Lawyers: Start Your Billing Clocks

Wall Street Journal Law blog has an interesting post today about the future of hourly billing:

It’s been a busy time for lawyers who specialize in advising clients on how to comply with the welter of regulations that come out of our nation’s capitol. Well, it’s likely to get a whole lot busier.

Early this morning, in the wee hours, Congressional Democrats hammered out a compromise with White House Officials on the final shape of the long-debated financial-overhaul legislation. The bill is expected to be approved by Congress next week and signed into law by the president no later than July 4.

The proposed legislation, quite simply, “deals with every single aspect of our lives,” said Senator Christopher Dodd (pictured), who was reported to be teary-eyed in announcing the compromise.

Many lawyers will also be crying tears of joy; the legislation promises to be a nice stimulus to a still moribund legal business.

By many accounts, the legislation is tougher on the banking industry than many expected. It includes new rules that:

• limit the ability of some banks to trade derivatives;

• create a consumer financial-protection bureau at the Federal Reserve to police banks and financial firms; and

• institute the “Volcker” rule, named after former Fed Reserve Chair Paul Volcker, which prohibits banks from making risky bets with their own funds.

Here are accounts of the compromise from Bloomberg Businesweek; WSJ; and the Washington Post.

Do litigators get anything out of this legislation? You becha.

For starters, the legislation would allow investors to sue credit-rating firms for a “knowing or reckless” failure to conduct a reasonable investigation. That is a higher liability bar than the one proposed in earlier versions of the legislation. A bill approved by the House in December, for example, would have required investors to merely show that a ratings company was “grossly negligent” in issuing a grade, Bloomberg reports.

We’ll flesh out more of the particulars in the days ahead.

Finally, here’s an awesome window into last night’s (and this morning’s) sausage making, courtesy of WaPo:

The cavernous Dirksen 106 conference room remained packed at [2:30 a.m.], but it was a chaotic and cluttered mass of humanity. Lawmakers had stopped trying to conceal their yawns. Aides who had worn down their BlackBerry batteries recharged them for the home stretch. Trash cans spilled over with coffee cups and sandwich wrappers. Empty Fritos bags and plastic Diet Coke bottles littered the room, along with reams of paper — old amendments, new amendments, handwritten amendments, amendments to amendments. “So much for the paperless society,” Barney Frank quipped at one point.