September 01, 2014
TRENDS 2013 Factors of Influence of Lobbying Firms

10/10/2013

In 2012, Association TRENDS and the Graduate School of Political Management at George Washington University collaborated on a method to measure influence that provided the association world with a more objective tool to determine what lobbying firm will be an outstanding partner in the legislative/regulatory arena.

Since 2010, Association TRENDS has been performing an annual analysis of government affairs firms on several “factors of influence” to help determine which firms are the most influential with respect to public policy. 2012’s collaboration with George Washington University resulted in a significant improvement over previous years, with many more factors being considered and a more robust, nuanced approach to data analysis. This year’s report follows the same model, and uses data from the extensive political database at Lobbyists.info.

Government affairs firms were scored on 12 factors of influence that we believe contribute to the firm’s overall level of influence, including conventional metrics, such as total income and number of clients, as well as a host of more robust metrics, some of which are detailed in this article. Each factor was weighted according to relative impact. Here, we just want to provide a 30,000-ft. explanation of the results. A more detailed version of the report will be released later this month.

Top Scoring Firms

1. Van Scoyoc Associates, Inc.
2. The Podesta Group
3. Cornerstone Government Affairs, LLC
4. McBee Strategic Consulting, LLC
5. Brownstein Hyatt Farber Schreck, LLP
6. Williams & Jensen, PLLC
7. Cassidy & Associates, Inc.
8. Alcalde & Fay
9. Akin Gump Strauss Hauer & Feld LLP
10. The Ferguson Group, LLC

The largest firms

The Factors of Influence report takes into account the total income, total number of employees, and total number of active clients for each firm. This year, a different firm scored highest in each of these factors
– Most income: Akin Gump Strauss Hauer & Feld LLP
– Most employees: Hogan Lovells US LLP
– Most lobbying clients – Patton Boggs LLP.

These factors are valued because a high level of resources, both monetary and human, allow for high capacity for a firm to be influential in government relations. Similarly, a large number of clients suggest high prestige in the government relations industry.

Robust analytical data

To obtain a full picture of a firm’s influence, we needed even more robust data analysis. One interesting factor was the concentration of highly paid personnel in a firm’s population of employees, or the ratio of the firm’s income to its employees. This is an effort to give advantage to firms with a larger majority of highly effective government affairs employees (assuming more highly paid lobbyists are valued and smaller ratios signal a commitment to government relations by the firm). Not surprisingly, this factor tended to favor smaller firms more than larger firms. The study demonstrates that high-income firms tend to have much lower concentration of highly paid staff.

Another important factor was the firm’s weighted average percent of clients’ lobbying spending. To arrive at this value, the percent of client spending on every firm of that client was taken, and these values were averaged to arrive at an average value of client spending for each individual firm. Then these averages were weighted according to the total number of lobbying contracts for each firm, because it is more impressive if a firm can maintain a high percentage across a large number of contracts. This factor represents the extent to which a firm constitutes a large percentage of its clients’ lobbying spending, the implicit logic being that the larger the portion of lobbying work that a firm performs for its clients, the more those clients are relying on the firm for their government affairs work. Alcalde & Fay has the highest value for this factor, up from second place in 2012.

Unquestionably, alumni of Capitol Hill make the firm more influential. Having worked on a congressional staff or being a former member of Congress strengthens the understanding of the process and personal relationships are likely deeper. Former members of Congress and staff are often able to better understand the verbal and nonverbal signals from Capitol Hill staff having observed or used the signals themselves. Moreover, calls are often returned more quickly; meetings are easier to obtain; the overall level of trust between current congressional staff and former members of Congress are higher with Hill alumni.

Other insights on the industry

The lobbying industry has been in decline for some time, with lobbying income decreasing steadily since first quarter 2012. That trend was bucked for the first time in more than a year, as second quarter 2013 lobbying income posted an increase of about $5 million over the previous quarter. This may suggest that the industry is preparing to rebound. Few of the highest earning firms, however, have exceeded 50 percent of their total reported income in 2012 during the first two quarters of 2013.

Other aspects of the government affairs industry remain unchanged. For example, the majority – 57 percent – of government affairs work occurs in the Washington DC metropolitan area, with 43 percent of firms having no Washington D.C. operations.

This report is based on the database of Lobbyists.info, which includes political information that has been developed for more than 40 years, as well as multiple surveys of the political community, professional and trade association research, quarterly lobbying disclosure forms, and extensive legislative research. The full Factors of Influence 2013 Report will include much greater detail in all 12 Factors of Influence, and will be available soon in the Executive Toolbox on the TRENDS homepage.

As we continue to build the model, we hope this analysis will help you and your association are getting full value for your advocacy investments and generating the return you expect for your association members.

 For the full report, which includes charts, send request to customerservice@AssociationTRENDS.com.


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