Federal Advocacy Clients Are Asking More About Their Deliverables

The question of retainer fatigue continues to gain traction in the federal advocacy consulting industry as client budgeting processes place additional scrutiny on discretionary expenses. Specifically, clients now seek assurances that they get real value for their money between key legislative events and that existing engagement approaches are sufficient.

In practice, that translates into new pressure around the definition of 'deliverable' within federal advocacy consulting engagements. While high-level policy updates or legislative summaries used to be sufficient to justify engagement, those deliverables are becoming less relevant – at least to midmarket organizations with higher scrutiny in discretionary expense categories.

Rather, clients now ask for more specificity around advisor responsiveness, issue focus and relevance to decision-making processes. For example, executives might ask for more focused, bi-weekly updates around actual policy threats and risk assessments rather than generic monthly reports on everything happening in Congress. Alternatively, they may require explanations of the relationship between policy analysis and the business exposure clients already experience through procurement or compensation planning.

Those trends reflect more sophisticated client behaviors within professional services in general. As buyers demand better visibility into workflows, escalation and issue relevancy, the consulting firm in question cannot hide behind reputation or long-standing relationships. In short, federal advocacy consulting is not an exception.

Client access to public policy information has also increased dramatically in recent years. Hearing records, agency notices and committee activities can all be accessed online and shared across business leadership quickly and efficiently. Such availability has made the process of sharing legislative updates much less valuable for clients compared to past periods.

Against such a backdrop, consulting firms are now rethinking their models based on narrowly defined issue categories. Instead of a broad retainer for general federal monitoring and analysis, the client could pay for narrower advice related to reimbursement, infrastructure financing or regulatory risks associated with a particular industry. Essentially, the scope of advisory becomes narrower but more measurable.

At the same time, the shift presents its challenges for firms historically built on retainers. Federal advocacy consulting models were based on relationships and broad access positioning; however, buyers today demand that their business issues are explicitly addressed and that advisory engagement contributes to decision-making.

The reporting format itself also seems to change. Rather than detailed policy memos, executives and finance managers might request brief updates indicating priorities, potential impacts, risks and uncertainties associated with each policy development. From this perspective, the client expects a more actionable report format.

As a response to such demands, some consulting firms now incorporate scenario-based analyses in client reports. In addition to identifying the most probable outcome of pending legislative events, the advisor also needs to outline other possible options, based on agency approval process or appropriations status. This approach mimics actual decision-making processes in any business.

All of this might exacerbate the differences between larger federal advocacy consultants and smaller boutiques. Larger organizations can rely on their ability to monitor legislation across different sectors via specialist teams and former agency personnel, while smaller boutiques may benefit from more responsiveness or narrower expertise. Nevertheless, retaining such differentiation will be more challenging for small consulting firms in an evolving business environment.

Finally, there is no reason to believe that federal advocacy is going out of favor completely. The federal policy agenda directly affects the timing of reimbursements, grants, reporting and contract management in multiple sectors. Nevertheless, client expectations around such services have changed; specifically, they now focus on more narrow and measurable aspects of advisory services.

In essence, the consulting firms that will benefit the most will be those that identify their client needs more accurately and provide tangible value.