Lobbying firm compensation reports for the fourth quarter are due no later than Friday. As the reports roll in, an interesting question has arisen: Is Tallahassee on the verge of it first $10 million lobbying firm?
Each quarter, lobbyists who are registered to represent clients before Florida’s legislature or executive branch must submit reports detailing their client roster and compensation ranges. Fees are disclosed within ranges, so the total billing amounts shown here are merely estimates of actual billings.
At the end of 2012, the top two firms in the state — Ballard Partners and Southern Strategy Group — each reported compensation in excess of $8 million, according to Florida Trend. Through 2013, both firms have seen their earnings increase dramatically.
For example, in 2012, Southern Strategy Group rang in $2.54 million in lobbying fees during the second quarter. Fast-forward a year and add nearly $1 million to that figure for a total of $3.41 million in quarterly compensation. If you calculate fees based on the top end of the ranges, Southern Strategy Group billed as much as $4.61 million in the second quarter.
While it did not see the same 33% year-over-year growth it realized in the second quarter of 2013, SSG did see revenues increase in the first and third quarters.
Since SSG was already at the $8 million mark in 2012, basic math indicates it will be near the $10 million mark for 2013. Likewise for Ballard Partners, which also has seen explosive growth in revenues throughout 2013. The firm headed by Brian Ballard also earned more than $4 million during the second quarter of 2013 (when the Legislature is in session) and saw year-over-year growth during the first and third quarters of 2013.
Some will speculate that SG and Ballard’s numbers have been arrived at during a “Steroids Era” of lobbying compensation — a comparison to the jaw-dropping records shattered during the recent period in Major League Baseball when journeymen players became .300 hitters and cheaters like Barry Bonds and Mark McGuire went yard almost every other day. This speculation is based on the assumption that some firms are “double reporting” their earnings across both executive branch and legislative lobbying. This may be true for some firms, many of which have acted this way out of an abundance of caution, but it’s just not the case with SSG or Ballard Partners.
Rather these head-turning numbers are a reflection of a new era in lobbying, one based on the rise of lobbying networks built throughout the state, with firms establishing multiple physical presences. That’s what SSG and Ballard and a handful of others have done or are doing.
So does it matter if Ballard or SSG cross the eight-figure threshold?
According to Jennifer Green, president of Liberty Partners of Tallahassee and past chair of the Florida Association of Professional Lobbyists, it may be premature to read too much into the money.
“The arrival of a $10 million firm at the end of 2014 would be much more significant than at the end of 2013 since the compensation reporting guidelines we not as clear previously as they are now,” Green said.
However, the outsized paydays lobbying firms are bringing in doesn’t surprise Green. “There are two key things going on: The economy is rebounding and the business model of lobbying firms seems to be moving toward the extremes – either large firms acquiring other firms and getting even larger or smaller firms focusing on being experts at particular industries and interests.”
As Green explains, lobbying firms are reactive to the business environment and what their current (or potential) clients want. Not only is Florida’s economy on the upswing, but the need for representation before government is more necessary now than ever before. There are also whole industries — privacy, security, social media, sports, technology — which are just beginning to ‘lobby-up.’
With all of this occurring, expect to see the $10 million mark crossed very soon, if it hasn’t been already.