Legal protection in the bank: here's how you can cover your legal costs - before an emergency - B.E. Consumer Notebook, part 1

Black Enterprise, July, 1997 by Sandra R. Bell

In August 1996, when Michael and Marchilene Harlee went to a relative's funeral in Philadelphia, they didn't anticipate needing a lawyer. That was before the car they were being chauffeured in was broad-sided, leaving them both injured. Following the advice of a medical representative, the Harlees sought legal advice from a lawyer in their home state of Maryland. They found out that lawyers generally only practice m one or two states, so the Maryland lawyer referred them to one in Philadelphia. After weeks of commuting to Philadelphia and waiting for an answer, they found out the lawyer had settled with the driver's insurance company and collected his legal fees, which equaled 40% of their payment and amounted to several thousand dollars.

Months later, as they were discussing how the legal odds seemed stacked against them, friend introduced them to Pre-Paid Legal Services Inc. of Ada, Oklahoma. "If we had Pre-Paid Legal at the time of the accident, our expenses would have been a lot different," says Michael.

Pre-Paid Legal Services Inc., according to its founder, Harland Stonecipher, was created to provide access to lawyers for middle-income people. Pre-Paid is one of two dozen national companies offering legal services plans.

The basic concept is that the cost of legal problems is spread over a group, similar to the premise of health insurance. And like health insurance, the goal of pre-paid legal service plans is to get people into the habit of calling a lawyer before there's a crisis. They also give you reduced rates of up to 50% off the lawyer's normal fees if it's a matter not covered by your group.

A legal service plan provides access to licensed attorneys at special rates or on a pre-paid basis. Benefits may include a pre-selected, pre-qualified law firm or legal provider, representation in selected court matters, and reduced fees for other legal services. Plans vary on the type of initial assistance offered: you may reach a trained representative or be referred to a lawyer with an area or expertise.

Michael Harlee, 47, and his wife bought a family plan from Pre-Paid legal for $25 a month. It provides coverage for them and their children up to age 23. The plan gives them unlimited phone consultations, correspondence to be reviewed and sent by an attorney, review of contracts and documents like home closings and automobile leasing and a free will. In addition, the Harlees have access to lawyers in Maryland as well as 42 other states. Additional charges may be added for legal services not specified in the contract.

Pre-Paid Legal sells to individual families and gives them the clout and leverage of being in a group. However, most legal services plans are group plans, according to the National Resource Center for Consumers of Legal Services. In fact, the center estimates that there may be as many as 98 million Americans who are eligible for some kind of legal service plan.

The center's director, William Bolger, says many people are unaware that they have this coverage. Nearly all AFL-CIO unions such as the United Auto Workers, American Federation of Teachers and the United Mine Workers are covered. Other organizations such as the NEA and AARP operate their own similar plans.

Although it's rare, some companies offer pre-paid legal services to employees as part of their "cafeteria plans," which let you pick and choose among a menu of benefits. If the services are