What is a Pre paid Legal Plan?
Legal plans come in different varieties. A pre paid legal plan is any type of arrangement in which a participant pre pays or an employer pays on behalf of employees for legal services that participants may require in the future. In many respects, a pre paid legal plan is similar to a medical benefit plan: A consumer pays a fixed amount each year or each month in exchange for certain service benefits to be used as and if needed.
A group pre paid legal plan may have a pre paid feature, such as those offered by employers as an enrollment choice and paid by way of a payroll deduction, but may also be similar to a group discount buying service for lawyer services. Group legal plan benefits - usually available without charge to members of an association, union, co-op, or other group - feature free telephone legal counsel plus fee discounts from a participating lawyer for other services.
Almost every pre paid legal plan provides legal advice and consultation by telephone as a basic service, and may also include brief office consultations, review of simple legal documents, creation of a simple will, and short letters written or phone calls made by a lawyer. Other pre paid plans offer more comprehensive coverage for trials, marital problems, bankruptcy, real estate matters and the like. In addition to the member, most plans include or offer coverage for his or her spouse and dependent children.
Why are Pre Paid Legal Plans Needed?
Many people could use legal help but do not seek lawyer services. According to a survey conducted by Leo J. Shapiro & Ass., for the American Bar Association Section of Litigation, 7 of 10 U.S. households (71%) report experiencing some event in a 12-month period that might have led them to hire a lawyer. The study indicated that for the consumer, legal services are among the most difficult services to buy. When it comes to hiring a lawyer, consumers feel uncertain about how to tell a good lawyer from a bad one. So, over half of those who might need a lawyer say they do not plan on hiring one.
A pre paid legal plan lets a member talk to a lawyer whenever the member thinks he or she might have a problem, without fear of the cost. With the proper legal advice most problems can be avoided or quickly resolved. And if further services, such as representation in court, are needed, a legal plan may help a member find the right lawyer, pay all or part of the legal bills or actually provide a lawyer to handle the case at no cost to the member. By putting legal advice as near as the telephone, legal plans enable their members to prevent legal questions from becoming legal problems.
In addition, having a pre paid lawyer readily available gives people peace of mind. legal plans can also save members money in complex legal matters. Even where a plan doesn't pay a lawyer's entire bill, the member usually benefits from discounted rates that plans can negotiate with panel lawyers. Finally, sponsoring a legal plan can benefit businesses since employees with legal problems are more reliable and productive when legal help is available and a plan may help the employer attract and keep quality employees.
To sum up, legal plans:
(1) Provide easy access to a lawyer, especially for preventive services, with no worry about high initial consultation fees;
(2) Make payment of lawyer's fees easier, if not painless, depending on the plan benefits;
(3) Make the cost more certain because of published fee schedules;
(4) Provide customer service so that plan members can have their questions answered about the plan, its coverage, or their relationship with plan lawyers.