Legal plan now helps prevent problems later

Prepaid care through a health maintenance organization is the best way to control medical costs, many experts say.

And in this increasingly litigious world, some folks are concluding that prepaid attorney’s services are the best way to keep necessary legal costs in line.

“This is a preventative type of plan,” said Kevin Heckman, vice president of Legal Service Plans, Inc.  “You use it to avoid trouble.”

Located in a second-floor office on Ann Street, Legal Service Plans has about 4,000 members across the state who receive free legal advice by telephone, free legal letters and phone calls, a no-cost simple will that can be rewritten every year, free review of documents, and most importantly, reduced fees for attorney representation.

Members call the company’s toll-free telephone number for referral to a local attorney, then make the contact themselves.

The program is available through many credit unions in Connecticut for $85.

“The majority of our credit unions participate in the program,” said Howard Hoemann, president of the Connecticut Credit Union League in Wallingford.  “It’s something that I think provides good legal services for people who may not have an attorney, or don’t know how to find an attorney.”

Legal Service Plans is now trying to enlist employers in the state to offer prepaid legal services as an employee benefit, perhaps as part of a “cafeteria” plan where workers can choose among an assortment of benefits.

“We’re just getting into companies,” Heckman said.  “This is a new focus.”

What is not new, he said, is the tendency for people to avoid lawyers because of the inconvenience, the expense, and the feeling that you have to have a problem in order to pay a visit.

“A lot of people go to the attorney as a last resort because it’s going to cost them money,” said Heckman.  But few stop to think that getting bad advice from friends, neighbors and co-workers might cost even more money, he added.

Legal Service Plans’ program is packaged “so that people have it available to use it in the proper way.”

Around the country, about 18 million people have signed on to prepaid legal plans, according to Alex Schwartz, executive director of the American Prepaid Legal Services Institute, an affiliate of the American Bar Association.  Another 60 million are members of groups that don’t enjoy prepaid service, but have access to lower rates through their plans.

Schwartz said the Meriden-based company is choosing the right time to increase its marketing to companies.

“Plans that are offered through employers are growing,” and often part of collective bargaining agreements, Schwartz said.

Some companies are making them available through employee assistance programs that also offer help for drug and alcohol addiction.

Among the more recognizable companies with legal benefit plans are Kraft Foods Inc., the Prudential Insurance Co. and the domestic automobile manufacturers.

Many plan administrators are small operations with limited geographic scope like Legal Service Plans.  Others, like industry giant Hyatt Legal Services, operate nationally.  

Heckman believes that Legal Service Plans is the largest in the state, and Schwartz agrees that the Meriden company is substantial.

“That’s a pretty good-sized group,” Schwartz said.  The Connecticut Bar Association’s committee on prepaid legal plans dissolved several years ago, and the association had no information on other such programs operating in the state.

Prepaid legal plans got their start in the 1970s when several unions won them as contract benefits for members, according to Schwartz.  They’ve had ups and downs over the years, and are still relatively unknown, Heckman said.

“People look for a medical plan or a dental plan, but the say, ‘Hey, a legal plan.  I’ve never heard of that,’” said Heckman.

The recession also kept prepaid legal plans from becoming better known, since few employers were adding benefits and few individuals had the extra money to spend.

To make it more visible as the economy heals, Legal Service Plans is trying a number of marketing strategies, including direct contact with employers and advertising in trade and commercial journals.  A TV campaign was disappointing for the company.

One selling point for employers, Heckman said, is the peace of mind workers can have in knowing that legal matters can be handled affordably and with a minimum of fuss.

Those workers who remain after the downsizing are valuable, Heckman reminds employers, and its better to have them on the job than out shopping for a lawyer.

“We’re trying to sell them a concept,” Heckman said.  “And I think that its time will come.”

-Jim Zebora, Record Journal Business Editor

Sunday, March 05, 1995

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