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Even in Venice, California, with its bizarre assortment of skaters, body builders and semi-nude exhibitionists crowding the famed boardwalk, the building at 340 Main Street is an attention grabber. The three-story edifice, headquarters of the Chiat/Day advertising agency, is wrapped in brick beams and topped by a concrete slab, and its entrance is straddled by a pair of 100- ft.-tall black binoculars. Inside, the building is even more remarkable. Gone are the choice corner offices where agency executives once held forth, the cubicles once occupied by their secretaries, the once ubiquitous rows of filing cabinets. Executive chairs have been replaced by couches, business phones by the portable, flip-top variety. The only spaces left that employees can call their own are the red, green, blue and black high school-style lockers where they stow their personal belongings. Unanchored, workers move about wherever their business takes them. Given the choice of working where they please, nearly half the staff telecommutes either from home or from the road, keeping in touch by pager, cellular phone, fax, computer and modem.

Welcome to the virtual office, a glimpse into the information age, which promises to change the way business does business. Some 3 million employees of U.S. companies already telecommute, performing all or part of their work away from their offices, and their numbers are increasing some 20% every year. The trend is likely to accelerate with the arrival of newer, more user- friendly technology designed specifically for mobile employees -- or ``road warriors,'' as they are called. The impact could be profound, and not necessarily all for the good. For one thing, managers and workers will have to make difficult psychological and social adjustments. For another, restructuring is sure to produce some unexpected costs, both financial and managerial.

The transition at Chiat/Day, which announced plans in January to merge with TBWA International, was abrupt: just six months to transform the workplace from conventional to virtual. Now, employees who choose to go to the office on any given day stop at a ``concierge's desk'' in the lobby to pick up laptop computers and portable phones, which can be programmed with any employee's extension. The workers then head for any one of a dozen or so living room-like settings in a large, red-carpeted open area, plug into nearby modem jacks and get cracking. For the occasional meetings of working groups, several ``strategic business units'' (conference rooms) have been set aside, but they are practically the only enclosed spaces.

Other than personal stationery and files stashed in each employee's private locker, paper has all but vanished. Faxes and memos show up on personal computer screens, and messages are left on voice mail. Documents once stored in filing cabinets are available only electronically on any of several computer terminals conveniently scattered around the premises. Clients can selectively tap into the firm's computer system to view advertising strategies and even critique new concepts.

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