Ask the Experts - Paying lobbyists a bonus or success fee - State and Federal Communications

May 12, 2023  •  

Ask the Experts – Paying lobbyists a bonus or success fee

Q: Can we pay our lobbyists a bonus or success fee?

A: In most states, no. An overwhelming majority of states have banned payments to lobbyists as a result of, or based on some way upon, the lobbyist’s success in achieving a specific governmental action. Thus, as a practice, it is best to pay your lobbyists a straight salary or simple monthly retainer. However, Louisiana, Missouri, New Hampshire, and Wyoming, as well as the District of Columbia and Puerto Rico, have not enacted contingency fee bans.

An important aspect of contingency fee bans to consider is their effect on staff selling to state governments. Many states require those selling to the state to register as lobbyists in some circumstances. Should registration as a lobbyist be required, they will then be subject to those same contingency fee bans, which can be problematic given most salespeople are paid commissions on successfully completed sales. Thankfully, many states have recognized this reality and have carved out an exception for bona fide commissioned salespeople, either allowing them to avoid the registration requirement or, if they do register, the ban on receiving commissions. Nevertheless, it is important to be aware of the rules regarding lobbyist registration and contingency fees as applied to salespeople so you can plan accordingly.

More information about contingency fees as applied to lobbyists can be found in the Contingency Lobbying section of the Lobbying Compliance Guidebook on the State and Federal Communications website. Information about registration requirements for procurement lobbying and contingency fee information specific to salespeople can be found in the Procurement Lobbying Compliance Guidebook.

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