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Skjerven Morrill MacPherson has become the third Silicon Valley firm to lay off associates as a result of the collapsing economy. Effective Oct. 15, the firm will cut 11 of its 98 associates. As a severance package, San Jose, Calif.-based Skjerven will pay departing associates through the end of the year. Managing Partner Edward Anderson said the firm had not discussed layoffs until the Sept. 11 terrorist attacks. While not a direct cause of the reductions, he said the tragedy had “affected people’s outlook,” making attorneys as well as clients more cautious. “We’ve seen a considerable slowdown in business conditions in the last month or so,” Anderson said. “We think [a layoff] is the prudent thing to do.” Anderson said that no staff positions would be cut at the present time, but he added that the firm is looking at all its options. Firm managers informed attorneys of the layoffs on Friday in individual meetings. “I think it was unexpected from both the partners’ and associates’ viewpoint,” said one associate, who spoke on condition of anonymity. “Up until a couple of weeks ago there was no indication.” Anderson said he agreed with Cooley Godward and Fenwick & West that “the right thing to do” was to say the layoffs were due to the poor economy rather than poor performance of associates. In August Cooley laid off 86 associates, a 17 percent reduction in its junior ranks, and also cut 50 staff. Last month, Fenwick & West laid off 32 associates and 15 paralegals. “I know a number of firms are doing performance review [reductions] which are much greater in number and percentage” than Skjerven’s cuts, Anderson said. As of the end of August, the 10 highest-grossing Bay Area firms had 261 fewer lawyers than they did at the beginning of the year. Wilson Sonsini Goodrich & Rosati, for example, had 75 fewer attorneys than it did at the end of December and Brobeck, Phleger & Harrison had 63 fewer attorneys. In addition to layoffs and performance-related dismissals, firms have instituted other measures to cuts costs. Orrick, Herrington & Sutcliffe, for example, announced last month that it is moving a portion of its support staff to a separate facility in Wheeling, W.Va., in May 2002. The move will save the firm upward of $1 million annually. And Brobeck announced in July that it would allow partners and associates to take a monthlong sabbatical or work fewer days per week. Like other firms with significant tech-related business, 140-attorney Skjerven, which focuses predominantly on intellectual property, had bulked up its associate ranks. Last year the firm grew 46 percent, and in the first half of 2001 had increased in size by 20 percent. Anderson said the layoffs would be proportional across the firm’s four offices and three practice groups, business, patent prosecution and litigation. Prior to the cuts Skjerven had 65 attorneys in San Jose, 37 in San Francisco, 15 in Newport Beach and 23 in Austin, Texas. “I really do believe the downturn in the economy is affecting everyone’s business,” Anderson said. However, he added, “I don’t want to paint the firm as not doing well. We are doing well.” Skjerven grossed $53 million last year and expects a 20 percent jump in revenues this year, he said.

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