By Alexandra Alper
(Reuters) - President Barack Obama may be smarting because his sweeping jobs bill has mostly stalled in Congress, but the Dodd-Frank bill -- much maligned as a job killer -- could boost the kind of work Democrats find hard to tout.
The Dodd-Frank financial reform overhaul last year aimed to curb the excessive Wall Street risk-taking that nearly leveled the financial system. It subjected the $600 trillion global derivatives market to regulation, increased banking oversight and created a new consumer protection bureau, among other measures.
And a debate has raged ever since over the impact of Dodd-Frank, with Republicans asserting the costs and uncertainty created by new regulations keep companies from hiring and force them to cut jobs.
But arguably, the more visible impact is the growth of a cottage industry of lawyers, compliance experts and other consultants, which does not score the kind of political points for Obama that new jobs for unemployed autoworkers would.
It's difficult to quantify exactly how many jobs have been created, but there are signs everywhere the legislation will produce a large number of high-paying jobs as hundreds of rules are rolled out over the next few years.
"Call me cynical, but I think pretty much any time Congress legislates in the area of securities and financial regulations, it tends to benefit lawyers and consultants," said Russell Ryan, a partner at King and Spalding.
The former enforcement officer at the Securities and Exchange Commission says his practice -- defending companies from regulatory action -- has grown in the 15 months since passage.
"It's probably a trend that has got some staying power," he said.
Paul Reymann, chief risk officer at Heit, an IT, security and compliance company for small banks, said it will take countless man hours to come to grips with the thousands of pages of the Dodd-Frank legislation.
"Dodd-Frank is a tsunami of change," said Reymann, a former Treasury Department official.
In June, Heit launched a cloud-based compliance management system to walk small banks through mortgage reforms, liquidity requirements, stress testing and for help finding new revenue streams.
Reymann says about two dozen clients have so far signed on to the compliance system and he expects that to grow in the next year as more regulations are finalized.
Dodd-Frank requires big banks to hand over reams of data for periodic stress tests, change how they pay employees and submit living wills -- blueprints for how they could be dismantled if they become insolvent -- among other requirements.
These complex reforms have the compliance industry gearing up for a jobs bonanza.
For example, a job opening posted by legal recruiter Robert Half Legal screams: "Compliance Mgr. w/Investment & DODD-FRANK exp -to 90K!!."
And attorney recruiter Sadie Madole says there are plenty more where that came from.
Law firm Morrison and Foerster's "FrankNDodd" provides 3,000 users with updates on new rules and cheat sheets on sections of the massive law.
No firm estimates exist for the total cost of complying with Dodd Frank, but Barclays announced in June it had spent $48 million to draft its living will.
Tower Group, a technology research firm, estimated Wall Street banks and asset managers will have spent $3.8 billion between 2011 and 2013 just for technology related to compliance.
Depending on how you spin it, that money is paying the salaries of experts who will help make the financial system safer, or diverting resources that could promote economic growth.
"Some 15 months after Dodd-Frank was enacted, many small businesses are starved for customers and credit; unemployment has soared to more than 9 percent; and for far too many American families, economic security seems further away than ever," House Financial Services Chairman Spencer Bachus wrote earlier this month. His letter to the deficit reduction panel urged that Dodd-Frank be watered down or repealed.
Democrats -- including the bill's co-author, former Senator Christopher Dodd -- have fired back that the law is only 10 percent implemented and could not be responsible for the economic slowdown.
"In fact, it was the uncertainty inherent in a non-transparent and reckless financial system that made Dodd-Frank necessary in the first place," Dodd wrote in an opinion article in the Washington Post.
But even as Dodd or other Democrats defend Dodd-Frank, they won't tout its bright job prospects, says Bill Galston, of the Brookings Institute.
"I don't think a jobs boom for lawyers and accountants is exactly what they had in mind," he added.
(Reporting by Alexandra Alper in Washington)