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Wilson Sonsini Goodrich & Rosati’s decision to cut associates raises the question: Which San Francisco Bay Area firm will be the next to announce a layoff? It’s not a distinction that any firm is scrambling to claim. But how long they can avoid it is unclear. Corporate work hasn’t picked up, and the stock markets are in worse shape this year than they were last. Most managers at the Bay Area’s largest firms say there are no plans in the works to follow Wilson Sonsini — though they stop short of saying mass cuts are off the table. Layoffs or no, associates are likely to face a tougher time keeping their jobs. If corporate work continues to lag into next year, firm managers predict that associates will have to work harder and pull ahead of the pack sooner than in prior years. One law firm manager said privately that even first-years will face a shorter grace period and many may not be around long enough to become second-years. Morrison & Foerster Chairman Keith Wetmore said his firm has had to toughen its criteria for determining which lawyers to keep on board in light of the drop in corporate work. “The standards for retention tend to be different when practices are desperately slow as opposed to when they were robust,” Wetmore said. When top performers were stretched during the technology boom it made sense for firms to employ lawyers who could assist, even if they lacked the ability to take a leading role, Wetmore said. That’s not the case anymore. “It’s harder for us to employ a broad range of skill sets,” Wetmore said. “The person not capable of running the deal doesn’t have a place in that tougher environment.” So far, MoFo has escaped a massive layoff, and firm management credits its large litigation practice, a diversified client base and a broader geographic reach. But Wetmore still has to keep close watch on the bottom line. It’s become a hobby for most big firm lawyers. “Everybody has to look at this thing on an ongoing basis,” said Dennis DeBroeck, a senior Fenwick & West partner. “We take a look at how the level of workload looks and we’re currently pretty consistent.” He added that the workload matches capacity “well enough.” “That gives you an ability to convey the message to associates that we’re not considering a layoff,” DeBroeck said. Fenwick & West was the second firm last year to announce a mass layoff, cutting 32 associates in September. The decision came one week after Cooley Godward became the first Bay Area firm to announce layoffs, cutting 86 lawyers. Brobeck laid off 35 associates in May and 54 lawyers in February, this coming after the firm persuaded 82 associates to accept a buyout plan. But, so far, Brobeck, Phleger & Harrison hasn’t yet reached full capacity — though Molly Moriarty Lane, managing partner of the firm’s East Palo Alto, Calif., office, said things continue to improve for the firm. “I can’t say what the future is going to bring,” Lane said. “Our hope and expectation when we did our last round [of layoffs] was that we would have our associates utilized or close to utilization.” Mark Pitchford, Cooley Godward’s chief operating officer, said the firm is not planning to do another massive cut this fall. “We went into this year with eyes wide open about what could be accomplished,” Pitchford said. “We don’t have to take steps for an affirmative reduction a la fall of 2001.”

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