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San Francisco Bay Area corporate lawyers should have been burning the midnight fluorescent for the past couple of days. After all, Aug. 14 was the Big Day for executives at many companies to comply with federal demands that they personally attest to the integrity of their companies’ financials. But for the most part, lawyers were able to get a good night’s sleep — primarily because they’d spent the weeks before in a rush to get clients up to speed. Lawyers discovered the flurry of breakfast briefings, luncheon panels and white papers they threw together to help clients bone up on the new regulations raining down on business paid off. “It came and went with less drama than a lot of us expected,” said David Michaels, a Fenwick & West partner. For one thing, the buzz around the office centered on whether an executive would balk at the requirement and refuse with great public hoopla, Michaels said. That didn’t happen. Lawyers on the sidelines were also anxious to see whether any marquee companies would miss the filing deadline, but that didn’t happen either. “The last two weeks were a mad scramble, but the last couple of days have been quiet,” said Diane Holt Frankle, a Gray Cary Ware & Freidenrich partner. Yet the relative quiet could be considered the proverbial calm before the storm. The SEC’s call for executives to certify financial statements is just the beginning of a slew of new requirements. The Sarbanes-Oxley Act of 2002 also carries certification requirements that all publicly traded companies will have to meet and requires executives to take even greater responsibility for the inner workings of their companies. The major stock markets are also expected to weigh in with their own sets of regulations. “We’re not over the hump,” Frankle said. “It’s just beginning.” While most Bay Area clients have acquiesced so far with the new requirements, some lawyers admit it’s been a struggle. Executives have accepted the new rules “reluctantly,” said Robert Townsend, a Morrison & Foerster partner. To counter the intolerance, Townsend has had to remind some of his clients of the stiffer penalties — longer jail time and bigger fines — they face for failing to comply or for slipping up. And the new corporate governance road map unfolding has some board members taking a hike. That in turn is giving executives new headaches, Townsend said. He’s counseling several clients who are losing board members — especially members of the boards’ audit committees. “No doubt this is a difficult time to be an executive,” Townsend said. “Compensation has declined, and risk has increased.”

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