Just as many of the state's largest firms are setting their sights on the Washington, D.C., market in anticipation of increased regulation post-election, many midsize firms in Pennsylvania are looking inward at practice areas that could potentially benefit from a regulatory push.
Jack Elliott, president and CEO of Pittsburgh-based Cohen & Grigsby, said that, with the role of government being a topic at the forefront of the election debate, there will "certainly" be increased regulation in the financial area.
And with more regulation comes more work, he said.
"When regulations are passed, our clients ask us to figure out what it means to them," he said, but added that he's unsure exactly which practice areas new regulation will affect.
Stephen J. Harmelin, managing partner of Dilworth Paxson in Philadelphia, said big change is coming.
"It appears as if when the dust clears, there will be five major banks and perhaps as few as two major brokerage firms. That changes the entire financial landscape," said Harmelin.
What that could mean for law firms, Harmelin said, is more work in any practice area "that involves governance and oversight in the financial and corporate world."
"Certainly the tax lawyers will be busy with new initiatives," he said. "And with limitations on compensation and increased taxes, you may see a resurgence of interest in innovative tax shelters."
Harmelin said that, regardless of the outcome of the election, it's more important that new regulations be "wise" than it is that they be "widespread."
"Some of the worst performers in this environment -- and I am thinking particularly of banks, who are significantly regulated -- have suffered the worst losses," he said. "So I think the effort should be made in the areas of disclosure, in accounting and in a more fair allocation of the rewards of our system rather than simply in efforts to root out alleged criminal activity."
Charles J. Ferry, executive committee chairman at Rhoads & Sinon in Harrisburg, Pa., also said he anticipates a flurry of new regulation that will affect the financial institutions his firm represents.
In fact, he said, since the federal government announced the voluntary Capital Purchase Program, a piece of the $700 billion bailout plan that sets aside $250 billion for purchase of preferred shares in banks, it already has.
"We have a tremendous amount of inquiries from financial institution clients as to the pros and cons of that," he said.
David M. Kleppinger, chairman and CEO of McNees Wallace & Nurick in Harrisburg, had a similar take.
"Certainly we do anticipate some higher degree of regulation in securities and financial services," he said.
Kleppinger said he anticipates many of his firm's clients will seek legal counsel and advice on new regulations as they develop but that he doesn't expect regulatory activity to pick up until the second or third quarter of 2009 "at the earliest."
Kleppinger said that, while he doesn't think being located in Harrisburg puts his firm at any distinct advantage because most of the new legislation will be at the federal level, the firm's clients will be "directly impacted" by new regulations.
And it's not only the financial sector that could be affected.
Kleppinger said regulation of energy and the environment could ramp up following the election, noting that both presidential candidates have energy platforms.
And because the two areas overlap so much, he said, increased regulation in either one will likely affect the other.
"I think environmental issues are going to go hand in hand with energy issues," he said. He said his firm is already seeing environmental and energy issues "merging more frequently than ever before," citing coal-fire generation and natural gas mining as energy issues with inherent environmental implications.
Paul Schmidt, co-chairman of Philadelphia-based Zarwin Baum DeVito Kaplan Schaer Toddy's environmental department, said that one possible source of increased regulation could be the U.S. Supreme Court's 2007 ruling that the government can regulate greenhouse gas emissions under the Clean Air Act.
Schmidt called the 2008 presidential election "surprising" because Democratic and Republican positions were "much closer than they've been in the past."
He attributed that to the economic and energy situations the country is facing, as well as to the fact that the Bush administration has not addressed a number of environmental issues.
Whatever the case, he said, increased regulation could lead to increased work for environmental lawyers, but when this will happen and to what degree remains to be seen.
"Depending on how significant the new regulation is, the more there are questions [from clients]," he said. "The newer it is, the more questions there are. The more complicated it is, the more questions there are. It really depends on specifically the type of regulation [to determine whether there will be] more work to sort that out and figure out how to comply."
