We frequently see legal issues come up here at Fatwallet. While many issues can be commented on as a matter of public knowledge or experience in a particular area, NOTHING you read here or anywhere on the internet is valid legal advice specifically applicable in your state or to your situation. Sometimes, people post terrible MISSTATEMENTS of the law, which only further confuses people.
THIS FORUM IS NOT A LEGAL FORUM. Though legal issues frequently affect people's finances, this is not the appropriate forum to discuss legal questions. If you are looking for a legal advice discussion forum, go here:
This site has tons of legal FAQ'a. They also have a Bulletin Board divided into particular legal issues where you can post your problem. However, as with this forum, be advised that the responses you may get to your question may also be inaccurate or misstatements of the law, as many people replying are not attorneys and are merely guessing.
However, there is really no substitute to the advice of a qualified licensed attorney in your state when you have a legal problem. To find attorneys in your area, probably the best way to find one is a recommendation from someone who has used a good one. You can also use www.martindale.com , which lists attorneys and also rates them "AV BV CV", etc.....Looking in the phone book is usually less recommended (and calling one from a TV ad probably the least recommended)....
Of course, attorneys charge between $150-350 per hour and many require a large retainer up front. This makes seeing one difficult, especially for small matters or when you have a quick question. One way to speak with an attorney at no charge is to use the phone book to see if they offer free consultations. If you are an AARP member, they have a legal services program that provides free 1/2 hour consultations...
Another way is to see if there are any free/low cost legal clinics or legal assistance centers in your area. You can also call the Bar Association in your County for a referral. This usually has a minimal cost ($25-50) and usually provides a one-half to one hour consultation. However, keep in mind many of these avenues will NOT usually include any services such as making a phone call or writing a letter on your behalf to resolve a problem.
For many issues, a short letter or quick phone call by an attorney is all that is needed to resolve a problem....businesses do not usually take an issue seriously until it reaches their desk via a letter from an attorney. Some people obtain "on-call" legal counsel through a Prepaid Legal Plan.
Prepaid Legal also has many legal forms and documents you can print out for FREE on their website. Prepaid Legal charges $15-35/month depending on the plan (plus a $10 enrollment fee) and provides access to attornies to help you with PERSONAL issues (not business ventures). They do however, have home-based business options.
There are other prepaid plans discussed later in this thread.
I believe many legal problems discussed here on FW could be resolved with quick letter or phone call from an attorney.... with some prepaid legal plans you are entitled to receive such calls and letters (subject to a maximum depending on the plan). You also get a simple will drafted, document review, help with warranties, and other services.
I cannot comment on the quality of the services or the attornies they contract with. In fact, it pretty much depends on the law firm they refer you to whether they will help you under the plans "included" features, or whether they will push for you to pay for additional services outside of what the plan includes. You should always understand that these plans provide only BASIC legal services....Since you can always change firms, this shouldnt be a problem.
One strategy some people take is to signup for one of these programs, use the services for a few months, then cancel after they receive the advice they need. Since there is no contract, this can be a way to obtain an attorney to help you with a problem and only pay about $10-30! These plans usually do not cover pre-exisitng legal issues you may have. But if you have a problem which MAY turn into a legal issue, it is not considered a pre-existing legal issue.
I encourage anyone who has used a prepaid legal plan to comment here, good or bad....many people even have this benefit through their employer....and if you know of other low-cost avenues of obtaining legal advice, please share!
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Excellent thread. Hadn't heard about the Amex option. IMHO well worth considering.
I'd like to see lots of high-priced professional services have this option. For example, accountants, consultants, buyer's brokers/realators, etc. In MANY cases, it doesn't make sense to keep one of these folks on retainer, but a prepaid contract to cover specific, limited problems can be a win/win proposition.
I've used the prepaid legal services ($16 / month)and they work well. With prepaid Legal, you get 1 will prepared for you free of charge (a $500 value) and they will prepare additional ones as well as power of attorney documents for $20 each...
I must admit I had all of these documents prepared and submitted then I quit....
but $9.99 / month sounds like a better deal anyway!
Pre-Paid Legal Services insures against the cost of lawsuits. Too bad it can't buy some of its own insurance. The irony is delicious. Pre-Paid Legal Services, an Ada, Okla. firm that insures individuals against legal expenses, has a peck of legal problems itself. A suit filed against it in March in a U.S. district court in Oklahoma says Pre-Paid lied to its agents about how quickly customers discontinue their policies, among other claims. And at least 21 suits filed by 114 customers in Alabama alone mostly accuse Pre-Paid of deceptive practices.
Then there's Pre-Paid's tie-in to the L-K Marketing Group of Waco, Tex., run by Paul J. Meyer. Pre-Paid hooked up with Meyer in 1998, when it bought The People's Network, a marketer of self-help programs where Meyer was a principal, for $19 million in Pre-Paid shares. L-K claimed two years ago to have recruited 53% of the Pre-Paid agents brought on board in North America in the first six months of 2000. But Meyer has been charged three times by the FTC with using deceptive business practices, the last in 1995. That June he agreed (along with other executives and another company he runs, SMI/USA) to settle the charges by paying a total of $320,000, one of the FTC's largest civil penalties at that time, for overstating to prospective agents the income potential and ease of selling self-improvement products.
Top recruiters listed as such in Pre-Paid's in-house magazine The Connection have legal problems of their own. One is the National Audit Defense Network, a Las Vegas tax adviser sued by both the Federal Trade Commission and the Nevada state attorney general in February for deceptive trade practices (the cases are pending). The network didn't return calls seeking comment. Neither Meyer's run-ins with the FTC nor the Nevada recruiter's legal troubles are disclosed in Pre-Paid's Securities & Exchange Commission filings. Pre-Paid's excuse for its silence, answered by Chief Operating Officer Randall Harp in a written response to a reporter's questions: "There is no SEC requirement that Pre-Paid disclose the past legal history of persons who are not officers and directors of Pre-Paid."
John Coffee, a law professor at Columbia University, disagrees: "If your operations are heavily dependent on an individual or business as a leading recruiter, you need to disclose that material fact in financial filings, especially if there have been repeated commercial fraud sanctions."
Besides the legal headaches, Pre-Paid has had accounting trouble. It restated its 2000 results, slashing earnings by half for the period. The SEC ordered the restatement, forcing Pre-Paid to expense sales agents' commissions immediately, rather than amortize them over future periods.
Harland Stonecipher, founder and chief executive of Pre-Paid, tried to put a good face on the situation. In a letter to shareholders, the dapper 63-year-old said his Big Board-listed company was rocketing ahead. Its North American customer base grew 17% last year, ending at 1.2 million. Even with the restatement, the company earned $27 million last year on $304 million in revenues. Pre-Paid's stock has doubled since March 2001 to $22 a share.
This is a curious business, selling legal insurance--it is more selling than insurance. The customer forks over on average $251 a year for the coverage. Only $83 goes to pay for supplying lawyers to customers. The rest goes to overhead and profits.
As for the selling part, Pre-Paid looks like a knockoff of Amway, the huge door-to-door marketer of household products that has tiers of agents, which collected commissions from the tiers below. As at Amway, so too at Pre-Paid: Many of the customers at the bottom of the food chain have the hope that they will rise up through the chain. A customer who becomes an agent can get commissions for selling policies. Move another step up the chain, recruiting people to become agents, and you earn bonuses as well as commissions on policies they sell. Pre-Paid has 286,000 agents trying to sell policies, and 87% of them have bought the insurance coverage.
But what's the hot sales item here--the legal coverage or the right to sell other people this insurance? Agents, lured with the promise of a 25% sales commission on policies they sell, pay a $65 initiation fee. They are urged to take an optional course in salesmanship, which cost $184 last year. Stonecipher gets a $10 cut of that fee, which amounted to $1.2 million last year. Fees charged to agents came to $36 million of Pre-Paid's revenue in 2001.
A key issue is what agents expect to earn in return for forking over these fees. A company filing shows only 29% of the customers keep their policies going for three years or more. But a suit alleges Pre-Paid told agents the three-year retention rate was more than 70%. Without giving specifics, Pre-Paid's Harp says the suit is meritless, as are the others, and that the company intends to fight the suits vigorously in court.
There could be a reason customers bolt. The suits allege Pre-Paid overstates its legal coverage by telling customers they have unlimited legal access and coverage on a range of matters. In an issue of Connection, David A. Savula, one of Pre-Paid's top recruiters, wrote: "Does our product cover everything? Yes. So if somebody asks does it cover this or does it cover that, we're going to say, ‘Yes.'" Stonecipher made similar assurances during an interview in April 2001 on Fox's The O'Reilly Factor, as well as in his folksy corporate memoir, The Pre-Paid Legal Story.
Not so fast. The plans sharply limit coverage for cases involving bankruptcy, alcohol, drugs, preexisting conditions, divorce, annulment, child custody, class actions, hit-and-run accidents, driving without a license and civil or criminal charges associated with a business and tax evasion. The policy covers 60 hours of trial time for the first year that customers join, but there is a big catch. Pretrial work--the bulk of what litigators do--is limited to just 2.5 hours per year in a basic policy.
Customers supposedly get a 25% discount on attorney fees for excluded items--but there's nothing to stop participating lawyers from hiking their rates. What is free under the policy? Will-writing and contract reviews, among other things.
A teacher-turned-life-insurance-salesman, Stonecipher started what would become Pre-Paid in 1972. He was inspired, his corporate memoir says, after he "came face to face with the high price of justice when a car accident he was involved in found its way into the courts. Even though the accident was not his fault, the staggering costs of legal protection nearly destroyed him financially." Not mentioned is the fact that Stonecipher was the one who first brought suit.
great link...lots of companies, but most offer prepaid legal services only to employers ....as part of their benefits package offered to their employees...
if you can pinpoint which of those plans can be purchased by individuals, that would be great!
Just got an advertisement in my Amex bill for the Legal Services Plan, presented by American Expess
Fine print said that the Legal Services Plan, presented by American Express, is a service of Signature Agency, Inc, part of the GE Financial family of companies.
slappycakes...thanks for the link to them! I pulled up their rates for CA on their website and it shows $11.99/month, whereas the AMEX-affiliated offer is for $9.99 month..is that how much your ad in your AMEX bill states??
oh it was an ad in your AMEX bill? We got a separate solicitation letter from AMEX...
I think the quality of the services you receive under a prepaid legal plan (much like health care) depends ENTIRELY upon the provider...if they contract with a good firm or attorney (or doctor in the case of health care) you will get good service...if they contract with a poor provider, you will get poor service...since you are free to change providers, I wouldnt hesitate to do so if the provider they pick isnt up to snuff..
A couple months ago I went to a Pre Paid Legal meeting. I had received something in the mail a while ago, but had never responded until I saw a flyer posted. Noting that free pizza was involved, I decided to check it out
After the meeting, which was very Amway-ish, I talked to the people about what exactly is covered for that price it sounded like you would get very limited help, if any, outside of the subjects covered in the contract. Based on that response I figured the monthly fee wasn't worth it.
I think if you have a possible legal entanglement its probably a good idea to check out to see if they will cover it, but as general "legal insurance" which is how they tried to sell it, I would pass.
Pre-paid legal is a joke. You get what you pay for. No lawyer worth his salt will work for the pittance these plans pay out. IMHO, more of an MLM scam than anything.
Read the Forbes article from Emre earlier in the thread. That pretty much says it all. These plans are VERY limited in what they cover. They also try to get lawyers to actually sell the plans - do you want your lawyer to be a counselor or an MLM salesperson? I think the basic pitch to lawyers is that it gets the client in the door, then you can sell them on other services at your regular rate. I know a few colleagues (lawyers) who joined up with one of these early in their careers and found it wasn't worthwhile.
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