The Dodd-Frank financial reform law is an intimidating piece of legislation, if not for the breadth of its reach and ambition, then certainly for its sheer size — all 2,300 pages of it.
But chances are, few in Congress have even bothered to read it — especially when there is a handy summary available, courtesy of the law firm Davis Polk & Wardwell LLC.
In fact, the firm had prepared its document, which has become a must-read for anyone trying to get a handle on the law, just before the bill gained Senate approval and was sent to President Barack Obama for his signature in July.
The 130-page summary soon became the de facto primer for the complex and unwieldy law. It was among the first publications to determine the full scope of the Dodd-Frank bill — outlining the 243 rulemakings and 59 studies that have to be performed by 11 agencies.
“The work required to implement these rules is staggering,” Sen. Richard Shelby of Alabama, the ranking Republican member of the Senate Banking Committee, said at a Feb. 17 hearing. “For lobbyists, lawyers and government bureaucrats, Dodd-Frank is proving to be a gold mine.”
Investment and financial advisory companies are relying heavily on law firms as rules for derivatives and other products are promulgated, forcing them to develop new infrastructure for those practices.
The firm received a boost in the Dodd-Frank advice market when it was featured in an editorial in The Wall Street Journal on July 14. The firm's summary also was distributed at a July 15 Securities Industry and Financial Markets Association conference on regulatory reform.
The document was embraced because it offers plain-English explanations of a complicated and comprehensive bill.
“It's the Dodd-Frank bible,” said Annette Nazareth, the partner who heads Davis Polk's financial institutions group in Washington.
“We really tried to make it readable. Our goal was to establish ourselves as the leader in this area to attract the implementation work from major market participants,” Ms. Nazareth said.
Davis Polk thinks that it has an advantage in the information market because it trains its associates to avoid burdening texts with legalese. In its summaries as well as in client memoranda, footnotes are banished, and long explanations of terms are provided in the margins rather than in the body of a document.
The methodology has attracted a following.
The Dodd-Frank summary and a companion set of slides about regulatory reform had been downloaded from the Davis Polk website nearly 100,000 times as of early December. The first memo in its series about bank rescue legislation, launched in the fall of 2008, had been downloaded more than 17,000 times.
The guidance also is in enormous demand from Davis Polk clients, who include the top six bank holding companies, foreign banks with U.S. operations and SIFMA.
It also has on its client roster smaller banks and financial institutions with which it had no relationship before Dodd-Frank.
“There is a strong need for advice on how to prioritize the [Dodd-Frank] changes and what changes will be the most significant,” said Ms. Nazareth, who served on the Securities and Exchange Commission from 2005 to 2007 after a seven-year stint on the SEC's staff.
Another popular Davis Polk offering is the online Regulatory Tracker. It contains 1,500 rows of sortable information about Dodd-Frank regulations and studies, and links to comment letters.
Users also can sign up for daily e-mails.
“That has been a very useful project management tool for clients,” Ms. Nazareth said.
“What we've tried to do is create very practical tools,” she said. “Half the battle is digesting the changes.”
Davis Polk established itself as a first-mover in the Dodd-Frank analysis competition because it monitored the development of the bill from its early stages.
“We made a conscious effort to follow the legislation closely,” Ms. Nazareth said. “We got out of the gate quickly [with the summary] because we had already developed a deep understanding of what the legislation provided.”
During the debate, however, Ms. Nazareth said, Davis Polk didn't take sides. It offers itself as a nonpartisan resource.
“We're not trying to further a point of view, nor are we interested in lobbying,” Ms. Nazareth said. “The insights we bring to Dodd-Frank are based on the experience each partner adds to the process.”
Capitol Hill Republicans also have depended on the Davis Polk overview to help them wade through Dodd-Frank. In a sign of the competitive nature of the analysis market, however, it is one of many sources.
“My sense is that it's just another resource for them — nothing more, nothing less,” said an aide to a GOP member of the House Financial Services Committee, who asked not to be identified in connection with the panel's research. Indeed, the scope and depth of the financial reform law increase the desire for multiple assessments.
“Dodd-Frank is too big for any one firm to be the oracle,” said a partner at a Washington law firm, who asked not to be identified.
The Washington offices of many other law firms are getting in on the action. Jones Day is producing white papers and client alerts, and hosting events such as its Executive Roundtable Series, that parse the financial reform law.
“Every speaking engagement now involves some part of Dodd-Frank,” said Joan McKown, a Jones Day partner and a former chief counsel in the SEC's Division of Enforcement. “Dodd-Frank has an impact on any company in the [financial services] sector.”
E-mail Mark Schoeff Jr. at [email protected].
