Dodd-Frank and law’s information revolution

Larry Ribstein —  9 September 2011

In Law’s Information Revolution, Kobayashi and I note that:

a Davis, Polk & Wardwell LLP report on Dodd-Frank became a main way to access materials relating to this long and complex law. The firms hope to use these materials to generate business. Law firms might also sell subscriptions to more sophisticated materials or offer them for free only to clients in order to bind the clients to the firm.

Indeed, this has come to pass.  The NYT discusses various businesses which have sprung up in reaction to Dodd-Frank:

Call it Dodd-Frank Inc. A year after Congress passed the broadest financial overhaul since the Great Depression, the law has spawned a host of new businesses to help Wall Street comply — and capitalize — on the hundreds of new regulations.

[Aside:  Who says the current administration is not creating jobs?]

One example:

Some law firms have even become small-scale publishing houses. Davis Polk & Wardwell, for example, is offering a $7,500-a-month subscription to a Web site that tracks the progress of every Dodd-Frank requirement. So far, more than 30 large financial companies have signed up.

As Congress started drafting the legislation in the spring of 2010, Davis Polk & Wardwell began compiling a spreadsheet to keep its lawyers updated on hundreds of regulations. Then, Gabriel D. Rosenberg, a young associate, proposed turning the firm’s database of legal summaries and rule-making deadlines into an interactive site — and spent a weekend building a prototype.

By late July, clients started logging on to the “regulatory tracker” — and have steered more business to the firm as a result, said Randall D. Guynn, the head of Davis Polk’s financial institutions group. “There were a lot of new relationships because people want this,” he said.

While we’re at it, why not privatize Dodd-Frank rule-writing as well?  See my and Kobayashi’s Law as a Byproduct.

Larry Ribstein

Posts

Professor of Law, University of Illinois College of Law