Over the weekend POLITICO ran a story — Tech: D.C.’s Biggest Loser? — that reminds folks in town that just because you can throw money at a problem, it is no guarantee, ever, that you’ll succeed with legislative or regulatory efforts. Tech is not losing, tech is just learning, some companies the hard way, that you cannot always get 100% of what you want in this town.
The technology sector has a lot of money to spend, however, many of the big players opted to stay out of DC for a very long time. This hurt them. If you’re not minding your federal legislative and regulatory flanks, you’re asking for trouble. They played catch up for a few years and paid a heavy political price for doing so. Mot of the big guns in this arena are well armed these day, however, it appears that challenges remain.
A cursory review of tech’s priority issues tells you one thing, they have too many priority and politically volatile issues. Patent reform, immigration reform, cyber security reform, privacy reform, and who knows what else. It is no surprise that Dean Garfield, the president and CEO of the Information Technology Industry Council told POLITICO that “[i]t’s been a disappointing year thus far.” The Council’s members include Apple, Google and Microsoft.
As a lawyer and legislative counselor, who also happened to have worked on Capitol Hill, when I scope a proposed matter or project for our firm, I first set time aside to discuss expectations with the prospective client. Changing regulations or passing laws is extremely difficult. In most cases, both take a long time. At this stage the prospective client needs to understand all this.
Passing new laws, or trying to tweak existing laws or regulations, may fix your short-term issue, however, it may also bring unintended transaction costs and, you guessed it, new headaches. Questions that I ask myself, as well as the client, include: Do they really need a regulatory or legislative fix? Can a non-government solution fix this problem? Is this issue ripe for action or should markets be afforded more time to craft a solution? Is a market-based solution possible? Is there any case on our issue that can instruct our proposed efforts? And many more.
If an issue is ripe for a legislative or regulatory fix, prepare to robustly defend your position and expect a lot of rejection. I’m surprised at how many businesses engage in this town thinking that their problem is the only problem in the world. Here is a cold reality that many CEOs and General Counsels never want to hear: You will never ever receive 100% of what you want. Our system was wisely designed centuries ago to make sure competing interests have the opportunity to meddle in your business. That is just the way it is. And it works. It really does work well.
On this issue of secrets, you’re never alone and, if you think your competition is not going to find out, whoever tells you that is flat wrong. Stealth is good, especially at the onset of an engagement. But after your first Congressional meeting or agency brief, expect several more people who were not in the room to know just about everything you said, including your competition. You must think ahead and anticipate what you want, and do not want, in the public domain.
The good news is that if you do your homework, temper expectations (i.e., never told your Board of Directors or shareholders, Washington will fix it all), be patient, and press forward until you win, you can successfully navigate the federal legislative and regulatory bramble. There is no way around that thicket of law, regulations, politics, and in some cases the media. Federal legislative and regulatory strategies require the same focus and discipline employed in any one of your other business units, maybe with a little more patience.