The corporate world has truly been turned upside down when the press-friendly dealmakers are edged out of the headlines in favour of more intellectually-minded colleagues in financial services regulation. Aside from the obvious effect of the prolonged credit squeeze, much of that has to do with the more proactive stance by the Financial Services Authority (FSA).

After all, with the FSA's once-lauded light-touch approach coming under increasingly critical scrutiny after the Northern Rock collapse, the regulator can scarcely go a week without making a bold claim regarding plans to crack down on its charges.

One such statement last week saw the FSA announce that it was to increase criminal prosecutions for market abuse – just the latest in a stream of similar claims. Recent months have also seen the FSA begin investigating suspicious trading in HBOS's shares, announce a review of anti-abuse mechanisms at hedge funds and admit its failings in the collapse of Northern Rock. Significantly though, it only launched its first criminal charges for insider trading – against the former general counsel at telecoms company TTP Communications, Christopher McQuoid – at the beginning of the year.

It is an open secret that many financial services lawyers believe the emphasis the FSA is putting on regulation through press releases will prove counter-productive if it cannot provide more tangible results through improved enforcement and successful prosecutions. As one financial services partner tells Legal Week: "There is a lot of fact-finding but they are not getting the dirt. You can only create fear with success, and they do not seem to be able to turf up problems. All they do is make a lot of noise."

On one level all this activity is good news for financial services and regulatory lawyers at the City, who have benefited from a steady but significant increase in FSA-related work for nearly a decade. Given their relative scarcity, there is a fair amount of anecdotal evidence to suggest that respected specialists in the sector could command some of the highest charge-out rates in the City, even before the current turmoil. And work comes in many forms, including advising on complex matters such as formal investigations, disciplinary procedures and corporate support work, as well as common-or-garden stuff like compliance issues and market abuse training.

The biggest mandates of recent months relate to the credit crunch and the collapse of Northern Rock. Firms including Clifford Chance and Freshfields Bruckhaus Deringer both picked up Northern Rock mandates (advising the Bank of England and Northern Rock respectively) – with Freshfields financial services chief Michael Raffan also picking up a high-profile role advising the Bank of England on its open-ended liquidity support programme.

CMS Cameron McKenna's Simon Morris comments: "There is never a dull moment. Anything the FSA does generates work and there are a lot of matters coming from the crunch. We have been busy for 10 years, but in times of a market slump, enforcement work really comes to the fore."

But despite the scepticism regarding this hard-line stance, it seems likely the FSA will have to follow through on some of its rhetoric, considering the mounting political scrutiny of its record. Likewise, regulation through publicity is something of a game of bluff – eventually you will be expected to show you have something to back up your words. Morris adds: "Making a noise is sometimes an end in itself. The FSA does cry wolf a lot but it acts with sufficient frequency to be taken seriously." At least some people think it is getting the balance right.

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