Best and worst of times for DC firms

WASHINGTON: Two midsize DC public affairs firms have come forward

with news of their performance during the second half of 2001. Taken

together, they paint a portrait of a sector reacting to a changed

environment in very different ways.



The Hawthorn Group, a 10-year-old, $9 million firm, was forced to

revisit its business plan in the face of decreasing profits. Sixteen of

the agency's 65 positions were eliminated, including the two that made

up its New York office. The agency is left with its Virginia

headquarters and an Atlanta office.



"On balance, we had a good year," said SVP for communications Peter

Hamm.



"We had 18% fee growth over 2000. But during the fourth quarter, we

experienced many of the same problems other firms experienced. Prudent

planning dictated that we adjust our business plans accordingly."



Though the firm has not seen clients leave outright, it is believed to

be, like many agencies, a victim of decreased spending following

September 11. With Congress wrapped up in antiterrorism efforts and

foreign policy, many of the battles that yield corporate public affairs

spending have been tabled.



In contrast, Qorvis Communications, an 18-month-old, $10 million

private firm, was so proud of its performance in the second half of last

year that it took the unusual move of publicly announcing its results.

Qorvis saw second-half growth increase 74% from the same period last

year. Its net operating profit margin for that period was a healthy

28%.



Ironically, some of Qorvis' success can be attributed to September

11.



Qorvis signed the royal family of Saudi Arabia, a major diplomatic

factor in the war on terror. The firm also staged a 10-city satellite

meeting for the UN and Ted Turner's Better World Campaign one month

after the attacks.



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