Capital Goods - May 2008

Firming up lobbyists
By Scott Mooneyham

For as long as anyone has kept track, the most influential lobbyists in Raleigh have been colorful characters who rose to the top of their trade on their connections and ability to schmooze prickly legislators. That’s not to say folks such as Zeb Alley, Don Beason and Roger Bone haven’t been well-versed in the policy issues of their clients or don’t know the legislative process as well as anyone. But all three would look out of place in the offices of a buttoned-down, high-powered corporate-law firm.

Alley, wearing his perpetual, toothy grin, hardly begins any conversation without passing along a ribald joke, often peppered with references to the mountain places and people near his Waynesville home. Beason, gruff and intimidating to those who don’t know him, walked away from lobbying last year. But it wasn’t the criminal charge that followed his flashing a pistol during a traffic dispute that unraveled his career. It was a $500,000 loan to former House Speaker Jim Black, now in prison, that did the deed. As for Bone, he probably wouldn’t know what to do in a white-shoe firm. Like Beason, he’s not a lawyer. The former legislator turned his connections with agribusiness interests in Eastern North Carolina into a lucrative practice.

For nearly two decades, this trio rated high, usually taking the top three positions in rankings compiled by the North Carolina Center for Public Policy Research. They did so representing multiple clients. The business, though, is changing, and the days of the highly successful, independent operators may be numbered. Regional and national lobbying firms, often tied to large law firms, are snatching up lobbyists and staking out a place in the hierarchy. In a state whose population is expected to grow nearly 50% by 2030, government will expand. There’s money to be made influencing it, and the newcomers know that.

Columbia, S.C.-based Nelson Mullins Riley & Scarborough bought Alley’s business early last year. Richmond, Va.-based McGuireWoods Consulting set up shop in Raleigh last year and has taken on four veteran lobbyists. Its parent law firm merged with Helms, Mulliss & Wicker, giving it substantial presence in Charlotte and Raleigh. The Wicker of Helms, Mulliss & Wicker — former Lt. Gov. Dennis Wicker — left to help Columbus, Ohio-based Schottenstein Zox & Dunn set up office in Raleigh. SZD Whiteboard, its lobbying arm, put out its shingle last summer.

Not that high-powered law firms with lobbying arms are new to the game in Raleigh. Southeast giant Womble, Carlyle, Sandridge & Rice, which traces its origins to Winston-Salem, has long had a substantial government-relations business in Raleigh and employed some of the most influential lobbyists around. Other firms with offices in North and South Carolina, and with key lobbyists in tow, have grown as lobbying has become more lucrative.

But in the past, the big law firms had nothing on Alley or Beason. Now those firms and their consulting arms are poised to gain the biggest chunk of business. Disclosure laws and bans on gifts passed in the wake of the scandal that sent Black to prison have put an end to the traditional tactics of chatting up legislators over a steak dinner or a round of golf — paid for by the lobbyist, of course. It’s a change that’s bound to favor the big firms.

Bone, though, isn’t ready to declare himself a dinosaur just yet. He says some clients worry that turnover in large law firms will mean less personal service and less familiarity with their policy issues. “I had a regional manager of a major company — I’m not going to name it — ask me: ‘Are those damn law firms going to take over all of you?’”

Even so, he admits that regional law firms have one big advantage over independent contractors: access to clients. Bone says he lost Richmond-based Universal Leaf Tobacco Co. because McGuireWoods sold it the concept of working with a single firm to handle all its lobbying business across state lines. Law firms working with corporate clients in a variety of other capacities can refer them to their lobbying arms. The lobbying-only shops may never have a shot at those clients.

And then there are those gobs of campaign cash that drive the political world these days. The big firms can tap an army of potential donors among their partners and associates, something that might go unsaid but isn’t missed by the legislators they’re trying to influence. It’s another factor that may signal the end of the back-slapping, good ol’ boy lobbyist who wanders legislative hallways with a quick joke and a mischievous grin.

Scott Mooneyham is the editor of The Insider, www.ncinsider.com.

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