The Other Washington: Attorneys, Accountants, and Associations
Lemann, Nicholas
The Other Washington: Attorneys, Accountants, and Associations by Nicholas Lemann Living in Washington, D.C. today, there is an exhilarating sense of being at a crucial juncture of history, one...
...In its reception room, a UP1 machine softly ticks out the news of the world, while inside a dozen “government relations specialists” work on “resolving problems at the national level...
...Union Camp has produced an elaborate Bicentennial message about “freedom,” that is, the free enterprise system, which is fighting off the encroachments of “the central government...
...In the last 20 years, however, the area immediately west of the old downtown, comprising about 25 good-sized city blocks, has been completely transformed, its houses torn down and office buildings erected in their place...
...Its developer, the Oliver T. Carr Company, originally intended to put up two buildings on the lot instead of one, but the Equitable Life Assurance Society, which financed the project and owns the building today, suggested that there might be more long-term profit in a single huge structure...
...Each of the three will be 400,000 square feet...
...The government occupies some space in the new downtown, but the great majority of its expansion has been in the suburbs, because the new downtown is too expensive...
...listing them all would put you to sleep, but some of the noteworthy ones are these: OAn organization called UBA, which used to stand for Unemployment Benefit Advisors but now doesn’t stand for anything...
...Judicial salaries...
...In the Washington office, he says, “I can’t think of any purely trade issues...
...and now it has six completed buildings, one more just being finished and another that it manages but didn’t build...
...The dozens of associations, consultants, corporate lobbyists, and so on that fill up the rest of the building all fit this general pattern...
...Usually these resources bring about a tremendous stimulation of the capitalist process as it’s usually definedgoods or services are made available for which there’s considerable public demand-but in Washington it’s different, and even better as far as the city is concerned...
...The southern end of Washington is full of mammoth government office buildings that house the various departments and agencies...
...Simply understanding our society has become the most valuable economic commodity...
...Half of this boom-the growth of the government itself, and the enrichment of its own employees-is fairly well known, but the other half isn’t...
...I can think of some that those who want to malign the legal profession say are trade issues...
...The company’s Washington business, Silton says, can only increase as more kinds of financial reporting are required of business...
...A few prints here, some potted plants there...
...It’s a class market, so 1800 M was to be a class building...
...It is not what you are expecting...
...For one thing, the effects of the government’s power flow two ways: if regulations are costing some companies money, other companies exist on subcontracted government business or on particularly favorable regulations...
...The IRS kept amending the tax code, and the Securities and Exchange Commission made its regulations vastly more complex, and Coopers and Lybrand realized that it needed a staff of people to monitor and interpret changes in the law that would affect its clients’ bookkeeping...
...today, there is an exhilarating sense of being at a crucial juncture of history, one of those points where various factors can combine to push a city over the line of greatness...
...it can be the Washington office for a trade association headquartered elsewhere...
...in smaller offices flanking his there are younger people doing research and writing it up into reports...
...The Three A’s The chief market for Washington office space is what’s known as the three A s-accountants, associations, and attorneys...
...Hoffman is right: on the ABA’s t e k s , what it do& is in the public interest...
...land-use laws that allow snowmobiling on other people’s property and on government parkland...
...Some are registered lobbyists...
...All the lawyers at 1800 M Street were an important factor in attracting another major tenant, National Economic Research Associates, a consulting firm that moved there, its office manager says, because “this is a prestige building, and there are people in this building like Morgan, Lewis and Shaw, Pittman who we’re associated with and who we want to be associated with...
...It eventually bought eight parcels of land over a period of six and a half years-a defunct French restaurant, once Washington’s finest, called La Salle du Bois, which had recently given way to a bar called Gentlemen 11, a store or two, and several parking lots, which together made up 70 per cent of the 1800 M site...
...Like everybody else in 1800 M, Coopers and Lybrand is a beneficiary of the Washington boom...
...Number one is this: “More regulation by the Federal Government seems inescapable...
...Nobody but private enterprises can afford the space, but the occupancy rate would make a real estate developer in New York or Atlanta seethe with envy...
...The Carr company had started assembling property at the corner of 18th and M Streets back in 1968...
...OThe Washington offices...
...they prefer to speak in broad generalities about ranges of services...
...The firm is seven years old and has a growing practice, largely in housing matters that involve the government-real estate law, tax law, securities law, federal housing law...
...While this makes perfect sense, it does seem now that the fastest growing sector of the economy is what might be called the nonproductive sector, and that this sector, instead of being a mere adjunct to the process of producing goods, has enormous power itself...
...The federal government has also done wonders for its state and local sisters and, most importantly, for private enterprise...
...Jimmy’s got a great idea, but you’re not going to cut heads...
...it can do one specific thing for an association, like monitor government regulations or publish a newsletter...
...It is quite a bit more...
...of a number of major corporations, mcluding Union Camp, Burlington Industries, Dow Chemical, Marathon Oil, and A&P...
...Fifteen years ago its Washington office handled only government relations and employed three or four people...
...UBA lobbies the government to keep down the degree of federal influence on unemployment benefits and workmen’s compensation, preferring to leave them under the States’ jurisdiction...
...The building at 1800 M was by far the biggest project Carr had ever taken on...
...Wolembe and Associates, a tenyearold, $1 .Zmillion-a-year consulting firm that primarily advises banks and financial houses on internal fiscal planning...
...If the government would mind its own business and not make so many regulations, there would be no need for every productive company to hire an array of unprotective companies for protection...
...Hauck doesn’t lobby, but he and his staff do keep up on and write up all federal regulations affecting their clients, which is a major task...
...In addition, it sets up industry-wide training programs and the like...
...Golembe also publishes several periodicals and sponsors seminars for executives...
...Coopers and Lybrand is the world’s largest accountant, with 300 offices and 19,000 employees, 7,000 of whom work in the company’s 80 United States offices...
...An Awesome Range The third A, trade associations, is well represented in 1800 M Street, most prominently by the ABA, but by several others as well...
...The awesome range of Hauck’s potential activities has not yet been achieved because it’s a new firm, founded in 1974...
...Altogether, the firm has developed 1.5 million square feet of office space...
...Thus while in the last 20 years the federal budget has more than quintupled, the number of civil servants has remained relatively constant...
...like all the other tenants, 15 years ago it wouldn’t have thought about occupying the kind of space it now occupies...
...Burlington expects to spend $25 million this year complying with government plant regulations...
...The same complexity that caused that growth also gave rise to research firms and trade associations that interpreted regulations for their own clients, and these firms needed accounting services-so Coopers and Lybrand expanded its services again...
...Clients like to come here-it sets a tone for their organizations...
...The International Snowmobile Industry Association, which lobbies the government on issues affecting snowmobile manufacturers, of which there are plenty...
...In all these offices people would be poring through government regulations and then explaining them...
...We get a lot of business from the vastness and complexity of government regulations,” says Silton...
...The ABA wants to give the mentally ill the right to hire lawyers...
...Judging from what’s happening in downtown Washington, the traditional economic order is changing...
...everybody likes to look like he occupies major space in his building to impress clients-by the end of 1976 1800 M was 98 per cent full...
...NERA, as it’s called, does a good deal of consulting for law firms , prep a ring supplementary studies for use in antitrust cases...
...Inside, there are six highspeed elevators in each half of the building, near-invisible air-conditioning vents, recessed lighting, and walltowall carpeting and modem art lithographs in the hallways...
...The brochure, which was written in free verse and had on its cover the building’s semiabstract logo, which looked like a Franz Kline painting, began like this: “We would like to tell you about an office that we’re planning for you...
...Perhaps even more important, the growth of the government’s regulatory power has so excited and alarmed the general populace that vast and increasing sums are being spent to fight, wheedle, cajole, and observe various federal agencies...
...At $9 a square foot, it was one of the best deals around...
...It might change, sure...
...OThe Washington office of American Medical International Inc., which defines itself as “an international health care services company...
...The consulting firm that tells corporations how to avoid new regulations is no less a beneficiary of big government than the consulting firm that tells agencies what regulations to draw up in the first place-in fact, most consulting firms do both...
...and when Oliver Junior took over the company he started looking at downtown properties...
...There’s no more visible sign of the government-spinoff boom than the architecture of downtown Washington...
...Because of zoning laws that place an absolute limit on height but allow a generous ratio of building size to lot size, these buildings all look the same-big and box-like, 11 or 12 stories high...
...Peat, Marwick, and Mitchell is moving next year to an expanded Washington office...
...Anybody who reads business publications, or even the oil companies’ newspaper ads, can see that the government is an obsession with every major corporation in America, and that obsession, whether or not it’s justified, gives rise to amply budgeted Washington offices...
...Ever since about 1960 these buildings have gone up at a rapid pace, interrupted only by the recession of the early 70s, when Washington’s builders found that in a surge of optimism they had overbuilt and were stuck with empty office space...
...Lane is a registered lobbyist who tries to influence legislation on tax breaks and other subsidies affecting the housing industry...
...It also printed up a glossy brochure and took out some newspaper ads...
...The American Institute of Certified Public Accountants opened a growing Washington office four years ago...
...Particularly intriguing is an organization called Hauck and Associates, which is in as so cia t ion management without being an association itself...
...Black designed the building to look like two buildings separated by an interior courtyard...
...The ABA’s stand on public-interest lawyers is pay them more so the public can have quality representation too...
...And downtown being about filed up by now, the company is further broadening its horizons...
...Directly north of them is an old downtown area that, like downtowns in most eastern seaboard cities, is dominated by large retail establishments and has seen better days...
...Construction of the building began in June of 1973, and four months later Carr put up a temporary twostory leasing office on the site in order to begin selling space...
...He was assisted in the research for this article by Joel Kaplan...
...The Washington managing partner, John Silton, has just signed on for some additional space in the building, and says he thinks Washington will be one of the company’s big offices in a few years...
...In 1964 the Washington office split from Baltimore and grew to 12 people, By the early 70s its quarters in a building at 1100 Connecticut Avenue were getting awfully cramped and it hired a real estate consultant who led it to 1800 M Street...
...The office has grown nearly 5,000 per cent in 15 years chiefly because of the government...
...But it’s becoming bigger...
...The future for Hauck Associates, again, looks bright...
...To show that 1800 M Street’s mix of tenants is typical of the new part of downtown Washington-mostly various advisors, c ants, and lobbyistshere’s a sampling from the directories of a few of 18 1717 K Street Consultants International National Science Foundation Association of Bituminous Con- National Labor-Management Foun dation ttee for Tax EqualAmerican Telephone & Telegraph 2021 LStreet National Association of Trade anc Technical Schools North American Committee foi East-West Common Existence Advisory Committee on Federal Group Health Association Pay Drivers, Chauffers, and Helper: National Alliance of Businessmen Local 639 Firestone Tire and Rubber Washington Office 1900 L Street Freedman, Levy, Knoll, and Graphic Arts International Unior Simonds Booker T. Washington Foundatior National District Attorneys Associ National Association of Concernet 1730 K Street 1776 K Street ation Aerospace International Marketing American Medical Association Veterans Commission on Private PhilanNational Sugarbeet Grower FederaThe Tobacco Institute Committee to Reform y and Public Needs 1801 K Street IBM Corporation Washington Of tion fice Taxation of Investment 2000 L Street Price, Waterhouse, and Compan...
...Philip Csrr is very excited right now about an old, rundown area just west of downtown called the West End, where the company has been buying up acres of land...
...Sure enough, 1800 M’s first tenant (and, at 56,000 square feet, its largest) was an accounting firm, Coopers and Lybrand, which in February 1974 signed a ten-year lease with Carr...
...The ABA has been growing as fast as everybody else in the building...
...National Association of Housing Managers and Owners National Housing Rehabilitation Association National Leased Housing Association Potomac Institute Metrouolitan Housing Program Council of State Housing Agencies The Institute for Professional and Executive Development Inc...
...San Francisco must have been like this in 1849, and Chicago in 1880-there’s a feeling of limitless possibility, of gold lying in the streets, of fortunes to be made by one and all...
...Like a frontiersman, which, in a way, he is, he gets a gleam in his eye when he talks about the West End...
...There are 13 law firms in all in 1800 M Street and about 160 lawyers working in them, which makes them the building’s biggest genre of tenant...
...And the ABA’s public-interest aura is infinitely helpful in achieving its goals, now that lobbyists and special interests are in disrepute...
...Then, seeing what a tangled web it was creating in the accounting field, the government started to think about regulating accountants, so Coopers and Lybrand had to worry about keeping an eye on those regulations and trying to influence them in a favorable direction (through testimony not lobbying), which is why its New York managing partner is going to be spending time at 1800 M Street...
...The Carr Company is now building a complex of three buildings in downtown Washington, called International Square...
...in that year, developers put on the market three million square feet of new downtown office space, which by past standards would have been considered a four-year supply of space...
...Take attorneys’ fees...
...Quite a bit different...
...fairly lax noise restrictions...
...The growth, says Herbert Hoffman, director of the office, has come about because the ABA decided to cover a broader range of governmental issues, and because the government started doing more things that affect lawyers...
...OThe Washington office of BartonMarsteller, which calls itself “a public relations/public affairs organization operating on a world-wide scale...
...The Can- Company, by virtue of having jumped into the commercial real estate business at exactly the right time, in 1960, is now one of the local leaders of the field...
...Clients use us as an address,” says Bruce Lane, the firm’s senior partner...
...Thus the ABA is opposed to federal no-fault laws on the grounds that they deprive people of the right to representation...
...For all the flaws of old-fashioned capitalism, it’s worth doffing our hats a moment at its passing, if only because it was centered around the late concept of productivity...
...Office’ probably isn’t even an Let us explain.’’ What “quite a bit more” meant was that one didn’t make a buck in downtown Washington real estate by aiming at economy-minded clients...
...Back in a corner office is the boss, in a meeting or talking on the phone...
...Morgan, Lewis takes up two floors of the north half of the building, and its dark, lush, woody decor is in marked contrast to the white-carpet-andchrome offices of the building’s secondlargest law firm, Shaw, Pittman, Potts, and Trowbridge, which has a ten-year lease on two floors over on the south side of the building...
...Its studies and its lobbying are built around the general goal of extending legal services to more people in America, which theoretically would be doing them a great favor...
...Tucson can get smaller...
...This apparently means that they lobby or advise corporate executives about how to lobby or testify themselves...
...In every office there seem to be bound copies of the federal code somewhere, and fresh copies of the Congressional Record and Federal Register, which someone is reading in order to keep up on the regulations affecting whoever the client happens to be...
...About a third are the Washington branches of big firms in Los Angeles, Chicago, Philadelphia, and other big cities, and handle the evergrowing government work of their clients back home...
...lawyer’s Washington office, its Washington lawyer, its Washington lawyer’s antitrust consultant, its public relations office, its own economic consultant, and so on...
...After passing through the Pet Food Institute and the National Broom Council, among others, he decided to go into business for himself...
...Wandering through the wellappointed halls of 1800 M Street, a sameness sets in: dozens of blondwood doors emblazoned with the names of firms and associations, which open to reveal deep-pilecarpeted reception areas...
...Historical moments like this come about when a city’s economic potential expands dramatically as some great resource is discovered, like gold in San Francisco or railroads in Chicago...
...The association, which was founded in 1965, wants safety standards its members can live with...
...Mental health...
...Because they were all built over a fairly short span of time, they’re all in the same concrete-andglass architectural style...
...The autumnal air of faded grandeur that eventually settles over most cities may never come to Washington...
...That much building was a risk, but the developers (and their investors) had good reason to be confident and were prepared to take it...
...Hoffman says the ABA does some things that affect lawyers’ pocketbooks, but that it’s mostly a publicinterest organization, involved in making America “a better place to live, a better place to raise your kids...
...Thirty years ago, when this retail area was in its prime, most of Washington (besides it and the government buildings) was just houses...
...That’s virgin land out there,” he says...
...The root of the boom is the federal government, which, because it’s not subject to the usual dictates of supply and demand, may never stop growing...
...Committee for National Museum of the Building Arts City of Baltimore Washington Office...
...Rents will start at $10.75 and go as high as $12.75...
...now it rents 42,000 square feet for more than 100 employees, who cover a wide range of issues: one recent ABA newsletter discussed legal developments affecting judgeships, the criminal code, campaign reform, grand jury reform, consumer protection, and direct election of the President, among other things...
...Indeed...
...Annual revenues are $450 million...
...Two hundred and forty people work in the office now, not counting the people who are moving in from New York...
...People like the address, since it’s so close to 1600...
...Although UBA is a non-profit corporation that subsists on voluntary contributions, these contributions all appear to come from businesses that fear federal control over benefits programs will mean higher taxes for them...
...Construction crews are encamped in Coopers and Lybrand’s hallway, spoiling the view of the long leather couches and white rugs in the reception area...
...The leasing took 18 months, three times longer than is usual for an office building, but it will be worth it in the long run...
...Quite exciting...
...Every time the government redoes the tax code, in effect it increases our revenues, although as professionals we abhor the law...
...Other companies began to contract with the government too, and soon government contracting got so complicated that Coopers and Lybrand set up a branch to advise companies on the accounting aspects of that...
...It was founded in 1902 by Arthur Carr as a builder of residential homes...
...Now, with the nation so vastly complex and so minutely regulated, the torch is passing from those who make things and sell them to those who can explain how it all works...
...If you believe that the more lawyers (and the better paid) the better, it’s logic you can’t argue with...
...So far its office, which opened this year, has a staff of only six, but it’s likely to do well: its field is “international government health care consulting,” and it is headed by a former deputy assistant secretary of Defense for health, who ought to know his way around the government contracting offices...
...The standard moral judgment that is passed on this great web of explainers that fils up 1800 M Street and the buildings like it is that they may not be doing anything productive, but that’s all the fault of big government...
...The architect was Byron Black of Weihe, Black, Jeffries, and Strassman, which along with Vlastimil Koubek is one of the Big Two firms for Washington office building design...
...At the comer of 18th and M the building notches inward, creating a second open space...
...They’re not big enough to maintain separate offices...
...NERA was founded 15 years ago in New York, but its Washington office has been growing by leaps and bounds...
...In the company’s brochure, it lists the major trends in the association business over the next 25 years...
...It occurred to me that it would be possible for a single company to hire half the building simultaneously to provide one service or another-an oil company in Los Angeles, say, could have its government relations office at 1800 M, its association, its association’s consultant, its L.A...
...It emphasizes, its brochure says, “relationships with legislative or regulatory bodies,” particularly by monitoring legislation and giving expert testimony before the government...
...So far he has four clients: three associations connected with the food business, and the brand-new International Discotheque Association...
...The need for them appears to be limitless...
...We can’t...
...Most of the firms are hidden behind elaborate lawyerly cloaks of anonymity: they don’t list their clients in Martindale-Hubbell, and they don’t give interviews for fear of appearing to advertise...
...The dizzying range of a Washington law firm’s activities is suggested, if only barely, by the building directory’s listings of the organizations headquartered at one of 1800 M’s firms: Lane & Edson PC (for professional corporation, as opposed to partnership) L & E, Inc...
...I asked Philip Carr whether all the talk of cutting down and simplifying big government scared him, and he said, “This government’s not going to get smaller...
...But that is, at best, about half true...
...Some, like the Atlanta firm of Alston, Miller, and Gaines, which has a new office in 1800 M and just lost two partners to the new administration, may be trying to take advantage of a particularly favorable political climate...
...and quite a few other things...
...But most are Washington-based...
...Major tenants could design their own interiors...
...This is a federal city...
...The federal government now pays $60 billion a year to private contractors of one kind or another and another $50 billion to state and local governments and nonprofit institutions...
...That seems vague, but vagueness is in long supply at 1800 M Street...
...Sure, ten years ago people would have thought we were crazy to be building on that site,” says Philip Carr, brother of Oliver and director of operations for the company...
...But at that time, your fears didn’t start until 19th, 20th, 21st...
...Half the firm’s Washington business is now for the government...
...All the firms list themselves in the MartindaleHubbell law directory as being specialists in practice before government agencies...
...The law firms have their own association, of course-the American Bar Association, which has its Washington office at 1800 M Street...
...Arthur’s son Oliver built up the business...
...maborate Cloaks of Anonymity The second A, attorneys, provided 1800 M’s second big tenant, the firm of Morgan, Lewis, and Bockius, which in July 1975 signed a five-year lease...
...Pretty soon the government’s regulations began to get so complicated that it couldn’t understand what was going on in the tax , securities, and bookkeeping fields-so it started to hire consultants 8 who did understand, Coopers and Lybrand among them...
...In going from office to office, I could find only one small place that was involved in actually producing some sort of goods for the consumption of the general public-a magazine called Ladycom that goes out to wives on military bases...
...Eighteenth was safe...
...Its potential range of activities is wide-it can serve as the office of a trade association and handle all its activities...
...Just a couple of months ago, Lane got his picture in Fortune for heading a coalition of low-cost housing lobbyists that got some tax shelters written into last year’s tax reform act...
...A newcomer to Washington might assume that these buildings house various parts of the ever-expanding government, but in fact that’s not the case...
...they’re renovating some additional office space to house Norman Auerbach, the company’s New York managing partner, who’s found he has to spend a couple of days if week in Washington...
...In the general Coopers and Lybrand scheme, the Washington office is not a big deal...
...In 1964 the company finished its first office building, the Mills Building at 1700 Pennsylvania Avenue (“No problem renting that,” says Phillip Carr...
...Arthur Andersen’s president, Marvin Kapnik, is spending time in Washington regularly...
...Higher ones will improve the quality of American justice...
...We may be sitting here in five years and it won’t be the three A’s any more...
...Although the Carr Company feared that the building’s size would scare tenants offadequate description...
...It helps attract employees...
...The complex will open in June, and it is already 65-per-cent leased...
...It was a good location, just coming into its own...
...It’ll be the three B’s or something...
...The government doesn’t pay for this secondary growth, but it is certainly the cause of it...
...Ten years ago it employed three people, but now there are 56...
...Hauck started the firm after ten years in the association business and three years as a lawyer...
...A Single Huge Structure Of the ten big office buildings going up in downtown Washington that year, the biggest was 1800 M Street, which at 500,000 square feet was more than twice the size of its closest competitor...
...It’s not going to get smaller...
...From the 1920s to the early 60s, the office had four or five employees and was essentially an adjunct to Coopers and Lybrand’s Baltimore office that dealt with the Internal Revenue Service...
...However, while in most cities the real estate market is only just starting to recover from that crushing blow, Washington has righted itself quickly...
...People are loath to say exactly what they do, in the way that a car manufacturer might say, “I make cars...
...During the 1960s, as the government’s money, scope, and power grew, a mistrust of the bureaucracy by liberals and conservatives alike led to more and more work being farmed out to smaller jurisdictions and to experts...
...By 1975 the building boom had resumed with a renewed fervor...
...by comparison, Washington’s biggest developer, Charles E. Smith, has 8.5 million...
...It did no actual accounting work...
...It moved to 1800 M in 1975 because, its president, Sheldon Hauck, says, the location was good and “this is a first-class office building...
...Association of American Railroads Urban Systems Development Corp Postal Rate Commission oration Nicholas Lemann is an editor of The Washington Monthly...
...It used to be assumed that the key to an economic system was production: those who owned property and controlled the means of production were the ones who got rich, and everybody else worked for them for somewhat less than the value‘they added to what was produced...
...These offices handle lobbying, monitoring of the government, and some polishing up of the company image-all, from the companies’ standpoint, with good reason...
...in the new downtown it’s hard to find anything for less than $8 per square foot, and the newer buildings go as high as $12.75...
...the increase has been in what is contracted out...
...They organize industry-wide conferences in the United States and abroad, and publish a vast array of public-relations . documents...
...Unlike raw materials, expertise is not something that gets depleted, and unlike consumer products it is not something for which demand dries up...
...The General Services Administration, which rents the government’s office space, has a rent ceiling of about $7.50 per square foot...
...Otherwise, everyone seemed to deal in expertise, advice, meetings, reports, access...
...or, in the case of an association that already has a Washington office, it can act as a consultant in association management, providing studies and advice...
...If the private companies themselves are models of tough, streamlined efficiency, it’s curious that they spend so much of their money on soft services from Washington, often supporting their various consultants in a manner far grander than most of their own executives...
...Its future as an economic commodity in America is bright and secure-and by extension, the Washington building boom is continuing apace...
...You could say lawyers want to be paid more-but lawyers have to eat too, and low pay can discourage people from taking on certain kinds of practice...
...As the brochure pointed out, the building is in close proximity to “luncheons at the finest restaurants” and has three levels of interior parking...
Vol. 9 • May 1977 • No. 3
