According to a 2007 LifeCare Study, more than 36% of employees in the United States suffer from legal or financial problems. This high percentage is leading employers to try alleviating the impact of these problems by using some type of group legal services or referral plan, but many are finding that a properly developed group legal insurance plan needs to be much more than a simple attorney referral service. This issue is examined in more detail below.
Legal Plan Needs Among U.S. Employees Are Increasing Exponentially. (National Resource for the Consumers of Legal Services)
It is well documented that stress is a leading cause of costly unscheduled absenteeism, high turnover, and accidents. Many expert studies conclude that approximately 60 percent of workers’ compensation awards are due to stress. According to Newsweek magazine, many experts find that 60-90 percent of all doctor visits are stress-related. But exactly what causes this stress, and how does that relate to employee legal needs?
Some companies mistakenly consider legal plans to be a lawyer referral service. However, many lawyer referral services are simply groups of private attorneys formed to refer business to themselves, without any of the safeguards present in true group legal plans. Some plans are nothing more than referrals services, which can usually be done with a minimal amount of due diligence.
Group legal plans are available in many forms, ranging from basic to comprehensive, and are usually provided to organizations such as associations, large companies, financial institutions, unions, and trade groups. Usually, the services that can be provided through a legal plan [similar to the benefits or services provided in a dental plan or vision plan] are structured to meet certain needs for the members or employees of these groups.
Legal plans can be offered by insurance companies, agents, brokers, marketing companies, direct marketers, and affinity marketers. Legal plans are marketed to corporations and organizations through a broker/agent services platform. Follow this link to learn more about the functions available in a well designed legal plan.
Legal Service Providers and Plans
Legal Plans are usually grouped by coverage type. These three types are listed below.- Referral & Discount Plan - The most basic type of plan. It is not really a true prepaid plan and its features and coverage is very limited. These plans range in retail cost on an employee paid basis from $4.00 to $6.00 per month.
- Legal Access Plan - Typically provides simple coverage such as unlimited phone consultation, phone calls and letters from attorneys and document review along with discounted hourly rates. These plans range in retail cost from $8.50 to $12.50 per month.
- Comprehensive Plan - Includes all the services of an access plan with additional in office and trial work. Many of these plans are insurance products regulated by state insurance commissions, and can offer "paid in full" or "paid up to a maximum benefit amount" coverage. A comprehensive plan is designed to cover 80-90% of the average person’s legal needs in a given year. These plans range in cost from $13.00 to $19.00 per month, with expanded plans up to $25.00 per month.
Quality of Group Legal Insurance
What makes a certain legal plan a good or inferior choice for a particular organization depends on many factors. Legal plans vary widely in many aspects such as attorney networks, access procedures, plan design, and customer service to name only a few factors. There is no one legal plan that is best for all organizations. Each company, association or organization has a distinct list of requirements that may or may not fit a given legal plan provider's capabilities. This wide variance between legal plan capabilities and organizational requirements sometimes results in unexpected plan failures. If a specific legal plan is forced to fit a particular need it was not designed for, the plan may not deliver the intended results, potentially leading to poor attorney service delivery and sub par customer service. This is a common problem in the group legal plan industry.Ultimately employee/member satisfaction with these plans can plummet, risking the integrity of the entire benefits platform and perhaps even loss of the entire relationship. This situation can occur rapidly and without notice. With the explosive growth and dynamic nature of the legal plan industry, legal plan companies start up and go out of business quickly. Financial instability, loss of customer or product focus and/or poor management can lead to a legal plan provider's quick demise, leaving their platform vendors embarrassed and grasping for answers to provide their clients.
In order to minimize this poor service risk, it is crucial the key legal services and service delivery requirements that address the needs of the majority of all employees be identified. A group legal plan provider selection should be based minimally on such factors as experience, track record, and integrity.
Furthermore, to maximize enrollment and fee-based revenue from these plans, a company should limit its plan choices to a group legal plan company that offers several choices of legal plans to cover the different needs of its employee base. Different employee populations have different legal needs and the ability of a single company to offer several legal plans with a different focus in each along with several different pricing points will most effectively cover the employees’ needs best and minimize any confusion among employees/members during enrollment. Often, confusion between different companies can create the kind of indecision that could result in the employee/member making no use of the plan at all.
Our experience indicates that few group legal plan providers can consistently deliver outstanding legal plan service delivery on a national basis, when considering such factors as customer service, backroom capability and long term commitment and focus on their product in the marketplace.
Please follow this link to see the functions and structure of a "best-of-breed" group legal plan.
