Have you considered offering your services through a group legal insurance plan?

The Herald-Leader published an article discussing group legal insurance.  Some lawyers are building their practice by signing up to offer legal services through insurance companies. 

AS THE COST OF LAWYERS SOARS, GROUP AND INDIVIDUAL INSURANCE IS A GROWING TREND 

By Brandon Ortiz HERALD-LEADER STAFF WRITER 

It’s a problem we’ll all probably face at some point. 

Whether it’s to look over a mortgage, deal with a speeding ticket or draft a will, there are times when you need the expert advice of a lawyer. 

Legal plans, commonly called legal insurance, promise to do that at an affordable price. 

They work similar to medical insurance under a preferred provider organization. For a monthly fee, you can consult with the plan’s network of lawyers either for free or at a discounted rate. 

“We give access to a system that most people are simply frozen out of,” said John Gardner, of Pre-Paid Legal Services Inc. 

Common in Europe, group legal plans have been a foreign concept in the United States. But they’ve grown over the last 40 years as unions have negotiated them into contracts and, in more recent years, large companies have searched for affordable benefits to attract workers. 

Growth has also been spurred by the rise of identity theft — some plans cover lawyer fees associated with ID theft, but not actual losses — and news coverage of the Terri Schiavo drama, which generated interest in living wills. 

Some companies also offer legal plans to individuals, though they typically are less comprehensive and more expensive, industry experts say. 

Providers and clients 

Hyatt Legal Plans, which has been in the business 30 years and is owned by MetLife, offers a group legal plan that provides unlimited telephone consultation; document review; will and estate matters; debt collection and civil litigation defense; traffic ticket defense; juvenile criminal defense; and adoption assistance. 

In cases of identity theft, the plan’s lawyers will provide courtroom representation and deal with creditors, said Marcia Messett, Hyatt’s national marketing and sales director. 

“We covered identity theft before it was known as identity theft,” Messett said. “We covered it when it was just known as ‘somebody stole my wallet.’” 

ARAG, another provider of legal plans, offers a similar group legal plan. Steve Champion, a regional sales manager in Louisville, said it is marketed toward midsize and large companies and sells for $12 to $20 a month, depending on the company’s size. 

ARAG’s optional benefit costs the employer nothing and is financed completely through paycheck deductions, Champion said. 

Hyatt’s premium plan averages $16.95 a month per employee, depending on the company’s size, Messett said. The optional benefit is paid through a paycheck deduction, although companies can choose to subsidize all or part of the benefit. 

Like other employer-sponsored legal plans, you cannot use it to sue your boss, Messett said. Employment and business matters are not covered. 

“We would never be as successful as we are if we promoted that,” she said. 

Kentucky employers such as Yum Brands and Papa Johns offer the benefit, Messett said. 

Ashland Inc., which employs about 1,500 Kentuckians and 12,000 people worldwide, has offered the benefit in the United States since 2001, company spokesman Jim Vitak said. 

“People frequently may not know where to turn or the best way to seek an attorney,” Vitak said. “This kind of provides that one-stop avenue to them and can be very efficient and stress-relieving.” 

Limits to representation 

Legal plans, particularly those for individuals, do have their pitfalls. 

Individual plans typically have vast exceptions. Pre-Paid Legal’s, for example, does not cover adoptions and divorces for free. It covers traffic offenses, but not those involving alcohol, drugs, invalid driver’s licenses, improperly licensed vehicles, hit-and-run cases, leaving the scene of an accident and “unmeritorious cases.” 

And while it promises unlimited consultation, it places strict time limits on in-person consultation and courtroom representation. Once those limits are met you’ll have to pay a retainer to keep your lawyer, though the company promises a discount on hourly rates. 

Several legal plans also appear to be loosely regulated. 

Legal insurance, but not legal plans, is regulated by the Kentucky Department of Insurance. 

Those in the industry consider the terms interchangeable. But Kentucky, like many states, says there is a distinction. 

What’s the difference? It’s a little complicated. 

Insurance has an element of economic loss that triggers coverage; premiums are based on the insurer’s expected losses, said Tracy Bertram, director of the agency’s property and casualty division. Legal plans are more like subscription services that provide access to an attorney, he said. 

“We’d almost have to look at the contract to see which one it is,” Bertram said. 

Consumers who have problems can file a complaint with the state attorney general, but the office does not regulate the plans, a spokeswoman said. 

Nor does the Kentucky Bar Association. The bar association would become involved only if a legal plan tries to interfere or control the lawyer’s advice, Executive Director Bruce Davis said. 

Pre-Paid Legal’s plan, which sells for $26 a month, has come under fire by critics who accuse it of misrepresenting its benefits. In 2005, the company weathered a $9.9 million jury verdict for allegedly defrauding a Mississippi customer. 

Pre-Paid’s Gardner said his company is no different from other publicly traded companies “that occasionally get sued.” The company cannot control what independent agents say, Gardner said. He advises customers to read the fine print. 

“You think you can control what a thousand salespeople say?” Gardner said. “Some people oversell every product in the world. That is why we have the written materials. So you can see exactly what is covered and what is not covered.” 

When it comes to the identity theft services, be sure to read the fine print. 

The Identity Theft Resource Center says you should be aware of exactly what the plan’s cover. 

“Some of them are good, some are less than good,” Executive Director Jay Foley said. 

They frequently do not cover lost wages, a big issue since identity theft victims must spend time talking to lawyers and creditors during business hours, Foley said. Some services do not cover copy and notarization fees. 

If a local notary charges $15 per document and you need to send documents to six credit agencies, “that starts to get a little steep pretty quickly,” Foley said. 

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Reach Brandon Ortiz at (859) 231-1443, 1-800-950-6397, Ext. 1443, or bortiz@herald-leader.com. 

 

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