Several of Washington’s top lobbying firms reported record-breaking earnings in the third quarter of 2022, according to figures shared with The Hill, defying expectations that lobbying revenue peaked earlier this year.
Hired guns worked overtime to influence the Inflation Reduction Act and the CHIPS and Science Act, both of which became law in August. They’re now turning their attention to government agencies that control the flow of billions of dollars in lucrative new grants authorized by the bills.
Lobbying firms and their corporate clients are also gearing up for a potential Republican sweep in November’s elections by building relationships with GOP candidates and hiring congressional staffers away from influential Republicans.
K Street giants expect strong revenues throughout the upcoming lame-duck session as Congress stares down a jam-packed legislative agenda that features a government funding bill and the must-pass National Defense Authorization Act (NDAA).
“At the end of a midterm with the potential switch in Congress, it becomes an even higher stakes game because lots of people see this as the last train out for their priorities based on who wins the election,” said Marc Lampkin, managing partner of Brownstein Hyatt Farber Schreck’s Washington, D.C., office.
“I think there’ll be a mad dash amongst various interested parties to get their provision, their bill attached to the year-end spending bill or the NDAA.”
Brownstein, which is on track to finish as the top K Street firm by lobbying revenue for the second straight year, earned $15.2 million in the third quarter. That’s up nearly 10 percent from the same period in 2021.
Akin Gump Strauss Hauer & Feld brought in $13.3 million, down 3 percent from last year’s third quarter but up around 4 percent from the second quarter.
“Election years are often down years for legislative activity, but that has certainly not been the case this year,” said Hunter Bates, a lobbyist at Akin Gump and former chief of staff to Senate Minority Leader Mitch McConnell (R-Ky.).
Lobbying doesn’t end after a key bill is signed into law. Top firms are drawing in new clients by helping them win highly sought-after government grants and loans. Corporations lean on lobbyists who previously worked in federal agencies to understand the process and introduce them to government decisionmakers.
Holland & Knight reported $11.3 million in third quarter lobbying earnings, up 21 percent from last year as the firm focused on implementation of the infrastructure law. Seven companies that received a combined $865 million from the Department of Energy this week to produce electric vehicle batteries in the U.S. contracted with the firm to secure grants.
BGR Group, which is also focused on implementation of key legislation, brought in roughly $9.7 million in lobbying revenue, boosting its year-over-year earnings by nearly 13 percent.
“We also continue to help clients engage leadership offices and committee staff to prepare for what certainly looks to be a good election for Republicans,” said Loren Monroe, a principal at BGR Group.
Invariant, another fast-growing firm, earned $9.6 million, up 21 percent from the same period last year.
K Street firms took part in a lobbying frenzy following Sen. Joe Manchin’s (D-W.Va.) stunning decision in August to revive Democrats’ reconciliation package as the Inflation Reduction Act.
Sen. Kyrsten Sinema (D-Ariz.) demanded last-minute changes to the bill’s 15 percent minimum corporate tax to save a lucrative deduction for manufacturers following intense industry lobbying. She also axed a measure to close a tax loophole used by fund managers amid pleas from the private equity industry.
The auto industry successfully lobbied Manchin to include expanded electric vehicle tax credits in the bill after he repeatedly bashed the policy. Oil and gas giants pushed hard to win new offshore leases and tax credits for carbon capture technology.
With the CHIPS and Science Act signed into law in August, microchip manufacturers won nearly $80 billion in direct subsidies and tax breaks to build semiconductors in the U.S. The industry aggressively lobbied for the bipartisan bill and warned lawmakers that it would cancel planned investments in the U.S. if Congress didn’t pass it.
“Given the historically narrow majorities, this has been an extraordinarily productive Congress with multiple big bipartisan accomplishments, and that’s kept businesses and associations intensely engaged,” said Bruce Mehlman, a veteran lobbyist at Mehlman Castagnetti Rosen & Thomas.
Mehlman’s firm earned $6.4 million, up from $6.2 million in last year’s third quarter. K&L Gates brought in $5.5 million, a tick up from $5.4 million last year. Van Scoyoc Associates earned $5.1 million, up from $4.8 million.
Corporations, trade groups and K Street firms have been scooping up top GOP staffers all year in anticipation of a Republican blowout in November’s elections. Brownstein recently hired Will Dunham, a longtime senior aide to House Minority Leader Kevin McCarthy (R-Calif.).
“Lobbying activity in the second half of the year has exceeded our expectations, amplified by a volatile midterm season,” said Paul Stimers, a partner at K&L Gates. “Clients are preparing for potential shifts in Congress and want to hit the ground running with new legislators and staff.”
Several top firms reported declining earnings in this year’s third quarter, though most are still making far more than they were before the pandemic helped usher in a lobbying boom.
Tiber Creek Group earned nearly $6.2 million, down from $6.6 million last year. Forbes Tate Partners reported $6 million in lobbying revenue, down from $6.3 million. Squire Patton Boggs’s lobbying revenue fell from $6.2 million to $5.7 million. The firm noted that some of its increased work on trade, sanctions and export controls isn’t included in that figure.
Cassidy & Associates reported $5.4 million in third-quarter earnings, down from nearly $5.7 million. Ballard Partners, a firm with close ties to former President Trump, saw its earnings dip from $4.7 million to $4.5 million.