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Posted: December 01, 2012

Legal Insight Special Section: Time to call a lobbyist

The competitive edge of knowing and understanding the state legislature

By John Karakoulakis

The Colorado General Assembly considers an average of 600 bills each legislative session. Remarkably, the legislature passes about half of those bills – an average of three bills every day they are in session. Many of these laws are narrowly targeted toward a specific issue or problem but often they have broad impacts on businesses with Colorado operations, such as new laws impacting labor and employment, tax, licensing, business regulation, economic development incentives, or resource and environmental issues. These types of laws impact every business in Colorado.

With the Colorado General Assembly reconvening on January 9, 2013, companies with operations in Colorado should assess whether there is value in monitoring state legislative activities. While most of the focus of the 2012 election was squarely on the Presidential race, the local races for State House will have distinct impact on Colorado’s 2013 legislative session. Two important developments may create a reason for Colorado companies to track the 2013 Colorado legislative session.

First, the Democrats will now control both houses (37 to 28 in the House and 20 to 15 in the Senate) as well as the Governor’s office. Such single party control typically leads to more pieces of legislation being introduced, usually about 100 additional bills as opposed to years with split control. Single party control could also typically lead to more partisan bills making it to the Governor’s desk for signature, since bills will be able to clear both houses without bipartisan support.

Secondly, 31 legislators will be new to the Capitol this session and an additional 17 legislators will have two years or less of experience. Employers understand that when nearly 50% of the workforce has little or no experience there are bound to be implications. This high turnover rate is due to term limits, retirements, and reapportionment. While this drastic turnover may incentivize certain legislators to make an immediate impact with bold legislation, it also provides a good opportunity for businesses to create new relationships.

Companies that monitor or engage in the legislative process typically discover that the service is a value-add from a pure financial perspective. Identifying legislation that creates a financial or competitive disadvantage to the company adds value. Likewise, being in a position to proactively identify and drive legislative solutions adds value. Companies are increasingly active in allocating internal or external resources to monitor state legislative activities because they realize that having a blind spot in this arena can quickly create business, legal and public relations liabilities for the company.

 

The Market for Lobbyists

 

While broad labels and popular stereotypes have essentially made the term "lobbyist" a dirty word, the reality is the vast majority of lobbyists are hard working, honest and ethical professionals. Even more than most industries, lobbyists rely on their professional reputations and bad actors typically have a very short shelf life in this industry.

The Colorado Secretary of State maintains an online register of state lobbyists. This is an effective tool for companies looking to retain any level of assistance in the Colorado government affairs arena. Colorado’s professional lobbyists range from single employee operations to large law firms. Some focus on particular issues while others engage a broad range of clients and subject matter expertise. Reviewing the Secretary of State register is a good starting point to identify lobbyists who are a good fit in terms of resources or substantive experience.

 

How Can a Lobbyist help
your Company?

 

Companies should first assess whether hiring a lobbyist would provide value to the organization. A company should speak with a lobbyist to first determine whether or not there is a reason to engage in the process, many times an initial conversation with a lobbyist can reframe a company’s thinking on an issue. Often, timing, political climate, or adequate representation at a trade association or business group level will suffice. However, companies often decide on hiring a lobbyist based on significant opportunities or liabilities that are brought to their attention. The key is to speak with a lobbyist to assess whether your company would likely receive a valuable return on investment for the service.

It is also important for companies to understand that lobbying contracts can be customized to fit a client’s current needs. While one client may require significant lobbying resources to engage on a specific bill, another company may simply want a weekly report summarizing state legislation or regulations that impact their business. Many clients request a hybrid of these two service levels, which provides for active monitoring of legislation in one or more states, regular updates on relevant developments, and the option to dedicate additional resources based on specific risks or opportunities.

With development of online state legislative tracking systems, companies can now monitor state legislation in a cost effective manner. Considering the costs of missing legislation that directly impacts your company, ignoring the state legislative process no longer makes business sense.

John Karakoulakis is the Director of Legislative and Regulatory Affairs at Holland & Hart, LLP. John can be reached at JOKarakoulakis@hollandhart.com or at 303-295-8000.

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