The Tao Of Pre-Paid Legal Services

December 20, 2013

A fellow blogger writes:

I know as a lawyer you don’t give legal advice etc etc, so maybe you’re not comfortable with this question. But what do you think about pre-paid legal services in terms of if its a worthwhile thing to look into.

Before I dig into the meat, let me offer some clarification: I’m not an attorney quite yet (hopefully I’ll be sworn in by the end of January). Non-attorneys (like myself at present) can give “Legal Information,” but not “Legal Advice.” It’s the difference between telling you where to look to find a statute (legal information), versus telling you how a judge is likely to rule on your case (legal advice). Attorneys, on the other hand, can obviously give Legal Advice, but they may be reluctant to do so in a free-wheeling fashion, because they don’t want to accidentally create an attorney-client relationship that can create liability for them down the road.

Here is my take on Pre-Paid Legal Services:

Short version

~~Some~~ Most of them are scams, and with pretty much all of them, you get what you pay for. But it’s better than having no lawyer at all.

Long version

Pre-paid legal services are great in theory, because they are a solution to the time-honored tradition of attorneys being too expensive for people of modest means to afford. And in fact, for some people, it’s not a bad deal. But the devil is in the details. Let’s look at an example: Legal Shield.

With Legal Shield, for a monthly fee, you get access to an attorney who will do the following:

1. Make phone calls and write letters on your behalf.

2. Review legal documents and contracts, up to 10 pages in length.

3. Up to 60 hours of trial and trial prep time, with yearly increases divided like so:

Here we have a good example of how a person might get boned on this particular plan. Namely, the division between “trial prep time” and “trial time” here is a bit strange. I’ve represented clients in administrative hearings, and I’ve helped a number of attorneys prepare for criminal trials. I am presently helping an attorney prepare for a civil trial. In each case, we put far, far more than 2.5, or even 4.5 hours of prep time into the case. Litigation is hard work. It takes diligence, and hours of legal research and writing. It also requires a lot of correspondence with the other party. For each of my administrative hearings, I spent at least 40 hours total on prep work, including legal research, developing a theory of the case, making discovery demands, reading client documents, drafting correspondence to other parties, writing direct and cross examination questions, developing a closing statement, conducting initial and follow-up interviews with the client, interviewing witnesses, and making sure every “i” was dotted, and every “t” was crossed on the file. If someone asked me to do all this in 2.5 hours, I would’ve laughed at them. And this is for a “simple” Unemployment Insurance hearing.

Nonetheless, at $17/month, Legal Shield’s services could definitely help somebody, if only for access to attorney consultations. Suppose that you live in an apartment in New York State with your significant other. Suppose further that you are a victim of domestic violence. One day, after a particularly bad fight with your partner, you decide that you need to leave your apartment. First, you go to the Family Court and get an order of protection. Then, you start packing your things. You call your landlord to tell him what’s going on. He informs you that your name is on the lease, and if you vacate the apartment, he’s coming after you for the unpaid portion of rent under the lease. Distraught, you go to your Legal Shield attorney with a copy of the lease. After perusing the lease and glancing at a statute book, your Legal Shield attorney will be able to tell you that in New York, because you have an order of protection against the abusive partner, and they continue to pose a threat to your safety, you can likely terminate a lease without liability to the landlord for the unpaid portion of rent under the contract. Your Legal Shield attorney can then draft a letter to the landlord citing the law and informing him that the law protects you, which will hopefully deter the landlord from attempting to file a civil suit against you for the unpaid portion of rent under the lease.

So there is potential value to be had in Pre-Paid Legal Services. On the other hand, there are a lot of horror stories about people going through Pre-Paid Legal Services as well. For example, many Pre-Paid Legal Service plans offer a “Simple Will” as part of the membership package. I’m not sure what that means, but I suspect it’s intended to limit the amount of time your attorney has to spend drafting your will. If you have any sort of complexity in your estate plan whatsoever, you should already be looking elsewhere. One shouldn’t expect much for $17/month.

Which brings me to my next issue: Pre-Paid Legal Services are notoriously shady. It is common for them to use Pyramid-scheme sales techniques to market their services. Guess where the savings are coming from that allow them to offer such low membership fees? Here is a complaint from the link above that sums up the potential issues:

As a fully licensed NJ attorney, I seriously looked into this entity before I even thought about participating as an attorney in their network. Thank God I did so. This is like an expensive lawyer referral service. They offer you a “simple will” as a free bonus incentive, but what they don’t tell you is that a simple will is something that you can draft yourself. If your needs are more complicated, then you need an estate planning attorney anyway.
The lawyers give you a free consultation and will write a simple demand letter for you. Anyone who knows anything about “the legal system” knows that a simple demand letter, while sometimes getting results, is simply the “first step” in the process and many times goes right into the trash. But if anything above and beyond a demand letter is needed, you have to pay for the attorney at their “discounted rate”. And since obviously not all attorneys participate in this program, you must be willing to use a participating lawyer in order to even avail yourself of the discount in the first place.
Even more troubling is the MLM structure of the entire business model. They don’t tell you that 95% of the “sales representatives” make less than $200 a year in commissions, and they skew all of their financial and membership numbers drastically to make it appear to prospective sales reps and clients as if this is a legit money making opportunity and a profitable company.
But what really pisses me off is to hear complaints like some of those on this board. Genuine people with genuine legal problems who respond to blogs, classified ads, etc. seeking REAL attorneys and needing real legal advice. Next thing they know, they are getting a call from a Prepaid Legal sales rep. Now you have someone who might not even have a high school education, much less a genuine legal background, giving you advice and trying, in you hour of need, to sign you up to this useless service. They lie to you, insisting that the program can really help you, no matter what your situation, just to get you signed up. How reprehensible and shady is that? Be Careful People. It’s a SCAM. 100%

So in the end, it all comes down to having reasonable expectations about the service you are paying for. If you are looking for a moderate amount of legal protection from common legal matters, a Pre-Paid Legal Services agreement can probably help you with that. If you are trying to draft important legal documents, or have a legal issue that will require trial preparation and court appearances, Pre-Paid Legal Services may not be terribly helpful.

2:26am | URL: https://tmblr.co/ZMMjnx11kElMg

(Notes: 21)