues doubled as of the end of 2007, from one year to two. In other words, dawdling on the Hill made little financial sense. Sander Lurie, who stepped down Dec. 30 as chief of staff to Sen. Debbie Stabenow (D-Mich.), says the ethics reform hastened his move by at least a few months. After the grueling work of serving Stabenow in Washington during her 2006 re-election campaign, “I couldn’t see doing this for another five years,” the 17-year Hill staffer says. He didn’t have a job lined up when he left, but he’s been interviewing with lobby shops and expects to settle on an offer in health care lobbying within the next few weeks. Patricia Knight, Utah Sen. Orrin Hatch’s former chief of staff, also left on Dec. 30 and intends to join a law firm in addition to starting her own lobbying consultancy on the side. The two-year lobbying ban was a consideration in the timing of her decision to leave, she says, though after nearly 15 years with Hatch and another 19 in various congressional offices, committees, and executive branch agencies, she thinks she wouldn’t have stayed much longer anyway. With decades of Hill experience between them, Lurie and Knight are the kind of staff members that are relatively recession-proof. But midlevel and junior staffers may find a lock on the revolving door. Firm leaders say they want talent with established books of business — or at the very least, the kinds of contacts and experience that a senior staff member can provide. In a recession year, “you may not hire the junior-level person until things get a little better, but you’re certainly going to hire the top-level person,” says Nels Olson, who leads the Washington office of law and lobbying recruiter Korn/Ferry. Specialization helps — provided it’s in the right area. A half-dozen lobbying firm leaders said that 2008 is likely to see strong growth in tax and health care lobbying, and that will mean corresponding hires. “It’s not that you stop hiring, it’s that you hire differently and more conservatively,” Gold says. “You’re looking for people who have a strong book of business in areas you see not affected by the downturn.” Holland & Knight recently passed on a senior official at the Consumer Product Safety Commission, Gold says, despite the commission’s recent prominence. The concern was that it wasn’t worth it to bring on board a lobbyist who would be starting from scratch. A LITTLE SLOWER The subprime crunch doesn’t help matters. Leonard Pfeiffer IV, managing director of recruiter Leonard Pfeiffer and Co., says he’s noticed that many of the D.C. clients he works with are spending a month or two longer deliberating on their hires than they have in the past. “Our clients are hiring a little slower,” he says. Both Pfeiffer and Olson suggest that a decrease in spending by one key sector — the securities industry — is to be expected. A prominent early example of such loss is New Century Financial, which spent $680,000 last year before terminating its lobbying registration. All of the uncertainty can worry even senior staffers. While Knight, Hatch’s former chief of staff, says market conditions and the new rules didn’t play a major role in her decision, she recalls plenty of talk among her Republican colleagues about whether staying into 2008 could be a costly mistake. “There was a lot of discussion among Republicans: Are we valuable in the marketplace?” she says. “Because the presidency will turn, all the people in the Bush White House will also be on the market competing with each other.” Who occupies the White House, of course, will settle the biggest question of this year’s hiring market: Once the nominees are picked, says Buchanan Ingersoll’s Ron Platt, he expects to see a small spike in hiring as their former staffers and allies are picked up. But most firms, he suggests, will wait until November to do their recruiting. “Almost every lobby shop,” he says, “is going to want to be able to say to clients that, �Yeah, we’ve got some kind of way to get access to senior staff at the White House.’”
Jeff Horwitz can be contacted at [email protected].

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