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Creating a Good Lobbying Contract
By T.R. Goldman
Signing a contract with a lobbying firm takes a bit of experience. So if you're new to the game, here are a few tips from some experts in the field.
1. To have a reasonable expectation of how much you should pay your lobbyist, go to the Senate Office of Public Records Web site, and type in the name of a competitor company of yours under "client name."
The Web site will tell you who the lobbyists, or "registrants," are for this company. By clicking on the midyear or year-end report - a document lobby firms are required by law to file - you can see how much money the lobby firm received from any particular company. Use companies in similar markets to yours as guidance for how much to pay.
2. Once you find a lobbyist, there are several things to remember to include in your contract. Most important, say lobbyists and experienced clients, is to carefully describe the scope of the work. Most client-lobbyist relationships founder on a misunderstanding of exactly why the lobbyist was hired. Spell it out in as much detail as possible. And make clear how often the lobbyist will let you know what's going on.
3. To avoid the all-too-common bait-and-switch technique, when a senior partner or high-level lobbyist with a recognized name makes the initial pitchÑthen rarely, if ever, services the account againÑspecify in writing precisely who will be doing the work.
Says Carl Feldbaum of the Biotechnology Industry Organization: "If you want a certain degree of attention by the senior people, you must identify those people and the proportion of time they will spend [on your account]. You tell them: 'I'm not hiring your whole firm and not anyone you delegate in your firm. We're hiring you, and if you need an assistant, we'll pay 25 to 30 percent of that time to that assistant, not to some unknown interns.'"
4. Most lobbyists and clients prefer a monthly fee. It keeps costs from fluctuating, and is usually a win-win for both sides. The problem, notes Feldbaum, is how to structure the contract if there is more work required than had been anticipated. "Lobbyists know they are to come to us if, in the course of any month, the work has gone over a certain level. And we have to approve that."
Still, no one expects a retainer to always equal the precise amount of work done for the client in any given month.
5. Finally, every lobbying contract should have a standard out clause, allowing either party to terminate the business relationship with a 30-, 60-, or 90-day notice. And most lobbyists say they prefer a contract that runs for at least a year.
Under legal ethics rules, law firm clients have an absolute right to choose their counsel, which means a law firm can't obligate a client to stay with the firm any longer than the client wishes. (Pure lobby firms are under no such strictures and, hence, can require the 30-, 60-, or 90-day notice.)
But law firms can still make sure clients don't walk away as soon as the job is completed by carefully structuring the engagement letter.
T.R. Goldman, formerly senior correspondent for Influence, is now the Congressional correspondent for Legal Times, a sister publication.
A version of this article first appeared in the January 2005 Influence Client's Guide to the Business of Lobbying. For more about Influence, visit www.influence.biz.
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