How's this for a sign of the times? A premier Washington law firm has ;et up a bank mutual funds practice.
Arnold & Porter announced last week that it had appointed partner Melanie Fein to head the new practice. In all, 18 lawyers in Washington, Los Angeles, and New York are assigned to the unit, which operates as part of the firm's financial institutions practice group.
Like many law firms, Arnold & Porter has seen an explosion in client requests relating to bank securities activities, particularly in the booming mutual fund business. In fact, Ms. Fein and several other partners and associates have been informally operating as a practice-within-a-practice.
By giving the group a formal structure, the firm plans to "marshal the varied resources needed to serve clients in this area," the firm's chairman, John D. Hawke Jr., said in a bulletin to clients.
Carl Frischling, a law partner with Reid & Priest, New York, said the move underscores that banks have become a major part of the mutual funds practice for many law firms. But it may nave a downside: It almost implies that you're not doing other mutual fund work."
Ms. Fein has been involved in bank securities matters since she joined the firm in 1986. Over the years, she said, there has been a shift in the kind of advice banks need, because the legal framework for securities activities has changed dramatically.
In the late 1980s, the big questions centered on what banks could do under the yoke of the GlassSteagall Act, the Depression-era law that created a wall between commercial banks and the securities business.
But now that the courts and the regulators have chipped away at Glass-Steagall, traditional securities laws are the hot topic. Suddenly, banks are "grappling with issues that they have not had to deal with," Ms. Fein said - for instance, how to register as a broker-dealer, or how to go about reorganizing trust assets as mutual funds.
"In the late 1980s, banks were not in the mutual funds business heavily," Ms. Fein said. "Now it has become a key part of the business of banking."
At the same time, the focus has shifted from "wholesale" securities issues - like Section 20 applications and private placements - to retail issues, such as how to provide investors with disclosures that pass muster with securities regulators.
Ms. Fein described the bank mutual funds practice as "multidisciplinary," drawing from the firm's securities, tax, trust, litigation, and legislati9n sections.
Ms. Fein, a 1979 graduate 'of Georgetown Law School, joined Arnold & Porter after seven years in the general counsel's office of the Federal Reserve Board.
She is the author of two volumes on bank securities law: Securities Activities of Banks and, with Arnold & Porter associate David F. Freeman, Mutual Fund Activities of Banks.
The mutual funds book was adapted last year from a chapter of the securities book. "There was no room in the securities book for everything that was happening in mutual funds," Ms. Fein said.