This happened in Ontario, Canada. But it’s happened in lots of other places, too. This is the story of a fight that’s been going on for 40 years.

The fight started in the eighties. That’s when the numbers guys stopped giving advice, and started taking charge.

Some numbers guys were accountants. Others were actuaries. There were data scientists who really knew their stats. But the numbers guys that made the biggest impact of all were the MBAs.

Insurers were one of the first sectors to fall under MBA influence, and there, MBAs rose faster and higher than anywhere else. MBAs got appointed COO and CFO, to chief of this and that.

MBAs talked their way into almost every position in insurance companies, but one role was denied them: Chief Legal Officer.

It was gospel that the CLO had to be a lawyer, but the MBAs didn’t see things that way.

The MBAs wrote their Case Studies, which they shared with each other and published in journals, telling everyone how much better it would be if legal departments were run by MBAs, just like all the other departments.

The MBAs paid heed to what they were telling themselves over and over again. “Why can’t I be CLO?” the more ambitious ones said—first to themselves, then to others—until they got their wish, and the Insurers started making them CLOs, too. Soon all the CLOs in the insurance sector were MBAs, and finally the future looked bright.

Finally MBAs were in total control of Insurers, and that meant only one thing: it was time to cut costs.

MBAs spotted the problem right away: external counsel were making big bucks. The lawyers were making more than the MBAs. But the only sure way to cut legal costs was to get all the insurers on board. And to get everyone on board that called for a sit down.

The MBAs had their sit down on June 12, 1986, at the Library Bar at the Royal York. They kept no notes. They left nothing behind for future Case Studies, or the police.

“How do we rationalize our spend?” an MBA to his buddies over beers. At business school he’d learned how to cut costs, and how to cover it up by turning verbs into nouns.

“We need to implement cost discipline,” said another MBA man, eager to make his cost-cutting bones.

“What if we cut lawyers’ fees ten percent?” a young MBA offered, to laughter and good-natured teasing.

“I’m thinking a quarter, a twenty-five percent cut,” a more senior guy said. There were nods all around.

“Stop thinking small,” the most senior of them said, “cutting a lawyer’s fees by a quarter is nothing. I’m thinking fifty percent, or even better, two-thirds.”

His father was a cabinet minister, and he’d cleared it with his Almighty Daddy. There’d be no pushback from the province.

The MBAs drafted a Memorandum of Understanding, to which everyone agreed, but nobody signed. They finished their beers, and went back to the office where they and their minions got to work.

The next day and by total coincidence, they all sent out the same letter at the same time to all their external counsel, imposing policies and creating procedures, changing how everything was done. Buried deep in the fine print was the worst news of all: a new “value-based procurement model.” From now on, the Insurers said, the lawyers’ rates would be slashed, their pennies pinched, every line item scrutinized with a presumption not only of error, but of dishonesty.

The men with the MBAs all high-fived themselves. MBAs 1, Lawyers 0. Looking good. They went to the best bars downtown and partied until dawn.

Over the following quarter the party continued. The bottom line improved, and MBAs all voted themselves bonuses.

But bonuses were not enough. They had fucked all the lawyers, and that called for a real celebration. Options were required to mark the occasion, and soon options fell like rain all over Bay Street.

If you aren’t clear on what Options are, let me explain. Options are the right to make money for nothing. Money for free. The Insurers gave the MBAs Options. The Options made them all born-again rich kids, except with a bigger silver spoon than before.

But all was not well on Bay Street. Soon there were signs of trouble. Lawyers were threatening to quit.

“No big deal,” the MBAs all told themselves.

They had the lawyers on ice. Any one of them stepped out of line, he’d get financially clipped. The lawyers had to fall in line. After all, what were they going to do? Quit?

The lawyers quit. Not all of them, not right away. But the best of them started to leave within a day of getting the letter. Others took a week to pull the plug. Soon there was a trend, and within a month the defence insurance bar had lost its best counsel.

“But where they gonna go?” the mystified MBAs said, the polish falling off their business speak when they saw their best lawyers starting to leave.

For the lawyers, the answer was simple. They crossed the street and took on Plaintiff’s work.

Of course they switched sides—it was the obvious thing to do. But the MBAs hadn’t seen it coming. To them, lawyers were suppliers. Vendors. The guys who shined their shoes. To the MBAs, it was like being dissed by the guy that asked them if they wanted fries with that.

“They can’t switch sides,” the MBAs said, “they can’t like actually sue us, can they?” That’s what they asked of their remaining lawyers, the guys who would work for small change.

“No conflict,” small change counsel reported back with a .2 docket at $250 an hour, “nothing we can do.”

That’s when the MBAs realized that they’d made a mistake.

Their mistake didn’t show up on the books, not right away, and for a while the numbers guys thought that maybe things would be all okay. Maybe it would work out.

But it did not work out. Not at all. Within two years the Insurers were getting wrecked by a new plaintiffs’ bar they’d created from their former counsel, a bar that included some of the toughest and most aggressive lawyers on the Street.

The losses became public in the last quarter of 1989. The MBAs tried slashing legal fees even more, but that didn’t work, and they started to panic. Their verdict payouts had soared.

But worst of all was that lawyers were still making more than the MBAs, and that was just ridiculous. Something had to be done.

The Insurers had another sit down, an IBC conference at the Sheraton providing cover. There the MBAs met and made plans. They couldn’t fight the lawyers alone, they realized. They needed help. They needed the Province. The Insurers sent a small delegation to Queen’s Park where the politicians sit.

“We’re getting wrecked,” the Insurers said to their guy in Queen’s Park, “we need a favour.”

They weren’t bribing the man in Queen’s Park, nor his party nor the premier. The Insurers had paid for the favour in advance years before, in regular installments called donations. Queen’s Park had to return the favour. They had to play ball.

“It’s time for No Fault Insurance,” Queen’s Park said the next day in the House, telling everyone that the new system would be cheaper and better and besides, it would fuck all the lawyers, and everyone agreed that would be a really good thing. Screwing over lawyers always scores you points with the public.

But the devil is in the details, and Queen’s Park was not looking forward to all the hard work of drafting No Fault legislation.

“Leave that to us,” the Insurers said, and they wrote the new law. The MBAs had fired all the lawyers, so they wrote the new law themselves. They did a really good job.

They came up with something really outside of the box. In the new system, if you weren’t paralyzed or dead—in other words, if you weren’t Catastrophically Injured —then you lost access to judges. Bureaucrats would hear your case.

The new legislation reduced personal injury claims to a bunch of forms that you submitted to tribunals. The forms were long and confusing, with cross-references and schedules. The forms contradicted each other, sent claimants to the wrong place, tied them up until they ran out of time.

They called it a Claims System.

The Claims System was a circular, self-referential maze of death, defeating anyone who lacked a university education and a lot of patience. The Insurers would pay off big, if you ever got to the end, but it was hard to get through the Claims System. Almost no one made it to the end.

The Claims System wiped out much of the old plaintiffs’ bar, like the MBAs intended. Once more, they’d fucked all the lawyers. The natural order of things was restored. More high fives for the MBAs over beers at the Club. More bonuses, too, and of course the street rained once more with Options.

But a new breed of lawyer entered the field. These lawyers were pretty good with numbers. These lawyers looked at the forms and the procedures and laughed at them. They countered with systems and protocols of their own, performed mostly by paralegals and staff and computers. The new plaintiffs’ lawyers greased the wheels of the Claims System, and in no time the Insurers were bleeding money again.

The Insurers ran back to the guys in Queen’s Park for a fix, spending a lot in political capital and even more in not-bribes for a little tweak. That’s what they called it.

The little tweak forced car accident victims to go to rehab if they wanted any money. The MBA guys knew that the car accident victims were lazy liars, telling bullshit stories about neck pain, so making them go to rehab would get rid of them. Their Case Studies proved it.

But injured people don’t read Case Studies, and soon rehab clinics opened all over the province. Insurers’ costs started to rise.

For a little while, it looked like the MBAs would tolerate the rehab costs. But when they found out that the rehab clinics were all owned by lawyers, the MBAs went nuts. It was déjà vu all over again. The lawyers were making too much money. It had to be stopped.

In no time there were new rules that stopped lawyers owning clinics. But the legal profession knew how to play that game. The lawyers filed some paperwork, changed ownership structure, put things in other people’s names, cut official ties. Then they kept right on doing business, and the Insurers kept weeping red ink.

The story continued for another twenty years after that, but the details don’t matter. The MBAs did this, the lawyers did that. The Insurers went to Queen’s Park with new laws they had drafted, giving the politicians nothing resembling bribes in order to pass them. This happened three more times, for six tries in all, and now a seventh is on the way.

The Insurers still have the ear of Queen’s Park, but having fired their best lawyers, they are giant self-reps, rubes for the legal profession to take to the cleaners over and over again.