President Barack Obama's signing of the most sweeping financial reform in decades was closely watched by banks and financial firms, but perhaps even more so by their lawyers.

Law firms in Baltimore and elsewhere have been ramping up to prepare business clients for a radically altered financial landscape, one that still remains largely unknown despite last week's signing of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

The law is designed to prevent another economic meltdown and will, among other changes, create the new Bureau of Consumer Financial Protection to regulate mortgages, credit cards and student loans.

But the details of the law's 1,000-plus pages will likely emerge slowly, along with regulations implementing the law, and that could take many months longer, local attorneys said. Changes will apply not only to banks, savings and loans and thrifts but insurance companies, private equity firms, hedge funds and mutual funds.

"In most pieces of legislation like this, the real teeth is in the regulations," said Cindy Allner, a principal with Miles & Stockbridge in Baltimore. "The pressure …is to understand the impact on business and the delivery of the financial products."

Law firms locally and elsewhere have been closely monitoring House and Senate debate over the bill and keeping clients informed through blogs and e-mails. Some are holding seminars both in-house and for clients. Others have special task forces of attorneys from various practice areas that meet regularly.

In the spring, Miles & Stockbridge assembled lawyers from across all practice areas, such as bankruptcy and litigation, transactional finance and real estate finance, and corporate governance to analyze reform's effect on clients' businesses.

Ballard Spahr LLP, which has offices in Baltimore, also created a financial reform task force of attorneys from various practice areas. The firm has a legal education session for attorneys and clients set for Wednesday to explain aspects of the law and has been sending e-mail alerts to its clients.

The firm's attorneys will be advising financial-institution clients on compliance with consumer-protection rules, which could include more user-friendly disclosures for consumers who apply for loans.

One of the biggest changes likely will be increased capital requirements for loan originators, who will have to retain an interest in loans that are packaged and resold. Details have yet to be worked out.

Lenders "may have to go out and raise additional money," said Tom Hauser, a partner in Ballard Spahr's Baltimore office and a member of the firm's financial reform task force. "They will have to take greater risk in underlying assets."

Those changes could ultimately increase costs to consumers, Allner said.

"It is fairly certain that the large institutions with more breadth of service will be better able to spread the costs than the smaller institutions," she said. "We expect that will have an impact and create pressure for consolidation among state and local banks."

lorraine.mirabella@baltsun.com