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Brobeck, Phleger & Harrison fired the first shot in what could become another salary war by raising first-year associate pay to as high as $170,000. But it’s still unclear whether Brobeck’s action will lead to a full-scale battle or merely a salary skirmish. By this afternoon, Gray Cary Ware & Freidenrich had announced it would match Brobeck’s increase across the board. And Seattle’s Perkins Coie, not to be shut out of the tech market, raised its associate salaries for its San Francisco Bay Area offices. But other firms say they’re still mulling salary increases for the coming year. The key question for associates at those firms: Will they match? Brobeck bumped base salaries up by $10,000 firmwide for its associates, bringing first-years to $135,000, fourth-years to $175,000 and seventh-years to $215,000. Associates don’t face a minimum billable requirement for the base, but they do if they want to reach four different bonus levels. First-years billing 1,950 hours will earn a discretionary $5,000 bonus, and associates logging 2,400 hours will pull down a $35,000 bonus. Seventh-years draw an additional $60,000 for billing 2,400. The move comes at a curious time. The Bay Area’s top-grossing firms scored record revenues and profits in 2000, but the economy has cooled and firms are grappling with how it will affect them and their fattened associate ranks. Brobeck chairman Tower Snow Jr. said the firm was undeterred by concerns over the economy when it set the new salaries. “We don’t now what the future brings; what we do know is we had a very successful year, and we have always told our people that everyone will share our success,” Snow said. At Brobeck, which logged $467 million in revenue, partners are poised to pull down an average profit of $1.17 million. Snow said the firm will absorb the increases by cutting attrition, not by raising rates for clients. He estimates each associate departure costs the firm $200,000 in recruiting and training. The move surprised many Silicon Valley players. Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, which touched off the wave of steep associate raises in 2000, won’t consider the issue until later this month. Wilson Sonsini Goodrich & Rosati is still considering associates’ salaries as well and did not immediately match Brobeck. Silicon Valley law firm watchers are uncertain whether every firm will line up behind Brobeck. “This will further divide firms into tiers that are highest paying, the most profitable and have a reputation for drawing individuals who at least in part are motivated by compensation issues,” said Robert Major Jr., a principal at lawyer recruiter Major, Hagen & Africa.
Law Practice Management: Managing People First. On Demand.

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