With the Dodd-Frank Act signalling a revolution in global financial regulation, Cleary Gottlieb Steen & Hamilton's Edward Greene explains how his firm's approach has distilled the issues for clients

As counsel to many of the world's largest financial institutions, Cleary Gottlieb Steen & Hamilton has recognised from the start that regulatory reform must be viewed through a global lens. While Dodd-Frank and other US legislative measures are key to the process, they are only a part of the picture.  

The European Union is still addressing some of the issues identified at the 2009 G20 summit. While the G20 is committed to global financial regulatory reform generally, harmonisation ultimately relies on moral suasion and will inevitably be uneven.  

Inconsistent approaches to such key issues as derivatives regulation, the structure of banking activities, compensation and how to address the issue of being 'too big to fail' pose significant challenges for global financial institutions. 

They must track in real time regulatory developments happening rapidly and globally so that they can understand how the changes affect their businesses, decide whether or not to participate in the debate and comment on proposed rule-makings, and plan how to restructure their businesses. 

Educating clients

To assist our global financial institution clients in managing this information overload, several years ago Cleary Gottlieb launched a regulatory reform group. The main objective of forming this group was to communicate to clients what they really need to know about fast-paced regulatory developments.

Rather than summarise every proposed rule, we set out to convey the key messages and issues that clients need to focus on from multiple perspectives: advocacy and strategy, compliance, and planning. 

One of the most valuable resources we created has been a fully customisable database. While many firms are keeping clients updated on US regulatory reforms, Cleary Gottlieb has developed an interactive database that covers regulatory reform in both the US and EU.   

This database allows clients to not only access the latest information about legislative mandates, regulatory actions and rules, and other critical developments. It also allows them to view Cleary Gottlieb's analysis of these developments, as well as calendars highlighting important upcoming dates for regulatory or legislative actions. 

Updated throughout each business day with information from our US and EU offices, it contains more than 5.5 gigabytes of data with more than 500,000 records, covering at least 11,000 relationships between laws, regulators, rules and other relevant information.

Because of the structure by which each piece of information is linked to all related data, the comprehensive database provides its 4,000-plus users with a richer and more sophisticated set of data points than can be produced in a two-dimensional spreadsheet. This provides clients with an easy way to track the evolution of rule making as it progresses from a statutory mandate to a rule proposal and, ultimately, to a final rule.  

The database is housed within a customisable website from which users can receive daily update emails on topics of their choice.  By leveraging this technology, the firm is able to reach directly a broad range of users at clients, including individuals with whom the firm would not have had the opportunity to connect with before.

We made the decision not to market the database widely. We do not set up booths at conferences or offer a menu of pricing alternatives. Instead, we have developed the database as a resource for the clients in our regulatory reform group, and the feedback from clients has been overwhelmingly positive. Its value for clients has been its customisable features and content – the areas where we have chosen to invest in over marketing.

Increased transparency

Another important service that we provide for members of our regulatory reform group is bi-weekly calls. Senior lawyers in our bank, securities, derivatives and executive compensation regulatory practices, among others, discuss new developments, focusing on their implications with respect to doing business on a global basis, and highlighting the developments in the US and the EU, and how they are diverging or converging. 

We prepare electronic summaries of each of these bi-weekly sessions. We also publish on our regulatory reform group website alert memos to addressing important developments and highlighting their implications. 

For the past three years, we have held an annual seminar reviewing what has happened over the past year, as well as hosting periodic seminars with guest speakers to explore in depth some of the current critical developments. 

Our experience with our regulatory reform group has validated the original assumption that motivated its formation – what clients value most is being able to access information that helps them work more efficiently and intelligently. 

Whether it be a customisable database that they can tailor to their needs or a one-hour bi-weekly conference call that distills the implications of recent developments into the handful of points that they really need to know, we have recognised that clients want focused and relevant information.  

Dozens of law firms summarise the rules being published each week. We strive to tell clients what those rules mean for them.

Edward Greene is a partner at Cleary Gottlieb Steen & Hamilton.