The Personal Property Securities (PPS) legislation recently passed by parliament looks to be the most momentous changing of the rules in the past four decades but there is doubt whether it will ultimately result in more work for law firms.

In the 18 months before the legislation takes effect, a surge of work for corporate and banking & finance teams is likely as banks and finance companies prepare themselves for the changes that will see 18 pieces of legislation simplified into one. It will cover all types of goods, shares, units, contractual rights, and IP – just about everything except land, fixtures and water rights.

“We see it as potentially as big as the Trade Practices Act when that came in – everybody is going to have to redraw their contracts,” Piper Alderman managing partner Gordon Grieve said. “There’s huge amount of work to be done in the finance industry – we see that as a big thing for next year.”

Gadens senior partner Jon Denovan agrees that the new legislation is a game changer and expects to receive increased work in the near-term but thinks that the streamlining of the process will encourage lenders to conduct future transaction work in-house.

“It is probably the biggest change to the law I’ve seen in my forty years of playing the game,” Denovan said. “But, if you’re going to have that degree of simplification, there’s even the potential for lawyers to lose work out of it because banks will be more comfortable to do this work internally because the process will be so much simpler.”

Before the legislation goes into effect in May 2011, however, there is much legal work that needs to be done in formulating new procedures and creating new documents for financial clients. “I’m hopeful of getting a fair bit of work to do new procedures for lenders and new documents but once they’re done I think lenders will have a simpler rules game like changing from chess to checkers or downgrading from bridge to 500,” Denovan said.

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