With the current Pennsylvania state budget impasse, various non-profit groups and industry sectors have become severely cash-strapped because many state appropriations and grants have been put on hold indefinitely. These groups often hire law firms to not only represent their legal interests, but also to advise, counsel, and advocate on their behalf as they navigate Harrisburg’s regulatory stream. However, the budget quagmire has trickled down into one of the main revenue generating vehicles of large Pennsylvania law firms. Fortunately, law firms and their lobbying shops have been somewhat shielded from a major blow to their book of business thanks to a general diversification of their practices over the past five to ten years.
In a recent article in The Legal Intelligencer, Leslie Gromis Baker, co-chair of Buchanan
Ingersoll & Rooney’s state and federal government affairs practice, said the “practice’s business has remained steady or increased during the budget stalemate. The firm represents a number of clients with more general regulatory concerns in Pennsylvania that aren’t tied to the budget or have more of a local component than a statewide need.” Baker went on to say that her firm’s practice is not tied solely to budget issues, but runs the gamut from regulatory, local and state matters.
Dennis Walsh of the Bravo Group was not so optimistic. Walsh stated, “It used to be that firms could build a practice solely on appropriations work tied to the budget process. A client might lobby to get $1 million for one pet project or another. There had been firms whose business was predominantly related to the appropriations process. Over the last five to ten years, we’ve really seen that business diminish.” Money just isn’t there, plain and simple.
To put it bluntly, as James D. Schultz, of Cozen O’Connor’s government affairs practice noted, the “[t]he lack of appropriations is having an impact, albeit more on clients than the firms.” However, while firms may be seeing a struggle in their revenues, and their clients are still without their state appropriations, lobbyists in the governmental affairs sector still will continue to take junkets with legislators and provide tickets to sporting events (as long as they’re reported). There is still no end in sight to the budget stalemate and while some appropriations are indefinitely on hold, the lobbying-wheels in Harrisburg will continue to be greased. While the legal market in general is still recovering from the 2008 recession, Pennsylvania law firms must continue to diversify their revenue streams and practice groups as the budget impasse slips into its tenth month.
Published on March 16, 2016.