Tools & Resources

Advantages of Prepaid Legal Services

Legal voluntary benefits give employees an affordable means to deal with legal issues.

Identity theft. Debt collection. Will creation. Traffic tickets. Personal property issues. These are just some of the legal issues that regularly challenge American workers. Many people choose to face their legal issues alone because they are uncertain about working with an attorney. Others are simply unable to pay. Many of the people who try to go it alone burn up a significant amount of time and undergo high stress only to achieve mediocre or unsatisfactory results.

Advantages of prepaid legal services

Access to prepaid legal services has been proven to save time and help people avoid unnecessary stress. Prepaid legal services are any type of arrangement in which a participant prepays, or an employer pays on behalf of employees, for legal services that participants may require in the future1. In many respects, a prepaid legal plan is similar to a medical benefit plan: A consumer pays a fixed amount each month or year in exchange for certain services.

A legal plan provides convenience and cost savings.

Having access to prepaid legal services is similar to having an attorney on retainer. When a legal issue arises, there is no need to search for and try to evaluate attorneys. Plan members simply call the provider’s client service center and give a brief description of their issue. The customer service representative may ask a few questions to accurately determine the nature of the issue so that they can connect the member to the appropriate attorney in a location that is convenient to them.

In addition to convenience, prepaid legal services offer cost savings. Example: Tom is in the process of purchasing a new home. Legal consultation on this matter costs an average of $10002. Suppose, however, that Tom is fortunate enough to have legal plan through his company. The $18 monthly fee3 is deducted from his paycheck equaling an annual expenditure of $216 and thus saving Tom $784 on his home purchase. Additionally, he’ll have peace of mind knowing that a professional attorney has looked over every line of his contract to ensure that the deal has been constructed in his best interest and that there will be no later surprises.

Having a legal plan contributes to overall well-being.

According to MetLife’s 9th Annual Study of Employee Benefits Trends, 78% of employers surveyed say employees are less productive at work when they are worried about personal financial problems, and 58% of employers say that financial stress contributes to employee absences. The same study found that 27% of employees admit they took off unplanned time or are distracted at work when dealing with personal financial issues.

The opposite was found among those with access to a legal plan. In a recent qualitative Harris Interactive study, employees with company-provided legal plans were asked about their experiences. You can see participant quotes by downloading the full prepaid legal service study.

Legal plans don’t cost companies anything out of pocket and require minimal time to administer. See what employers like JetBlue, Pepsi-Cola, Frito Lay and Pitney Bowes are saying, or, find out directly for yourself by requesting a proposal for your company.

1 American Prepaid Legal Services Institute, What is a Legal Plan?
2 Based on information provided by Lending Tree, 2010.
3 Based on Hyatt Legal Plans 2012 average monthly rates.