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Another firm has cut closer to the bare bones in associate pay and perks. Wilson Sonsini Goodrich & Rosati, based in Palo Alto, Calif., told its nearly 600 associates last week not to expect much by way of year-end bonuses. And to drive home the message, Wilson also told them the firm wasn’t paying out advances on those bonuses — an August tradition at the firm. “The expectation is that the second half of the year will be worse, said Donna Petkanics, Wilson’s managing director of operations. The tech economy dropped further and faster than anyone expected and in response, law firms have been battening down the hatches. Wilson’s announcement is just the latest in a series of moves by law firms to save money and stave off mass layoffs. The prior week, San Francisco-based Brobeck, Phleger & Harrison announced it will let partners and associates keep their benefits if they’ll take unpaid sabbaticals or cut back to working part time. Menlo Park, Calif.-based Venture Law Group did something similar last spring, offering to a handful of its associates a monthly stipend if they want to leave the firm for a year to work for a public interest law firm or nonprofit. VLG also moved some of its associates into lower-paying jobs to work on the firm’s internal databases. And earlier this year, Gunderson Dettmer Stough Villeneuve Franklin & Hachigian — the Menlo Park-based firm that started the associate salary war — withdrew its guaranteed bonuses. In a memo last week, Wilson told associates they would not receive the taste of the year-end bonuses they have come to expect every August. The firm has two bonus plans. One is a merit-based bonus paid at the end of the year to most associates. In the past, it has ranged from $10,000 to $50,000. The other is a quarterly performance bonus that is paid to associates who rack up extraordinarily high billable hours. That bonus remains intact at least through this year, the memo stated. But Petkanics made it clear it will take another look at its compensation system at the end of the year. Petkanics, who issued the memo in response to numerous nervous queries from among the ranks, said the firm evaluates its compensation system annually regardless of the economy. But this year’s review will almost certainly be tougher because of the declining revenue. The firm is also cutting the amount of money it was investing in clients on associates’ behalf. Before the market tanked, a piece of WS Investments, the firm’s chief investment fund, was a powerful carrot in luring hot, young talent. That’s just not so anymore. One senior associate who sank his entire bonus last year into equity investments said now he just wants the cash. “I don’t think anyone cares about that because they realize the cash might be better,” he said. “Anyone with a half a brain could see this coming,” said the senior associate, who spoke on the condition of anonymity. He added that anything, including getting no bonus at all, is better than getting laid off. “It’s saying, ‘Hey, the reality is that the firm’s overall revenues will be lower than last year’s and the result is that bonuses may be lower,’ ” said another associate who spoke on the condition of anonymity. Though most of the Silicon Valley’s major players have tweaked pay or bonuses, not every firm has joined the fray. Palo Alto-based Cooley Godward, for example, has cut costs, like travel expenses and retreats, but hasn’t yet followed any of its competitors by trimming bonuses. “We continue to monitor expenses and control things as best we can,” said Mark Pitchford, Cooley’s chief operating officer. “We have the benefit of reading recently about a lot of alternatives that other firms have taken up and they’re all understandable options,” Pitchford added. “But at this point, we haven’t undertaken them.”

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