Phillip Ung is with California Common Cause, and he says here's how it works:

Ung: "Legislators consistently leave after being termed out and they serve as consultants or advisors to lobbying firms and are not technically considered lobbyists.  This is what we call the Newt Gingrich loophole…"

Gingrich: "…I have never done any lobbying.  Every contract that was written during the period when I was out of the office specifically said I would do no lobbying.  And I offered advice.  And my advice as a historian…"

That's the former House Speaker's widely-mocked description of his work for Freddie Mac during a Republican Presidential Debate in 2011.

Ung says most firms don't publicize their hiring of former lawmakers, so it's hard to know how many are violating the spirit of the law if not the letter.  But newly-retired Democratic Assemblywoman Alyson Huber recently took an "of counsel" job in a prominent law firm's government affairs practice.  Huber points out that not all Government Affairs work is lobbying.  She said she wouldn't do any lobbying in her new job, and now it's a moot point.  Governor Jerry Brown just appointed her to a judgeship.