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Like hiring partners throughout the San Francisco Bay Area, Sarah Shields remembers the moment she learned that Robert Gunderson had sparked the salary wars of 2000. Her firm, Carroll, Burdick & McDonough, had just raised its own first-year salaries from $81,000 to $90,000. “I remember the day that I read the news. I just put my head down on my desk and just went, ‘Ah, no.’ “ The firm’s latest solution — spreading half the projected bonuses over the year’s paychecks — has sparked a mixed reaction among associates. A year ago this month, Carroll Burdick upped its own first-year salaries to $100,000. Still, Shields said the firm saw 20 percent attrition among associates in 2000 and watched the quality of its job applicants drop significantly. But as a midsize firm without the resources of legal behemoths like Brobeck, Phleger & Harrison or Gray Cary Ware & Freidenrich, Shields said her firm tried to find a way to make its salary structure competitive without passing the cost on to clients or taking the cash out of partner profits. The solution was to take half the projected year-end bonus for 2001 and spread it out through this year as part of the associates’ regular paychecks. The firm also boosted its first-year base to $110,000, upped the possible billable bonus amounts, and started an origination bonus program that gives associates 8 percent of the billings in the first 12 months for any new clients they snag. Although the newly tweaked bonus structure doesn’t actually increase associate salaries, it does get the money into its associates’ pockets more quickly to satisfy what Shields and other partners saw as an increasing focus on short-term income. But quicker cash comes at a price. The firm has implemented mid-year reviews on its associates to keep tabs on how they’re keeping up with their target billables. And therein is the part of the plan that leaves some associates squeamish. They’ve learned that more money up front comes with increased expectations for regular performance, said sixth-year associate Richard Hong. “You’re getting a monthly reward; obviously you’re measured more on a monthly basis,” he said. Hong added that although he hasn’t felt the pressure so much himself, the increased monitoring did create a mixed reaction among associates when the firm first announced its bonus plan. He said in the previous once-a-year evaluation system, the work balanced itself out over the year. So if an associate had a slow first eight months, but then business picked up in the tail end, the associate’s performance would balance itself out in the long run. “If we have somebody pegged at 2,000 and it looks like they’re more on a 1,900 track, we may knock it down,” Shields said. “Conversely — and I expect that this may happen in a few circumstances — we have people that we pegged at 1,900 or 2,000 that are just going gangbusters. We’ll peg them higher so their salaries will go up mid-year.” Shields said the restructuring has paid off. The firm hired about a dozen associates in 2000 — and from a pool she said was back up to the caliber that Carroll Burdick had previously grown accustomed to. But even after months of meetings that Shields and other partners went through to come up with the projected bonus structure, several of the associates who joined Carroll Burdick in the last year said the payment plan had little or nothing to do with their joining the firm. “In all honesty, I didn’t even know about the plan when I joined,” said associate Todd Bruno, who started at the firm on Jan. 3. He was previously an associate with Jones, Walker, Waechter, Poitevent, Carr�re & Den�gre in New Orleans. He was looking to join a midsize firm in the Bay Area and said he really liked the practice and people at the firm. He earned his J.D. from the University of Pennsylvania in 1999. Other new associates echoed his reasons for joining. Theresa Mak started in September 2000. “You know, I interviewed with some of the megafirms, but I didn’t get the same feel,” she said. She graduated from the University of California at Berkeley’s Boalt Hall School of Law in 2000. Other recently acquired associates like Terrie Robinson said they came for the firm culture. Robinson earned her J.D. at Harvard University in 1990 and has served as an assistant professor of law at the University of Mississippi School of Law, a visiting assistant professor of law at McGeorge School of Law, University of the Pacific, and as a teaching fellow at Stanford Law School. She works in the firm’s appellate practice. Still, although astronomical salaries may not be as necessary to grab talent this year as they were last year, recruiters say they remain in the front of applicants’ minds. “I think the cooling off of the dot-com mania helped,” said Rodney Eshelman, Carroll Burdick’s managing partner. Michael Brown, a principal at the recruiting firm Major, Hagen & Africa, wishes the firm had told him about the plan since it would have helped him pitch the firm to prospective candidates. “They can’t afford to pay Brobeck salaries, but Carroll Burdick is a prestigious firm and they need to get the talent,” he said adding that “I think people would rather see the money sooner than later.” But as much as Carroll Burdick is competing with the Bay Area’s biggest firms for talent, Shields said Wilson Sonsini and Cooley became the firm’s best friends when they decided not to match Brobeck’s first-year base increase to $135,000 in 2001. “I have to say I’m very happy that only some of the firms went up again,” she said. “Because when I heard about it I thought, ‘Oh, no, not again, I can’t go through this again. I’ve used up all our creativity.’ “

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