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Vol. 72, No. 6, June 1999

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Group & Prepaid Legal Service Plans:
A Way to Build Your Practice

Is It Right for You?

Generally, plans are best suited to small- to mid-size firms that need to expand their client base; larger firms usually have other client-generation strategies available to them. "The main thing, however, is that you are in general practice," Schwartz says. "These cases are not business problems; they don't tend to be big cases. These are standard, everyday legal problems that people need help with. If you enjoy that kind of practice, then this may be for you."

Another factor to consider is whether legal service plans match your personal philosophy about law practice. It works best when you're "philosophically in tune with the idea that people should have better access to lawyers," Schwartz says, "and when you're interested in the people who call you. If you feel you already have a pretty good practice and steady referrals, and you don't want to talk to a lot of new people, don't do this."

Any lawyer worried about being inundated and interrupted with members' calls would best avoid getting involved in plans, Schwartz advises. "You have to have the attitude that those calls are not burdens, they're opportunities," he says. He also recommends that if a lawyer decides to work with one plan, he or she may as well participate in several, thereby enhancing chances for client contacts.

People skills are crucial for any lawyer in general practice, and perhaps all the more so for attorneys involved in legal service plans. Because plan members have legal advice readily at hand, they may be inclined to call with trivial complaints, not just genuine legal issues. Patience and willingness to listen are vital attributes for plan attorneys.

Also, members - especially those paying the fees themselves - may have unrealistic expectations. "Every once in a while," Rodgers notes, "you run into an individual who believes the attorney ought to be able to move mountains, without charging any more (than the membership fee to cover basic services). For a complicated matter, the question comes up, 'Why am I paying a fee if I have to pay you more money to handle this matter?' That is one challenge. You have to handle such situations gingerly."

Lawyers' expectations also must be realistic. Attorneys signing up with a plan and counting on having their firm's business double in six months are setting themselves up for disappointment. Keep in mind that this is a client-development tool, not a magic bullet. "What I tell lawyers is that if this is a matter of you just getting on a panel, and you're not otherwise obligated (to pay a fee, and so on), then this is a no-brainer," Schwartz says. "If you're in general practice and you want some new clients, with low-cost marketing, put your name on the list. You may get some clients or no clients, but you have nothing to lose."

A Square Deal All Around?

Legal service plans have raised questions and concerns, however, for both lawyers and consumers. For attorneys, one worry is ending up in a financial bind; the reduced rates they agree to work for may not fairly compensate for time invested in serving plan members. To avoid that problem, the key is to be as efficient as possible, say attorneys with plan experience. Success from a business standpoint hinges on delegating work to paraprofessionals and smart use of technology - strategies many attorneys, whether in plans or not, find vital to making it in today's marketplace.

Another pitfall to safeguard against is what Domer calls "intake burnout." An attorney can get bogged down handling inquiries and telephone consultations, which may not lead to any substantive legal work. "That can result in frustration for the intake attorney," Domer says, "because he or she doesn't see the cases through to fruition. The calls may be more counselor as opposed to lawyer questions. So you need to rotate intake (among the firm's attorneys) and assure there's ample support staff." For sole practitioners, of course, there's no one to rotate to. The only remedy is to keep reminding yourself those calls are opportunities that could eventually lead to substantive work.

Some critics have questioned whether plan participation could place an attorney's professional independence at risk. For instance, plan members might steer toward use of basic legal services, because those already are covered in the plan, rather than asking for other legal services they really need, but can't or don't want to pay for themselves. And what happens if an attorney spots a conflict of interest? Or realizes he or she can't possibly do an adequate job on a case for the compensation offered? Some lawyers foresee potential problems paralleling those that doctors already face in HMOs.

But Nixon doesn't feel he's sacrificed his professional autonomy. "I don't have problems in the plans we deal with," Nixon says. "They do a good job of selecting the basic services people need. I think the free market will sort that out to some extent. If the plans aren't providing what people want, people won't subscribe to them."

Nixon has met good cooperation in gaining approval for additional fees for additional services, in instances when the plan pays for those rather than the individual. Also, in good plans the attorney always has the right to decline cases. The Wisconsin Supreme Court Rules mandate that plans operating in this state protect that right. "If I think there's a conflict," Nixon says, "or I don't think I can do the job because I'm not getting paid a fair rate for that particular service, I have the right to say no. The plan doesn't own you."

As for consumer concerns, critics question whether plans' discount-rate legal services could result in lesser quality. This echoes arguments that arise in debates about the merits of the flat-rate fee versus the billable hour. "That's an issue whether you're working through a legal services plan or for an individual client," says Bill Bolger, executive director of the National Resource Center for Consumers of Legal Services in Gloucester, Va. "I don't think that issue is faced in any greater degree in legal services plans."

Good plans also provide consumers formal mechanisms to register complaints. "What a plan does offer to the consumer is, if anything, the incentive for the lawyer to do a better job," Bolger contends, "because an unhappy client has recourse through a plan. The plan is a repeat player in a way the individual consumer is not. A plan has clout, like a major client. So the incentive is to make sure the plan member is well taken care of."

Bolger notes that 105 million Americans now are legal service plan members, according to 1997 figures. He estimates a 1998 increase in membership of about 7 percent, and he expects the number to keep climbing every year.

That's good news to lawyers like Jay Nixon, who already have their foot in the door. "More and more consumers are subscribing to plans, and that's making it more worthwhile for lawyers to be involved," he says. "We have a head start in knowing how to work with them. It's a slow wave right now. But lawyers who represent consumers are going to have to deal with this eventually."

Dianne Molvig operates Access Information Service, a Madison research, writing, and editing service. She is a frequent contributor to area publications.