Banking Law

The ether was wearing off. The acid was long gone. But the mescaline was running strong. Good mescaline comes on slow. The first hour is all waiting. Then about halfway through the second hour, you start cursing the creep who burned you because nothing's happening. And then - ZANG!
---Hunter S. Thompson, "Fear and Loathing in Las Vegas"

If you thought that the lobbying that occurred during the run-up to the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act was hot and heavy, the Washington Post's Amanda Becker says that you ain't seen nothin' yet.

The Dodd-Frank Wall Street Reform Act has generated more work for lawyers and lobbyists since being signed into law than during even the frenzied days leading up to its passage in the House and Senate last summer.

That's because a host of federal regulatory agencies are now in the process of trying to write the rules that will turn the law into reality.

Work has begun on drafting 243 rules and on 67 separate studies by the likes of the Treasury Department, the Securities and Exchange Commission, the Commerce Department, the Commodities Futures Trading Commission and other regulatory agencies, according to one estimate by the law firm Davis Polk & Wardwell.

"In a way, during the run-up to the legislation, while it was very active, there was a limit to how much people could really influence the statute," said Covington & Burling's Mark E. Plotkin. "The implementation phase is really industry's opportunity to influence what the final product looks like."

The gravy train appears to be engineered by those law firms with big D.C. offices and ex-government lawyers who know somebody who knows somebody who knows somebody who will "take a meeting."

Some of the attorneys making the most frequent appearances come from the District offices of Alston & Bird; Gibson, Dunn & Crutcher; Patton Boggs; and Skadden, Arps, Slate, Meagher & Flom. Winston & Strawn's Peter Y. Malyshev, who has attended dozens of commission meetings, said the "unprecedented" scope of the rules that must be drafted over the next year has prompted the CFTC to "reach out very actively to both the business community and the legal community to explain the rules' likely impact and what the unintended consequences might be."

Delta Strategy Group's Scott Parsons was one lobbyist who met frequently with CFTC staff. Parsons says Delta's specialty in commodities and derivatives gives the firm a leg up in helping clients through the implementation of Dodd-Frank.

"We were doing derivatives before derivatives were cool," Parsons added.

Imagine a land where "derivatives are cool." Then, imagine that land layered with lobbyists and lawyers. Now, imagine an ICBM carrying a B83 thermonuclear warhead plowing straight into that land.

Yeah, I know. As the Chevy Hemi would cry: "Sweet!"

Well, dream on, dear banker, because reality bites, and in the real world of D.C., the fun has only just begun.

Both lobbyists and lawyers say Dodd-Frank work is unlikely to dry up anytime soon. Plotkin reports he recently requested three additional associates to keep up with client demand. Most attorneys estimate the rules will be hammered out over a period that will span not months but years.

Years of billable hours and fat retainers. So it was in the beginning. So it shall always be.

ZANG!