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San Francisco-based Orrick, Herrington & Sutcliffe’s decision to move support staff to a separate facility in West Virginia may be a cutting edge move to save money. While other Bay Area firms say they have made no plans to split their support staff from their office hubs, some legal consultants see it as a smart decision. “I think [Orrick is] a little ahead of the curve, but it’s a prudent thing to do,” said consultant Peter Zeughauser of Newport Beach-based ClientFocus. “After associate salaries, real estate is the next big overhead. Firms don’t need to put support staff in downtown office space.” Orrick Chairman Ralph Baxter Jr. said the firm would save upward of $1 million dollars annually by moving a portion of its financial and technological support staff to a separate global operations center in Wheeling, W.Va. Orrick announced Monday that the firm planned to open the center in May 2002 with an initial staff of 80 employees. The new facility will house portions of Orrick’s technological and finance operations, which are primarily handled by the firm’s San Francisco and New York offices. Baxter said the center would eventually be expanded to include other positions, such as marketing and travel support and some paralegal work. The actual number of current staff that will lose their jobs if they chose not to move is uncertain. Baxter said that will depend on the number of jobs that are transferred to West Virginia, the number of people that elect to relocate, the extent that people can shift to alternative jobs within the firm and turnover within the next nine months. “We really won’t know who is affected in a direct way until May of next year,” Baxter said. “I’ll bet it’s not very many.” Orrick will provide severance packages for those who don’t opt to relocate and can’t be placed in another position within the firm. Orrick managers met with finance and tech staff on Monday to inform them about the new center. One staffer from the finance sector said people were shocked by the announcement. He and others in the affected departments declined to discuss the situation. But other Bay Area firms were critical of Orrick’s decision. “I think it’s boneheaded,” said a senior partner at a competing firm. Noting that the Yahoo entertainment guide for Wheeling, W. Va., doesn’t list any entertainment or cultural attractions in the city, he questioned whether anyone would move there. “It means Orrick will have to hire and train from scratch a whole new staff” that isn’t of the same high caliber as the work force in New York and San Francisco, the partner said. And by disassociating staff from the professional office, Orrick is “making them feel like second-class citizens.” Morrison & Foerster said it has considered relocating so-called back office operations over the years. “We tend to find the quality of personnel in the Bay Area is expensive but exceedingly good,” said MoFo Chairman Keith Wetmore. “The cost of dislocation outweighs savings associated with the move.” MoFo houses much of its tech and accounting staff in office space four blocks from its headquarters on Market Street. Even that short distance “introduces interesting complications,” Wetmore said. “I can’t imagine what it’s like when you go to West Virginia, so you better be saving a lot of money.” Staff at other firms suggested that the move was a de facto layoff, since they expect few employees will opt to move to Wheeling, which has a population of about 30,000 people. “It’s a very unique way of handling the downturn,” quipped one staff manager. Baxter dismissed the idea that the firm would be laying off staff. Creating the center doesn’t involve elimination of jobs, he said. “It’s a question of only where we will be performing jobs.”

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