Wall Street's New Power Brokers: Lawyers

Story updated to include addtional comments from Cohen.

NEW YORK (TheStreet) -- Wall Street lawyers have never been more in demand, and that demand is on the rise.

Wall Street super lawyers like Rodgin Cohen have advised a litany of banks and financial institutions in the legal doghouse. In Cohen's case that includes the likes of Lehman Brothers, Fannie Mae, Wachovia, Barclays (BCS), JPMorgan Chase (JPM), American International Group (AIG),and Goldman Sachs (GS).

Sullivan & Cromwell's Rodge Cohen.

The business bonanza leaves little personal time for Cohen. Several times a week he catches the 6:30 a.m. shuttle to Washington D.C. from New York, only to arrive back in Manhattan for client meetings until late in the evening.

"Since the fall of 2008 it has been busy, and it hasn't stopped," Cohen says from his offices at the powerhouse law firm of Sullivan & Cromwell in the heart of New York's financial district. Cohen is one of several lawyers on Wall Street that gets to watch himself being portrayed in the HBO movie, "Too Big To Fail."

"It is neither here nor there," Cohen said, laughing off that someone was playing him in a movie. "This is a movie about the financial crisis so the main characters are Bernanke and Geithner and those people who got done what needed to be accomplished."

In the aftermath of the financial crisis, banks and broker/dealers have spent billions on outside legal fixers in an effort to prevent drowning in sea of lawsuits and keep up with myriad of new regulations that are being written. For example, JPMorgan raked up $7.4 billion in litigation fees in 2010, according to regulatory filings, while Bank of America (BAC) paid lawyers $1.4 billion in 2010.

The onslaught shows no signs of abating. Over the past several months banks have announced that they have set billions aside for litigation in 2011, such as Wells Fargo (WFC), which announced at its investor day meeting that it has set aside $1.7 billion for legal expenses.

This year the culprit for banks legal woes is the Dodd Frank Wall Street Reform and Consumer Protection Act, a massive regulatory overhaul that leaves more questions than answers in the minds of bank executives.

Luckily, lawyers may have the answer.

"The Dodd Frank Act has really rewritten the landscape in a number of respects," says Cohen. "It requires much more intensive and comprehensive knowledge of a major new body of law, and it a fair amount of judgment. As these regulations are being written, lawyers are needed to figure out how the law will be interpreted."

It does not stop with Dodd Frank. The combined creation of the Volcker Rule and the Durbin Amendment -- along with mortgage "clawbacks" and the fallout assorted lawsuits from the foreclosure crisis -- lawyers have built a whole new set of specialties.

"I would say there are some lawyers that have some very narrow specialties, especially in swaps or commodities. With some of the new regulations coming out they are in very high demand," says Jones Day partner Henry Klehm III, who specializes in regulatory investigations and represented several banks during the government's investigations of collateralized debt obligations and credit default swaps.

Klehm says that besides his firm, you often see banks banging on the door of big white show law firms Sullivan & Cromwell, Davis Polk, Skadden Arps, Simpson Thatcher & Bartlett, and Debevoise & Plimpton.

Klehm, who lives in Manhattan, also lives the new dual existence of Wall Street lawyers. He visits Washington D.C. at least three times a month to meet with regulators and clients.

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