Why People Drop Out of Prepaid Legal Service Plans 

You may be covered when it comes to health, life, car or home insurance, but what about legal coverage? Most Americans will be involved in some kind of legal matter at least once during their life times.  Attorney fees can be expensive, starting at $100 an hour and ranging up to $1,000 per hour.

The Concept of Prepaid Legal Services

With the such a strong possibility that having to hire a lawyer will be necessary at some point, prepaid legal services may be what you need for peace of mind. The concept is simple.  For a fixed monthly subscription, you get telephone access for lawyer advice. You pay a fixed amount in advance each month to defray the cost of legal services furnished in the future. These services cover various legal practices, from reviews of simple legal documents and the writing of a simple will to more comprehensive coverage of divorce, bankruptcy and real estate issues.

Prepaid legal services can be an attractive idea for people who don’t have the resources to retain a lawyer on a regular basis. With a prepaid legal plan, you effectively have a network of attorneys you can call on for preliminary basic advice or simple issues.  Services not covered by the plan are generally available to members for a discount on regular hourly rates or for flat fees.

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Why Do New Subscribers Drop Out?

As appealing as the concept of prepaid legal services may seem, more than half of new subscribers drop out after their first year. One reason is that members do not require any legal help during their first year, so they opt out. Another reason is that the scope of legal services available under the prepaid legal plans are extremely basic and limited in nature. Most plans have certain caps or maximums as far as benefits provided are concerned, and purport to offer discounts on standard attorney fees instead. By simply calling around, you could probably negotiate a lower rate than the one being offered as a benefit under the prepaid legal insurance.

Another problem with prepaid legal insurance plans is the likelihood that your project will be assigned to a novice attorney. Because of cost considerations, it is typical that a trainee or inexperienced attorneys is assigned to handle phone consultations and the drafting of simple legal documents provided as benefits under the prepaid legal services plan.

Finally, others may drop out of the prepaid legal services plans because there is no rapport and understanding built with an attorney.  This is because most of the work is done over the phone and there is never an opportunity to know a lawyer on a personal basis.

"Why People Drop Out of Prepaid Legal Service Plans" contributed by Brent Danielson