shlep: the Self-Help Law ExPress

In January 2004, the New York Times published an informative piece on “prepaid legal services” insurance policies, “The H.M.O. Approach to Choosing a Lawyer,” by Susan B. Garland, Jan. 11, 2004).  The article noted: “According to the American Bar Association, half of all consumers who need a lawyer do not seek legal help. The reasons include cost and uncertainty: many people say they do not know how to find a good attorney. This potential demand is fueling the growth of prepaid legal-services plans, also known as legal H.M.O.’s.”  It also reported that “Most legal plans are aimed at consumers with annual household incomes of $50,000 to $150,000.” 

As I stated at the time, in a posting at f/k/a, the NYT article is a very good introduction to the concept of prepaid legal services.  It includes a helpful checklist, with explanations, that consumers should keep in mind, when considering the purchase of such coverage.

Here are the primary issues to consider:

1. check first with your employer to see whether it offers one in its benefits package.
2. Compare the benefits of several plans.
3. Check what is included as covered, paid-in-full benefits. (“Many plans offer unlimited telephone advice, and some provide unlimited face-to-face consultation.”)
4. Understand how the plan imposes additional fees.
5. Look for exclusions. (e.g., “Many plans do not provide coverage for contingency-fee cases, lawsuits against your boss, tax audits or divorces. Many plans also limit coverage for “pre-existing conditions.”)
6. Ask for a list of participating lawyers.
7. Ask how the plans select lawyers for their networks (and how they ensure their competence and diligence).

The 2004 article mentioned that plans are sold directly to consumers or as part of an employee benefits package.  It stated that “The individual market is now dominated by the 1.4-million-member Pre-Paid Legal Services, a publicly traded company . . .”    Earlier this week, the Times put Pre-Paid Legal Services in the spotlight again, in an article dealing with the Federal Trade Commission’s proposed rulemaking on multilevel marketing companies, and the incentives for “short sellers” to support the FTC proposal, which is likely to drive down the price of stocks offered by such marketers. (“Why Short Sellers Want to Crash the Tupperware Party,” Nov. 13, 2006)  As Carolyn Elefant noted at Legal Blog Watch, the article “offers an interesting window into how Pre-Paid Legal services plans are sold.”  The proposed FTC rule may make it more difficult for PPL to recruit marketers, and that might give law firms or bar groups an incentive to come into the market with high-quality, high-value plans in competition with PPL.   Like the first NYT article, this one is worth reading, if you’re considering purchases such legal services coverages — or, thinking about getting into the business.  If done correctly, prepaid legal services plans can indeed fulfill their promise of increasing access to affordable legal services.