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Associate salary hikes have done little to curb the appetite of San Francisco Bay Area firms for more lawyers. In fact, they’re as hungry as ever. “You’d think that when you increase salaries, that maybe you’d be able to scale back recruiting,” says Molly Lane, chairwoman of the firmwide hiring committee at San Francisco-based Brobeck, Phleger & Harrison. “That hasn’t happened. If anything, we’re stepping up recruiting.” During the first half of 2000, hiring at several San Francisco Bay Area firms — particularly those with large, tech-related practices — has been triple that of the same period a year ago. That’s despite the added expense of salaries, training and management of new associates. Consider: � Brobeck’s associate ranks were at 400 in the summer of 1999. They now stand at 520. And the firm’s summer associate class — a key indicator of the firm’s future hiring — grew from 83 last year to 103 in 2000. � Morrison & Foerster, the Bay Area’s largest firm, ballooned from 682 lawyers last August to 887 as of July 31 — powered primarily by the addition of 114 new associates. � Wilson Sonsini Goodrich & Rosati has seen hiring skyrocket during the last year. The firm added 154 associates from July 31, 1999 to July 31, 2000 — bringing its total number of associates to 520. � For all of 1999, Pillsbury Madison & Sutro added 94 associates at a base salary for first-years of $95,000. Since the beginning of the year the firm has added at least 111 associates at a base salary of $125,000. Of course, hiring has also meant additional expenditures for training. At Pillsbury, for example, partners are spending more of their time mentoring associates. On the one hand, the contact helps keep associates from jumping to a startup or another firm. On the other, it helps associates bring up their billable hours more quickly. “Their cost is quite high, and we want to make sure they’re more valuable more quickly,” said Mary Cranston, Pillsbury’s chairwoman. The pay increases have also meant a rush of resum�s from other parts of the country. Kelly McHaffie, director of attorney recruiting for Wilson Sonsini, said she has seen a greater interest in Bay Area firms from lawyers in New York and Los Angeles. And Avis Caravello, a San Francisco legal recruiter, said she’s noted an influx of resum�s from the Midwest and South. “The Silicon Valley practice is catching on, and people are attracted to it, and now they don’t have to make a sacrifice in terms of the cost of living,” said McHaffie. “It helps level the playing field.” Of course, the hiring spree isn’t universal. Some smaller and mid-sized firms — especially those with more traditional practice areas — have resisted both big pay hikes and enormous surges in the number of associates. Take, for instance, San Francisco’s Gordon & Rees. Michael Lucey, the firm’s San Francisco managing partner, said the firm has made a conscious effort not to boost salaries into the $120,000 range. Gordon & Rees pays first-years a base salary of $90,000. But the firm has also kept minimum billable hours at 1,850 — a far cry from the 2,000 hours that are de rigueur at other firms. Though Gordon & Rees has seen turnover increase somewhat, Lucey contends the firm has not suffered significant consequences. “When this all hit, we braced for what we thought would be huge attrition, but just haven’t had that,” Lucey said. Lucey said the firm has also maintained its efforts to give associates more front-line case work and client contact. He also acknowledges that the firm’s litigation focus allows it to compete for a different set of lawyers than firms with a heavy transactional practice. “The litigation appeals to a certain segment of the law school population,” Lucey said. “Some people are willing to trade that experience for higher salaries.” Firms that have found themselves in the center of the salary wars, however, have not had the same luxury. Not only have they worked to add new associates, they also have attempted to keep mid-level associates from jumping to stock option-rich, in-house positions. They’ve been helped on that score this year by the instability of the stock market. Wilson’s McHaffie said that she’s watched attrition at her firm decline in the second quarter of 2000 — and she cites the recent volatility of the Nasdaq and the increasing rate of dot-com mergers and failures. Caravello, too, has noticed the trend. “[The firms'] stability is being seen as an attractive feature,” she said. “And it is offsetting, to a certain degree, the in-house opportunities at the dot-coms.” With associates keeping an eye on their year-end bonuses, Caravello said she sees lateral movement settling down. Still, she says, it’s an associate’s market. “Things are cooling off right now; firms are allowing the dust to settle,” said Caravello. “Still, if I had 60 mid-level corporate associates right now, I could place them in a heartbeat.”

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