When Hiring a Lobbyist, Beware of Contingent Fee Restrictions
Many states don't provide clear guidance on the scope of these restrictions
More than 40 states and the District of Columbia prohibit the receipt of contingent fees for lobbying. This restriction generally prohibits a person or entity from being paid a fee that is contingent upon a successful outcome, including the passage or defeat of legislation, the issuance of an executive order, the adoption or rejection of a regulation, or the award of a public contract.
Compliance with all lobbying rules is essential for associations to limit legal risks and protect their organization’s reputation. In the area of contingent fee restrictions, liabilities exist not only for the lobbyist, but also for the client association. Unfortunately, many states do not provide clear guidance on the scope of these restrictions, and in some cases, they have been applied in ways that are far broader than the statute’s wording might suggest.
If your association is contemplating retaining a lobbyist or lobbying firm, avoid the following scenarios, which can result in violations of contingent fee lobbying prohibitions.
Please select this link to read the complete article from ASAE's Center for Association Leadership.