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Gray Cary Ware & Freidenrich staged its second round of layoffs Thursday, cutting 22 associates and 33 staff while also announcing plans to pay half its incoming first-year associates to stay away. The cuts represent 8 percent of the firm’s 277 associates and 6 percent of the firm’s 544-member staff, said Lynn Kirk, a firm spokeswoman. The cuts are concentrated in the corporate and licensing groups in the firm’s San Francisco and Palo Alto offices. J. Terence O’Malley, Gray Cary’s chairman, said that corporate and licensing work has continued to slide this year, forcing the firm to cut deeper than its January layoff. The firm laid off 46 associates and 68 staff on Jan. 3. “This reduction in force is designed to right size those groups,” O’Malley said. “We believe we have struck the right balance between the size of the work force and the current work levels.” With only four months to go in the year, Gray Cary anticipates a slide in revenues and profits for 2002, O’Malley said. Corporate work is down by 10 percent from last year’s already depressed levels, he added. In 2001, the firm generated $225 million in revenue and logged $515,000 in profits-per-partner. Also on Thursday, Gray Cary delayed the start date by one month for 18 of its incoming first-years. They will begin work in January instead of December. The other half of the class can accept one of three options, including a buyout offer. Associates who accept a public service job can opt for a monthly stipend of $3,000 while individuals who pursue other interests or remain unemployed are eligible for a $2,000 monthly stipend. Those offers are good through January 2004, at which time they can join Gray Cary with that year’s incoming class. Would-be associates can also turn down the stipends and the open offer to start work in 2004, and the firm will fork over $25,000 in return. Gray Cary is the second firm to adopt such measures regarding incoming first-years. Brobeck, Phleger & Harrison made a similar move last week, offering identical stipends. Hired at the end of last summer, the first-years have little or no work waiting for them at many tech firms. O’Malley said the firm is still extending offers as usual to candidates from its summer class. The firm plans to make offers in the next two weeks for associates to start work in the fall of 2003. Like many of the tech firms, Gray Cary shrank its summer class from prior years, playing host to 46 summer associates, down from 60 the prior year.

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