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West Virginia ranks among the poorest states in the country. And to a lot of bicoastal lawyers, the very mention of the place evokes thoughts of banjoes, coal mines and country roads. It seems an unlikely place to do business, let alone open any sort of office. But San Francisco’s Orrick, Herrington & Sutcliffe recently decided that the state is almost heaven. Last month, the firm announced it was moving most of its back-office technology and finance operations to Wheeling, a city of 31,000 located in the northern end of West Virginia. The help desk, e-mail administration, accounts payable, billings and collections, and software support are the largest departments that will make the move. A move like this probably would have been difficult a decade ago, before the advent of widespread e-mail and high-speed connectivity. But according to Ralph Baxter, Orrick’s chairman, it now seems a perfect way to save money on office space. “We realized the tech, finance and support elements don’t need to be centered in high-priced real estate,” he says. According to Baxter, commercial real estate in Wheeling costs about $10 per square foot, about one-tenth as much as in San Francisco. Baxter also thinks that creating a center dedicated to back-office functions will reduce the high turnover among Orrick’s rank-and-file intellectual technology staff, a problem that has plagued most Bay Area law firms for several years. “West Virginians will have a higher appetite for these types of jobs than do San Franciscans, who are used to being in high demand,” he says. “We think it will yield a work product that is more consistent, more comprehensive and more reliable than what we’re used to seeing in San Francisco.” Orrick is still inviting all of the 80 or so affected employees to move to Wheeling and keep their jobs. But Baxter expects that most employees will take a severance package. “We don’t expect many to make the move,” he concedes. Widespread layoffs have become fairly routine at airlines and manufacturing companies. But until this year, they were almost nonexistent at law firms. So Orrick likely has as much of a public relations chore ahead of it as did two other Bay Area firms, Cooley Godward and Fenwick & West, when they made big layoffs a few months ago. “Culturally, it sends a dreadful signal,” says a senior partner at another San Francisco law firm. “It really says that no matter how long you’ve worked for us, we don’t care. We make our decisions based only on the bottom line.” But others defend Orrick’s rationale. “People need to wake up and smell the roses,” says Peter Zeughauser of the Newport Beach, Calif.-based legal consultant ClientFirst. “This is the way corporate America works. People get transferred and moved. There’s no reason to expect law firms to act any differently.” In the 1980s, for example, Citibank moved its credit card operations to South Dakota, and it is now one of the largest employers in that state. Many software companies rely on programmers and even technical support staff based in India. While Orrick was primarily attracted to the area’s affordable commercial real estate, Baxter says he was also impressed by the well-educated labor pool. “The colleges and universities in West Virginia are very focused on churning out students that have a fundamental training in technology,” Baxter says. More than 70 percent of the state is wired with fiber-optic cable. “The backbone for communications and e-commerce exists in West Virginia like few other places,” he says. Law firms across the country are paying close attention to Orrick’s move. Bruce McLean, the chairman of Dallas-based Akin, Gump, Strauss, Hauer & Feld, says his firm recently began handling a lot of its accounting and billing work out of a Deloitte & Touche office in Tulsa, Okla. “It’s arrogant to think that people in other parts of the country can’t do the job as well as people on the coasts,” he says, “because it’s just not true.” Baxter, for one, better hope McLean is right.

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