Pennsylvania State Capitol, Harrisburg. Photo: Waldteufel – Fotolia

Harrisburg-based McNees Wallace & Nurick has acquired a Harrisburg lobbying firm, adding to its government relations subsidiary as it looks to supplement the firm’s offerings with nonlegal services.

Capital Associates Inc., the acquired firm, will operate as part of McNees Wallace’s Community Networking Resources subsidiary, but will keep its name and organizational structure. The firm’s five employees all became part of McNees Wallace on Feb. 1.

Community Networking Resources, which had five lobbyists before the acquisition, provides clients with county and local government relations services, but the Capital Associates group adds a statewide government component to the subsidiary. Three of McNees Wallace’s lawyers also lobby—Kathy Bruder, Kathy Pape and chairman David Kleppinger.

According to its website, Capital’s clients include Procter & Gamble, the American Heart Association, the Pennsylvania State Employees Credit Union and the Commonwealth Foundation, among others. The firm was founded in 1994, when Layman left Killian & Gephart, where he lobbied and practiced law.

“Three or four of their major clients are clients of the law firm, so that was a natural fit,” Kleppinger said. The overlapping clients are in the paper products, financial services and health care industries, he said.

Capital Associates was looking for a larger platform, Kleppinger said, when it began talks with McNees Wallace in December. Kleppinger already knew principal Jay Layman well, he said, and McNees Wallace partner Donna Kreiser knew Capital Associates’ Paula Vitz.

Kleppinger said McNees Wallace is looking to grow its government relations business “on an incremental basis.” He said the lobbyists and lawyers at the firm work in the same building and meet regularly, and often cross-service clients.

Generally, McNees is looking to expand its nonlegal service offerings, Kleppinger said.

“Growing the traditional outside legal services for private law firms like ourselves is challenging,” Kleppinger said. “While we’re doing well, the growth rates you see among the Am Law 200 and below are in the 3 percent, 4 percent range. Some of the ancillary businesses we’re looking at can grow at a higher rate.”

Community Networking Resources has grown at a rate of 10 percent a year recently, he said.

McNees Wallace does not currently have any other ancillary businesses, Kleppinger said, but it has increased the number of nonlawyer professionals it employs to provide supplemental, nonlegal services. And in formulating its long-term strategic plan, the firm has set up a small group of lawyers to evaluate opportunities for ancillary businesses, he said.