Four years ago, Paul Kanitra opened up a one-man lobby shop whose business model was nicknamed by some as “McLobbying” — he charged clients no more than $2,995 a month (compared with a typical K Street retainer of $15,000) to lobby on their issues in Washington.
Today, the firm has grown to include seven salaried employees and more than 20 clients, and is projecting $1 million in revenue this year.
Kanitra and his team are working on many of the hot issues of the day, including EB-5 visas and the Marketplace Fairness Act, a bill that would enable state governments to collect sales tax on goods sold over the Internet. But they are largely representing the “little guy,” mostly mom-and-pop shops and little-known associations located outside the Capital Beltway that are affected by those policies.
LobbyIt is finding success by doing virtually everything differently from the traditional K Street shop. It started with three tiers of pricing: $995, $1,995 or $2,995 a month, and six months ago added a fourth tier of $4,999 a month. The firm is not shooting to pass legislation for clients, but rather build companies’ presence in D.C. and alert them to future regulations that may impact their business. Most of the firm’s clients have never had a lobbyist before, and the majority have revenue of less than $5 million a year.
The firm was originally called Keys to the Capitol, but that was later changed to LobbyIt — a name chosen in part because of its similarity with the word “lobbyist,” to maximize search engine hits. If you Google “DC lobbyist,” the first sponsored ad that pops up is that of LobbyIt. Kanitra, 34, said the firm pays up to $5 per click, and gets a third of its clients from the Internet. The firm’s Web site was designed to seem approachable and transparent, listing client success stories and pricing.
“Lobbying is a product,” Kanitra said. “You have to take into account things like, ‘What are your deliverables?’ ‘Is it affordable?’ And, ‘How do you bring people to the product?’”
Kanitra describes the firm’s target audience not as the seasoned in-house government affairs manager at a Fortune 500 company, but as “the executive director of a small association in Idaho who hasn’t been in D.C. since their eighth-grade class trip.” The firm has a small sales team that cold-calls potential clients.
It is an unconventional approach that, so far, has carved out a small niche for Kanitra. In its first year, 2010, the firm earned $10,000 in lobbying fees. The following year, it grew to $240,000, and by 2013, the firm hit $500,000.
“Business is booming now,” said Kanitra, who once worked on a Native American reservation in Nevada on gaming legislation, and later became a lobbyist for Carfax, the Centreville-based provider of vehicle history reports.
Among the firm’s clients are the Brick Industry Association, the World Floor Covering Association, the Aircraft Mechanics Fraternal Association and the American Jail Association. All of the firm’s clients pay less than $30,000 in fees each year, according to lobbying records.
Kanitra works out of a converted row house in Capitol Hill, alongside Nile Elam, the firm’s director of congressional relations and former Hill staffer; Keith B. Nelson, executive vice president and former Justice Department attorney; Morgan Muchnick, director of advocacy; and Matt Kent, manager of legislative and regulatory analysis.
Kanitra said he owes part of the firm’s success to a confluence of factors that came to a head around the time LobbyIt opened its doors in 2010.
“Earmarks are dead and there’s been increased transparency in government,” he said. “The interaction of the public and social media means there’s a lot [of measures that are] less able to get slipped in in the middle of the night. That’s created an environment where it doesn’t make sense to spend $20,000 or $30,000 a month anymore hoping for a big home run. But people still need to have a voice in Congress.”