Ideas from the Front

Thoroughly Persuasive

Lobbying Can Be a Lucrative Addition to Law Firm Practice, But Beware of Conflicts

Posted Sep 12, 2004 11:20 AM CDT
By Leslie A. Gordon

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Mark Ruge excels at the persuasion game. His research is thorough, he shines in debate, and he’s mastered influential writing.

Natural-born trial lawyer? The Washing­ton, D.C.-based law firm partner doesn’t even practice traditional legal work: He’s a lobbyist.

“A lawyer is the best person to handle regulatory, judicial and congressional approaches to a client’s problem,” says Ruge, head of the policy department at Pres­­ton Gates & Ellis.

“We are very substantive as opposed to simply using the ‘access approach’ where you just get to know a congressman and then ask for a favor,” says Ruge, who works to influence legislation, identify government money sources, sell goods to the government and facilitate regulatory matters. Law firms may find lobbying a lucrative counterpart to traditional legal work. According to Influence magazine, which covers the lobbying industry, Preston Gates’ policy group brought in nearly $19 million last year. Even that is small potatoes compared to Piper Rudnick, which earned $43.5 million from its lobbying practice in 2003, according to the magazine.

Lobbying should be part of a client’s “holistic game plan,” along with things like litigation prevention and transaction management, says Thomas O’Neil, who chairs Piper Rudnick’s government affairs group. Among its successes, the firm obtained favorable tax depreciation treatment of fiber optic cable and secured government research funds for heating oil marketers.

Lobbying practices are not without downsides, however. Piper Rudnick recently lost a lucrative contract with the state of Texas over a conflicts issue. According to news reports, the state objected when it learned that former House majority leader Dick Armey, who joined the firm in 2002, was working to preserve Florida’s military bases.

O’Neil says that the Texas contract, which was a general legislative consulting agreement that did not include military installation work, ended amicably.

“We operate way above ethical standards. We look at real, perceived and potential conflicts,” says O’Neil.

CONFLICTS CONCERNS

Ethical rules indeed limit the lobbying matters attorneys can handle. “We’re a law firm and we’re subject to conflicts rules. We have to be very, very careful,” says former California state Sen. Charles Calderon, now a partner at Nossaman Guthner Knox & Elliott in Los Angeles. “In that way, [nonlawyer] lobbying houses have a great advantage,” he says.

As with any matter, attorneys can seek conflicts waiv­ers. Calderon says lobbying clients are slightly more relaxed about conflicts. “Many Sacramento lobbying firms depend on clients to explain the issues. At a law firm, there’s a whole body of lawyers available to address legal issues. Plus, lawyers are better presenters of bills before legislative committees because they have a better understanding of the law.”

It’s also far less costly to resolve issues through legislative, regulatory and political processes than to engage in prolonged litigation, he adds. For example, Calderon represented a wholesaler that was authorized by statute to buy water from the state and sell it to retail customers such as municipalities or bottlers. When the wholesaler purchased a private retailer, an environmental group that feared depletion of underground water supplies challenged the deal.

Calderon helped move a bill through the state legislature permitting the client’s dual roles. “We figured, if the law’s unclear, we should clarify it.” For law firms, a major advantage of lobbying work is that it can lead to representation on other issues, Cal­deron says. “There’s hardly an activity in the private sector that isn’t regulated by some agency.”

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