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Top Silicon Valley firm Gunderson Dettmer Stough Villeneuve Franklin & Hachigian has scrapped its fixed bonus scheme for associates in response to the rapidly slowing US technology market.The scrapping of the guaranteed £20,000 (£14,220) bonus is being seen as a further sign of the severity of the downturn which is currently effecting Silicon Valley law firms – which last year kicked off a Trans-Atlantic pay war.It was Gundersons which lit the touch-paper on last year’s escalating pay war, which soon spread to London, by setting a new US first year standard of $125,000 (£88,900).The firm is understood to have also implemented a three stage take on of new associates that will spread the arrival of trainees over the course of the year rather than all coming at once.Though the guaranteed bonus has been scrapped, the firm will still pay a merit-based bonus that will reflect individual performance.Gundersons’ new measures are expected to stop the firm from having to lay off staff, although US-based associate on-line bulletin boards are predicting staff job losses. The move by Gundersons comes as a growing number of technology-focused law firms are struggling to cope with the sharp drop in the US venture capital market.In April another West Coast firm Orrick Herrington & Sutcliffe froze its base pay for first year associates rather than following the move of rival firm Brobeck Phleger & Harrison to raise base pay to $135,000 (£92,500).This raise did not stop Brobecks later laying off 16 staff members from its Concorde Technology Centre base in California in the same month.The Brobecks cuts came only weeks after New York firm Dewey Ballantine took the unusual step of publicly announcing that it was to lay off 12 associates due to over-manning.

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