First came the news that Quinn Gillespie and Associates' parent company, WPP, was considering merging the struggling lobbying firm with another company in its stable. And then this week we learn that the firm's energy team is decamping to hang its own shingle - a move that QGA partner Jack Quinn said he "encouraged."
This from a firm that has seen its revenue decline every year since 2007 and has watched some of its top Democratic and Republican talent bolt. (See: Lampkin, Marc and Ortiz, Manny.) So naturally, this latest news raised questions, namely, how is it good business to lose a team of policy rock stars? And, perhaps more broadly, what the hell is going on at QGA?
So the Alley called Quinn and asked.
Spinning the energy team off into the independent firm 38 North Solutions made sense for both parties, Quinn said. The energy group was highly specialized, almost a firm within a firm so the split made cultural sense, he argued, and would let QGA get back to its generalist roots. And QGA will share two of the biggest energy clients with the new firm because Quinn signed them.
The read between the lines here is that QGA's lost revenue is at least partially offset by the decrease in expenses. And it frees the firm up from conflicts created by the group's work on clean energy. No doubt coal, oil and natural gas interests will be getting pitched by QGA soon.
On the merger talks, Quinn played down the prospect, saying, "There are no discussions of any kind of merger going on at this point. My eyes are focused on recruiting in the best possible talent we can including and, especially, on the Republican side." (Read: Lampkin's replacement.)
But Quinn says his non-lobbying revenue, which is not publicly reported, is strong. For instance, the firm's PR shop recently signed Wells Fargo. In 2010, Quinn hired Republican PR man John Feehery to head the firm's communications practice, which was beefed up last year with the addition of longtime Democratic communicator Jim Manley.
Still, given the firm's difficulties, there have been rumblings on K Street that Feehery and Manley might flee - something both men have denied.
Feehery said the PR practice has about 10 clients and about $2 million in revenue.
"We feel very good about where we are given the political situation and we feel very good about the service we provide our clients. No plans to leave," Feehery told the Alley. "From our perspective, the PR practice, we're very strong."
All that said, the trend lines are not good. The firm is now eyeing its fifth straight year of declining lobbying revenues, which, as a general rule, are more lucrative than PR revenues. (I first wrote about the sagging figures three years ago.) There's no doubt that QGA is in a tough spot and will be until they can turn their numbers around -- or die trying.
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