The down economy is forcing some solo and small-firm lawyers to come up with new and innovative ways to make money. Some are turning to the provision of legal insurance or prepaid legal services.
Prepaid legal services are just what they sound like: Consumers pay a monthly fee in exchange for basic legal services. Often, the insurance is a voluntary benefit provided by employers to employees, with the cost ranging from $70 to $400 per year.
At a half-day Hennepin County Bar Association seminar last month, “Innovating Like Your Firm’s Future Depends on It, And It Does,” Bloomington attorney Shaun Jamison said providing prepaid legal services is a way for lawyers to ensure some income.
“They may not pay you a lot of money, but they will pay you,” he said. “And it comes regularly.”
According to Jamison, typical services covered by prepaid legal plans include:
• a brief consult with a lawyer
• a letter written by a lawyer
• a simple will
• a contract review
• a residential purchase agreement
Other requested services that may be offered at a discount can include:
• bankruptcy filings
• divorce matters
• post-divorce issues
• criminal defense
• complex estate planning
“It’s interesting because from the consumer standpoint, sometimes those discounts aren’t so hot, but from the lawyer’s standpoint they’re steep,” Jamison said.
Major prepaid legal service vendors include Hyatt Legal Plans Inc., Pre-Paid Legal Services Inc. and Arag Insurance Co. Inc. Some lawyers work for more than one plan.
The two biggest advantages for lawyers who provide prepaid legal services are money and marketing.
You are paid as promised, said Jamison, which isn’t necessarily the case with individual clients who may be in dire straits and can’t always pay. Lawyers also don’t have to spend any money to bring those clients in, he added.
Moreover, it’s a low-effort way for attorneys to market themselves.
“It’s a nice marketing thing because the vendor is giving your name out,” said Jamison. “You don’t have to do a lot.”
The primary downside, Jamison acknowledged, is that the pay is relatively low.
In preparation for his presentation last month, Jamison surveyed 16 lawyers who provide prepaid legal services in Minnesota. Some of the respondents indicated that they didn’t feel appreciated for the work they did. Others felt that the clients were too demanding or pursued matters that weren’t worthwhile just because they had paid for the insurance.
If providing prepaid legal services is something an attorney is considering, Jamison advised investigating the quality of the legal provider or insurer. Find out what kind of reputation the company has, how much they pay and how their particular system works, he said.
Jamison compares providing legal insurance to public service work. People with simple questions they ordinarily would be afraid to ask a lawyer because of cost or simple intimidation can get answers this way. That’s what legal insurance taps into, he said – the public’s fear of contacting a lawyer.