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M ention the recent partner exodus that rocked Littler Mendelson, and Gary Mathiason doesn’t flinch. He picks up a magic marker and sketches a graph illustrating the firm’s ups and downs.

For most of the 1990s, demand for Littler’s labor and employment expertise rose as employers grappled with an explosion of workplace laws and litigation. But by 1998, the unthinkable had happened: Times were simply too good for employers and employees to do battle. Demand stagnated, explains Mathiason, drawing a flat line marking Littler’s static growth.

Compounding the problem were booming technology and general practice firms, flush with work and looking to beef up their employment arms. Littler was a prime hunting ground and, with offers of as much as $200,000 a year, partners began to walk.

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