A question that comes up occasionally in phone calls to my office or during consultations, is "do you take XXX legal plan or legal insurance"? It has come up enough times that I decided that a blog post on the answer seems wise. The short answer is that I don't, but read on to see why.
Pre-paid legal plans are sold to consumers on both an ala carte basis by sales representatives, or more often are provided by an employer as part of a benefits package. These plans are offered by companies such as ARAG, CLC, Hyatt Legal, and others. Most of the time, a consumer or their employer will pay a set monthly fee, of say $20, to the company that is offering the benefit. The legal plan offers the consumer some kind of benefit, such as a free initial consultation, or a percentage off the ultimate legal fee. For instance, CLC offers a free consultation, and then 25% off. Some such as ARAG will offer a set price for a service to a criminal defense lawyer, for instance $300 to handle a DUI case.
Let me explain the problem with such plans:
1) Most criminal defense lawyers already offer free consultations with their clients. If you are paying a legal plan for this benefit, you are not receiving a benefit for your dollars spent.
2) There are not set legal fees at most criminal defense law firms. If a lawyer wants to tell a client they are getting a 25% discount and charge them their normal fee, all they have to do is raise the price, and claim it is being discounted. Legal fees are generally variable and based on things such as: a person's criminal record; the court where the work will be done; the severity and number of charges; and other factors. So there is no published fee schedule to compare a discounted fee against. You may not be getting any discount at all.
3) Most attorneys cannot make a living handling cases at low reimbursement rates that are offered by companies like ARAG. I have heard from other attorneys that they may pay only a few hundred dollars to the attorney handling the case. If I handled DUI cases at $300-400 I would quickly go out of business, and would not be able to fight the prosecutor for months at a time in my cases. An attorney who has an office, staff, insurance, and a private investigator cannot function at such a low rate. Therefore most of the attorneys that are handling these cases are fresh out of law school with little or no experience, and working out of the trunk of their car or their local Starbucks. Many will take these cases because they have to, until they gain experience at the expense of these customers. These lawyers generally do not have supervising senior attorneys assisting them, and don't usually get any formal training. They usually try to settle a case as soon as possible, since they can't afford to be in trial, at these rates. They usually have to handle hundreds of cases at once to make a living, leaving them with little time to truly work on each case.
I once had a client call me to hire for a DUI case out of King County District Court. He had called a legal referral service, which he had been referred to by his employer, the University of Washington. The legal referral service was out of California and he paid them $6000 to handle his case. The California lawyer he hired was not licensed to practice law in Washington, so they hired local counsel to represent him. This attorney is known for his incompetence and likely was paid less than $1000 to handle the case. His incompetent local counsel met him at the Seattle court house, and tried to talk him into pleading guilty at his arraignment. Mind you, this is his very first hearing. He had the presence of mind to fire this attorney immediately, but they fought refunding his money. He went on to hire me for a similar amount, and we ended up with a great result in his case, that did not involve him pleading guilty to a DUI. It took us many months of protracted litigation to get a good result, something the underpaid incompetent lawyer didn't have the stomach for.
Another client was referred by that same referral service to a lawyer who had no office. The client went to meet with the attorney, and the attorney had sent him to the trailer park where his motor home was parked. The attorney was in his bathrobe when the client knocked on the door. This case was for a class A felony sex offense. Something that could result in a client being sent to prison for the rest of their life. Would you trust your life to an attorney like this?
4) Many cases are not covered at all. A large percentage of my practice involves domestic violence cases and sex offenses. Most legal plans will not cover anything other than an initial consultation on these cases, which I always offer for free anyways. These are felony cases, and generally employers don't want persons going through felony trials in their offices. Would you want to go to your employer for help with a Rape of a Child case? If you approach them for employee benefits, do you think they will keep you employed?
I think there are situations when these plans might be of use. These situations are those where you need to meet with an attorney to advise you about the law, in an area of the law that does not offer free consultations. For instance, if you needed to meet with a family lawyer, or estate lawyer to have some questions answered, it might be helpful to have a free consultation. But remember that most attorneys that are participating, would not be getting paid anything for this service, and would be quick to mve on if there was not an ability to sell you other paid legal services.