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Citing the stalled economy and continued decline in corporate work, Palo Alto, Calif.-based Cooley Godward laid off 27 associates in its business department and 19 paralegals, secretaries and other staff members Thursday. The firm also hinted that it was planning to close its Kirkland, Wash., office. In a firmwide e-mail, Cooley Chairman Stephen Neal said the cuts would affect all offices except the Reston, Va., and Sand Hill Road [Menlo Park, Calif.] offices. “While the firm has reasonably weathered the downturn, it is the ongoing responsibility of the management to ensure that Cooley is well positioned for the future,” Neal wrote. “With no sure way of predicting when the economy will rebound, we are compelled to undertake these efforts to continue to shape and balance the firm so that our capacity meets the demand we can reasonably foresee.” Neal said the firm has had a remarkably strong 2002 but that “activity for certain practice groups has decreased considerably over the last few years.” “We felt we still remained out of balance in our capacity in our corporate department,” Cooley Chief Operating Officer Mark Pitchford said in an interview. Cooley has already laid off several associates this year. In June the firm axed five associates and five staff members in the Kirkland office; in September it cut two associates, three paralegals and a staffer from its San Francisco-based immigration practice. And two weeks ago, the firm laid off at least 10 secretaries and paralegals in one of its Palo Alto offices. Associates said some partners were miffed about that staff layoff because they were not informed beforehand. Two of the dismissed paralegals were asked to return, one associate said. They had shifted to litigation work, and Cooley management did not realize they were still needed. It’s less likely, however, that Cooley lawyers and staff in the 4-year-old Kirkland office will get a reprieve. “In light of the market conditions in the Pacific Northwest, as well as the ongoing consolidation in the legal market in that area, the management committee and the partners in the Kirkland office have agreed to pursue strategic alternatives for that office,” Neal said in his memo. An associate said partners had confirmed that Cooley would indeed be shuttering the outpost, which includes two partners and five associates. Cooley is among several Bay Area firms that set up shop in the Seattle area to take advantage of the high-tech market in the region. While announcing that 27 associates are being cut from the firm, Neal also welcomed the arrival of 44 first-year associates. They joined the firm last week. Associates said they were disappointed by the layoff but were glad the firm was open about its decision. “In some respect the layoff is being greeted with some relief since everyone knew something was brewing,” one associate said. People are relieved “the firm did the stand-up thing again.” Since the economy took a nose dive in 2000, Cooley and other firms in Silicon Valley have been struggling to cope with the decline in work, particularly in the technology sector. Cooley was the first firm to cut associates en masse, laying off 86 associates and 50 support staff in August 2001. Since then, Cooley and other firms have reduced their ranks through performance-based layoffs. In his memo, Neal emphasized that despite the decline in work among some practice groups, the firm has had a strong 2002. He said the litigation department was particularly busy, and the business department had worked on significant transactions. Pitchford declined to say how the firm’s financials would compare with last year’s. In 2001 Cooley posted gross revenue of $354 million, a 3 percent increase from the previous year, and net income of $103 million, a 12 percent drop. “We think we will show remarkably strong performance given the economic hand that those of us in this space have been dealt,” Pitchford said.

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