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Citing mounting pressure from the market and other San Francisco Bay Area firms, Pillsbury Winthrop has raised salaries and rates in its Sacramento, Calif., office. Pillsbury and Orrick, Herrington & Sutcliffe are among the last of the major Bay Area firms to bring their Sacramento offices up to par with their salary and billing structures at other offices. Partners at the firms cite California Central Valley growth, the entrance of national companies like Xerox and Intel into the market, and competition for associates as reasons why Sacramento has gotten more competitive for firms. The trend in raising rates and salaries appears to have been started by Gray Cary Ware & Freidenrich, which opened its Sacramento office in August 1999. From the outset, Gray Cary paid its Sacramento associates according to the same salary scale used in all of its offices. The office now has 15 lawyers. But not all Bay Area firms are raising their rate and salary structure in Sacramento. Littler Mendelson still bills and pays less in Sacramento than in its other offices. Bruce Sarchet, managing partner for Littler’s Sacramento office, said lower salaries have not had an impact on hiring. Sarchet said the four-lawyer office recently hired an additional lawyer, who came to Sacramento at what he called “a significant pay cut.” Prior to its decision to bump salaries in January, Pillsbury’s Sacramento office was the last vestige of the firm’s longstanding system of having lower salary and rate structures at its far-flung outposts. Firmwide managing partner Marina Park said associates in that office were paid roughly 10 percent less than associates in other offices. Several factors influenced the decision to raise Sacramento salaries, Park said, including a new management team — comprised of Park and chairwoman Mary Cranston, who took their posts in 1999 — that wanted to eliminate salary differences based on geography. Also, Park said, “The big salary wars last year forced a lot of decisions.” Park said the need to raise salaries also put the firm under pressure to alter the mix of its clients in Sacramento. As the firm moved toward establishing an office with a greater focus on larger clients that could afford higher billable rates, four partners who helped the firm establish the office 10 years ago took the hint and left the firm. The group was led by John Cooluris, who had been the office’s managing partner before establishing Boyden, Cooluris, Livingston & Saxe last year with three other Pillsbury partners. The four-lawyer group was part of a banking boutique that merged with Pillsbury in 1991 shortly after the firm opened its Sacramento office. Today, Boyden, Cooluris works out of offices downstairs from Pillsbury’s, where it moved in May 2000 after what both sides describe as an amicable separation. The firms continue to swap business. “It was basically a recognition that the direction of our practice and the substance of our practice was not something Pillsbury was interested in long term,” Cary Boyden said. “The relationship is extremely cordial.” The new managing partner for Pillsbury in Sacramento is Benjamin Webster, who came to the office as an associate in 1990, shortly after it was opened by former Pillsbury partner and football star Eddie LeBaron. LeBaron has since retired. Pillsbury clients in Sacramento include Campbell Soup Co., Xerox Corp., Intel Corp., Taco Bell Corp. and El Torito Restaurants Inc. “The economy’s cooling in other places, but not so much here,” Webster said. “People are seeing greener pastures in Sacramento, and in the areas around it.” Iain Mickle, managing partner in Orrick’s Sacramento office, said he pushed his firm to bring Sacramento rate structures up after two other Bay Area firms, Gray Cary and Morrison & Foerster, did so. “That put pressure on us,” said Mickle, who estimated that prior to the bump the 19-year-old office billed out at rates between $5 and $10 per hour less than Orrick’s other offices. “We want to be competitive.” Orrick’s Sacramento clients include ClickAction Inc., iVillage Inc., the state of California, the city of Sacramento, Wells Fargo, Apple Computer Inc. and Oracle Corp. And in early 2000, Morrison & Foerster — which opened its Sacramento office in 1991 but had only two lawyers there until it added another eight in 1999 — brought salaries up to par with its other offices. MoFo’s Sacramento clients include Bank of America and Lennar Corp. Pillsbury, Gray Cary, MoFo, Littler and Orrick are all in the same downtown building, which is located at 400 Capital Mall. The national firm of Arter & Hadden also has an office in Sacramento.

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