I was told years ago by an astute CEO of a major utility, that there were few business executives or counsel who knew how to navigate the intersection of business, government and politics. The reasons some corporations struggle to maneuver through this unique environment can vary.
Often, senior corporate officers are too focused on business issues; sometimes, they or their advisors lack the necessary government or political experience; and other times, there is a failure to recognize how politics and government are affecting their industry or business. It is therefore an investment, often not quantifiable, to have a team of corporate representatives that can advocate for the company and put a face to the corporation.
No matter the industry, most businesses need to coordinate and manage political or public relations issues, as well as regulatory or legal concerns. Frequently, senior officers and in-house counsel work closely with an outside advisor or lobbyist to help coordinate and manage the corporation's many governmental affairs challenges.
What's more, a lobbyist can help a company raise its profile or help present a company's position to government and political leaders. At the very least, an effective lobbyist can provide guidance on opening communications with government officials - which could be critical in the event the corporation needs those relationships during a crisis or turmoil. The more government officials know about the ongoing affairs of the company, its concerns and constraints, as well as its benefits to the community, the more receptive the officials will be to the company's message and outreach.
A Solid Corporate Structure: "Paving the Way" For Lobbying Efforts
Companies have different internal structures for undertaking external affairs. Some have a sizeable internal staff to undertake these efforts; others are limited in personnel and experience. Whatever the company's make-up, lobbying activity generally falls into several distinct components, including:
Legislative Affairs - Monitoring, initiating, responding and commenting on pending or proposed legislation at the state or federal level.
Regulatory Affairs - Monitoring, initiating or responding to pending or proposed regulations at the federal, state or local level.
Public Relations - Interacting with the media and initiating efforts to increase the company's visibility.
External Affairs - Integrating advocacy, public relations and positions on legislative, regulatory or legal matters to outside constituencies. These audiences can include government officials, press, political leaders, and business or civic groups.
As mentioned, a company's size and strategic plan often determines how equipped it is to carry out these endeavors. Some corporations have internal staff dedicated to each or all of these functions, and designate one senior officer to oversee all public relations, external affairs and legislative or regulatory outreach. Often, the general counsel has these functions report directly to his or her office. On the other hand, a number of companies have just one senior official managing these matters, but hire outside lobbyists as advisors. In most circumstances, a combination of internal and external staff is used; it is not unusual, for instance, for lobbyists to be on a corporate client's government affairs team. Typically, the team could include government affairs staff, the internal business development staff, along with outside contractors. If the business has larger operations, this could include lobbyists who represent the client in the various states - as well as in Washington, D.C., for federal representation.
The Roles Of General Counsel And Lobbyists: "Steering" The Engagement
When people think of lobbyists, they often think of those who have "access" to legislators. While providing a client access to public officials may be one of the activities a lobbyist engages in, access only gets a client so far. A good lobbyist, first and foremost, attempts to understand the business operations and needs of the client, which includes researching the issues confronting the corporation and its industry. Next, the lobbyist should identify key decision-makers - legislators, regulators and other government officials - who can impact the corporation's operations. Then, the lobbyist should provide corporate counsel or corporate officials with a tactical plan to raise the corporation's visibility and identity with those targeted officials.
Often, a lobbyist will try to quantify the economic impact of the business' ongoing operations and attempt to gauge how adverse opinions could impact either their employment base or the region's economy. Usually, these kinds of efforts are coordinated through, or along with, the corporate counsel. For example, when new legislation or a regulation is being proposed, the lobbyist will actively work with corporate officials to understand how such a proposal might affect the operations, and evaluate the technical impacts and effect on the corporation.
Overseeing the engagement, general counsel should have regular interaction with lobbyists and external affairs consultants. Monthly "status" meetings involving all parties should be held to:
evaluate ongoing lobbying initiatives and efforts;
analyze corporate visibility and image issues;
review policy-making and political developments;
assess present advocacy efforts and coordinate outreach plans, such as attending chamber of commerce and other civic events; and
address any pending litigation or government applications.
This active, ongoing dialogue and teamwork is essential for a successful representation.
How Lobbyists Are Paid: Avoiding Fee "Gridlock"
Lobbyists' fees might seem out of step with their attorney-partners who handle traditional legal matters. Typically, lobbyists are paid on a monthly flat-fee basis, mainly because it's difficult to precisely earmark time expended. For lawyers this is an unusual practice since a flat "retainer" fee is normally escrowed, then time is billed against the account. In addition, lobbying fees often do not translate to what was accomplished. Many times, a lobbyist is "in the halls" of the statehouse, is shuttling around to meet with public officials, or is "buttonholing" a legislator in the hallway. With such a fluid environment, it is challenging for lobbyists to track their time on a time sheet.
"True value" to the client is another reason that lobbyists' fees are not cut and dried. Frequently, lobbyists can get access to government agencies and politicians in a fraction of the time it would take a corporate representative. Therefore, there is prevailing sentiment that savvy lobbyists bring the valuable knowledge of government inter-workings - considered a commodity by many businesses - but a commodity that is hard to put a dollar value on.
A Winning Partnership: Collaborating With Lobbyists Can Result In A "Smooth Ride"
A successful lobbyist can increase visibility, identify potential legislative or regulatory challenges, and expedite access to government leaders and representatives.
The intersection of government with politics and business can sometimes lead an inexperienced corporation into a head-on collision with trouble. However, corporate counsel and senior officers of a corporation, along with the active participation of a lobbyist, can maneuver the company through the complex yet potentially beneficial environment of government and politics.
Published May 1, 2006.