US Contingency Fees For Lobbyists Resources in United States
US Contingency Fees For Lobbyists Resources
The Center for Ethics in Government – UPDATED March, 2008
This table is intended to provide general information and does not necessarily address all aspects of this topic. Because the facts of each situation may vary, this information may need to be supplemented by consulting legal advisors. It reflects in summary form statutes in effect as of 12/31/07 or statutes set to take effect shortly thereafter.
“Contingency fees” are often paid to lawyers – in medical malpractice cases, for example. If a lawyer and client agree to do business on a contingency basis, the client pays no fees until the case is won, and at that time the lawyer gets a cut of the damages won. If the case is lost, the attorney receives no payment. Contingency fee advocates say they’re the only way for poor people, who cannot afford fixed fees, to get the representation they deserve. In many everyday contexts, this method of payment makes complete sense: “Satisfaction guaranteed, or your money back.”
But when it comes to state and federal lobbying the standard is different. The public response to the practice of contingency fees for lobbying services is usually strong, and rarely positive. In the parlance of the lobbyists, a contingency fee is defined as any commission, percentage, brokerage, or other fee that is contingent upon a favorable legislative result. Federal regulations governing contractors who lobby for government contracts specifically prohibit contingency fees on the grounds that they may induce lobbyists to exert “improper influence” on public officials, in other words, inducing someone to act on any basis other than the merits of the matter.
On the state level, 38 states prohibit the practice, and four restrict it, imposing strict reporting requirements. A majority of legislators seem to agree that legislation should be prompted solely from considerations of the public good, and agreements for compensation contingent upon success suggest the use of corrupt means for accomplishing the desired end and undermine the public confidence in government.
The following is a table of contingency fee prohibitions by state.
| State | Policy | Statutory Reference |
| Alabama | Contingency fee prohibited. No principal or lobbyist shall accept compensation for, or enter into a contract to provide lobbying services which is contingent upon the passage or defeat of any legislative action. Each principal must also sign a statement for each registered lobbying confirming that no contingency fees will be paid. | Ala. Code § 36-25-23 (c), 36-25-18 (b)(6) |
| Alaska | Contingency fee prohibited. A lobbyist may not …accept or agree to accept any payment in any way contingent upon the defeat, enactment, or outcome of any proposed legislative or administrative action. | Alaska Stat. § 24.45.121 |
| Arizona | Contingency fee prohibited. No person shall retain or employ another person to promote or oppose legislation for compensation contingent in whole or in part upon the passage or defeat of any legislation, or the approval or veto of any legislation by the governor, and no person shall accept employment or render service for compensation on a contingent basis. | Ariz. Rev. Stat. Ann. § 41-12333 |
| Arkansas | Not addressed in statute. | N/A |
| California | Contingency fee prohibited. No lobbyist or lobbying firm shall: Accept or agree to accept any payment in any way contingent upon the defeat, enactment, or outcome of any proposed legislative or administrative action. | Cal. Govt. Code §86205 (f) |
| Colorado | Contingency fee prohibited. No person may make any agreement under which any consideration is to be given, transferred, or paid to any person contingent upon the passage or defeat of any legislation; the making or defeat of any rule, standard, or rate by any state agency, or the approval or veto of any legislation by the governor of this state. | Colo. Rev. Stat. § 24-6-308 |
| Connecticut | Contingency fee prohibited. No person shall be employed as a lobbyist for compensation which is contingent upon the outcome of any administrative or legislative action. | Con. Gen. Stat. § 1-97(b) |
| Delaware | Contingency fee restricted, but not prohibited. No person shall employ a lobbyist nor shall any person be employed as a lobbyist pursuant to any compensation agreement that permits more than half of the compensation to be paid to such a lobbyist to be dependent upon the outcome of any legislative or administrative action. | Del. Code Ann. Tit. 29, §5834 |
| Florida | Contingency fee prohibited. No person may, in whole or in part, pay, give, or receive, or agree to pay, give, or receive, a contingency fee. | Fla. Stat. § 11.047 and 112.3217 |
| Georgia | Not addressed in statute. | N/A |
| Hawaii | Contingency fee prohibited. No lobbyist shall accept or agree to accept any payment in any way contingent upon the defeat, enactment, or outcome of any proposed legislative or administrative action. | Hawaii Rev. Stat. § 1-97-5 |
| Idaho | Contingency fee prohibited. A lobbyist shall not: Accept any employment as a lobbyist for a compensation dependent in any manner upon the passage or defeat of any proposed or pending legislation or upon any other contingency connected with the action of the legislature or of either branch thereof or of any committee thereof. | Idaho code § 67-6621(b) |
| Illinois | Contingency fee prohibited. No person shall retain or employ another to promote or oppose legislation for compensation contingent in whole or in part upon the passage or defeat of any legislation, or the approval or veto of any legislation by the Governor, and no person shall accept any such employment or render any such service for compensation contingent upon the passage or defeat of any legislation or the approval or veto of any legislation by the Governor. | Ill. Rev. Stat. ch. 25 § 170/8 |
| Indiana | Contingency fee prohibited. It is unlawful for any person to be a lobbyist for a compensation dependent upon the success of his lobbying efforts, or upon any contingency connected with the administrative action or legislative action. | Ind. Code § 2-7-5-5 |
| Iowa | Contingency fees restricted by Iowa Rules of the House and Senate. Receipt of fees must be reported.In the Senate, lobbyists must file a detailed description of any contingency fee arrangements. House rules prohibit the payment of fees or bonuses to lobbyists conditioned upon the result of the rules they attain. Executive branch lobbyists shall not accept or agree to accept any payment in any way contingent upon the defeat, enactment or outcome of any proposed administrative rule or any executive order by an executive branch state agency or a statewide elected official. | Senate and House Rules, IAC 13 |
| Kansas | Contingency fee prohibited. No person shall pay or accept or agree to pay or accept or arrange for a third party to pay or agree to pay present, future, promised or contingent compensation, or any part thereof, for lobbying which is contingent upon the result achieved or attained.(b) No person shall pay or accept or agree to pay or accept present, future, promised or contingent compensation, or any part thereof, for the referral of a person or persons to a lobbyist for lobbying services. | Kan. Stat. Ann. § 2-46-267. |
| Kentucky | Contingency fee prohibited. No Person Shall engage any person to lobby in exchange for compensation that is contingent in any way upon the passage, modification, or defeat of any legislation. No person shall accept any engagement to lobby in exchange for compensation that is contingent in any way upon the passage, modification, or defeat of any legislation. Violation of this provision is a Class D felony. | Ky. Rev. Stat. §. 6.811(9) |
| Louisiana | Not addressed in statute. | N/A |
| Maine | Contingency fee prohibited. No person shall accept employment as a lobbyist on a basis which makes that person’s compensation contingent in any manner upon the outcome of any legislative action. | Me. Rev. Stat. Ann. tit. 3. § 318 (1) |
| Maryland | Contingency fee prohibited. A regulated lobbyist may not: be engaged for lobbying purposes for compensation that is dependent in any manner on the enactment or defeat of legislation;: | Md. State Gov’t Code ann. § 15-706(1) |
| Massachusetts | Contingency fee prohibited. No person shall make any agreement whereby any compensation or thing of value is to be paid to any person contingent upon a decision as described in the definition of “executive agent”, or the passage or defeat of any legislation or the approval or veto of any legislation by the governor. No person shall agree to undertake to influence such a decision, or to communicate to influence such a decision or to promote, oppose or influence legislation or to communicate with members of the legislature, or to advocate approval or veto by the governor for consideration to be paid upon the contingency of the outcome of such a decision or that any legislation is passed or defeated. | Mass. Gen. Laws. Ann. ch. 3, § 42 |
| Michigan | Contingency fee prohibited. A person shall not be employed as a lobbyist agent for compensation contingent in any manner upon the outcome of an administrative or legislative action. A person who knowingly violates this subsection is guilty of a felony and if the person is an individual shall be punished by a fine of not more than $10,000.00, or imprisoned for not more than 3 years, or both, and if the person is other than an individual shall be punished by a fine of not more than $25,000.00. | Mich. Comp. Laws § 4.421 |
| Minnesota | Contingency fee prohibited. No person may act as or employ a lobbyist for compensation that is dependent upon the result or outcome of any legislative or administrative action, or of the official action of a metropolitan governmental unit. A person who violates this section is guilty of a gross misdemeanor. | Minn. Stat. § 10A.06 |
| Mississippi | Contingency fee prohibited. A lobbyist shall not contract to receive or accept compensation dependent upon the success or failure of a legislative or executive action. | Miss. Code Ann. § 5-8-13 |
| Missouri | Not addressed in statute. | N/A |
| Montana | Contingency fees must be reported. A principal may not make payments to influence official action by any public official unless that principal files the reports required under this chapter. | Mont. Code. 5-7-209 |
| Nebraska | Contingency fee prohibited. No person shall be employed as a lobbyist for compensation contingent in any manner upon the outcome of an administrative or legislative action. | Neb. Rev. Stat. § 49-1492 |
| Nevada | Contingency fee prohibited. A person who employs or uses a lobbyist shall not make that lobbyist’s compensation or reimbursement contingent in any manner upon the outcome of any legislative action. | Nev. Rev. Stat. § 218.942 |
| New Hampshire | Not addressed in statute. | N/A |
| New Jersey | Contingency fee prohibited. A governmental affairs agent shall not enter into any agreement, arrangement, or understanding under which the governmental affairs agent’s compensation, or any portion thereof, is made contingent upon the success of any attempt to influence legislation, regulation or governmental process. | New Jersey Code 52:13C-21.5 |
| New Mexico | Contingency fee prohibited. No person shall accept employment as a lobbyist and no lobbyist’s employer shall employ a lobbyist for compensation contingent in whole or in part upon the outcome of the lobbying activities before the legislative branchy of state governmnet or the approval or veto of any legislation by the governor. | N.M. Stat. Ann. § 2-11-8 |
| New York | Contingency fee prohibited. No client shall retain or employ any lobbyist for compensation, the rate or amount of which compensation in whole or part is contingent or dependent upon the passage or defeat of any legislative bill or the approval or veto of any legislation by the governor, or the adoption or rejection of any code, rule or regulation having the force and effect of law or the outcome of any rate making proceeding by a state agency and no person shall accept such a retainer or employment. A violation of this section shall be a class A misdemeanor. | N.Y. Unconsolidated Law Ch. 122-L § 11 |
| North Carolina | Contingency fee prohibited. No person shall act as a lobbyist for compensation which is dependent in any manner upon the outcome or resultof legislative or executive action. | N.C. Gen. Stat. § 120-300 |
| North Dakota | Contingency fee prohibited. It is unlawful for any lobbyists or for any other person
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N.D. Cent. Code § 54-05.1-06 |
| Ohio | Contingency fee prohibited. No person shall engage any person to actively advocate in exchange for compensation that is contingent in any way upon the passage, modification, or defeat of any legislation. No person shall accept any engagement to actively advocate in exchange for compensation that is contingent in any way upon the passage, modification, or defeat of any legislation. | Ohio Rev. Code § 101.77 |
| Oklahoma | Contingency fee prohibited. No person may retain or employ a lobbyist … for compensation contingent in whole or in part on the passage or defeat of any official action or the approval or veto of any legislation, issuance of an executive order or approval or denial of a pardon or parole by the Governor. No lobbyist may accept any employment or render any service for compensation contingent on the passage or defeat of any legislation or the approval or veto of any legislation by the Governor. Any person convicted of violating the provisions of this section shall be guilty of a felony punishable by a fine of not more than One Thousand Dollars or by imprisonment in the State Penitentiary not exceeding two years or by both such fine and imprisonment. | Okla. Stat. tit. 21 § 9334 |
| Oregon | Contingency fee prohibited. A person may not lobby or offer to lobby for consideration any part of which is contingent upon the success of any lobbying activity. | Or. Rev. Stat. § 171.756 (3) |
| Pennsylvania | Contingency fee prohibited. | 65 Pa.C.S Sec. 1307-A(e) |
| Rhode Island | Contingency fee prohibited. No person shall be employed as a lobbyist for compensation dependent in any manner upon the passage or defeat of any proposed legislation or upon any other contingency connected with the action of the general assembly, or of either branch thereof, or of any committee thereof, or of the governor. | R.I. Gen. Laws § 22-10-12 |
| South Carolina | Not addressed in statute. | N/A |
| South Dakota | Contingency fee prohibited. | S.D. Codified Laws Ann. § 2-12-6 |
| Tennessee | Contingency fee prohibited. | Tenn. Code Ann. § 3-6-304(k) |
| Texas | Contingency fee prohibited. (1) A person may not retain or employe another person to influence legislation or administrative action for compensation that is totally or partially contingent on the passage or defeat of any legislation, the governor’s approval or veto of any legislation, or the outcome of any administrative action.(2) A person may not accept any employment or render any service to influence legislation or administrative action for compensation contingent on the passage or defeat of any legislation, the governor’s approval or veto of any legislation, or the outcome of any administrative action. | Tex. Govt. Code Ann. § 305.022. |
| Utah | Contingency fee prohibited. A person may not employ or solicit another to serve as a lobbyist for compensation contingent in whole or part upon the passage, defeat, or amendment of legislative action or the approval, modification, or denial of a certain executive action. | Utah Code Ann. § 36-11-301 |
| Vermont | Contingency fee prohibited. It shall be prohibited conduct: (1) to employ a lobbyist, or accept employment as a lobbyist, for compensation that is dependent on a contingency; | Vt. Stat. Ann. tit. 2 § 266.(1) |
| Virginia | Contingency fee prohibited. It shall be unlawful for any individual to lobby for compensation which is dependent in any manner upon the outcome of any legislative or executive action. | Va. Code § 2.1-791 |
| Washington | Contingency fee prohibited. A lobbyist shall not: (f) Enter into any agreement, arrangement, or understanding according to which his or her compensation, or any portion thereof, is or will be contingent upon the success of any attempt to influence legislation. | Wash. Rev. Code § 42.17.230 |
| West Virginia | Not addressed in statute. | N/A |
| Wisconsin | Contingency fee prohibited. No lobbyist may: … (d) Contract to receive or receive compensation dependent in any manner upon the success or failure of any legislative or administrative action. | Wis. Stat. § 13.625(1) |
| Wyoming | Not addressed in statute. | N/A |
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