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LOS ANGELES � Gibson, Dunn & Crutcher is raising first-year salaries to $135,000, a move that will likely drive salaries up across the Los Angeles legal landscape and beyond. A few smaller firms, such as Irell & Manella, boosted first-year salaries to $135,000 earlier this year. But Gibson, Dunn is the first major California-based firm to make the move, and experts expect it will force other large firms to hike salaries that have largely been frozen since the tech boom fizzled. “All firms that consider themselves to be among Gibson, Dunn’s peer group will be forced to follow to $135,” said consultant Richard Gary. “I am convinced of it. There is no way they can afford to stay at $125.” Gibson, Dunn is raising first-year salaries by $10,000 and other classes’ salaries by $5,000 for its non-New York lawyers, according to several sources within the firm. That would lift fourth-year base pay to $170,000 and seventh-year pay to $210,000. Officials at the firm declined to comment publicly. Other Los Angeles firms, which are currently in the process of evaluating associate compensation, acknowledge that they pay close attention to the competition, though no one has said for sure whether they’ll raise the numbers. “We look at many factors, including what’s happening in general in the market,” said John Sherrell, Latham & Watkins’ chairman of the associate committee. “One of the factors you always look at is the market, and if we find our compensation is trailing, we look at it in a lot of detail: where we are and where we want to be.” O’Melveny & Myers is continuing to study the market, said Los Angeles Managing Partner Seth Aronson: “We continue to strive to be competitive in the market.” Though news of Gibson, Dunn’s raise has been appearing on associate Internet message boards for the past week, the firm has made no formal announcements, inside or out of the firm. Apparently associates have been told of raises during their individual evaluations. Gary said the firm could be keeping quiet in hopes of retaining the competitive advantage that a $135,000 starting salary will give Gibson, especially since it’s the time of year when firms evaluate associate compensation, Gary said. Or it’s possible that Gibson is just shying away from the limelight. “Who wants to be the market leader in associate salaries?” Gary said. “Perhaps Gibson doesn’t want to be out there in the forefront.” When Quinn Emanuel Urquhart Oliver & Hedges quickly matched Irell & Manella’s hike earlier this year, trying to keep the news quiet wasn’t an issue, said William Urquhart. With the Internet, he said, everyone finds out about everything pretty quickly anyway. Urquhart said he anticipates that Gibson, Dunn’s recent news might affect the overall market more than his firm’s decision. “I suspect that it will create more of a ripple than it did when we raised ours because our competition is a different group of firms,” he said, pointing out that associates looking at Gibson, Dunn are often looking at other firms such as O’Melveny and Latham. Although some consultants say clients could balk at the Gibson raises, consultant Peter Zeughauser said he doubts clients will care as much as some did during the dot-com era of multiple raises. Since associate salaries have been frozen for several years, Zeughauser questions whether it’s a concern. Avis Caravello, a Bay Area recruiter, said salary increases at the largest firms will widen the pay gap between them and midsize and small firms. For lawyers overall, she said, the news is a harbinger of good economic times. “It’s an indicator that things are starting to pick up,” she said. “This is very good news for associates at [Gibson]. It’s a nice Christmas present.”

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