Legal insurance lets the rest of us have access to a lawyer - to review a contract, fight a ticket or make a will - for a monthly fee.
By DONG-PHUONG NGUYEN
Published September 23, 2003
TAMPA - It was 10 a.m. and in four hours Jim Chen was leaving with his family for a vacation. The alarm system at his New Tampa house wasn't working, so Chen called his security company. He was told no one could come until the next week - well into his vacation.
Chen was unhappy, but he didn't get mad. He called his lawyer.
Chen's attorney made a quick telephone call to the security company and within 15 minutes Chen got a call back: He had been moved to the top of the priority list.
Chen, a computer systems engineer, didn't have to pay big bucks to call his lawyer. In fact, he can call his lawyer as many times as he wants.
For $17 a month, Chen can say, "Let me call my lawyer," and mean it.
That's because Chen has signed up with Pre-Paid Legal Services Inc., one of a number of companies across America that provide a form of legal insurance offering virtually unlimited access to a lawyer for a monthly fee.
It's a benefit that only the well-off could once afford. Now the power is in the hands of the average Joe. In Florida, tens of thousands of families have signed up for this insurance. A prepaid lawyer will fight the traffic ticket you got, threaten the dry cleaner who ruined your blouse, help you create a comprehensive will.
The lawyer will even represent you in court if you get sued because your dog bit your neighbor's goat - as is the case for one Midwestern family.
It's "an idea whose time has come," says a spokeswoman for Pre-Paid Legal Services.
The thought is not to create an even more litigious society, said spokeswoman Marilyn Thompson, but to try to settle disputes before they land in court.
The plan does not offer free lawsuit filings. "We are not encouraging lawsuits," Thompson said. "We are encouraging people to know your rights."
Legal insurance has been popular in Europe for years, but only in recent years has it caught on in America.
Twelve years ago, Pre-Paid Legal Services Inc., which is based in Ada, Okla., had 70 employees. Today it has 950.
Prepaid insurance companies offer various plans that allow members to call an 800 number to discuss any legal problems. The companies contract with law firms across the country to offer these services - similar to the way a health insurance company contracts with doctors.
Among other services, prepaid lawyers will:
Review a limited number of contracts and documents.
Handle traffic violations anywhere in the United States.
Cover lawsuits and work-related actions.
Provide IRS audit protection.
If you end up in a trial, a number of trial hours will be provided at no extra charge, based on your plan and the length of membership. For instance, the longer you are a Pre-Paid Legal Services member, the more free trial hours you accrue. Any time over that has to be paid out of pocket.
The number of letters and phone calls a prepaid lawyer makes also depends on the plan.
In Florida, about 83,000 families are covered under Pre-Paid Legal Services contracts. Two law firms - one in Orlando, the other in Broward County - provide the expertise.
The prepaid work is building the two law firms into powerhouses.
Daniel Mantzaris, a partner with deBeaubien, Knight, Simmons, Mantzaris, Neal in Orlando, said his firm represents 51,000 families in North and Central Florida. It signed up as a provider law firm in 1996.
"We wanted to get involved in something cutting edge at the time," Mantzaris said. "We were developing clients and growing. It put us in a position to provide legal services that people can afford."
The firm, which has 50 attorneys, charges clients without legal insurance $155 to $400 an hour.
"A lot of people used to get bullied, but because they have us, they don't get bullied as much," Mantzaris said. "I know that sounds kind of white knightish, but it's true."
The Broward County law firm of Glantz & Glantz represents 32,000 families in South Florida - up from 6,000 in 1996, according to Ronald Glantz. The firm has 38 lawyers.
Most of the business is done over the phone. Once a client calls, he or she normally receives a return call the same day from a lawyer who specializes in the subject.
When a client wants to meet with an attorney face to face, but it's not feasible geographically for Glantz & Glantz, the firm will hire a lawyer in the member's area.
At least one Tampa lawyer says legal insurance is a good thing - to an extent.
"It helps deliver a good commodity at a fair price," said Bill Jung, who handles both criminal and civil litigation. "But it's a bad idea if you need sophisticated legal representation."
Jung said he once represented clients who had legal insurance but whose lawyer had little to no experience dealing with federal cases.
"(Handling cases in federal court) is like high-wire stuff with no net," Jung said. "It's an excellent program for the generalist. A disaster if you need a specialist."
If they do know what they are doing, "more power to them," Jung said.
But he warned: "It's kind of like HMOs. You better make sure your HMO has a good cardiologist if you need to see one for your bad heart."
If you get a lawyer you are unhappy with, there are mechanisms in place to get a different lawyer, said Tori Wible, staff counsel for the American Prepaid Legal Services Institute, a professional trade organization that monitors the industry.
People like Chen, the computer systems engineer, and Gary Balkcom, a master police officer with the Tampa Police Department, say they have gotten more benefit from legal insurance than from automobile insurance.
They sell legal insurance in their spare time as associates for Pre-Paid Legal. Associates get commissions for signing up members.
Balkcom, like many Americans, had no idea the legal insurance existed. Then, about eight years ago on his way to work, a sign on a semitrailer truck, just off Interstate 4 in Lakeland, jumped out at him.
"Pre-Paid Legal" it said. And there was a telephone number.
Balkcom was too preoccupied with a child support battle between his wife and her ex-husband to think about anything else, much less this sign.
He and his wife had hired an attorney and were suing for back child support and over visitation issues. But their day in court opened Balkcom's eyes. Two hours in front of a judge and Balkcom got a bill from his lawyer for $11,000.
He decided to call the number he had seen on the trailer.
Now, Balkcom uses the plan to fax contracts for his prepaid lawyer to review. A lawyer contested a speeding ticket for his wife.
"The little guy always gets (hurt)," Balkcom said. "But with prepaid legal, your voice is heard."