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In its latest move to cut costs, San Francisco-based Brobeck, Phleger & Harrison confirmed Monday it will freeze associate salaries in 2002. Associates will not advance to their next lock-step salary level, leaving first-year and second-year associates earning the same base pay of $135,000 a year. The firm said it was already paying an above-market rate for most associates but would review its decision if other firms raised salaries. Brobeck firmwide Managing Partner Richard Parker said the firm wants to bring Brobeck salaries back in line with the current market rate. “We misjudged the market last year,” Parker said, citing Brobeck’s $10,000 boost in first-year salary to $135,000. “We find ourselves in the unusual situation that we’ve been well above market.” Gray Cary Ware & Freidenrich, Pillsbury Winthrop and Perkins Coie’s Bay Area office were the only firms to match Brobeck’s salary hike in 2001. Most others remained at a $125,000 base salary for first-years. Now, Brobeck is waiting to see what other firms do until it makes any salary adjustments this year. If competitors do boost salary, Brobeck is “committed to being at the high end of the market” and will make salary adjustments accordingly, Parker said. In fact, he expects there to be increases in first-year salaries at other firms. “We’re expecting the market will see there needs to be some adjustment up,” he said. “As soon as we see that we will know what increase needs to be given.” If other firms don’t go above Brobeck’s current levels, he said the lack of disparity between first- and second-year incomes “will be an issue we need to talk about.” This isn’t the first step Brobeck has taken to trim expenses. Last month, 82 business and technology associates agreed to take a buyout. And the firm has been more aggressive in performance-related terminations. Brobeck is the third firm to make an announcement about associate salaries. In August, Gray Cary said it was freezing associates at their current salary for six months, so they won’t advance to their next lock-step until at least July. And last month Menlo Park, Calif.-based Venture Law Group reduced first-year salaries to $100,000 from $125,000 and cut base pay for third-years to $115,000 from $150,000. Cooley Godward and Pillsbury said they would be making decisions about associate salaries later this month. At least some Brobeck associates were expecting the salary freeze — news of which was delivered by e-mail Friday. “I think people are actually reasonably relieved,” said one associate, who spoke on condition of anonymity. Partners began discussing the salary freeze a few months ago and “I remember thinking that it’s relatively rare [in big business] that you get automatic raises just for being there.” Parker said he received an e-mail from one associate who asked if associate billing rates would increase or also remain constant. “I don’t know the answer,” Parker said. “We will talk about it in January at management meetings.”

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