Lawson was elected to the Victorian Legislative Assembly for Castlemaine as a Liberal in a by-election in December 1899, and represented the district in its different incarnations for 28 years. In June 1904, Lawson was elected to the new Electoral district of Castlemaine and Maldon, holding this seat until a redistribution in 1927, when he was elected as member for Castlemaine and Kyneton. Lawson was President of the Board of Land and Works in the government of William Watt from 1913 to 1915, and Attorney-General and Solicitor-General in the government of Alexander Peacock from 1915 to 1917. He remained loyal to Peacock when most country Liberal members supported John Bowser's rural faction, the Economy Party, and when Bowser's short-lived government ended in resignation in March 1918, Lawson succeeded him, holding the portfolios of Attorney-General and Minister of Labour. Lawson proved to be the longest-serving premier Victoria had seen to date, holding office for six continuous years, something none of his 26 predecessors had done. This was despite the further fragmentation of the non-Labor vote with the emergence of the Country Party. At the 1921 elections, Lawson's Nationalist Party won 30 seats, to Labor's 20 and the Country Party's 13. Both Labor and the Country Party preferred Lawson to each other, so Lawson was able to survive as a minority Premier. He was helped by Labor's continuing inability to win seats outside its strongholds in the industrial suburbs of Melbourne and a few provincial towns. The biggest test Lawson faced was the 1923 Victorian Police strike, which saw riots and looting in the streets of Melbourne. There was also increasingly bitter industrial strife in Melbourne as the prosperity of the pre-war years failed to return. There were major strikes on the waterfront and in the coal mining industry. Lawson gained a reputation as a tough conservative. He refused to give in to the demands of the police for better pay and conditions, running the risk of a breakdown in law and order, but once the strike was over he appointed a Royal Commission into their grievances, which gave them much of what they wanted. In September 1923 Lawson formed Victoria's first conservative coalition, taking in five Country Party ministers. The coalition broke down in March 1924 when the Country Party made demands Lawson would not accept. The Country Party ministers resigned, and then united with Labor to bring Lawson down. After unsuccessfully contesting the Speakership, he retired to the back bench, where he stayed until October 1928, when he quit state politics altogether.
Lawson died in East Melbourne, survived by seven of his eight children. His wife died in 1949 and his youngest son had joined the Royal Australian Air Force and was killed in 1941. Helen Mary Keays his daughter was awarded an OBE in 1972 for Women's Services. His last surviving child, Ina Constance Watson, died in Melbourne, Australia on 9 November 2012.
