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San Francisco Bay Area associates are so jittery about getting the ax that any blip in firm routine starts the rumor mill churning. Last Friday, some associates at Menlo Park, Calif.-based Gunderson Dettmer Stough Villeneuve Franklin & Hachigian were alarmed when they got an e-mail notice that direct deposits of their paychecks had been delayed. One associate said the paycheck problem was an ominous sign as attorneys were expecting an announcement of layoffs. “I’ve been here three years, and this has never happened before,” said the associate, speaking on condition of anonymity. “They’re trying to say, ‘Oh, there’s a glitch.’ “ The e-mail said the delay in processing direct deposits was due to a problem with Citibank’s transferring system and that deposits would enter accounts either later that day or the day after Labor Day. In the meantime, the memo said, employees could pick up a pay stub or a check from the firm’s accounting department. Partner Steven Franklin reiterated that concern about the problem was unfounded. “The glitch is a mere glitch.” Franklin said a rumor also was going around that someone had seen a memo about layoffs “with a huge number of names on it.” That, too, is fictional, Franklin said. He said it appears that a secretary actually saw a memo about internal office moves that occur semiannually. The Gunderson Dettmer associate said the rumor was that “there was a list of attorneys who were going to be laid off, but the firm was going to hold off until Wilson made its announcement.” But after Wilson managers said publicly the firm wasn’t planning a layoff, “we’re not sure how much the rumor [about Gunderson Dettmer's layoff plans] is valid,” the associate said. Since Cooley Godward announced Aug. 23 that it was laying off 86 associates and 50 support staff, rumors have cropped up daily about what other firms are planning. Firms have been trying to cut costs to deal with the sharp downturn in the tech sector. Two months ago Gunderson Dettmer, which launched the associate salary wars last year, canceled its guaranteed bonuses for associates. That effectively cut salaries by as much as $20,000. Several firms also have offered incoming associates the opportunity to delay their arrival. Gunderson Dettmer is giving $10,000 to those who decided to come in January rather than September. Franklin said about seven of 17 incoming associates took up the offer. Brobeck, Phleger & Harrison moved back the start date for its 81 first-years by three weeks, to Oct. 22. Brobeck said the move would save the firm $750,000. Morrison & Foerster is bringing in 82 first-year associates at the same time as in past years, Sept. 10 through Oct. 31. But the firm did give an unspecified amount of money to two or three associates who chose to delay their arrival by six months or a year. For people coming into slow practice areas that “expressed interest in doing things constructive to their long-term career we explored ways to delay arrivals,” MoFo Chairman Keith Wetmore said. One of the attorneys elected to do nonprofit work during that period, he said. These moves to cut costs have only fueled the rumor mill, making it clear that associate anxiety isn’t likely to drop any time soon. The Gunderson Dettmer associate expressed a general feeling among the ranks at many firms. “Things are really scary around here,” the attorney said. Editorial assistant Ross Hanig contributed to this story.

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