Feature Stories - September 2002

Law Firms and Lobbyists

Gearing Up for the 2003 Session

by Jennifer Rachel Baumer

When the Nevada State Legislature meets in 2003, it will be considering a variety of issues, from construction defects to utility regulations and tax issues, questions of how public entities compete with private and how to fund the state budget. All these issues have the potential to impact a variety of Nevada businesses and businesspeople.

Nevada is still a small state and the Legislature isn’t huge. Unlike California, legislators can’t rely on a large staff for research into every issue. With citizens working part-time as legislators, they are not going to have deep technical information on every issue. This is one reason legislators rely on lobbyists to communicate the position of their clients, explain the inner workings of the entities they represent, give background on the legislation and an idea of the impact that legislation will have.

The impacts can be wide-ranging. There aren’t just two sides to every legislative story. "Normally there are far more than two sides," said Lorne Malkiewich, director of the Legislative Counsel Bureau, a state agency that provides legal advice, fiscal information and background research for legislators. "For example, on an issue dealing with power companies, there are people representing public utilities, utility shareholder groups, consumer advocates, small and large businesses, as well as mining and gaming companies that want to be able to make their own deals on power. The Legislature works in areas where solutions will affect different sides differently, so getting alternate points of view helps [lawmakers] understand all the groups who will be impacted, not just the obvious one or two groups you might think of with a major issue."

Which is why there are lobbyists. A lobbyist, said Malkiewich, is a person who appears in the Legislature building and communicates with members of the legislative branch of government on behalf of a third party. Lobbyists represent clients’ interests, keep clients informed of pertinent regulations in front of the Legislature, keep legislators informed of their clients’ concerns, and supply industry information. Though it sounds like a natural for an attorney, attorneys don’t make up even a majority of lobbyists. Nonetheless, law firms are becoming more and more involved as firms set up government affairs practices, staffed by both attorney and non-attorney lobbyists.

Law Firms and Lobbyists

Jim Endres joined McDonald Carano Wilson McCune Bergin Frankovich & Hicks in July of this year, coming out of semi-retirement to help the firm set up its government affairs practice. Formerly vice president of legislative regulatory affairs for AT&T for nearly 20 years, Endres found it an interesting, challenging opportunity.

The practice entails more than lobbying, including evaluating clients’ needs with respect to government affairs. During his years with AT&T, Endres learned to evaluate what challenges the company faced - problems he found were largely driven by statutory issues, regulations and legislation. With regard to McDonald Carano clients, he said, "We go in on behalf of the clients to help them look over the course of their business cycle and examine what issues and challenges they face regarding regulations. We help them understand how some of those things might be changed to make things work more efficiently and to improve how they do business and how government does business with the private sector. There’s a benefit for larger corporations that can afford in-house advocacy, as opposed to firms that rely on some other party. In this case it’s a natural fit for law firms to engage in this area on behalf of the client."

Not all law firms that lobby are looking to set up a government affairs practice. At Allison MacKenzie Russell Pavlakis Wright & Fagan, Ltd., lobbying is handled primarily during the legislative session, with attorneys keeping an eye on certain hot spots during the interim. The firm does no full-time intensive lobbying, said Chris MacKenzie, who is both an attorney and a lobbyist. The firm’s interests are more on the monitoring side, checking bill drafts and alerting attorneys with clients whose interests might be affected - a more reactive than pro-active role. "Some firms are more pro-active," said MacKenzie. "True lobbyists are trying to get specific things done ahead of time, but it’s just not a huge part of our bottom line. It’s more a service we provide to existing clients than a service we’re using to solicit people for lobbying purposes."

Jim Endres believes there’s a place for lobbyists in law firms. "Once clients learn the value that law firms like McDonald Carano can offer in the area of government affairs, they will start to look more to the law firms for lobbying, because firms that offer the practice are offering a fuller and broader range of services with the expertise to handle all legal needs including government affairs."

Professional lobbyists work full time during the legislative session and have multiple clients. Other lobbyists are only interested in one or two bills, and check in on specific legislation. In law firms, lobbying is added on top of the regular caseload. Regular work doesn’t stop just because the Legislature is in session, said MacKenzie. Attorneys work in specific areas and are alerted when proposed legislation or hearings come up. "Many times we have clients going to the Legislature themselves and we accompany them or assist them," he said.

"Obviously, we still have other things going on during the legislative session, but there are other people available to assist," said John Sande with Jones Vargas, a firm with attorney lobbyists and one non-attorney lobbyist. "We’re a fairly large law firm for Nevada – over 60 lawyers – so there are always lawyers available to cover." Because much of Sande’s work is in the field of administrative law or at the agency level, there’s not much difference for him between legislative sessions and interim periods. "There may be a little more time to relax [out of session], not working so many late nights and weekends," he said. "If you’ve represented a client over a period of time and are familiar with issues that concern the client, you may have worked on a lot of legislation that’s become effective in the interim. So you continue to work on behalf of the client, looking at how new laws are being enforced by agencies and parts of government, and being involved at the local level. It becomes a year-round task."

Changes begin to occur as legislation is enacted during the session, but it’s between sessions that lobbyists can sit down with clients and discuss both the changes and the best way to use them to benefit all parties involved. "A lot of work that occurs between legislative sessions involves educating both yourself and your client and evaluating who the stakeholders are in any change about to occur. You try to assure that what changes do occur are beneficial to all parties involved," said Endres, who believes such beneficial changes are possible. "I think in every transaction, including legislative transactions, there’s a middle ground that everyone generally finds acceptable. Not everyone gets everything they want, but there is a middle ground."

State law requires lobbyists to register at the beginning of each session, and to disclose any relationships with legislators, including work on campaigns. Once registered, lobbyists are required to submit reports of expenditures made on behalf of legislators. "If they take another lobbyist to lunch, we don’t need to know about that," said Malkiewich. "If they take a legislator to lunch, they need to report that to us." There are other prohibitions involved, many of which sound obvious - lobbyists can’t misrepresent the truth, can’t seek to influence legislation improperly and are not allowed to have legislation introduced in order to seek employment and then kill the bill. In other words, Malkiewich said, "They can’t go to the Legislature to introduce a bill, for example, to abolish the Landscape Architecture Board, then go to that body and say ‘If you hire me, I can kill this bill,’ then go to the Legislature and say, ‘I got my money, kill the bill’." It sounds obvious, perhaps, but it had to be specified in the law.

"I know there’s a lot of public perception that lobbyists somehow have undue influence at the Legislature, but I find that legislators look to lobbyists to provide them with information and help them make sound decisions," said John Sande. "Obviously, some lobbyists have more of a reputation than others, but I think by-and-large the corps at the Legislature are quality people."

According to Malkiewich, "The role of lobbyists is misunderstood in that they do provide a great deal of helpful information to legislators. As there are lobbyists representing all the various sides, I don’t believe they have undue influence over the legislation that is produced."