What is Legal Insurance?

By American Bar

Group and Prepaid Legal Services plans provide an efficient mechanism for matching clients in need of services with lawyers. Group Legal Plans create panels of lawyers with expertise in various areas and match them with plan members/clients. The model is similar to a PPO in the health insurance industry. Clients find a lawyer with the appropriate skills on the panel and within the limits of the plan receive the legal services they need. The benefit for lawyers is that the bills are paid!

In addition, when a lawyer establishes a relationship with a client, that client may return for services not covered under the plan, for which the lawyer may charge his or her regular rates. Many lawyers have created a thriving practice solely based on their participation with group legal services plans. Others have supplemented with just a few cases. Either way, group and prepaid legal services are a great way to grow your practice without marketing expenses or accounts receivable!

What are prepaid legal services?

Imagine only paying $10 -$15 per month for your own personal lawyer – too good to be true? That is what prepaid legal services offers you! Think of it like you would a health insurance plan, but you receive legal services. With one phone call, your lawyer can draft a will for you, look over a purchase contract on a home, represent your teenager in traffic court, negotiate a "life contract" for nursing home care, and even get you a divorce!

The basic service provided under most plans in generally legal advice and consultation by telephone and may also include brief office consultations, review of simple legal documents, preparation of a simple will, and short letters written or phone calls made by a lawyer to an adverse party. Other plans offer more comprehensive coverage for trials, marital problems, bankruptcy, real estate matters and the like.

Most legal service plans in operation today rely on a panel of lawyers in private practice to provide covered services. This panel may consist of one lawyer or firm which services a small group under a direct contract or a nationwide network of law firms all of whom have signed a participation agreement with the plan administrator.

In addition, ask your employer, union, credit union or other organization whether a plan is available to you. You may already be a member of a legal service plan.