Pre-Paid Legal Services--are they worth joining?

Just a few thoughts:

"You can call and get advice for free and will be assigned an appropriate lawyer, etc..." sounds good at first glance, but I wonder if it is really a bargain.

A lot of lawyers will talk to you for free, on the phone or in their offices, to find out whether or not your concerns requre legal help, and will charge you only if they do further work on your behalf.

The offer of a "25% discount" is not too meaningful in an area where fees are very flexible and subject to negotiation in the first place. An item on sale for "25% off" is no bargain if the original price was

200% too high.

A free drafting of a will is something that most people are concerned with only once in their life. I suspect many lawyers would do it for about that same $287 cost that this pre-payment service costs, not once but year after year.

There are a lot of good self-help legal books available. If you ever need any legal advice that goes beyond the simple problems in those books, you will end up paying for it for sure!

Personally, I would put the $287 per year into a good index fund.

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What they are offering is legal insurance. Treat this just like any other insurance decision. You are looking at paying $3000 over

10 years. If you invest that $3000, you will have even more over time. Will you spend more than $3000 on legal fees over the next 10 years? Most Americans do not.

I look at all insurance as pretty much the same--it is an expensive way to level out the payments and avoid going bankrupt when something bad happens. That might be worthwhile for automobiles and health, but for most everything else, skip the insurance and save the money. Over time, you will do much better.

-john-

Many cities have public lawyer referral services, charging a nominal fee to have the opinion of a lawyer. In my hometown, the fee is $20 for 30min for a face-to-face meeting.

HTH

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That would depend on the details of the service, which I'll bet you would have some difficulty finding out.

I am particularly skeptical of claims to offer a "25% discount," partly because of the following story.

Once upon a time I knew someone who got into a minor car accident. She called her insurance company, which I will not name for reasons you are about to see. The insurance company sent someone to look at her car, after which they sent her a check together with a list of three body shops that they said would repair her car for the amount of the check plus the deductible.

She went to each of the body shops, and none of them was willing to repair her car for the amount of money the insurance company had sent her. When she called them to tell them this, the response was: "Did you tell the body shops we had sent you?"

Now... Suppose you offer to repair someone's car for $1,000 and they come back and say "You agreed with this insurance company to accept their estimate, so you have to do it for $600." Do you think that you are going to a good job on that car? No -- you'll do the cheapest work you can get away with.

So the question is what economic incentives are are work with the law firms involved. Unless you can find out, it's hard to know whether the plan is a good deal or a ripoff.

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