To say that HR4173, the financial reform legislation pending in Congress, is going to have a major effect on the legal and financial services industries is an understatement. ““It’s probably the largest change in the banking laws since the Great Depression,” comments Gregory Lyons, co-chair of Debevoise & Plimpton’s U.S. financial institutions group. “Law firms with financial services practices will see a lot of work out of this bill.” The legislation is likely to create business for other practice areas, too. Since it will require some banks and other financial institutions to sell assets, M&A lawyers are expected to be busy. Litigators’ dockets could also increase as investors challenge credit ratings. While some law firms say they will spin this new work to associates, others are ramping up their senior-level ranks. Last week, for instance, Dechert hired a three-partner financial institutions team from Fried Frank. Since the bill will require hedge funds and private equity firms to register with the SEC and disclose information about their trades and portfolios, in-house hiring is also likely to pick up. “I expect that firms that aren’t registered are going to take a close look at this and may want to bring on a General Counsel or Chief Compliance Officer, if they don’t already have somebody on board,” notes Dimitri Mastrocola, a Partner in MLA’s New York office who specializes in senior-level placements in the financial services industry. The bill will create a number of new agencies to govern financial institutions, credit rating agencies and consumer affairs. Banks will be limited to investing up to 3 percent of their capital in proprietary trading or hedge funds and private equity funds. Derivatives will be regulated and traded on exchanges, which could cause some companies to change their outside counsel, according to Robert McLaughlin: “People who previously sent business to firms familiar with OTC products may start sending that business to firms that understand exchange-traded products, futures and clearing.” McLaughlin, who joined Fried Frank this week from Katten Muchin, is the author of the book "Over-the-Counter Derivative Products: A Guide to Business and Legal Risk Management and Documentation".